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Success Stories Assistance Areas SEED Reports Contact Information Last updated: Wednesday, 13-Mar-2002 10:46:50 EST     Technology Transfer U.S. AND EUROPEAN BEST PRACTICE TECHNOLOGY TRANSFER AND MANUFACTURING EXTENSION PROGRAMS   Developed and produced by: Innovation Associates Inc. Reston, Virginia USA and Segal Quince Wicksteed Ltd. Cambridge, England UK   Under subcontract to: Mendez England & Associates Inc. Chevy Chase, Maryland USA   This report was produced under contract to: U.S. Agency for International Development Contract No. 181-C-00-98-00319-00   14 January 1999   The content and views are those of the author and do not necessarily reflect the views of the prime contractor, the U.S. Agency for International Development or the U.S. Government   TECHNOLOGY TRANSFER AND MANUFACTURING EXTENSION PROGRAM MODELS   TABLE OF CONTENTS Introduction Overview Essential Best Practices Lessons Learned Models: Integrated Manufacturing Extension, Technology Transfer and Workforce Development (Cleveland Advanced Manufacturing Program and Great Lakes Manufacturing Technology Center C CAMP/GLMTC) Comprehensive Technology and Investment Support for Technology Enterprises (Ben Franklin Technology Center of Southeastern Pennsylvania C BFTC/SEP) Commercialization Corporation (Kansas Commercialization Corporation) University-Based Technical Assistance, Technical Information, and Summer Intern Program (Purdue University Technical Assistance Program C TAP) Statewide System of Industrial Extension Through Field Office Network (Georgia Manufacturing Extension Alliance C GMEA) Industrial Extension Services in a Rural State (Iowa Center for Industrial Research and Service C CIRAS) University-Based Industrial Extension Patnership (Maryland Technology Extension Services) Statewide Manufacturing Extension and Outreach (North Carolina Industrial Extension Service C IES) Membership-Based Advanced Technology Center (Edison Welding Institute C EWI) Centralized Technology Development and Transfer Institute (Danish Technology Institute C- DTI) National System of Technology Transfer Centers (Fraunhofer Gesellschaft) Technology Extension and Network Development (Tekes and the Finnish Technology Centers)   INTRODUCTION The information in this report is being provided as part of the U.S. Agency for International Development's FABRYKAT 2000 Program. The intent of the program is to assist Polish Technology Transfer Centers (TTCs) commercialize promising technologies and provide manufacturing extension to Polish firms. As part of this effort, FABRYKAT 2000 is providing information on U.S. and European best practices and will work with pilot TTCs to adapt these practices to the Polish environment. FABRYKAT 2000 will also convene national meetings, conduct training in the United States and in Poland, assist the Polish TTCs identify and develop linkages with technology and business resources, and help structure services for small and medium-sized enterprises (SMEs). We have selected the U.S. and European models that appear in this report because they provide examples of successful programs having different structures and operating in different environments. These models were drawn from an on-going study of U.S. and European best practices being conducted by Innovation Associates Inc., U.S., and Segal Quince Wicksteed Ltd., U.K., under subcontract to Mendez England Associates, U.S. The programs that we have selected for this report are: Cleveland Advanced Manufacturing Program (CAMP) and Great Lakes Manufacturing Technology Center (GLMTC). CAMP/GLMTC provides both technology transfer and manufacturing extension to the region's industries. It is one of seven Thomas Edison Technology Centers set up by the state of Ohio to provide technology transfer in manufacturing technologies through its university affiliates. GLMTC, which operates as a division of CAMP, is one of the first three designated federal Manufacturing Extension Partnerships (MEP). Ben Franklin Technology Center of Southeastern Pennsylvania (BFTC/SEP). BFTC/SEP provides a wide range of technology and business assistance, and investment tools for technology enterprises. Technology services are provided through a variety of programs that link enterprises with technology sources at research universities and federal laboratories. Investment services are provided through multiple grant, loan and investment funds in exchange for royalties and other types of payback methods. Kansas Commercialization Corporations. The Kansas Technology Enterprise Corporation (KTEC) is a statewide technology system that supports three Commercialization Corporations, in addition to seed capital funds and other financing programs for SMEs. Manufacturing extension is provided through the Mid-America Manufacturing Technology Center (MAMTC), which also operates as part of KTEC. Purdue University Technical Assistance Program (TAP). Based in the College of Engineering, Purdue's industrial extension program has a national program in data and information for companies, faculty delivery of problem solving, student programs for both short- and long-term projects, and linkages to research. Georgia Institute of Technology Manufacturing Alliance (GITMA). The industrial extension programs at the Georgia Institute of Technology are the largest university-based technical services delivery system in the United States. This program involves 19 field offices, staffed by highly trained engineers. These field offices are integrated into the university's economic development program providing services in economic research, international standards, and a host of other support and delivery units. Iowa Center for Industrial Research and Service (CIRAS). CIRAS is a 36-year-old industrial extension program that operates in the rural state of Iowa. CIRAS has evolved from providing low- and mid-level industrial outreach to serving the technology needs of high technology firms through its affiliation with the Iowa State University. Field staff provide services from marketing to problem solving throughout the state. Maryland Technology Extension Service (TES). TES is one of the smaller statewide U.S. industrial extension programs and is unusual because it operates as part of a university's engineering research center. Engineers provide lower-end problem solving through field offices and refer a large number of advanced problems to the university's research center and faculty. The extension service also has unusually close ties with several federal laboratories in the area. North Carolina Industrial Extension Service (IES). IES has a large continuing education program for working engineers and industrialists that uses university faculty and electronic media. This effort is integrated with a statewide technical services component that combines manufacturing assessments with workforce development, and concentrates on industrial clusters. Edison Welding Institute (EWI). EWI, another of Ohio's Thomas Edison Technology Centers, is the largest welding and materials joining center in the United States. EWI has one of the largest U.S. A membership programs, in which SMEs and large firms collaborate on research and development (R&D) with the institute and share in the results. Members receive additional business and information services. Danish Technology Institute (DTI). DTI is a comprehensive national technology center that provides a full range of high quality technology transfer and extension to Danish industries. This includes technology assessments and problem solving, demonstrations, business assistance and financial help for start-ups and mature SMEs. DTI gains an unusually large portion of its revenues from user fees. Fraunhofer Gesellschaft (FhG). The FhG is a network of regional technology transfer centers located throughout Germany. They specialize in specific technological areas and normally are affiliated with universities, making good use of faculty and students in helping technology firms assess and solve technical problems, and adapt advanced technologies. TEKES. TEKES is the Finish national technology center that uses various funding tools to stimulate technology development and commercialization. Through technology clinics, TEKES uses a network approach to assist SMEs from both the demand and supply sides by identifying and meeting specific technological needs and also identifying and promoting adaptation of specific advanced technologies. In this report, we also provide an overview that outlines the technology transfer and manufacturing extension process and infrastructure, and present some lessons learned from programs in the United States and Europe. Back to Top   OVERVIEW Technology transfer and manufacturing extension programs have been used effectively by nations, states/provinces, and smaller regions to stimulate their economies through the start-up and expansion of technology-based enterprises. Technology transfer and manufacturing extension programs are the center of many U.S. and European initiatives to stimulate and support high-tech economic growth. But these programs do not operate in isolation; they are part of a larger system that supports technology growth through a multi-faceted and interrelated process. That process is supported by internal and external sources of research and development, business assistance, marketing, financing, and networking opportunities. Most states in the United States now have some form of technology transfer program and manufacturing extension program, many of which focus on small and medium-sized enterprises (SMEs). Normally these are distinct programs although, in some cases, they are part of the same organization. For example, the Cleveland Advanced Manufacturing Center, a state-funded technology transfer program, also operates the Great Lakes Manufacturing Technology Center, a manufacturing extension program that is jointly funded by the state and federal governments. However, most often technology transfer and manufacturing extension programs function as distinct programs and serve different clients.   CREATING A TECHNOLOGY INFRASTRUCTURE In order for a nation, state/province, or smaller region to develop a technology infrastructure that supports the technology transfer and manufacturing extension process, a number of specific elements intend to develop and enhance technology-based enterprises are needed: research and development (R&D) -- universities, technical institutes, R&D institutes, government laboratories, and technology-based corporations capital for high-risk enterprises (entrepreneurs and start-ups, and existing enterprises attempting to reach new markets) technology assistance business and management assistance legal assistance (including patenting and licensing) marketing and export assistance business networking skilled workforce tax and legal structures that encourage technology-startups, diversification of industries, and technological advancements in existing enterprises Since most regions have only some of these resources available, governments in the United States, Europe and Asia have developed programs to fill the gaps in their technology transfer infrastructure. The following list describes some of the program types that have been implemented, but it is important to remember that, in practice, these programs sometimes overlap and collaborate, and there may not always be clear distinctions among them. Technology commercialization and transfer programs: These programs bring together the sources of R&D with firms that commercialize the R&D. The programs are called by different names in different U.S. states and countries, and although they may differ slightly, their goal of using R&D for technology commercialization is the same -- centers-of-excellence, advanced technology centers, centers for advanced technology, etc. Technological institutes and similar institutions in Europe, technology transfer programs at U.S. federal laboratories, and regional research institutes in Japan and the Asia-Pacific region serve the same purpose. Manufacturing and industrial extension services: These services were started in individual U.S. states to advance technologies in existing manufacturers. Later, the federal Manufacturing Extension Partnership (MEP) Program has developed a nationwide system of manufacturing extension. Technology transfer and extension services: These services are similar to the manufacturing extension services, but have a broader client base covering all technology-based enterprises including manufacturers. Technology extension services may overlap with those of manufacturing extension services in some U.S. states. Manufacturing networks: These networks are established by a variety of sources. They help small businesses share their experiences and may involve collaboration on R&D, marketing, and other activities. They are usually organized on a sectoral basis, but may be organized around other common interests. Technology councils: These membership organizations bring together technology enterprises on an informal basis through luncheons and other vehicles, and provide information to technology-based enterprises. Programs that provide a physical environment to help technology-based enterprises: These programs include small business incubators and research or science parks. Science parks and incubators range from simple real estate investments to more complex programs involving intensive assistance and investment in technology enterprises. Zoned areas to promote technology enterprises: Called technopolis in Europe and Asia, or enterprise zone in the United States, these are usually geographical zones that are designated by provincial or local governments in order to concentrate special incentives and services that attract and raise the visibility of technology enterprises. Financial programs that invest in technology-based enterprises: These programs include grants, loans, and investment structures intended to stimulate and commercialize products/processes developed by firms. This would include, at the U.S. federal level, the Small Business Innovation Research (SBIR) program, and at the state level, product development corporations, challenge grants, and others. Seed and venture capital programs: Mainly found in the United States, these programs either provide capital directly to technology enterprises or provide match making services to help bring together technology-based enterprises with potential investors or Aangels. Workforce development programs: These programs include teaching factories, training courses at local educational institutions, on-line tutorials, customized and on-the-job training to upgrade the technological skills of employees, or more generally to make skilled workers available to new or advancing enterprises. MANUFACTURING AND TECHNOLOGY EXTENSION SERVICES In the United States, manufacturing and technology extension services were based on the earlier Agriculture Extension Service. This national program was developed by the U.S. Department of Agriculture, in conjunction with land-grant universities in each of the 50 states, to help spread new ideas and practices among American farmers. Based on this model, state governments later established similar programs to provide technical and other assistance to manufacturing firms. One of the earliest of these industrial extension programs was the Pennsylvania Technical Assistance Program (PENNTAP), which was launched in the 1950s. These programs gained popularity in the United States and spread rapidly in the 1980s. Manufacturing and technology extension services help small manufacturers implement technologies, enhance productivity, and assist in other ways that lead to new growth. They are often linked to a major university, but not always. Most state programs are composed of small field offices located throughout the state. The field offices normally have small staffs, composed primarily of engineers who have extensive experience in industry. State programs often rely heavily on a roster of consultants. Although many of the programs are linked to major universities, the universities often provide little direct assistance to firms. Rather, the university affiliation gives the extension service credibility and visibility with client firms. Most extension services provide "technology audits" or assessments of a technological problem or issue and recommendations for addressing the problem. Most often these technological problems or issues require application of multiple types of business and management assistance in addition to and often in lieu of technological assistance. Because of the success of these state programs, the federal government started the Manufacturing Extension Partnership (MEP) in 1988. Administered by the National Institute of Standards and Technology (NIST), there is now an MEP in every state. In states where there had been an established extension service, MEP often expanded the existing state program by providing additional funding. Funded at over $90 million (FY98), the Partnerships provide a variety of services such as technology assessments, training, development of business and market plans, upgrading of equipment, total quality management and standardization, and other services. In Europe, there are extension programs at the EU level and in most member states. These programs often operate through a national agency such as the Danish Technology Institute or the Norwegian SINTEF, which organizes programs around particular sectoral interests and technology themes. In many cases, extension services are also organized into clusters through special sectoral agencies, either concerned with particular technologies, such as joining technology at the TWI in the UK, or industrial sectors such as the ceramics sector in northern Italy. An increasing proportion of the programs are funded by industrial sources rather than the public sector; although the public sector is often needed to establish the programs and infrastructure in the first instance. Increasingly, firms in Europe are prepared to pay for services once they are convinced of the value of those services. In Japan, there is a massive system of extension services in every region called ko-setsuchi, roughly translated as regional research institutes. There are almost 600 institutes across Japan that are designed to help SMEs. About half of the institutes serve agriculture, forestry, and fish industries; about 20 percent serve health care and environmental industries; and about 20 percent serve manufacturing industries. The regional institutes are mainly financed by prefecture and municipal governments. Institutes provide somewhat different services and emphasize different technological areas to reflect the technical strengths of the region. Most regional institutes provide applied research, testing and examination, advisory services, training, information dissemination, and technology diffusion groups or networks. Detailed descriptions of several U.S. and European models are provided under Technology Transfer and Manufacturing Extension Models.   