The US Manufacturing Extension Partnership (MEP) is a federal programme supporting the competitiveness of manufacturing SMEs through technology adoption, process improvement, workforce training, supply chain upgrading and market development. Administered by the National Institute of Standards and Technology (NIST), it operates through a decentralised network of 51 centres combining federal funding, matched state contributions and client fees (only for larger firms). The programme reaches around 35 000 manufacturers per year across all manufacturing industries and mainly serves small firms. Evidence from external and internal evaluations points to positive associations with productivity growth, sales and business survival, with stronger effects among the smallest firms. The model highlights the role of nationally branded, locally delivered and demand-led support in strengthening SME upgrading and manufacturing competitiveness.
The US Manufacturing Extension Partnership (MEP) programme
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Introduction
The Manufacturing Extension Partnership (MEP) is a longstanding programme of the US federal government which aims to upgrade the competitiveness of manufacturing SMEs through the adoption of advanced technologies, efficiency improvements (which may go beyond technology adoption), and increased presence in global markets. The programme was launched in 1988 through the US Ombudsman Foreign Trade and Competitiveness Act (OFTAC), whose overarching ambition was to strengthen US domestic manufacturing in the face of intense competition from abroad, notably Japan in the late 1980s1.
Delivery arrangements
The MEP programme is administered by the National Institute of Standards and Technology (NIST), an agency of the U.S. Department of Commerce whose mission is to promote American innovation and industrial competitiveness. Although MEP is a federal programme, it works in a decentralised manner through public private partnerships in which state governments partner with local industry stakeholders in the design and implementation of programme activities. The MEP programme also has a national advisory board, which meets at least twice a year, is appointed by the NIST Director and consists of members broadly representing the interests and needs of the manufacturing sector.
This multi-level structure allows the programme to be flexible enough to address the different development needs of manufacturing industries at state level, while maintaining a national framework for overarching funding and branding. The federal umbrella of the programme, as well as its longstanding existence, has also ensured that the programme is well-known nationwide and that baseline guidelines are the same in every state. Furthermore, federal sponsorship and co-ordination make it possible to share good practices and experiences across different states, thus favouring the diffusion of innovative practices across the different states of the nation.
At local level there are 51 centres, one located in every U.S. state, plus one in Puerto Rico. These centres work with local manufacturers to provide expertise in various areas, including process improvement, workforce training, supply chain optimisation, and adoption of advanced manufacturing technologies. Each centre is the result of a collaboration between federal, state, and private sector stakeholders, with funding coming from federal grants, state contributions, and fees from client services. The MEP draws on a network of 1 400 industry experts and thousands of other partners across 475 MEP service locations.
Each centre is funded for an initial period of 10 years, with mid-term independent evaluations taking place in the 3rd and 8th year of operation2. Organisations eligible to run a state-level MEP centre include nonprofit organisations, state or local government entities, universities or university-affiliated entities, economic development organisations and, in some cases, private sector organisations. Applicants must show the capability to serve manufacturers statewide (or in a defined region) and to match federal funds with non-federal sources.
This box provides practical information on how MEP centres work at local level, bringing the example of two very different states, Ohio, which has a stronger industrial base, and Alaska, which is on the other hand a largely rural state that lacks a strong SME sector.
In the first case, information is provided on how the MEP centre is organised locally, whereas the second example offers a practical example of business-support activity on the ground.
The governance of the Ohio MEP centre
The Ohio MEP centre is funded by the federal and state government. Locally, it is administered by the Ohio Department of Development (Office of Technology Investments). To serve the diversity of Ohio’s industrial base, Ohio MEP manages a network of regional partner organisations that are competitively selected and co-ordinated to meet the needs of local small manufacturers. Through this network, manufacturers have access to a broad range of services, including training, coaching, implementation of operational improvements, automation, and engineering.
The Ohio MEP has 6 regional partners to support statewide assistance: the Centre for Innovative Food Technology (CIFT, Toledo); the Manufacturing Advocacy and Growth Network (MAGNET, Cleveland); the Ohio State University-South Centres; PolymerOhio (Westerville); TechSolve (Cincinnati); and FASTLANE at the University of Dayton. In the 2024 Fiscal Year report, based on survey evidence, the Ohio MEP centre reported 3 175 jobs created or retained, cost savings worth USD 147 million, new/retained sales worth USD 622 million, and new client investments worth USD 118 million.
An example of MEP activity in the state of Alaska (food packaging)
Chugach Chocolates, a small, family-owned business in Anchorage, Alaska, faced a challenge when their new flow packaging machine, which was capable of increasing output from 90 bars an hour to up to 90 per minute, struggled with certain chocolate bar flavours. The company was unsure of the cause and unable to easily find local expertise to address this problem, which is why the business owner turned to the local MEP for help. Alaska MEP found a packaging machine specialist in one week, who diagnosed the issue and helped resolve it on site, enabling the full use of the new machine. In this specific case, beyond troubleshooting, Alaska MEP also helped to cover the cost of the specialist and made other productivity-related suggestions that the company had not previously considered.
