Government Can Help Grow Industry

DANIEL S. GREENBERG

June 16, 1992|By DANIEL S. GREENBERG

WASHINGTON — Washington. -- American agriculture remains super-efficient, untouched by the productivity lag that afflicts manufacturing. What accounts for the difference between these two basic foundations of the economy?

One striking factor is that the federal government spends a great deal of money and talent to keep farmers technologically up to date and to solve their production problems. The efforts date back to the early days of the nation, when there were no arguments about the need to assure a reliable supply of food. Today, more than $400 million a year is directly devoted to agricultural education and technical service to farmers. Through various routes, a great deal more than that flows into the agricultural economy.

When fearsome insects descend upon the fields or disease wilts the crops, farmers know that expert advice is promptly available from a nationwide network of extension agents of the U.S. Department of Agriculture and its state counterparts. But when owners of small manufacturing firms need technical advice, for example, on corrosion problems or processing techniques, government help is close to non-existent.

Efforts to fill that gap with ''industrial extension services'' hit an ideological barrier in the Reagan administration, which condemned direct help for manufacturers as ''industrial policy.'' The term is political shorthand for bureaucratic intrusions into the marketplace, and has been adopted by the Bush administration as its battle cry against federal help for industry.

But economic necessity tends to wear down ideological conviction, and, as a result, federal industrial extension services are beginning to sprout around the country. At the same time, most states have established extension programs to provide technical assistance for small and medium-sized firms.

The federal effort now consists of five regional technology centers operated by the National Institute of Standards and Technology, formerly the National Bureau of Standards, plus a special center to assist state extension programs. The name change, accompanied by assignments to help small industry, was legislated by congressional Democrats in 1988. The Reagan White House responded by refusing to carry out the prescribed industrial role, and President Bush adopted that tactic in the early days of his term.

But the woes of American industry reached the point where willingness to experiment overcame political resistance. The Bush administration plans to expand the technical extension services next year and is asking Congress for $86 million for the program. That's small money by agricultural standards, but a major advance from the Reagan era.

Meanwhile, extension programs for industry have been set up in almost every state. Most are fairly modest, according to a report by the National Governors' Association, with average budgets of about $2 million a year. Unlike their agricultural predecessors, which span the entire agricultural economy, the industrial services are just beginning to make themselves known among the nation's 360,000 small and medium-sized manufacturing firms.

Many of the state programs are managed by universities and muster business, science and engineering professors as a corps of experts for firms seeking assistance. In a typical problem-solving episode reported by the Governors' Association, the University of Tennessee's Center for Industrial Services came to the assistance of a manufacturer of small brass valves who was having difficulty disposing of hazardous waste. The center helped the firm develop a process that eliminated the environmental problem and saved $48,000 a year at the same time. Expert advice alone will not assure a national industrial renaissance. But it can help, and in some instances it could be the difference between prosperity and failure.

Not to be overlooked is that manufacturing extension services are a well-established feature on the Japanese and German industrial landscapes.

Daniel S. Greenberg is editor and publisher of Science & Government Report, a Washington-based newsletter.

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