TECHNOLOGY TRANSFER AND COMMERCIALIZATION CENTERS In the United States, the first centers-of-excellence were established by the National Science Foundation, but this successful model was soon adopted and modified by state governments, and it is now common throughout the country. Most centers are affiliated with major universities and focus on the research strengths of the university. Centers usually offer contracted research to firms, in which firms pay a fee and receive exclusive rights to the research results. Firms may also enter into joint research programs, or generic research through memberships in the centers. This allows firms that contribute funding to the project to share in the rights to the results. Often centers facilitate small-firm participation by allowing them to contribute to the project according to their size and means. In addition to R&D, these centers are often part of larger state programs that offer other services to help technological firms. Those services may include grant programs to help firms participate in R&D, venture capital programs, small business incubators, and science parks. In Europe, there has been a strong shift from outright commercialization of products/processes to instituting the notion of commercialization of R&D into the thinking of researchers at the beginning of R&D programs. Many European Union (EU) member-state research programs are now required to have industrial partners as a prerequisite for funding. This increases the chances of commercializable outcomes. Most large research universities and public research centers now have specific programs to transfer research findings after protecting intellectual property rights. The practice of embedding commercial research teams in university laboratories for collaborative work is also becoming more prevalent in Europe. A full range of information, consultancy services, exchange fora and Internet tools are also being utilized. The Thomas Edison Centers in Ohio and the Ben Franklin Technology Centers in Pennsylvania in the United States, and the Danish Technological Institute and German Fraunhofer institutes in Europe are excellent examples of technology transfer and commercialization centers. These centers are detailed under Technology Transfer and Manufacturing Extension Models.   BUSINESS AND MANUFACTURING NETWORKS In the United States, state and local governments and private non-profit economic development agencies are starting to develop networks. An example is the State of Washington, which has developed 14 networks involving shipbuilding, tooling, aerospace, and other traditional industries. ShipNet, for example, is a statewide shipbuilding and repair industry network intended to help improve productivity, identify new markets, and form collaborative relationships among its members. Some of the networks have grown into industrial associations such as the Washington Aerospace Alliance that now involves over 1,000 aerospace suppliers. Other networks, such as the ISO 9000 network, are designed to provide improved techniques and standardization across different industries. In Italy, the well-publicized Emilia Romagna example of networks and one-stop business centers, is leading to replication and adaptation by other European local and regional agencies. In Finland, the TEKES program, which is detailed later in this report, is another successful example of networking. The TEKES program, which has now been operating for over a decade, involves fifteen technology networks operated around technology and business clinics. These clinics have helped over 250 companies in Finland to catch up with technology leaders as well as to become leading-edge in their own right. In eastern England, there is a particularly wide-ranging initiative centered around the biotechnology sector where many new small firms are assisted across the full range of technical and business services. Japan is particularly strong in organizing business and industry networks. Japan's regional institutes, prefectural governments, municipal governments, industrial associations, and other entities organize networks of SMEs. In the Kanagawa Prefecture, the national Industrial Research Institute established an industrial association to serve the software industry in the area. The industrial association formed over 100 networks of small firms, which meet about once per month to exchange information, develop research topics for the IRI, and form collaborative relationships in R&D, marketing, and other areas. In South Korea, the Korea Industrial Technology Association and the Korea Institute of Science and Technology started about 200 networks, which they called "study circles." Each circle was composed of about 10 to 15 firms. Its purpose was to exchange information among its members.   SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM The SBIR program is a very popular U.S. program designed to stimulate innovation in small technology firms. It has been emulated by the SMART program in the United Kingdom, and more recently by the SNITS program in Sweden. SBIR was created by the U.S. Congress in 1982 in order to give SMEs greater access to federal R&D contracts. Because of its success, the program was re-authorized and augmented in 1992. Government agencies with a certain level of R&D funding are required to grant 2.5 percent of their external R&D funds to small firms. In FY97, this funding amounted to $1 billion. SBIR funds are provided as direct grants to firms whose proposals are judged in a peer-review evaluation process. The proposals are judged on both technological and management merit. An average of eight proposals are submitted for each one funded.   INDUSTRIAL ASSOCIATIONS AS A TOOL FOR TECHNOLOGICAL STIMULATION In Germany, Chambers of Commerce provide wide-ranging services to technology enterprises. Supported by public funds derived from business taxes, some German Chambers provide services often provided by U.S. technology transfer and manufacturing extension services. Depending on the Chamber, those services include brokering technology enterprises with sources of R&D, administering government grants and loans to enterprises for technological development, assisting with market research and export development, and formating of business networks. In Japan, industrial associations are active in promoting technologies among SMEs. The Japan Industrial Robot Association (JIRA), for example, was formed to introduce robots to SMEs. Along with various government measures including grants and tax incentives, JIRA was instrumental in making Japan's SMEs the world leader in the use of robots. In 1992, Japan's SMEs made far greater use of industrial robots than did European or U.S. SMEs. JIRA and other major industrial associations in Japan perform a variety of services for their member firms. This includes market research, development of joint R&D between their members and national R&D centers, formation of networks, design and promotion of tax incentives, development and administration of government loan programs, extensive training and education, and technical advice similar to that provided by extension services. The Korea Industrial Technology Association, Singapore's Manufacturers' Association, and others in the Asia-Pacific region also take an aggressive "pro-active" role in promoting technological changes in SMEs in their respective countries.   U.S. FEDERAL LABORATORY TECHNOLOGY TRANSFER Since the 1980s in the United States, federal laboratories have been thought of as having an enormous wealth of R&D that could be shared and commercialized by the private sector. Congressional Acts (Stevenson-Wydler Act and Federal Technology Transfer Act) mandated mechanisms to stimulate the often difficult marriage between federal laboratories and firms. Federal laboratory Offices of Research and Technology Assistance (ORTAs) were established in all major laboratories to facilitate the identification and transfer of R&D to private industry. Businesses now can enter into formal agreements with federal laboratories under Cooperative Research and Development Agreements (CRDAs) or, in the case of National Aeronautics and Space Administration (NASA) laboratories, Space Act Agreements (SAAs). These formal agreements between firms and federal laboratories to perform contracted or collaborative R&D may result in granting non-exclusive or exclusive licenses and improvement patents to the firms. Firms also can contract with federal laboratories (outside of a CRDA agreement) to conduct R&D on the firm's behalf that also may result in licenses and improvement patents. However, the great majority of firms work informally with federal laboratories. Most often this involves researchers providing informal advice to firms on how to improve their technologies or how to diversify use of the technologies. They might provide advice on what has been tried before, conduct testing and evaluation, perform limited research, and introduce the firm to a third party for further assistance or corporate partnering. In 1992, NASA formed six Regional Technology Transfer Centers formerly known as NASA Industrial Applications Centers. The purpose of these six centers, located through the United States, is to identify R&D in NASA laboratories and help firms work with the laboratories to extract and commercialize promising technologies. The National Technology Transfer Center also was created by the U.S. Congress in 1989 to identify and transfer technologies from federal laboratories to industries and to provide information and other services to technology firms to help them commercialize R&D from federal laboratories.   SEED AND VENTURE CAPITAL A number of states in the United States provide public seed and venture capital and/or services that help link entrepreneurs and start-up firms with private venture capital. Often these programs are incorporated as private non-profit corporations which allow them to take equity positions in firms or to receive royalties in exchange for their investments. These programs are intended to fill a gap in traditional financing and venture capital programs, often investing in enterprises too small or too high risk for other sources of financing. Many governments initially seed the funds for a period of time -- normally for several years -- and expect the funds to become self-sufficient based on their returns-on-investment. As government money has tightened or has been withdrawn, these funds have tended to invest in larger and lower-risk enterprises. Although this has somewhat defeated the original intent of these public funds, it has also saved some from bankruptcy. In general, the funds that have been most successful are those that have operated as private funds, basing investment decisions on stringent due diligence processes and strict guidelines. Networks of venture capital "angels" -- that is, rich individuals with money to invest in firms -- are another source of capital for small technology firms. State or local agencies, science parks, and others have established computerized services that match the firms with interested "angels." Based on successful networks developed around the United States by the Center for Venture Research at the University of New Hampshire, the U.S. Small Business Administration in 1997 formed the "Angel Capital Electronic Network" (ACENET). ACENET will provide matching of "angels" with firms through the Internet. The aim will be to provide investment from between $250,000 and $5 million, which now represents a gap in the U.S. venture capital market. Back to Top   ESSENTIAL BEST PRACTICES MODELS AND BEST PRACTICES This report reviews the activities of 12 organizations in the United States and Europe that are noted for their effectiveness in promoting technology-based economic development. The design and operation of these programs have been selected as best practices because key experts in the technology-based development field consider their overall programs to be outstanding. There are many functional similarities between these programs. Summarized below are some of the functional best practice areas basic to developing and operating technology transfer centers (TTCs) and manufacturing extension programs (MEPs). The 12 selected TTCs and MEPs perform most or all of these activities exceptionally well. But experts have difficulty in agreeing who is best, because these programs operate in different environments, have different resources available to them, and have somewhat different goals. Moreover, the evaluation criteria and methodologies used to assess technology and extension programs vary from state to state and nation to nation. Additionally, there are many subjective factors used in making the determination of which programs are best. Given these caveats, we have noted which of the organizations discussed in this report are particularly strong in each functional area. The reader is cautioned that unique circumstances have often shaped the direction in which these organizations have gone, and trial and error experience has played a significant role in their development. What has worked in one location and why it has worked may be due to factors as diverse as the expertise of one individual to a complex interaction of factors such as national culture, commitment of resources, availability of technology generators, prominent industrial sector(s), and political climate, to mention only a few. Although there are many best practices, we have selected ten operational areas under which to organize the basic functions that Poland's Technology Transfer Centers may wish to consider in shaping their own programs. These practices are in the areas of (1) technology development, transfer and commercialization; (2) technology diffusion and deployment; (3) technology transfer networks; (4) risk capital; (5) fee for service and return on investment; (6) linkages with universities; (7) linkages with federal laboratories and government institutes; (8) industrial input and leadership; (9) private sector experience; and (10) program monitoring and evaluation. Planned additions to this document will explore some of these best practices in greater detail and will include additional best practices.   Best Practice TTCs Provide a Full Range of Technology Development, Transfer, and Commercialization Services Successful commercialization programs provide access to the full range of business and technical assistance needed during the commercialization process. Entrepreneurs and technological innovators usually need help in developing business plans, obtaining financing, identifying markets, and obtaining specialized services. Existing companies require similar assistance when seeking to introduce a new product or process. Commercialization assistance programs help with patent applications, engineering and testing, and development of business and marketing plans. The Kansas Commercialization Corporations, established by the Kansas Technology Enterprise Corporation, use their entrepreneurial, financial, and research capabilities to assist start-up technology-based companies and to transfer new technologies to the market place. Since the goal of the program is to create a base of technology companies in places that do not currently have a strong base of such firms, the commercialization corporations focus their services on a small number of carefully selected clients. Because they work with only 10 to 12 clients annually, each corporation must select as clients only the firms and entrepreneurs with the greatest potential to succeed. This approach differs significantly from more traditional public sector programs that seek to assist large numbers of client companies, providing services to all who request them. As a first step in identifying potential Commercialization Corporation clients, the corporation staff interviews the prospective client. The interview is used to make an initial assessment of the company's commitment and commercialization potential. If the project appears to be appropriate for the Commercialization Corporation, the prospect is asked to complete an application and submit a business plan. The commercialization corporation staff reviews this information to determine market potential, technical feasibility, and management capabilities. If the application is approved, the client is asked to make a formal presentation to a committee of board members. Once the corporation agrees to work with a client, it signs a formal agreement outlining the services that will be provided and the mechanism by which the corporation will receive a return on its investment if the company succeeds. The exact services provided are tailored to the specific needs of the client. A key service provided by the corporation is to help the client recruit entrepreneurs and managers skilled in starting up technology-based firms. They also spend a great deal of time helping client companies obtain start-up capital. Additional services provided by the corporations include: business plan development, including marketing and financial analysis competitor analysis market research assistance in locating and accessing financing sales and marketing strategy development management consulting technical assessments identification of new products and processes prototype development patent and trademark assistance The Fraunhofer institutes in Germany offer a similar range of technical and commercial services to client firms. These services include market assessments, feasibility studies and profitability analyses that are conducted in conjunction with prototyping and other special technical services. The institutes also provide opportunities for licensing and developing new technology-based businesses. Licensing involves establishing the intellectual property rights (IPR) in all the target markets, which requires access to special legal advisory services, identifying likely target commercial interests, targeting firms in the key markets, and developing and following a strategy to target users. Additionally, licensing involves adopting either a single client approach or broadcasting the availability of the IPR among potential interested parties or presenting the opportunity to a small target group. The Fraunhofer Patents Center provides a good example of these services conducted on behalf of private sector clients, as well as for the researchers from other institutes. Development of new technology-based businesses, stemming from transferred technologies, is done through the following stages: technical appraisal to establish the novelty and reliability of the performance claimed for the innovation business appraisal to identify the scale of investment needed and the likely return on investment sources of capital at seed stage, the riskiest stage for an investor development of prototypes and design for production, which takes the product or process from its inception to the point in which investors recognize its commercial potential market planning and presentation to assist in setting up the commercial aspects of the new business, which is often as necessary as the acquisition of capital development of the right management team to bring the business to fruition, which usually involves strengthening the commercial skills of the management team to complement the technical skills of the inventor development of strategies for injecting capital at various stages of business development The Ben Franklin Technology Center of Southeastern Pennsylvania (BFTC/SEP) makes investments in new and emerging technology companies and provides them with technical, business, and management assistance. BFTC/SEP recently established peer networks or Success Teams. The Success Team concept allows companies to collaborate in solving business problems through the implementation of working advisory boards -- five-member coaching teams comprised of Ben Franklin staff and other entrepreneurs. An attempt is made to assign entrepreneurs in similar businesses to each team. The Success Teams provide entrepreneurs with peer-driven, pragmatic advice in a variety of fields, including accounting, raising capital, hiring and employment, as well as strategic planning. BFTC/SEP also operates a Business Information Center (BIC) to meet the information needs of early-stage, small businesses. The BIC, which has been in operation since 1991, provides professional on-line information services to small and medium-sized enterprises that do not have access to on-line business data. BIC is staffed by five professional librarians who have access to 4,000 databases, which they use to provide information on marketing, competitors, and industry trends. Another example is the Edison Welding Institute (EWI), which provides a wide range of services to its member companies. EWI's services are geared to solving industrial problems and advancing the state-of-the-art of materials joining technology. In addition to conducting research and development, EWI provides consulting services to solve company-specific problems; conducts contract research and engineering; holds conferences, seminars and training workshops; and provides testing services.   