Budget
In 2025, the annual federal budget of the programme was USD 175 million. Federal funding has slowly increased over the last years, mostly to offset inflation. In 2021, federal funding was USD 150 million, USD 4 million higher than in 2020. About 80% of the federal funding finances programme activities, while the remaining 20% is used at the federal level of the overall management of the programme.
Matched funding is an important linchpin of the programme which ensures its financial sustainability. Matched funding is based on a 1:1 ratio, i.e., for every federal US dollar, the local MEP centre is expected to bring in one additional US dollar from non-federal sources by its 10th year of operation. Non-federal sources mostly come from state-government grants and, to a lower degree, from client fees and third-party sources (e.g., universities, regional economic development organisations, and private foundations).
While there is no information on the current total budget of the programme (federal and state funding included), in 2012 the federal contribution was USD 128 million, while the total budget of the programme was USD 326 million, giving a federal ratio of 40%, which is quite close to the 1:1 ratio set by the law3. Assuming the 40% ratio is still the same, this would give a total estimated budget of the MEP in 2025 of USD 437 million, USD 175 million of which from the federal government and the remaining from state funding and client fees.
Outreach
In terms of outreach, between 2022 and 2024, the MEP served annually between 33 500 and 36 000 manufacturing companies, pointing to a relatively steady caseload4. Given the overall federal budget, this means about 5 000 federal US dollars spent on each case, plus another USD 5 000 coming from state sources, assuming a constant 1:1 ratio. Altogether, this suggests that the average MEP intervention (USD 10 000) is rather small-scale and mostly targets quite small enterprises.
Sector-wise, the MEP programme spans all different manufacturing industries, both high-tech and low-tech (all NAICS code between 31 and 33), although statistics from the programme show that the biggest impacts on sales were on transportation equipment, fabricated metal, and plastics and rubber products (see Figure 1)5.
Source: Robey, J., K. Bolter, R. W. Eberts, N. Patten, and N.Perttunen (2020), The National-Level Economic Impact of the Manufacturing Extension Partnership (MEP): Estimates for Fiscal Year 2019, Prepared for National Institute of Standards and Technology (NIST) and Manufacturing Extension Partnership (MEP). https://research.upjohn.org/cgi/viewcontent.cgi?article=1248&context=reports
Thanks to its longstanding existence and prominence in the landscape of US policies for SME manufacturers, the MEP programme has been widely researched since its establishment in 1988.
Independent external evaluation
A relatively recent impact evaluation, published in the Economic Development Quarterly6, compares productivity growth, business survival rates, and employment trends among firms receiving and not receiving MEP support over the period 1997-2007. This observation period is further split into two subperiods (1997-2002 and 2002-2007) to discern differences in terms of impact along the economic cycle.
Key findings from the study are as follows:
Firms that received MEP support show statistically significant improvements in productivity and sales per worker, which were stronger between 2002-2007, a period of sustained growth preceding the outbreak of the Great Financial Crisis in 2008.
The impact on productivity growth (value added per worker) was the strongest for small firms employing less than 20 workers, which account for 78% of client companies.
Possible reasons include the average small scale of the intervention which, as noted earlier, was in the range of USD 10 000 in the early 2022-2024 period; that larger companies are more exposed to external factors which may influence economic performance than smaller firms; or that larger companies may need more time to embed the results of the received service in their operational process, which are more complex.
MEP-assisted firms also displayed an average 18% higher probability of survival compared to non-assisted firms over the entire observation period. This effect was stronger during phases of economic downturns, suggesting that the programme was particularly useful to keep companies alive in periods of low demand.
From a methodological perspective, the main regression methodology used in this study is the difference-in-difference model, with results further corroborated by a limited dependent variable model. Furthermore, the evaluation study acknowledges the issue of selection bias when comparing MEP-assisted firms with non-assisted firms, as firms seeking assistance are already typically more focused on improving performance and, therefore, more likely to have improved their productivity anyway without the assistance.
Findings from this study are in line with those from previous independent evaluations, including larger productivity impacts for smaller SMEs7,8.
Internal evaluation
Each year the MEP programmes undertake a survey where it asks clients about the impact of programme activities on a series of business outcomes, including sales, cost savings, investments and job creation/retention. Based on the results of these surveys, the MEP programme has estimated that cumulatively, between 1988 and 2021, the network of state offices had worked with more than 132 000 manufacturers, resulting in USD 138.8 billion of new sales, USD 26.2 billion of cost savings, and over 1.45 million jobs created/retained.
The latest available information from the website of the programme (2024) reports that the MEP national network had helped manufacturers achieve in the last year USD 15 billion in new/retained sales, USD 5 billion in new client investments, USD 2.6 billion in cost savings and over 108 000 of jobs created/retained9.
