The National-Level Economic Impact of the Manufacturing Extension Partnership (MEP)

By MAMTC on July 13, 2017

A recent study by the W.E. Upjohn Institute found the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP) Program generates a substantial economic and financial return of nearly 9:1 for the $130 million annually invested by the federal government. Using the national REMI® model, along with the results from the FY2016 NIST MEP client impact survey conducted by Fors Marsh, the W.E. Upjohn Institute for Employment Research study finds that economic returns are substantially higher than previously reported by the MEP Program due to broader economic effects. The study uses a conservative approach in estimating the broader economic impacts of the program by examining the competitive interactions between firms. NIST MEP contracted with Upjohn to create the study estimating the broader national impacts of the NIST MEP program. The study and subsequent report, The National-Level Economic Impact of the Manufacturing Extension Partnership (MEP), is posted at the Upjohn Institute website.

A Positive Return on Investment

The Upjohn study reports that the $130 million invested in MEP during FY2016 generated an 8.7:1 increase in federal personal income tax ($1.13B/$130M federal investment). The study only looked at personal income tax and not businesses taxes, so it is a conservative estimate of the return.

The MEP Program Generates Additional Jobs for the U.S

The study finds that total employment in the U.S. was over 142,000 higher because of MEP center projects than without the program. This estimate includes both direct, indirect, and induced jobs generated by MEP projects. These jobs support additional manufacturing jobs critical to U.S. supply chains and jobs outside of manufacturing.

Other Positive Impacts of the MEP Program

The Upjohn study also examined additional areas of economic impact not previously reported by the MEP Program: (1) personal income is $8.44 billion higher and (2) GDP is $15.4 billion larger, translating into an increase of $1.13 billion in personal income tax revenue to the federal government than without the program.

About the MEP Program

The MEP program is a public-private partnership created in 1988 to improve the global competitiveness and productivity of America’s small manufacturers. MEP has Centers in all 50 states and Puerto Rico dedicated to serving small and medium-sized manufacturers (SMMs) with nearly 1,300 Trusted Advisors who work with local SMMs to provide services that help create and retain jobs, increase sales and improve the local economy.

About the W.E. Upjohn Institute for Employment Research

The W.E. Upjohn Institute for Employment Research is an activity of the W.E. Upjohn Unemployment Trustee Corporation and was established in 1932 to address issues of unemployment during the Great Depression. The Upjohn Institute is a private, nonprofit, nonpartisan, independent research organization devoted to investigating the causes and effects of unemployment, to identifying feasible methods of insuring against unemployment, and to devising ways and means of alleviating the distress and hardship caused by unemployment. Upjohn’s broad objectives are to: (1) link scholarship and experimentation with issues of public and private employment and unemployment policy; (2) bring new knowledge to the
attention of policy makers and decision makers; and (3) make knowledge and scholarship relevant and useful in their applications to the solutions of employment and unemployment problems. Click here for more information about the Upjohn Institute.

An executive summary of the study, the full study, and appendix can be found here.