Best Practice TTCs and MEPs Provide Multiple Services Aimed at Technology Diffusion and Deployment Technology transfer centers provide many services aimed at diffusing technologies and technological know-how, and manufacturing extension services additionally provide services aimed at upgrading or advancing technologies and business practices in existing SMEs. The Danish Technology Institute, as one example, provides: demonstrations and testing of new technologies technical training identification of licensing opportunities, patent and licensing assistance business development assessments (technology audits) of technical and business feasibility advice on specific technical and management problems/issues information retrieval market research and competitive positioning business and management assistance referral and help in accessing public and private financial sources preparation for trade fairs sponsoring on- and off-site exhibitions human resources planning and organization export development corporate partnering information dissemination on new technologies and improved techniques through conferences, workshops, seminars, newsletters, and databases A central activity of many manufacturing extension programs is to provide a technology audit in which field staff, normally engineers, visit a technology-based SME and provide an assessment of their technological problem or more generally assess their operations and provide recommendations. The University of Maryland's Technology Extension Service, in conjunction with the U.S. Department of the Navy, conducts audits called best manufacturing process surveys. The extension service organizes a team composed of university and manufacturing experts who visit a company's plant and together analyze all aspects of the company's manufacturing operations. They then issue a detailed report and recommendations. Most extension services conduct less formal assessments of manufacturers' problems and opportunities. Georgia Institute of Technology's Manufacturing Extension Alliance provides a wide variety of manufacturing-related services including industrial engineering, product design, health and safety assessments, and energy audits. Most of their field staff's activities concentrate on assessing and making recommendations on improved manufacturing processes. Their Information Manufacturing Technology Center conducts demonstrations and assesses manufacturing software for corporations, and the Lean Manufacturing Center shows companies how to operate economically. The Great Lakes Manufacturing Technology Center, the manufacturing extension arm of the Cleveland Advanced Manufacturing Center (CAMP), contracts with the Advanced Manufacturing Center at Cleveland State University to work on manufacturing design, production, and testing that is customized to a manufacturer's specifications. CAMP's electronic services help manufacturers market their products and their Manufacturing Learning Center provides demonstration and training on new technologies for state manufacturers. Purdue University's Technical Assistance Program conducts nationwide database searches for companies. The extension service uses the university's on-line data systems to identify particular technologies and technological solutions, identify markets, provide information on new management techniques, and search for R&D projects at universities and federal laboratories nationwide and worldwide; turnaround on client questions is under 48 hours. Although other extension services have tried to make this type of service commercially viable, Purdue's search capacities have succeeded in part because of their quick turn-around time to the corporate customer. North Carolina's Industrial Extension Service helps design and deliver industrial training courses throughout the state at various Adownload sites@ such as technical schools, cooperative extension offices, and large industrial plants. In addition, the Industrial Extension Program has a demonstration facility in textiles that exhibits and trains SMEs on the latest innovations in textiles. All of the equipment in the demonstration facility is donated by industry, and most of the operations are supported by industrial donations.   Best Practice TTCs and MEPs Develop Technology Transfer Networks Technology transfer is now recognized as a process. Networks provide the means to connect technology generators and suppliers with technology users. The essence of an efficient network is the creation of a commonality of interest between the supply and the demand side -- through the development of a shared language, shared values, and the expansion of areas of common technological interest -- so that barriers to communication can be broken down. Network initiatives can take several forms, including specific network development programs, like the TEKES clinics scheme in Finland; outreach programs, including joint R&D and graduate placement programs with firms; and dissemination programs, ranging from passive databases to active technology push. Network development is multifaceted. There are as many benefits from networks that involve firm-to-firm exchanges as there are networks that involve technology sources and technology users. The TEKES scheme in Finland is a particularly good example of a network-based approach with its emphasis on networks at both international and local levels. The Finnish national program does the initial market research and then brings together the participants who with continuing guidance are given control of the process to ensure they define its form and focus. Core public funding covers part of the costs from the start, with firms expected to contribute an increasing proportion of the total costs. The steps used by TEKES in creating technology transfer networks are: conducting a scoping exercise that targets issues facing technology users refining the topic to reflect urgent issues facing technology users in order to attract network participants attracting participants by high visibility events and following up to ensure continuing involvement of target participants developing active programs through a catalyst from the development agency with planned transfer of ownership to businesses as soon as practicable refining and applying the network model to individual networks and ensuring that the model is flexible and responsive to changing priorities of its users spreading the experience by active dissemination intended to stimulate the interest of other likely groups Outreach programs are active attempts by sources of technology to market their capabilities to target firms with dedicated staff looking to build networks between their host organization and technology users. The best examples build the outreach concept into their organization structures and have permanent field staff making connections on a daily basis. The Georgia Institute of Technology's Manufacturing Extension Alliance, the University of Maryland's Technology Extension Center, and Iowa's Center for Industrial Research and Service all have field offices located throughout the state. The field offices are staffed with engineering and business development specialists who address the diversified needs of local SMEs by linking them with technology and business sources at their host universities as well as with other sources throughout the state, nation, and at times, worldwide. These organizations include Small Business Development Centers (SBDCs), which are business development organizations funded by the U.S. Small Business Administration; federal laboratories; agriculture extension services; industrial and professional associations such as the Society of Industrial Engineers; and the Regional Technology Transfer Centers funded by the U.S. National Aeronautics and Space Administration. Dissemination programs target technology information sources as potential users with the most effective being very narrowly cast in their methods, i.e. having a clear idea of who are the technology users and what are their immediate problems and opportunities so that information can be tailored precisely to their needs. It is the addition of interpretative and targeting aspects that adds real value to data bases and dissemination programs, as they otherwise can lead to information overload and miss their target. Best practice examples include the Purdue University Technical Information Service, which distributes in excess of 11,000 documents a year to users at quick turnaround to meet the immediate needs of users, and the Fraunhofer Demonstration Centers in Germany, which expose SMEs to new technologies and are constantly being updated to keep up with changing demand and hot topics from their network of co-operating firms.   Best Practice TTCs Offer Access to Risk Capital Best practice commercialization programs assist firms and entrepreneurs to obtain risk capital through seed and venture capital funds. Some operate as part of the TTC, are affiliated with the TTC, or help firms identify and access private capital from outside sources. Entrepreneurs and new technology enterprises normally have little credit worthiness and are considered too high risk for most usual channels of financing. Moreover, they require small amounts of money, which financial institutions do not like to bother with, as well as patient money, meaning financiers must wait a long time for return on their investment. Technology-based SMEs have financial needs at each stage of the technology transfer and commercialization process. They particularly need capital at the early-stages, when the potential payback seems too remote for most financial institutions, and at later development stages, when positive cash flows are still questionable. Without access to high risk capital, enterprises and the TTCs assisting them will not be able to realize the results of their technology transfer efforts. The Ben Franklin Technology Center of Southeastern Pennsylvania (BFTC/SEP) operates six funds designed to meet companies' capital needs at each stage of the business start-up process. Investments are made to support product development, proof of technical feasibility, and the development of prototypes. In return for its investment, the BFTC/SEP receives a royalty payback. BFTC/SEP staff specializing in investments assist start-up enterprises in preparing business plans and other documentation needed for the due diligence process. The staff screen and approve the plans and forward them to a technical committee, which reviews the plans for technical feasibility and merit. If approved, the plan is forwarded to an investment committee that evaluates the plan based on the enterprises's business and financial strength. The final step in the process is approval from the center's board. The Kansas Commercialization Corporations have taken an alternative approach. Each commercialization corporation is affiliated with both a for-profit corporation and a holding company that manages a pre-seed and/or seed capital fund. The holding company is structured as a limited liability company. The Commercialization Corporation holds an equity position in each of its client companies. Applications for seed investments are reviewed by a three-member Investment Review Committee made up of one representative from each of the fund's investors -- typically the Kansas Technology Enterprise Corporation, the local sponsor of the Commercialization Corporation, and the university with which it is affiliated. The president of the Corporation manages the fund. Any disbursements from the fund are divided in the following way: 80 percent to the fund investors; 15 percent to the management company; 5 percent to the management company president, and/or key staff. Thus, staff of the Commercialization Corporation have a financial incentive to see clients succeed.   Best Practice TTCs and MEPs Receive Fees-for-Service and Return on Investment Increasingly, best practice programs require that clients provide some type of payment toward part of the cost of the services received, which can take the form of paying fees-for-services, making repayments from royalties, or providing a percentage of equity in any businesses created. Centers are seeking a return on investments in order to provide future revenue to support the program, but also to ensure that the entrepreneur or innovator has a stake in successfully commercializing their technology. Manufacturing extension programs such as the Cleveland Advanced Manufacturing Program (CAMP) or the Edison Welding Institute (EWI) often provide a free initial assessment for a company, which is then used to identify ways in which the center could assist the client. The company can then contract with CAMP to provide specific services. EWI, in addition to undertaking cooperative research funded by its member companies, conducts proprietary research on a contract basis for individual clients. Firms can also contract with EWI for technical consulting services. While many of the programs examined have a goal of achieving self-sufficiency, most still rely heavily on public sector support. CAMP has been more successful than most manufacturing extension centers in terms of raising revenue, yet in 1998, only 20 percent of the Center's revenues came from fees-for-service. The remainder came from public sources. Centers that invest in commercialization and new businesses seek to obtain a return on their investment if a project is successful. The Ben Franklin Technology Center of Southeastern Pennsylvania investments in enterprises are expected to be returned through royalties on product sales. The structure of the royalty agreements differs depending on the specific funding program, with start-ups and emerging companies required to repay 3 percent of their total sales up to two or three times the original investment, depending on the specific investment program. There are annual repayment caps over the first several years. This allows companies to mature and strengthen without the burden of high royalty payments hindering their growth. Kansas' Commercialization Corporations enter into a formal client agreement with each company they plan to assist. The agreement outlines the services that will be provided and the mechanism by which the corporation will receive a return on its investment if the company succeeds. In general, the Corporations assume small (in the range of 3 to 5 percent) shareholder or equity positions in the companies being helpful, and negotiate royalty payments on commercially successful products. In most cases, the centers do not require a return if a project does not succeed.   Best Practice TTCs and MEPs Develop Linkages with Universities Best practice technology transfer and commercialization programs have close ties to technology generators. In the United States, one of the major generators of technologies are universities. Most state technology transfer centers, particularly centers-of-excellence, were established at or near major research universities in order to take advantage of the research and development (R&D) capacities of the universities. Although less so in Europe, universities play a critical role in technology transfer by conducting collaborative R&D with industry clients and providing technical expertise to technology transfer centers and their clients. University faculty often serve on advisory committees and technical review committees for technology transfer centers. University faculty and students can provide technological expertise to help firms with product design, testing and refinements, and graduate students also can assist clients with marketing and business planning needs. University R&D can be contracted by one firm, in which rights to the technologies usually are retained by the firm; it can be conducted jointly between a corporation and university, in which rights to the technologies usually are negotiated; or it can be conducted by the university and multiple firms, in which the university and all of the participating firms usually share in the rights to the technology. This differs among programs. In the Edison Centers, which include CAMP and EWI, the center or institution conducting the research usually retains ownership of technology rights. In the Fraunhofer institutes, rights to technologies remain with the firms. Kansas' Commercialization Corporations were established at the three major research universities in the state in order to assist in commercializing technology generated by university faculty, staff, and students. The Corporations seek to identify researchers within the university that may have inventions or discoveries that could be commercialized. Staff of the Commercialization Corporations help researchers evaluate the commercial prospects for their technologies and determine whether licensing or a business start-up is the best approach to commercialization. The Corporation provides patenting and licensing expertise as well as assistance with the problems inherent in marketing a new technology. If starting a new business is the preferred route to commercialization, the Corporation staff negotiates a client agreement with the university researcher. The Ben Franklin Technology Program, of which the Ben Franklin Technology Center of Southeastern Pennsylvania (BFTC/SEP) is a part, is in the process of reestablishing linkages with universities in its region. When the Ben Franklin Technology program was established in 1983, a central feature was to develop partnerships between universities and the private sector. In the early days of the program, the Ben Franklin Technology Centers (BFTCs) directed significant resources to support centers-of-excellence and university-industry research projects. During the late 1980's and 1990's, the centers began to focus more of their resources on investing directly in new and emerging technology-based businesses. In 1998, the BFTCs adopted an integrated strategy that calls for renewed ties to universities. Specific actions include the development of an innovation and commercialization network that will identify ways in which the BFTCs and universities could jointly invest in support mechanisms designed to increase interactions between university researchers and industry partners and to accelerate the commercialization of university-based, federal laboratory, and industry technology. The Maryland Technology Extension Service (TES), which is part of the University of Maryland's College of Engineering, works directly with businesses to identify and solve critical engineering and technical problems facing small manufacturers. Because the extension service operates as part of the College of Engineering, it provides direct linkages between client firms, faculty, and students. Iowa's manufacturing extension service, the Center for Industrial Research and Service (CIRAS), is also housed in the University's College of Engineering, and its director reports to the Dean of Engineering. CIRAS has an informal agreement with the College of Engineering to have its faculty provide one day per week of free assistance on solving industrial problems identified by CIRAS' field staff. This assistance often involves evaluating materials, giving advice on product design, advising SMEs on safety issues, and consulting on manufacturing processes. In addition, the faculty of the university's research centers give industry tours and advise industries on current R&D in specific fields. The Fraunhofer institutes (FhGs) have developed strong linkages to universities, with many of the FhGs located on or adjacent to research universities. These institutes perform contractual R&D for private industry often with faculty and graduate students from research universities. FhGs contract directly with researchers, professors, and lecturers at local universities. The universities permit professors to work at the institutes provided it does not interfere with teaching obligations. Researchers and professors are paid at market rates; students may be paid at minimum rates, but usually receive academic credit toward their degrees. The close working relationship between the FhG and the universities provide academicians, particularly students, the opportunity to gain experience with real world problems, and offer the corporation contracting the work the advantage of having the latest technology and techniques applied to their projects.   