The last published annual report of the programme, in FY 2021, additionally underlined that for every US dollar of federal spending, the MEP programme generated USD 26.20 in new sales growth and USD 34.50 in new client investment. During the same period, for every USD 1 193 of federal investment, the network of MEP centres created or retained one manufacturing job.
The following main lessons can be distilled from the history of this programme.
Federal sponsorship ensures national branding and recognition of the programme at state level, besides block funding from the federal government.
Strong decentralisation in programme implementation ensures that activities are tailored to the specific needs of local small manufacturers.
Matched funding at state level ensures financial sustainability and greater outreach of the programme. Furthermore, client fees, often charged on larger SMEs for more sophisticated services, allow for the partial subsidisation of the services provided to smaller SMEs.
Manufacturing-wide application means the programme can be used by multiple industries, both knowledge-intensive and more traditional ones. In fact, the average small scale of the intervention suggests that the programme has been mostly used by smaller SMEs in non-high-tech sectors, especially for small operational improvements or management upgrading.
Programme activities are demand-driven and, thereby, supports many different forms of SME upgrading, from technology and innovation support to skills development, thus recognising that technology adoption often requires the upskilling of both managers and workers.
Empirical evidence points to stronger impacts for smaller companies (up to 19 employees), suggesting the programme was especially useful for the introduction of small technological improvements in enterprises which are not often exposed to innovation processes.
On the other hand, the impact of the programme on larger SMEs has been weaker, especially for those employing more than 100 employees. One possible reason could be the average cost of the single MEP intervention, which is too small to make a real difference for larger SMEs. Another reason could involve an “inverse” selection bias in the case of larger SMEs10.
When the MEP was first launched, its legislation had emphasised the transfer of advanced technologies from federal labs to SMEs. However, it was eventually clear that these technologies are not practical for most small manufacturers because they are expensive, untested, and complex.
MEP offers a tested template for combining a single national framework with devolved, partnership-based delivery, highly pertinent to the UK’s multi-level governance and regional industrial specialisations. Its centre network model shows how services can be tailored to local manufacturing bases while maintaining common standards, branding and metrics nationwide. The programme’s matched-funding and client-fee mix crowds in regional and private resources, strengthens local ownership, and improves fiscal sustainability, features relevant to UK budget constraints.
MEP’s demand-led, relatively low unit-cost, firm-level interventions – spanning diagnostics, process improvement, supply-chain upgrading, workforce practices and practical technology implementation – speaks directly to adoption barriers faced by the UK’s large share of micro and small manufacturers. Its performance management and evaluation discipline (competitive centre selection, mid-term reviews, consistent outcomes tracking) provides a replicable accountability framework. These elements informed the Made Smarter policy option presented in this publication, particularly the national umbrella with regional delivery hubs, co-funding arrangements, vendor-neutral implementation support and systematic evaluation.
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← 1. National Academies of Sciences, Engineering, and Medicine. 2013. Strengthening American Manufacturing: The Role of the Manufacturing Extension Partnership: Summary of a Symposium. Washington, DC: The National Academies Press. https://doi.org/10.17226/18329. https://nap.nationalacademies.org/read/18329/chapter/6 (intervention by Philip Shapira).
← 2. Legal Act establishing the MEP, https://www.law.cornell.edu/uscode/text/15/278k.
← 3. The National Academies of Sciences, Engineering, and Medicine (2013), 21st Century Manufacturing: The Role of the Manufacturing Extension Partnership Program, https://nap.nationalacademies.org/read/18448/chapter/10
← 4. The programme does not prevent supported companies from applying again for support, although priority may be given to new clients.
← 5. It should be noted that sales volumes may vary significantly by sector.
← 6. Lipscomb, C. A., Youtie, J., Shapira, P., Arora, S., & Krause, A. (2017). Evaluating the Impact of Manufacturing Extension Services on Establishment Performance. Economic Development Quarterly, 32(1), 29-43. https://doi.org/10.1177/0891242417744050.
← 7. Ordowich, Christopher and Cheney, David and Youtie, Jan and Fernandez-Ribas, Andrea and Shapira, Philip, Evaluating the Impact of MEP Services on Establishment Performance: A Preliminary Empirical Investigation (July 1, 2012). US Census Bureau Center for Economic Studies Paper No. CES-WP-12-15, Available at SSRN: https://ssrn.com/abstract=2160471 or http://dx.doi.org/10.2139/ssrn.2160471
← 8. Jarmin, R. S. (1999). Evaluating the impact of manufacturing extension on productivity growth. Journal of Policy Analysis and Management, 18(1), 99-119.
← 10. By “inverse” selection bias, it is meant that the MEP programme may have attracted applications from cash-constrained and underperforming larger SMEs, whereas better performing mid-sized firms, which would comprise the control group in an evaluation study, would rather either apply for more competitive programmes giving larger sums or undertake investments without public support.