Best Practice TTCs and MEPs Develop Linkages with Federal Laboratories and Government Institutes Exemplary technology transfer and commercialization centers in the U.S. and Europe develop relationships with federal laboratories and government research institutes in order to tap into existing R&D at the laboratories, use laboratory facilities for third-party testing and evaluation, contract research, and conduct collaborative R&D. Technology transfer centers can benefit from relationships with near-by laboratories and with laboratories elsewhere that are performing R&D in areas of interest to the TTC's client firms. Rights to technologies stemming from projects in which U.S. federal funds are involved, such as collaborative R&D between corporations and federal laboratories, can be assigned to the inventor, assigned to the U.S. government, or the government can license the technology and agree to give the inventor a portion of the paid royalties. Normally, rights to contracted or collaborative R&D between federal laboratories and private corporations are negotiated before the work begins. This arrangement is formalized in a Cooperative Research and Development Agreement (CRADA), or in the case of the National Aeronautics and Space Administration (NASA) laboratories, through a Space Act Agreement (SAA). The Federal Technology Access Program (FedTAP) of the Ben Franklin Technology Center of Southeastern Pennsylvania (BFTC/SEP) has developed relationships with 12 federal laboratories. Ten of these laboratories are located outside of the Southeastern Pennsylvania area, but have been chosen because they conduct R&D in specific technological areas of interest to BFTC/SEP. BFTC/SEP and two affiliated organizations -- one that provides technology extension services throughout the state and the other that provides regional extension services for NASA -- work with the federal laboratories to provide a variety of resource identification and commercialization services. These include helping SMEs test, design, and analyze new or improved products and processes. BFTC/SEP assists SMEs in developing agreements with the laboratories in order to contract with laboratories to conduct joint R&D. They help in identifying licensing opportunities and help the SME apply for licenses. Extension services also benefit from relationships with federal laboratories. Georgia's Manufacturing Extension Alliance, for example, has direct linkages with the NASA laboratory in Huntsville, Alabama. They have developed a formal memorandum-of-understanding (MOU) between the university and the federal laboratory. As a result of this MOU, the federal laboratory has assigned a technology transfer agent to the university. He is responsible for technology linkages to all federal laboratories. The technology transfer agent refers to the federal laboratory system high-level manufacturing problems brought to him by extension service field offices. In addition, one member of the extension service staff is designated as a liaison and marketing agent for NASA, in order to encourage deployment of advanced federal laboratory technologies in existing SMEs. Similarly, Iowa State University's Center for Industrial Research and Service (CIRAS) has developed formal relations with the U.S. Ames Laboratory, located on the Iowa State University campus. CIRAS' field agents identify and refer high-tech SMEs that can benefit from the laboratory' services, provide introductions, and develop agreements between SMEs and the laboratory. The laboratory provides state manufacturers with testing, evaluation and recommendations for specific uses of new materials suitable for manufacturing.   Best Practice TTCs and MEPs Have Industrial Input and Leadership In best practice programs, industry plays a key role in setting and overseeing the direction of the technology transfer and commercialization program. In each of the programs described in this report, industry plays a key role. In most cases, a board of directors which includes industry representation, governs the program. Programs that invest in companies use venture capitalists, entrepreneurs, and Chief Executive Officers (CEOs) of technology-based companies to review applications for funding and recommend investments. The Edison Welding Institute (EWI) is an example of a membership-based, industry-led program. A board of directors, whose majority is from the private sector, governs EWI. The board sets the research direction, determines what services are provided, and establishes the charges associated with those services. In addition to providing technical advice and consulting assistance to companies, EWI operates a multi-million dollar Cooperative Research Program. An Industry Advisory Board and Industry Advisory Committee representing the interests of EWI's member companies determines the agenda for the program. A public-private board also governs the Ben Franklin Technology Center of Southeastern Pennsylvania. The board meets four times a year and is responsible for oversight and setting the strategic direction of the center. In addition to the board, volunteers from the business community serve on a number of investment committees and technical committees. The investment committees are composed of representatives of venture capital companies, banks, and small technology companies. The technical committees include representatives from universities and private corporations. All of the manufacturing extension services highlighted in this report have industrial advisory boards or committees. CIRAS has an industrial board composed of 28 manufacturers, the majority of whom are SMEs. The board meets five times per year to target specific industrial problems that are of immediate concern, review the industrial extension services' programs, and make recommendations for future programs. In addition to the input provided by industry-led boards, all extension services in this report, and most of the TTCs, conduct surveys of local industries. These surveys provide technology transfer centers and extension services with important input that is used to make decisions on service design and delivery. Georgia's Manufacturing Extension Alliance, for example, conducts a bi-annual manufacturing needs survey of every manufacturer in the state. The survey focuses on industrial problems, both present and expected, and solicits information about new technologies that the industries have implemented or plan to implement in the near future.   Best Practice TTCs and MEPs Hire Staff with Private Sector Experience Best practice programs hire staff with private sector experience. Technology transfer and commercialization centers need staff with experience in commercializing technology and starting new companies. Technology extension programs typically hire staff that have many years of industrial experience. When the Kansas Technology Enterprise Corporation established its Commercialization Corporations, they conducted a worldwide search to find presidents with expertise in transferring technologies from the public to private sector and in launching new start-up companies. The staff of the extension programs examined in this report also have manufacturing experience and backgrounds in engineering and business. The Georgia Institute of Technology Manufacturing Extension Alliance has a professional staff of 47 most of whom have undergraduate engineering degrees and graduate business administration degrees. All have industrial experience and are literate in computer and advanced manufacturing systems. The majority of the 160 full-time professionals on the staff of CAMP also hold degrees in engineering and most have extensive industry experience. Increasingly, however, the program is recruiting younger professionals in engineering who are up-to-date with new technologies. In the past, greater emphasis was placed on hiring engineers who had spent most of their career working for manufacturing companies. Turnover is greater among these younger workers, but the center views their move into private companies as an important element of technology transfer. The Ben Franklin Program of Southeastern Pennsylvania also hires investment staff who have gained business and financial experience in the private sector.   Best Practice TTCs and MEPs Conduct On-going Program Monitoring and Evaluation Best practice programs have in place performance measurement systems to collect data on project and program impacts, monitor center performance on a continuous basis, and assess and revise program operations as needed. Measuring the impact of technology development programs is difficult. Most of the programs reviewed in this report have struggled with defining appropriate measures. Programs such as the Ben Franklin Technology Centers (BFTCs) and Ohio's Edison Centers have identified core measures that they use to track center performance. The BFTCs recently adopted a new set of core measures designed to measure job impacts, dollars of leverage (public and private dollars brought into the state as a result of BFTC projects), sales, and customer satisfaction. The BFTC/SEP collects specific measures on an annual basis from client companies. These measures include: number of new products/processes introduced with BFTC/SEP assistance average annual sales of new products/processes introduced with BFTC/SEP assistance number of new companies created with BFTC/SEP assistance dollars of federal funding attracted to BFTC/SEP projects and clients dollars of industry funding attracted to BFTC/SEP projects and clients dollars of venture capital attracted to BFTC/SEP projects and clients dollars of private capital leveraged to BFTC/SEP projects and clients number of jobs created with BFTC/SEP assistance number of jobs retained with BFTC/SEP assistance customer satisfaction measures EWI, CAMP, and other Edison Centers collect, on an annual basis, performance measures that include: number of services initiated number of establishments assisted number of return/repeat customers number of minority and women-owned businesses assisted total value of contracts and awards to the center number of businesses created number of people trained CAMP, Georgia's Manufacturing Extension Alliance, Iowa's Center for Industrial Research and Service, Maryland's Technology Extension Service, and North Carolina's Industrial Extension Service all participate in the Manufacturing Extension Partnership (MEP) program of the National Institute of Standards and Technology (NIST). The NIST MEP program has established a rigorous assessment process. In addition to collecting data on project client impacts, MEP has developed Criteria for Center Performance Excellence. The criteria are adapted from the Malcolm Baldrige National Quality Award, a national program sponsored by the U.S. Department of Commerce that recognizes high performance companies. The performance criteria identify functional areas in which the centers are expected to excel and provide a vehicle for identifying and sharing best practices. MEP centers track performance in the areas of: customer and regional impact results short-term indicators of customer impact, including changes in sales, capital investment, productivity, and employment measures of regional economic impact, including change in real total or per capita regional income, regional employment, and market penetration percent of the centers' SME population served with value-added work patterns of market penetration by industry, size, region, first time vs. repeat customers financial profile assets and liabilities revenues and expenditures customer satisfaction profile of customer ratings; repeat business, referrals, and complaints capacity utilization and operational efficiency percent of total available center staff hours spent delivering services total expenditures per available center staff hour employee well-being and satisfaction (measures can include absenteeism, turnover, and the results of employee surveys) Direct feedback from industries with whom TTCs and MEPs have worked is also important in providing performance information needed to make program adjustments. Most manufacturing extension services conduct follow-up with corporations that they have served. Georgia's Manufacturing Extension Alliance, for example, conducts surveys by mail and telephone to follow-up with firms about the timeliness, satisfaction, money and time invested in a project, cost savings and revenue generated from an extension service project. They also track the number of inquiries made to field agents on specific topics and the amount of time field agents spend on specific types of services. This information along with industrial needs surveys and impact data provide invaluable input needed by program administrators to make program adjustments to insure that services meet the changing needs of technology SMEs and achieve economic objectives. Back to Top   LESSONS LEARNED The following are some of the lessons learned by successful U.S. and European technology transfer and manufacturing extension programs. Some of these lessons may provide preliminary guidance to the Technology Transfer Centers (TTCs) in Poland. One of the foremost lessons, however, is that these programs must grow out of and reflect the economic, institutional, and cultural conditions of their settings. As the FABRYKAT 2000 program progresses, we will tailor these and other lessons to the specific needs of the TTCs and their clients. TECHNOLOGY TRANSFER AND MANUFACTURING EXTENSION AS PART OF A LARGER SYSTEM Technology transfer and manufacturing extension programs operate as part of a complex technology system: Successful technology transfer and manufacturing extension services are part of a process that involves multiple services and support for technology-based enterprises. This includes internal and external sources of financing, business assistance, technology assistance, marketing and export assistance, legal help, and networking opportunities. Technology transfer centers play an important part in the technology process, but they are only part of a larger, interrelated system. Legal, regulatory and tax structures should be in place that provide incentives for technology-based firms: Successful programs operate in an environment where there are legal structures that protect proprietary rights, provide incentives for start-ups, give credits for adapting advanced technologies, and promote entry into new markets. LINKAGES WITH R&D RESOURCES Forming linkages with the sources of research and development: In most successful communities, it is the universities, government research institutes, and private research and development (R&D) institutes that have formed the base upon which high tech firms have been built and manufacturers advanced. In the United States, universities particularly have been important in providing a foundation for high tech enterprise development. Encouraging the participation of university and government institute researchers: University professors and government institute researchers respond best if they have a self-interest in seeing that their work is commercialized. Successful technology transfer programs work with the universities, government institutes and other R&D sources to develop appropriate incentives for researchers to collaborate with industry. This may be developing systems for monetary rewards or other meaningful commendations such as giving added consideration toward tenure or prestigious awards. Directors in successful technology transfer centers work with heads of government institutes and universities in order to structure such incentives. Using universities and government institutes to build credibility: Linkages to universities and government institutes are often used to provide a technology transfer center with credibility, and contrary to common perception, usually do not provide more than a minor part of technical assistance to small enterprises. INDUSTRY-DRIVEN TECHNOLOGY TRANSFER Industry vs. university-led technology transfer: At the same time that it is important for technology transfer centers to form linkages with universities and government institutes, these institutions should not dominate the technology transfer agenda. Although most of the United States's best technology transfer programs were originally university-centered, as the programs matured, they increasingly became more industry-focused and industry-driven. Funding directed to private enterprises: Until recently, many state programs provided funding, through competitive bids, to universities to perform university-industry collaborative R&D. In order to promote more industry-led R&D, several successful state programs have changed their funding systems and now provide direct funding to private enterprises to conduct collaborative R&D. Matching requirements: Most successful programs require matching from enterprises as a funding requirement for collaborative R&D and/or receiving other types of grants and investments. This helps ensure that there is private sector value in the R&D and that the R&D is not being performed for pure scientific interest alone. ASSISTANCE TO AND NETWORKING SMES Focusing technology transfer center services on SMEs: In the United States, SMEs have been the engine that has driven high technology growth. SMEs have been found to be more flexible and innovative than larger enterprises. Technology transfer centers can provide the opportunity to link SMEs with sources of R&D that would otherwise only be available to larger enterprises. Membership programs at technology transfer centers and programs that subsidize collaborative R&D can provide cash-poor start-ups with access to R&D at minimal expense. Targeting clusters of SMEs: Manufacturing extension programs sometimes provide services to groups or networks of SMEs that have a common industrial base or that are linked together in a supply chain. This method can reduce costs and help create a synergy among SMEs that supports regional technology growth. PROGRAM STRUCTURE Hiring the right staff:  Hiring the right staff is always one of the highest priorities of successful technology transfer and manufacturing extension programs. Most successful center directors say that business experience is the most important criteria when selecting staff for both manufacturing extension and technology transfer programs. Many programs require, or at least prefer, 5 to 10 years of business experience, giving the greatest preference to those who have started their own enterprises or worked with entrepreneurial high-tech enterprises. Centers usually prefer engineers, particularly those with a masters in business administration, for technical support and field staff positions. Directors of most successful technology transfer programs also say that business know-how is more important than science and technology expertise, although it is best if staff have both. The most successful programs are those with staff who can speak the language of business and the language of researchers. Field staff play a valuable role: Manufacturing extension programs particularly benefit from placing technology and business specialists in various locations throughout the region. Staff who have worked in a specific geographic area are usually particularly well received by local business people. Using consultants vs. in-house staff: Many successful programs make heavy use of consultants. Consultants may provide from 25 to 75 percent of services to client firms. The advantage of using consultants is that it allows technology transfer and manufacturing extension programs to benefit from specialized expertise. By screening consultants, centers develop rosters on the basis of training and experience. The centers provide referral services to client firms that match consultants' expertise with specific firm needs. There is some controversy about the use of consultants vs. the use of in-house staff, since directors of some successful centers discourage the use of consultants in favor of building in-house expertise. In part, this depends on the size of the center, with smaller centers that have limited in-house staffs benefitting most from the use of consultants. Boards can be used for multiple purposes: Boards overseeing technology transfer centers should include representatives from all of the sectors that make up the technology infrastructure -- that is, universities, government laboratories and institutes, large and small technology enterprises, banking and financial institutions, business organizations, and political entities. Some of the more successful technology transfer programs require that business and industry representatives make up at least half of the board. Boards overseeing manufacturing extension services have a similar composition, but usually have fewer R&D institutional representatives and more manufacturing, business, and often labor representation. Boards formally review the activities and financial standing of the technology transfer center or manufacturing extension service and provide input (and sometimes have ultimate authority) in planning. Boards most often involve prestigious members from the community who have established relationships with the media and hold visible positions in their fields. Centers can effectively use their board members to promote the center's activities and to help build the center's credibility in the community. Building trust: Although trust and credibility in the business community usually is built over time, technology transfer and manufacturing extension programs can take a number of steps to facilitate business acceptance of the program. They can do so by hiring staff with solid business experience, hiring locally recognized professionals, developing linkages with respected institutions, and using successful businesses that have benefitted from the center/extension program to promote services among their colleagues. Manufacturing extension services also often use field staff, who are located in their own communities and who are known locally, to help build program acceptance. Promoting success stories, particularly when told by successful firms to other firms through workshops, media, and other opportunities, is one of the most effective ways to build credibility. Directors of successful U.S. programs say that building credibility and trust for technology transfer and manufacturing extension programs can easily take a decade or more to be accomplished. DEVELOPING AND MARKETING SERVICES Marketing services to client firms: Developing marketing strategies to attract clients is critical. Successful technology transfer and manufacturing extension programs can at minimum place advertisements in selected media targeted to technology SMEs; feed the media success stories; present services at meetings of chambers, industrial associations, scientific meetings and other places where technology enterprises gather; contact firms targeted by industrial sector, size and/or development stage; conduct free or low-cost seminars, luncheons, and other fora to attract firms; and conduct personal follow-up with individual firms. Assessing industry needs: The U.S. Manufacturing Extension Partnership (MEP) program requires the extension services they fund to conduct industry needs assessments. Whether these assessments are conducted formally through surveys or informally by querying business representatives, industries should be consulted on an on-going basis to determine their needs and interests. Services should be reviewed and updated at least annually, since industry needs can change quickly. Boards can provide input, but centers should not rely solely on boards, since members may be out of touch with mainstream small enterprises. Business and technology specialists/field staff who work on a day-to-day basis with firms often provide the best input into structuring appropriate services. Conferences, workshops, and seminars: Many beginning technology transfer centers focus on conferences, workshops and seminars. They use these activities as a way to initially attract client firms and advertise the center. They find the most value from conferences and workshops by following-up with firms afterwards to market direct services. Often centers charge little or no fees for conferences and workshops, using them as loss leaders for follow-on activities. “Hands-on” services: Successful manufacturing extension programs provide a substantial portion of their services in direct hands-on services to client firms. This usually involves conducting technology audits; providing advice with selection, purchase, and installation of equipment; and business and management advice, training, and other services needed by firms in specific industrial sectors and regions. Although information services such as data searches, newsletters, and seminars can provide important information to firms, these services should consume a small part of staff time and expenses and they should not be used in place of direct services to firms. Business services vs. technology services: Directors of many successful technology transfer and manufacturing extension programs say that business services are by far more important than technical services to their client firms. Most high-tech enterprises with whom technology transfer centers work have considerable expertise in their particular field and know where and how to access technical knowledge. But most are weak in business, management and financial aspects of enterprise development and require substantial assistance in these areas. New technology transfer centers often make the mistake of building up their technical expertise and linkages with technology resources rather than concentrating on building up business and financial expertise. As technology transfer centers mature, they tend to de-emphasize the technical assistance and build in-house expertise in management and financing, and develop linkages with external business sources. Investment and financing assistance: It is critical that technology transfer centers and manufacturing extension services structure financial assistance or develop linkages with sources of financial assistance for high tech SMEs. Enterprises are often frustrated and lose confidence in technology transfer centers when the enterprise can not carry out advice from the center because it does not have the financial means to do so. Manufacturing extension and technology transfer programs fail when they do not develop the critical linkages needed to financially support enterprises to implement the technology and manufacturing advice. SELECTING ENTERPRISES FOR INVESTMENT AND SERVICES Targeting client firms: Although most programs do not advertise or may not even admit that they target firms, most successful programs give preference to certain types of firms over others. They may do so based on targeted industrial sectors that are of primary importance to the region. Many technology transfer and manufacturing extension programs also try to fill a gap not being met by the private sector. For example, some programs target firms in the 50-250 employee category, since above that, the firm can pay for private sector services and, below that, they may not be able to pay for any services. Manufacturing extension programs may target firms that are technologically advanced enough to understand and absorb new technologies, but not so advanced that they cannot benefit from the extension services. Most manufacturing extension programs will not work with firms that are on the bottom rung of the business ladder nor on the very top rung. Selecting firms for funding and investment: Exemplary technology transfer programs and to a lesser extent, manufacturing extension programs, have selection processes by which they select enterprises for funding and investment. Based on a U.S. National Science Foundation model, most states have chosen to have two types of advisory committees -- a technology committee and a business committee -- that select enterprises for investment. The technology committees are typically composed of experts from universities and other R&D institutions. There may be one committee made up of experts from different fields, or in large programs, multiple committees that specialize in specific fields. The business committees are typically composed of representatives from banking, venture capital, large firms, accounting and management consulting firms, and successful entrepreneurs. Sometimes technical and business committees are structured to overlap, with one or two of the members from one committee also sitting on the other committee. Normally, client firms must first pass the technology committees review before it proceeds to the business committee for review. Final selection may be up to the program's board or the program's director. This dual-stage system has proven quite successful. FUNDING ISSUES Developing self-sufficient centers: Although making TTCs self-sufficient is usually a government goal, this has rarely been accomplished in the United States or elsewhere. Most technology transfer centers and manufacturing extension programs that are considered successful are not self-sufficient, and rely on government funding for at least half of their revenues. For example, the U.S. Congress mandated that the Manufacturing Extension Partnerships were to become completely self-sufficient in their sixth year. When none of the MEPs could meet this criterion, the mandate was changed to continue providing one-third of funding from the federal government, one-third from state governments, and one-third from fees-for-service. Technology transfer and manufacturing extension services have developed successful fee-for-service programs, but centers should be realistic about how much private enterprises contribute to the total budget. Product development is often a more profitable source of income than fees for service. But it is unusual for fees from services or product development to contribute more than one-third of a center's revenues. A tradeoff between program self-sufficiency and helping small enterprises: There is often a trade-off between a center assisting start-up enterprises that cannot afford services and assisting more mature enterprises that may not need the services as much as the start-ups, but can afford to pay for them. Manufacturing extension services also encounter a dilemma between providing services for more advanced manufacturers that can afford to pay for services and less advanced manufacturers that may not be able to pay for them. When structuring grandfather clauses or phasing out of public support for technology transfer and manufacturing extension programs, political and government leaders should be aware of these economic development tradeoffs and their consequences. ADAPTING MODELS FROM ONE COUNTRY TO ANOTHER Numerous TTC and MEP programs throughout the world have been adapted from one country to another, only to witness successful programs in one country fail in the other. This happens when programs: are oversimplified are not understood to be part of a larger process are not supported by appropriate legal, financial, and regulatory structures do not take into account different cultural factors Programs may be considered best practices in one country because they operate well within the environment in which they are located, but they may not necessarily operate as successfully in another environment. Policy makers and program administrators should not expect that models or best practices can simply be transferred to their country with the same result as in the country of origin. Rather, they can expect that processes that have been successfully implemented in one country can be successfully adapted when taking into account the needs of indigenous enterprises, the receptiveness of these enterprises to change, the cultural makeup of the country, and the context of the governmental, political, legal and financial structures in their particular region and nation. Back to Top   MODEL A INTEGRATED MANUFACTURING EXTENSION, TECHNOLOGY TRANSFER, AND WORKFORCE DEVELOPMENT    BEST PRACTICE EXAMPLE CLEVELAND ADVANCED MANUFACTURING PROGRAM AND GREAT LAKES MANUFACTURING TECHNOLOGY CENTER (CAMP/GLMTC)   I. OVERVIEW AND FOCUS In 1983, the State of Ohio organized the Thomas Edison Technology Centers to address the decline in its manufacturing sector, which had been hurt by a protracted slump in international trade, the movement of jobs to the Sunbelt and abroad, industry restructuring, and major technological developments. A total of seven centers were established, each of them linking a major university with technology-based businesses throughout the state: Cleveland Advanced Manufacturing Program (CAMP), Cleveland (see below): CAMP provides manufacturing, engineering, and other services for manufacturers. Edison BioTechnology Center, with sites in Cleveland, Columbus and Cincinnati: The Center promotes the growth of the biomedical and biotechnology industries. Edison Industrial Systems Center, Toledo: This center emphasizes manufacturing modernization, including advanced imaging, applied coating technologies, food manufacturing technologies, quality improvements, and minimizing waste products. Edison Materials Technology Center, Kettering: The Materials Center helps solve problems and conducts research for manufacturers in materials and processing technologies, including metals, ceramics, composites and polymers. Edison Polymer Innovation Corporation, Akron: This program provides applied research and development of new materials and processes to support polymer technology. Edison Welding Institute (EWI), Columbus: EWI, which is described in the following case study, provides materials joining and engineering expertise to manufacturers throughout the United States. Institute of Advanced Manufacturing Sciences, Cincinnati: This center provides assistance to manufacturers in several areas, including waste reduction, machining, operations analysis, industrial engineering, energy conservation and computer aided planning. The Cleveland Advanced Manufacturing Program (CAMP) was organized in 1982 when a local economic development organization (Cleveland Tomorrow) brought together 50 corporations in Cleveland to develop and apply technological solutions to manufacturers and to develop a technologically advanced workforce. These organizations were integrated into one organization and shortly after being formed became part of the state's Thomas Edison Program, a new program to serve the technological needs of the state's industries. Through the years, CAMP has gone through several transitions. Originally linked closely with universities with a primary focus on university-industry R&D, the program in more recent years has increasingly emphasized direct manufacturing services to firms. Moreover, the program has worked to serve the technology and business needs of SMEs. The program continues to receive substantial funding from the state. In 1988, CAMP was designated as one of the three original Manufacturing Extension Programs funded under the federal Manufacturing Extension Partnership program. CAMP has developed some innovative fee-for-service activities and, unlike many other technology transfer centers, additionally provides some workforce development services to SMEs. Unlike the Ben Franklin Technology Center in Southeastern Pennsylvania (BFTC/SEP) [see Model B], which focuses primarily on research and development, CAMP focuses on manufacturing extension and adapting technological advancements to existing manufacturers. And unlike the BFTC/SEP, CAMP devotes almost no resources and staff effort to investment vehicles for SMEs.  II. STRUCTURE CAMP is structured as a non-profit corporation overeseen by a board of 14 people. By legal mandate, industrial members must constitute the majority of the board and the chairperson of the board must be from industry. Small and large firms are equally represented. Industrial members are named by a local economic development organization (Cleveland Tomorrow). Three board members come from the three affiliated education institutions and are named by the president of those institutions. Other members are from the National Aeronautics and Space Administration (NASA) and the financial sector. As one of seven centers that compose the Thomas Edison Program (TEP), CAMP receives funding from the state for research and development and seed capital. TEP also supports an affiliated incubator in Cleveland operated by a separate private non-profit organization. The Great Lakes Manufacturing Technology Center (GLMTC), a division of CAMP, is part of the federal Manufacturing Extension Partnership (MEP) program operated by the U.S. National Institute of Standards and Technology (NIST). GLMTC has enabled CAMP to extend its manufacturing services to additional SMEs and to smaller firms. GLMTC is completely integrated into CAMP's services and activities.  III. REVENUES AND EXPENDITURES CAMP's revenues for the fiscal year 1998 were $38.3 million. About 80 percent of the total revenues came from grants and contracts. Almost all of the grants and contracts (95 percent) were from public sources. About 38 percent of the grants and contracts come from the federal government's MEP program and local matching funds. Another 12.5 percent of the revenues were in the form of projects contracted from private sector firms. The small remaining revenues came from a combination of corporate membership, investments, events (such as conferences and seminars), and other extraneous activities. About $7.7 million, or 20 percent of all revenues, came from fees-for-service. Program costs made up most of the expenses, with less than 8 percent of expenses going to administrative costs. Of the program costs, about 80 percent were spent on deployment activities, which are direct manufacturing extension services to firms, primarily small and medium sized enterprises (SMEs). About 10 percent of expenses are devoted to workforce and human resource development, and the remaining 10 percent of expenses are devoted to research and development and work wear renovation.   IV. STAFFING CAMP is operated by a staff of 180 full-time employees, of whom about 160 are professionals. Most of the staff are technical specialists, of which the majority are engineers. About 15 professionals are sales and marketing specialists, five of whom are located outside of Cleveland in various locations throughout the state. Another 15 people are operational staff in accounting, contracting, and human resources. CAMP's director believes that it is critically important to build up in-house professional capability. Unlike many other centers, three-fourths of manufacturing services are done by in-house professionals. In-house technology specialists are required to have manufacturing experience, with most of them having between 5-10 years. CAMP seeks engineers with MBAs who have technological knowledge and business know-how. The program is increasingly recruiting younger professionals in engineering who are up-to-date with new technologies. Turn-over of technology specialists is high, but intentional. CAMP's director believes that technology specialists should have a tenure of a few years and then take jobs with private industry to continue to promote technological advancements from within the firm.   V. CLIENTS Almost 95 percent of CAMP's clients are SMEs. Most of these firms have 50-250 employees. CAMP has targeted this size firm because they are large enough to pay for outside services and small enough that they can not afford the services of large consulting firms. CAMP has also targeted SMEs in specific industrial sectors that dominate the region. About 80 percent of CAMP's clients are in the following manufacturing sectors: fabricated metals durable mechanical equipment electrical equipment plastic products transportation About three-fourths of these firms work in defense-related industries.  VI. SERVICES Services are continuously evolving and being updated in order to keep up with the industry's needs. CAMP's director contends that what works one year will not necessarily work the next. For example, total quality management (TQM) was popular with firms just a few years ago, but it is now considered passé by most firms. CAMP focuses most of its services on technology assistance. An unusual feature for a U.S. center is its manufacturing equipment automation service in which the center proactively works with firms to design and build manufacturing equipment. This type of activity is more typically seen in European centers such as Germany's Fraunhofer Gesellschaft, which is described in a separate case study.  Technology and Business Assistance CAMP's deployment services made up about 80 percent of all of CAMP's services. The most important of these services during 1998 were: manufacturing engineering quality and ISO 9000 manufacturing equipment automation manufacturing software selection and deployment electronic commerce services industrial marketing change intervention workforce training Through its manufacturing equipment automation program, the GLMTC division of CAMP subcontracts to the Advanced Manufacturing Center at Cleveland State University to work on manufacturing design, production, and testing that is customized to a manufacturer's specifications. CAMP's electronic services help manufacturers market their products and processes. Workforce development is considered a change intervention tool to help advance manufacturing skills. Unlike many centers, about 75 percent of manufacturing extension services are handled by in-house staff. Outsourcing to consultants is usually done because of a specialized technical need that cannot be met by in-house staff. Consultants normally are drawn from the private sector and are predominantly engineers. On occasion, university professors provide consulting, but this is not the norm. Research and development now constitutes a small part of CAMP's services (about 5 to 7 percent of total expenditures in FY 98.) This has dropped substantially from the early days of the program, when R&D activities constituted about 80-90 percent of expenditures. The actual dollars devoted to R&D have remained steady at the same time that manufacturing extension revenues have increased dramatically. R&D is performed on a contract and membership basis at CAMP's locations at Case Western Reserve University and Cleveland State University. Many of CAMP's deployment services, R&D, and workforce training are provided through CAMP's affiliated centers: Advanced Manufacturing Center. The Advanced Manufacturing Center at Cleveland State University specializes in research and is a problem-solving resource for manufacturers. They specialize in automation machinery design, vibration and thermal analysis, jet assisted cutting, customized software development and in many others areas. The Cleveland center works with more than 100 local, national, and international companies. The Center for Automated Intelligence Systems Research. The Center for Automated Intelligence Systems Research at Case Western Reserve University has developed software for flexible manufacturing, and new ways to apply soft intelligence to production lines to improve productivity, automation machinery design, jet-assisted cutting techniques, vibration and thermal analysis. Manufacturing Learning Center. In partnership with Cleveland State University and Cuyahoga Community College, CAMP runs the Manufacturing Learning Center to provide training programs for small and medium-sized manufacturers in northeastern Ohio. They use new manufacturing facilities to conduct hands-on training. They also help 600 defense-dependent small firms commercialize old or new technologies for the civilian market. Plastics Deployment Technology Center. The Plastics Deployment Technology Center, a division of CAMP, is a one-stop resource for any manufacturer involved in the plastics industry. The center develops new technology as well as working on existing products and processes for manufacturers. It also provides education and management services for small plastics firms. Center for Employment Training. The Center for Employment Training in Cleveland is training economically disadvantaged adults. The Center is a partnership among CAMP, the City of Cleveland, Cuyahoga County, and the Urban League of Greater Cleveland. The goal is to train 300 disadvantaged people by the year 2000 in machine tools, welding and shipping and receiving. Thus far, the Center has trained 60 workers and placed 34 of them, a 60 percent placement rate. Electronic Commerce Center. The Electronic Commerce Center, located in Cleveland (but not at a university) is a CAMP center that trains people in automated manufacturing and on-demand manufacturing of replacement parts for aging U.S. military jets. The Electronic Commerce Center has trained more than 4,000 people from firms in the Great Lakes region. They have also helped firms take advantage of Internet-based business systems by training 425 employees and helping firms develop Internet marketing strategies.  Financial Assistance and Investments in Firms CAMP does not give financial assistance directly to firms. In earlier program years, CAMP tried to develop financial assistance programs, but did not find them effective, since many of the firms with whom they worked had already established relationships with local banking institutions. The exception is that CAMP will engage in a royalty-payback arrangement with firms that purchase equipment through CAMP's Advanced Manufacturing Center, but this has been done with only a few firms. However, the U.S. National Institute of Standards and Technology (NIST) has provided financing through its Advanced Technology Program, with awards totaling $29 million to organizations and businesses in Ohio since 1989. This included several collaborative projects performed through CAMP and the GLMTC. In 1998, CAMP became a partner in a for-profit corporation called Total Facilities Technology, a limited liability corporation. The corporation provides facilities management, maintenance, planning, and design assistance to new business startups. CAMP provides facility design, information systems consulting, and a range of other services through this corporation. The State of Ohio additionally gives taxpayers a tax credit for investing in research and development and technology-oriented businesses.  Marketing Services to Clients CAMP aggressively markets its services to clients. CAMP targets SMEs for marketing activities by sorting various mailing lists by SIC codes (industrial codes developed by the federal government). Since its inception, CAMP has contacted over 10,000 firms to determine their service needs and to market services to them. Other marketing efforts involve: disseminating multiple publications including brochures, a bi-monthly newsletter, quarterly journals, and weekly mailings announcing events announcements and advertising on public radio, local newspapers, and news media sources directed to SMEs placing bill boards on highways convening seminars and workshops telemarketing pro-active direct marketing by CAMP's sales staff These marketing tools serve not only to attract potential clients, but also to inform the public and particularly policy makers about the program and its activities. Another successful marketing tool is industry seminars. CAMP also conducts more than 100 seminars each year on specialized topics of interest to targeted SMEs. Last year some of the most popular topics included: lean manufacturing ISO 9000 Year 2000 problem environmental regulations CAMP charges a small fee (less than US$ 100) per seminar. Seminars are considered to be a loss leader and are designed as much to attract firms to learn about CAMP and to market CAMP's services as they are to educate SMEs on the particular subject.  VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES CAMP has linkages to over 50 partners including universities and education institutions, business and industry organizations, extension services, labor-management councils, labor organizations, employment and training programs, and other development-related organizations. CAMP is affiliated with three major educational institutions -- Case Western Reserve University, Cleveland State University and Cuyahoga Community College -- with which it conducts technical and extension services. CAMP is the prime contractor for five regional electronic commerce centers sponsored by the U.S. Department of Defense. Two of these centers are in Ohio in Cleveland and Dayton. Other linkages are maintained with the Department of Commerce and its many sources of assistance for universities and businesses. CAMP also actively works with labor-management councils on certain projects. CAMP works with the NASA Lewis Research Center in Cleveland to transfer technology to firms for commercial applications. It also maintains relationships with the Great Lakes Industrial Technology Center, one of NASA's six Regional Technology Transfer Centers.  VIII. PROGRAM RESULTS Since CAMP's inception, its agents have made at least one visit to nearly 4,000 firms. A total of 2,547 projects have been completed or are in progress with over 1,000 regional companies. Each year CAMP works on 20-30 large manufacturing automation projects for larger firms, conducts a range of engineering and management projects for 150-200 firms, and performs diagnostic assessments for another 150-200 companies. In addition, staff performed 500 fee-for-service projects in 1997. CAMP's director estimates that they are successful in over 50 percent of the companies they serve. A third-party evaluation is currently being conducted that will give further program results. The evaluation will be made public in early 1999.  IX. STRENGTHS AND WEAKNESSES CAMP is an example of a well-integrated manufacturing extension service within a larger technology context. CAMP began as a technology transfer center that focused on R&D with secondary services in manufacturing extension and workforce development. Designated as one of the first three national Manufacturing Extension Partnerships in 1989, CAMP has increasingly focused on manufacturing extension. In recent years, its focus has been almost exclusively on manufacturing extension. Its Great Lakes Manufacturing Technology Center (the MEP), which is technically a division of CAMP, is fully integrated into CAMP and plays a dominant role in all of the Center's activities. Unlike many other centers, CAMP has concentrated on developing in-house staff rather than relying on external consultants. Its director also encourages close interaction between extension staff and firms. This serves an important purpose of providing feedback to the Center on firms needs. CAMP's director views the Center itself as a business, operating to serve the needs of its clients. As a business, it operates to maximize its bottom line -- by increasingly selling its services. It judges its success by the willingness of businesses to pay for services and return for additional services. It prides itself on being industry-driven. Like the private sector, CAMP uses aggressive marketing campaigns, employing a range of techniques from placing advertisements on billboards to direct cold calling of targeted firms to using all types of news media. CAMP has a designated sales staff who are responsible for marketing services to firms. This is quite unusual for a non-profit or quasi-government organization. It has been very effective in attracting business and manufacturing clients. CAMP's future plans include further increasing direct sales of services to manufacturers. CAMP's ties with universities have been minimized and it also operates at a good distance from government. Its budget has become more diversified with income coming from different levels of government (state, federal and local), different agencies, and the private sector. The center is physically located in the industrial and business area of the city, apart from universities and government buildings. This provides an additional visible cue of its business stance to the private sector. For the Polish Technology Transfer Centers, CAMP provides a solid example of a mature program that is increasingly industry-driven and focused on the needs of its region's manufacturers. It is weaker than some technology transfer programs in terms of the transfer of advanced science and technology, but this is of little practical value to most of the area's manufacturers. The program has stayed flexible and has kept abreast of its clients' changing needs. Back to Top    MODEL B COMPREHENSIVE TECHNOLOGY AND INVESTMENT SUPPORT FOR TECHNOLOGY ENTERPRISES   BEST PRACTICE EXAMPLE BEN FRANKLIN TECHNOLOGY CENTER OF SOUTHEASTERN PENNSYLVANIA (BFTC/SEP)   I. OVERVIEW AND FOCUS Pennsylvania's Ben Franklin Technology Partnership (BFP) supports four Ben Franklin Technology Centers, each of which covers a portion of the state and is intended to meet the specific needs of the region. The four centers operate in a rich and well-developed system of technology transfer and manufacturing extension. The state system includes a wide variety of technology programs, manufacturing and business extension, research and development grants, and business investment. Core programs are the four BFP centers, several additional Industrial Resource Centers (IRCs), which provide manufacturing extension services, and the Pennsylvania Technical Assistance Program (PENNTAP), which provides business extension. Financing programs include the Challenge Grant Program for Technological Innovation (Challenge Grants) and the Seed Venture Capital Funds. Started in 1983, the BFP is one of the oldest and most respected technology programs in the United States. The Ben Franklin Technology Center of Southeastern Pennsylvania (BFTC/SEP) is intended to address a wide array of technology and financial needs of its region's small and medium-sized enterprises (SMEs). Since its inception 15 years ago, BFTC/SEP has gone through several major changes and has refocused its activities. Originally the Center focused heavily on informational services to firms, supporting R&D at local universities, brokering collaborative relationships between universities and technology enterprises, and assisting entrepreneurs and technology start-ups and early-stage firms through third parties. In recent years, BFTC/SEP has refocused its activities to target more mature firms. Moreover, it increasingly is integrating investment and technology services rather than treating them separately. Some refocusing has been the result of the need for increased revenue at a time when state funding of the Ben Franklin Partnership has leveled off. Other changes such as a shifting emphasis on direct services to enterprises and a de-emphasis of university involvement has been the result of trial and error. II. STRUCTURE BFTC/SEP, like the three other BFP centers, was incorporated as a private non-profit corporation affiliated with universities. In the early 1990s, BFTCs were restructured into independent non-profit corporations to provide them with greater flexibility in addressing technological needs of enterprises. In particular, this gave them greater investment flexibility, allowing them to invest state and private funds in higher-risk enterprises. A board of 24 members oversees the Center -- 35 percent from universities and other non-profit organizations, 65 percent from for-profits. The board meets four times per year and is responsible for oversight, direction setting, and strategy. In addition to the board, there are investment committees and technical committees composed of over 150 volunteers from the community. There are three investment advisory committees, two that address early-stage enterprises and a third that addresses mid-stage enterprises. Representatives from venture capital companies, banks, and small business experts including small business owners, sit on the investment advisory committees. There are five technical committees each addressing specific science and technology areas: information technology, environment, medical and biomedical, materials, and manufacturing/sensors. Representatives from universities and R&D directors of private corporations sit on the technical committees. These committees screen potential candidates for funding. (The screening process is described under Investment Services.)  III. REVENUES AND EXPENDITURES The Center's total funding for FY 1998 was about $6.5 million of which $6 million came from the state Ben Franklin Center Partnership. The remainder came from federal and other state sources.  IV. STAFFING The Center has a total of 33 staff, 17 of whom are professionals. The professional staff is structured as follows: Technology services: 6 Investment services: 6 Marketing: 1 Research and information: 1 Management information systems: 1 Finance, human resources and administration: 2 V. CLIENTS The Center has an active portfolio of over 200 companies, most of which are SMEs with fewer than 250 employees. They range from start-up companies to pre-commercialization stage firms.  VI. SERVICES BFTC/SEP provides two major types of services: technology services and investment services. In addition, it offers some workforce development, community development, and other services. Most efforts are directed to investment services, with an increasing amount of time devoted to technology services. General information services, conferences, and seminars are minimal and are considered less effective than direct services to SMEs. In addition to services provided to SMEs through staff located at the University City Science Center, BFTC/SEP provides services through field agents located throughout the Southeastern region of Pennsylvania. BFTC/SEP funds four agents, some of whom are located in Industrial Development Corporations in several counties of the region. Field agents extend the reach of the Center's services to SMEs in less urbanized areas. The Center staff uses a variety of methods to inform SMEs about services. The staff make presentations at local business organization meetings, promote success stories through the press, post web sites, and pursue on-going contact with financial institutions and business organizations that serve SMEs. Center staff also conduct cold calling to selected SMEs using various business databases to target them by at least industrial sector and size.  Technology Services Technology Extension Partnership (TEP). This program maintains formal agreements with federal laboratories, universities, synergistic companies, and technology transfer agencies. The different goals and motivations of these entities can make its projects extremely time consuming and expensive for individual companies to seek their assistance. However, TEP's extensive technology network and experience in structuring projects allow it to expedite the process for client companies. The staff consists of specialists with Ph.Ds and MBAs as well as work-related experience covering a wide range of scientific and engineering disciplines. The client portfolio includes manufacturing and technology companies typically with over $2 million in revenues. Centers-of-Excellence Service Network (COE). These centers are located at local universities and R&D institutions to provide enterprises with consulting and laboratory resources. BFTC funding is matched by that of the enterprise. The Technology Loan Fund and the Applied Research and Development Fund provide additional funding for longer-term research projects and product/process development. There are currently eight centers at several local universities: West Chester University, Villanova University, Drexel University, and Thomas Jefferson University, and two R&D institutes: Wistar Institute and ECRI. Business Information Service. BFTC/SEP provides companies on-line search capabilities through its information specialists. BFTC/SEP has access to 5,000 databases that help enterprises locate and interpret information on market research, competitive positioning, government and international regulations, suppliers and distributors, potential manufacturing partners, and identifying solutions to technical problems. The most frequently requested services are: current market and industry trends statistical data series and projection market shares competitor analysis marketing strategies pricing and distribution channels patent and trademark analyses R&D abstracts BFTC charges fees to enterprises for these services. Fees range from $300 to $500 per search. TechScout. Through this program, BFTC staff and consultants help enterprises locate technologies to advance product development. They provide a technology push service by identifying new technologies coming from federal laboratories, universities, and other sources and adapting the technologies to enterprises. They also provide market pull services by identifying product needs within a specific firm and then searching for new technologies through local and national networks of R&D institutions. FedTAP. The Federal Technology Access Program (FedTAP) is aimed at transferring and commercializing technologies from federal laboratories. The consortium has support from the National Aeronautics and Space Administration (NASA). Through its FedTAP program, BFTC has established relationships with 12 federal laboratories. FedTAP agents help identify federal laboratory equipment and facilities and laboratory scientists and engineers to assist enterprises with R&D activities. FedTAP agents help broker contracts and cooperative agreements between enterprises and the federal laboratories. FoodTAP. This program is aimed at helping enterprises meet research, manufacturing, and product development needs in the food industry. BFTC has established relationships with four research centers and industrial/business organizations for this purpose. Like the FedTAP program, agents identify expertise, equipment and facilities, and R&D and broker agreements between these sources and enterprises.   Investment Services In order to receive funding from one of the several seed and investment funds, enterprises apply to the BFTC. Their projects are assigned to a technical advisory committee for review. The technical committee judges the application for its technical merit using the following criteria to judge funding applications: validity of the R&D concept potential for short-term commercialization credibility of the principals If the application receives a favorable review from the technical advisory committees, the proposal is assigned to a due diligence reviewer, who is a paid consultant charged with visiting with the company and assessing its business strengths and weaknesses. These consultants produce a report for the investment advisory committee. The enterprise's application then proceeds to the investment committees. The investment committees review the enterprise from a management and financial standpoint, including: management experience and business credentials financial soundness understanding of the market and the competition barriers to market entry time scale to realize return-on-investments Once an investment is made, a portfolio manager is assigned to oversee the investment. The portfolio manager provides mentoring to the firm, and where needed, provides technical assistance on specific problematic areas. More recently, a firm-to-firm mentoring program has begun in which more experienced firms mentor less experienced firms that have received investments from BFTC. If enterprises are rejected for funding, BFTC debriefs the enterprise and refers them to sources for remediation. BFTC is particularly interested in those firms that have potential scientific and technological promise that may be weak in business and management. According to the BFTC staff, some firms that do not receive funding on the first try return and receive funding on subsequent submissions. By debriefing firms, the application process provides feedback intended to strengthen the enterprises' knowledge of successful business planning. BFTC investments in enterprises are expected to be returned through royalties on product sales. The structure of the royalty agreements differs depending on the specific funding program, with start-ups and emerging companies required to pay 3 percent of their total sales up to two or three times the original investment, depending on the specific investment program. There are annual repayment caps over the first several years. This allows the company to mature and strengthen without the burden of high royalty payments hindering their growth. In addition, enterprises can pay off the investment early. BFTC currently has 200 companies in its active portfolio, and makes about 40 investments per year. Although different investment programs have different requirements and limits, the average investment is about $85,000/enterprise, with larger SMEs (above $2 million in annual sales) in later stages of development receiving an average of $150,000. An evaluation of the investment programs is currently underway, but preliminary results show that about 75 percent of the companies in which BFTC has invested are still in business. (This is considered an excellent rate.) In recent years, BFTC has begun to shift its investment focus. It has increasingly invested in later stage firms as opposed to start-ups and early-stage investments. It is also investing larger amounts in fewer firms. This appears to be as a result of the leveling off of state funding which has prompted the BFTC to pay more attention to the bottom line -- return-on-investments -- that is more easily achieved with safer investments. BFTC invests in enterprises through six major funds. Each fund serves a slightly different population and/or has different criteria, restrictions, and programs aims. Ben Franklin Enterprise Growth Fund. This program is designed for for-profit SMEs that are owned by individuals considered disadvantaged (such as minorities) or enterprises located in economically disadvantaged areas. Existing businesses can receive $25,000 and start-ups can receive $5,000. Funds can be used for: purchasing, relocating, or installing machinery and equipment purchasing inventory purchasing furniture and fixtures financing accounts receivable other working capital needs Emerging Company Investment Fund (up to $50,000). The program is intended to provide capital for product commercialization or development to companies that have a management team, R&D or production capabilities, and a marketing strategy. Funds cannot be used for overhead costs, equipment, or for sales and marketing efforts. Innovation Investment Fund (up to $150,000). This fund provides assistance to firms developing new technology or the application of existing technology in an innovative manner. The seed capital can be used for: product development technical development and commercialization (project must involve both) development of a prototype proof of technical feasibility conducting marketing feasibility studies, developing marketing plans or sales and marketing efforts (but these must be combined with other uses) Technology Improvement Fund (up to $250,000). This program provides financing for research and development and commercialization activities for established technology companies and manufacturers. To be eligible, a company must have at least $2 million in sales in the most recent fiscal year and must be located in Southeastern Pennsylvania. Funds can be used for: personnel supplies prototype development direct R&D expenses technical feasibility assessment field testing travel and other efforts to commercialize a new or improved product or process leasing of equipment Applied Research and Development Fund. This fund finances applied business R&D projects with a near to mid-term commercial outcome. The projects must be conducted as a joint activity between companies and non-profit research institutions. Financing ranging from $25,000 to $100,000 is generally awarded to the research institution though a company is eligible for 25 percent of the funds. The program is a cost sharing program, requiring a 1:1 match of state funds. Multi-year awards are possible. Technology Commercialization Fund. This program awards grants only to universities or research institutions for the commercialization of technology discovered and licensed by them. The outcome that is expected from an investment from this fund is the creation of a new company. Funds in excess of $100,000 can be awarded only with the participation of a venture capital firm. At least 75 percent of funds are to be used for university research to move toward a prototype or an initial trial. A maximum of $25,000 can be used for support of a management team. VII. LINKAGES TO BUSINESS, TECHNOLOGICAL, AND INVESTMENT RESOURCES BFTC/SEP has an extensive network of organizations with which it provides services and conducts outreach to SMEs. These include federal laboratories, universities, state industrial and technology extension services, and economic development organizations. Linkages to Universities and Federal Laboratories BFTC/SEP's Technology Extension Partnership has entered into memoranda of understanding with numerous federal laboratories throughout the nation, including those from National Aeronautics and Space Administration (NASA), Department of Defense (DoD), Department of Energy (DoE), and Department of Agriculture. These laboratories were chosen because they conduct R&D in major industrial sectors represented in the Southeastern Pennsylvania region. BFTC/SEP is also affiliated with six affiliated universities that conduct specific technical assistance and business services through its Centers-of-Excellence Service Network. Moreover, BFTC/SEP funds universities to conduct product development and technology transfer in collaboration with industries through Applied Research and Development funds and Technology Loan Funds. In recent years, however, linkages with universities have been de-emphasized in favor of direct technical services and direct investments in enterprises. Linkages to Other Technology and Manufacturing Extension Services BFTC/SEP has significant linkages with local and state industrial and technology extension services -- the Delaware Valley Industrial Resource Center (DVIRC) and the Pennsylvania Technical Assistance Program (PENNTAP). DVIRC is the federal designated Manufacturing Extension Partnership in Southeastern Pennsylvania and also the state-designated Industrial Resource Center. BFTC/SEP coordinates the following activities with the DVIRC: training development of regional manufacturing extension strategy product development assistance to the manufacturing sector BFTC and DVIRC refer clients to each other based on individual expertise and need with BFTC taking the lead in technology development and funding and the DVIRC taking the lead in manufacturing and process development.  VIII. PROGRAM RESULTS Since its inception, Pennsylvania's Ben Franklin Partnership, through its four centers, has helped transform Pennsylvania's economy in the following ways: $340 million in state funds have leveraged over $1.1 billion in industry, federal, and university funds 46,000 jobs were created or retained with wages 35 percent higher 1,284 new products commercialized or processes were implemented 1,176 new firms were assisted IX. STRENGTHS AND WEAKNESSES The BFTC structure presents a diversified program that addresses most of the important needs in high-tech start-up/emerging firms: investment capital, technology assistance, business assistance, informational needs, and networking. It also provides linkages to multiple types of complementary assistance through related state programs: PENNTAP, which serves business needs; Industrial Resource Centers, which provide manufacturing extension and training; seed and venture capital funds; and the regional economic development corporations, which provide bricks, mortar, and equipment support. BFTC requires a steady stream of funding with substantial public seed funding in the early years. As public funds have leveled off, the program has relied on leveraging a substantial amount of private funding for its investment capital that has facilitated program growth. A strong banking and venture capital structure must be in place and carefully fostered in order to support the investment activities of a program such as BFTC. Although BFTC has leveraged private investment capital for local enterprises, technical and business services are still supported by state funds with small, but growing income from fees-for-service and royalties. In recent years, BFTC has relied less on university involvement for technical support and more on consultants and technological advisors who are volunteers from the community. This is an advantage for the Polish environment that does not have the university structure in place to support strong university involvement. However, BFTC operates within a mature state system that funds multiple resources to support manufacturing and business extension activities. Moreover, there is a receptive private investment environment. Nevertheless, BFTC provides an excellent example of how linkages among institutions and organizations can be fostered and how public investment capital can be used to leverage private capital for high-risk technology investments. Back to Top   MODEL C COMMERCIALIZATION CORPORATION    BEST PRACTICE EXAMPLE KANSAS COMMERCIALIZATION CORPORATIONS   I. OVERVIEW AND FOCUS The Kansas Technology Enterprise Corporation (KTEC) is a quasi-public corporation established by the state legislature in 1987 to promote the creation, growth, and expansion of advanced technology enterprises in Kansas. KTEC programs include centers-of-excellence, grants for applied research and development, matching grants for federal Small Business Innovation Research projects, seed capital financing, and commercialization centers. KTEC is funded by proceeds from the Economic Development Initiative Fund, which consists of revenue from the Kansas Lottery and Racing Commission. KTEC's commercialization corporation program was established in 1994 to stimulate the creation and growth of technology-based businesses, and to facilitate technology transfer from the region's academic and entrepreneurial communities. Prior to 1994, KTEC -- like most state-supported technology programs -- invested significant resources to support university-based programs, including its Centers-of-Excellence and applied research and development grant programs. The KTEC Board, interested in achieving greater leverage from its R&D investments, began to explore ways to facilitate the formation of new companies and to capitalize on the technologies developed at Kansas's universities. The commercialization corporation program was designed to provide a mechanism to accelerate the commercialization process. The legislature provided increased funding to KTEC to institute the program. In addition to KTEC, each commercialization corporation has a university and local sponsor. The initial three corporations were created at Kansas's three research universities, each of which were home to one or more KTEC Center-of-Excellence.  II. STRUCTURE There are three Commercialization Corporations in Kansas: Wichita Technology Corporation (WTC) Kansas Innovation Corporation (KIC) Mid-America Commercialization Corporation (MACC) Each of the three is organized as a non-profit corporation, but is affiliated with a for-profit company that provides management and technical support to the commercialization corporation. The for-profit company is overseen by a three-member board of directors composed of a KTEC representative, a representative of the commercialization corporation (the non-profit corporation), and a representative from the affiliated university. Each Commercialization Corporation is also affiliated with a holding company that manages a seed capital fund. Each innovation and commercialization center has a 13-member independent board of directors that is composed of: four members appointed by the local business sponsor (usually prominent people from the business community) four members appointed by the affiliated university (normally the deans and vice presidents of science and engineering departments) four business leaders and state legislators (state political representatives) appointed by KTEC the President of KTEC or his/her designated representative There are additional ex-officio members, which include the president of KTEC, government officials and representatives of other sponsors and funding sources. The Board's primary role is to design a strategy for assisting technology-based businesses and how best to transfer new technologies to the marketplace. They also hire the top staff people. In addition to the three commercialization corporations, there are five affiliated commercialization centers. Unlike the commercialization corporations, these centers are not directly affiliated with universities, but they do receive assistance from and work in partnership with the three major innovation and commercialization corporations. The state requires the affiliated commercialization corporations to have a minimum 1:1 match of private funding to public funding. Funds can be used for services and investing in a seed fund.  III. REVENUES AND EXPENDITURES Each commercialization corporation receives approximately $300,000 per year from KTEC. The funding may be allocated between service support and seed capital. The commercialization corporations receive additional funding from affiliates of their host universities and local sponsors. The Mid-America Commercialization Corporation in Manhattan, for example, receives about $100,000 from the City of Manhattan and $100,000 from the Kansas State University Research Foundation for providing services. In addition, KTEC funds up to $600,000 for seed capital that is matched over three years by contributions from the City and the Kansas State University Foundation. The city funds come from a sales tax increase enacted to support economic development. The corporations also receive funding from fees for services paid by business firms and income derived from equity holdings in businesses. IV. STAFFING Each commercialization corporation is staffed by a president who is hired by the board of directors, one to three professionals, and one support person. They are all employees of the for-profit company. These centers also use graduate student interns who work for the non-profit corporations, and their presidents have expertise in technology transfer and small business development. V. CLIENTS The commercialization corporations enter into a formal client agreement with each company they plan to assist. The agreement outlines the services that will be provided and the mechanism by which the corporation will receive a return on its investment if the company succeeds. In general, the corporations assume small (in the range of 3-5 percent) shareholder or equity positions in the companies and negotiate royalty payments on commercially successful products. Potential clients must be technology-based and have high growth potential. Each corporation establishes its own criteria for selecting clients. Criteria used by the Wichita Technology Corporation (WTC), for example, to select clients include: a willingness to locate all or part of the development or production in Kansas, specifically in the Wichita and South Central Kansas area; development of a technology-based product or service; the potential to achieve $5 million to $10 million in sales within five years; and acceptance of WTC as a partner through a relationship such as an equity position, royalty basis, licensing agreement, or other applicable agreement. In FY 1997, the commercialization corporations evaluated 91 potential clients and signed formal agreements with 21 companies. VI. SERVICES Each of the commercialization corporations provides a full range of technical and business services, office space, and managerial support to start-up companies. Services include: business plan development, including marketing and financial analysis competitor analysis market research assistance in locating and accessing financing sales and marketing strategy development management consulting technical assessments prototype development patent and trademark assistance In a few selected cases, the corporations may provide board and management services on an interim basis through its for-profit subsidiary company. The following are examples of the services provided to individual clients. The MACC created a start-up company to commercialize technologies developed at Kansas State University. One of the first activities of the start-up company was to develop a technology that could be used for environmental remediation and protection against toxic materials. The technology builds on core technology in advanced materials researched at the university. The university has licensed the technology to the start-up company. The principal scientist serves as the company's chief technical officer while continuing as faculty on a fractional appointment basis. The MACC helped transfer the technology by identifying its commercial potential, helped to form the company, and currently provides management support. The company is currently conducting research for the Department of Defense and working with several potential customers in civilian markets. WTC is assisting a company that produces interactive CD ROM-based training materials. The company, started by four Wichita State University students, recently raised $1.3 million in private capital. WTC helped the company develop a business plan, identified sources of capital and helped prepare the company present its business plan to potential investors. KIC client, Help Innovations, Inc., brings health care to home-bound patients through interactive television. The Resource Link TeleHome Healthcare system was developed by the corporation and is marketed nationwide. The company was started by a registered nurse who invested her personal assets in the company. KIC helped the company obtain significant follow-on funding through two strategic partnerships. VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES The three commercialization corporations are located at universities and have full access to their personnel and resources. The five affiliate commercialization centers also have university linkages, and all of these corporations and centers work with local business organizations or Chambers of Commerce. They also work with state and local officials who are on their boards and often help them access services and financing. Through KTEC, all of the centers have access to seed capital, grants for applied research, and matching grants for federal commercialization programs. VIII. PROGRAM RESULTS During 1997-1998, the three commercialization corporations evaluated 91 potential clients and signed formal agreements with 21. They took an equity position in 19 firms, and they helped launch 4 new business startups. A total of 167 jobs were created during the year and almost $10 million in increased sales were reported. After only three years in operation, the three corporations held equity positions in 23 firms, 14 of which are new start-ups. Commercialization corporation client companies report the creation of 205 jobs and $13.5 million in new sales. Fourteen copyrights/patents have been filed, and two patents have been issued. The commercialization corporations generated $166,304 in royalties and received $179,632 in fees-for-services. In the long run, the commercialization corporations are supposed to be self-supporting, through fees paid by business firms for services and the revenues realized from their equity position in profitable firms. The affiliated financial funds are also expected to be self-supporting in the future. IX. STRENGTHS AND WEAKNESSES The commercialization corporation model is an innovative approach geared to an area of the United States that lacked a history of entrepreneurial activity. Strengths of the program include the centers' ties to Kansas research universities and the involvement of local government, in addition to the state technology agency. The corporations have recruited highly experienced staff, who have succeeded in launching a number of new companies and leveraging significant amounts of private capital. Given the goals and structure of the program, the centers are only able to help a small number of clients each year. One question that such a program design raises is whether the SMEs launched by the corporations will generate significant impact to create a more entrepreneurial culture in Kansas. The structure of the program is fairly complex, with a combination of for-profit and non-profit entities. The use of a for-profit company provides a mechanism for return on investment from client firms. However, since public funds are being used to invest in private firms, the funds must be careful to guard against any real or perceived conflict of interest. Back to Top    MODEL D UNIVERSITY-BASED TECHNICAL ASSISTANCE, TECHNICAL INFORMATION, AND SUMMER INTERN PROGRAM   BEST PRACTICE EXAMPLE PURDUE UNIVERSITY TECHNICAL ASSISTANCE PROGRAM (TAP)   I. OVERVIEW AND FOCUS The Purdue University Technical Assistance Program (TAP) began operation in 1986 to support job and economic growth in the State of Indiana. Purdue University was chosen to administrate the program because of its traditional engineering expertise, and because the credibility of the university faculty is universally recognized by the business and industry community. TAP acts as a catalyst to allow the vast resources of Purdue University to become readily available to Indiana business, industry, and governmental units. The mission of the Technical Assistance Program is to help Indiana business, industry, and government implement new technologies for the economic benefit of clients and the state. TAP works closely with Indiana companies to improve manufacturing competitiveness, assist in new product development, implement advanced industrial management tools, and solve difficult environmental problems. A team of 49 faculty, graduate students, and professional staff at three campuses work with hundreds of companies throughout the state each year. Funding for TAP initially came from the Indiana Department of Commerce. From 1986 to 1997, seven different state agencies funded TAP due to state budget restraints and gubernatorial priorities. However, the funding continued during that period at a satisfactory level. Beginning in 1997, funding for TAP came directly from a line item in the Purdue University budget as a part of the State of Indiana's support of the University. The original administrative body with oversight responsibility for TAP was the Indiana Economic Development Council. Currently, TAP is administrated by the Dean of the School of Engineering at Purdue. This change in oversight occurred concurrently with the funding for TAP being made part of the university budget.  II. STRUCTURE Organizational Structure TAP performs its mission of helping Indiana business, industry, and government implement new technologies for economic benefit (primarily job growth) of clients and the state through the delivery of three programs: Technical Assistance Projects, Technical Information Service (TIS) and the Summer Intern Program. The Chief Executive Officer of TAP is its Director, Robert Greenkorn, Professor of Chemical Engineering. Professor Greenkorn answers directly to the Dean of the School of Engineering and has direct control over all 49 employees of TAP. This management design appears to work well for the TAP. The very high number of part-time faculty, staff, and student workers (see Section IV. STAFFING) requires such a single manager approach. The Director seeks advice and direction for future needs and strategic planning from TAP's Industry Advisory Council -- a 20-member council comprised of representatives from various Indiana businesses and industries. The advice is augmented by additional advice and direction received from the TAP Advisory Board -- a 6-member board comprised of representatives from various academic institutions within Indiana. TAP has only one central office and no satellite offices. All three program activities are coordinated out of the office located on the Purdue main campus in West Lafayette, IN. Program Areas Technical Assistance Projects are face-to-face, results oriented, technological problem solving services of TAP. The program staff meet in person with company representatives to define projects and ensure that the assistance provided is timely, feasible, and technically sound. Many measures of program effectiveness are taken, including the impact on capital investment, sales, and employment. Over 90 percent of those working with the program report positive results. The Technical Information Service (TIS) is a fee-based library information service. The information specialists of the TIS analyze information requests and tailor responses to the specific needs of the client. TIS Specialists have access to over 500 electronic databases in addition to the resources of the Purdue University Libraries. As appropriate, and with the client's permission, the TIS specialists may invite Purdue faculty with recognized subject expertise to participate in responding to the request. Specialists will also advise the client how to obtain services and resources unavailable at Purdue. A technology alert, a newsletter service, is also available whereby automatic monthly updates track new patent technology, industry trends, competitors, and scientific research. The Summer Intern Program helps Indiana companies, businesses, and cities find well-qualified and highly motivated Purdue University students for summer projects. The students are employed directly by the employer and have access to Purdue faculty for advice on their summer assignments. Most students are visited and advised by TAP faculty during the summer. To make it as convenient as possible for both the employer and the student every effort is made to place local students for each position. The results from summer intern projects have been significant, with many employers making job offers to students upon graduation, offering part-time employment during the school-year, or asking students to return for a second summer. III. REVENUES AND EXPENDITURES TAP's total funding for 1997-1998 was about $1.5 million, with $1.1 million coming from the State of Indiana, as part of the funding for Purdue University, and $400,000 in revenues coming from fees-for-services provided to its clients. An additional $400,000 in wages and salaries are paid by Indiana businesses and industries to support TAP's summer interns. This funding level adequately supports TAP's current activities, but as workload and project complexity increase, additional funds will have to be available to support the full-time professional staff. IV. STAFFING The Center has a total of 49 staff providing professional services under the oversight of qualified faculty. The staff is structured as follows: Faculty and staff (full-time) 4 Faculty and staff (half- and quarter-time) 12 Graduate Assistants 25 Research and information retrieval 2 Management information systems 1 Clerical staff 5 The current staffing level appears to be satisfactory considering the present number of requests received from clients. The use of so many part-time personnel and graduate assistants provides a very cost effective and efficient means of adjusting personnel against current workload. There has been no significant change in the staffing design since the program began. V. CLIENTS TAP services are available to all owners and operators of business and industrial operations located in the State of Indiana. However, most of TAP's projects have involved the manufacturing sector. The criteria for qualifying for TAP assistance centers around three major points: (1) the outcome of the project must have the potential for providing economic benefit to the economy of Indiana, (2) there can be no litigation associated with the project, and (3) no project can require the seal of a registered professional engineer. All information related to providing information to the client is held in total confidence, unless negotiated in advance with the client. The name of the contact person, the company or the nature of the request are never released by TAP. VI. SERVICES Technical Assistance Projects When a request for assistance is received, TAP's associate director receives the call and obtains a problem statement from the caller. The associate director determines whether the request is within TAP's scope of service and whether TAP's assistance could contribute to a significant economic benefit to the client and state. Once that determination has been made, the case is assigned to a faculty member who has appropriate expertise. The faculty member calls the client to solicit more detailed information about the problem or opportunity, and schedules a visit to the facility. At the manufacturer's facility, the faculty member assesses the problem and related conditions. He/she then decides what type of assistance should be provided and whether to involve a team of graduate engineering students and/or other faculty members. The graduate students work for TAP under a graduate student assistantship paid for by TAP funds. If within a 3- to 5-day period the faculty member or team can provide the client with a solution to the problem he/she will do so and the service will be free of charge. If the faculty member determines that he/she or the team cannot complete the solution to the client's problem within 5 days, the client will be informed that because of the complexity of the problem TAP's services will be fee-based. At that point, TAP will negotiate a contract with the company to formalize the arrangement. If the problem is quite complex and beyond the capabilities of TAP, the client will be referred to a consultant that can address the problem. Shortly after the problem has been solved by the TAP, the faculty member in charge of the project will call or visit the client to determine how well the solution was implemented and how successfully. Shortly after that contact, a questionnaire will be sent to the client by TAP's main office to determine the benefits of the project in greater detail. The Technical Assistance Projects address a broad spectrum of issues and subjects. These include, but are not limited to:   Advanced Manufacturing plant layout in production and warehouse areas implementation of advanced methods for measuring product attributes and controlling quality process improvements for machine centers, assembly lines, and individual work stations systems development such as scheduling, computer-aided design, and computer-integrated manufacturing reduction of material handling costs   Product Development and Engineering review of design changes and improvements material selection for specific applications problem solving such as corrosion or component failure identification and demonstration of new design, testing, and evaluation methods   Environmental determine if a plant or process is within U.S. Environmental Protection Agency regulations assist in understanding and completing the environmental permitting process solve specific waste treatment and disposal problems compliance with the Federal Clean Air Act find consultants, test labs, and summer interns for extended projects   Industrial Management improvement of product costing and financial systems assistance with strategic planning development of improved methods for industrial marketing evaluation of proposed plant and equipment investments Technical Information Service (TIS) The TIS at the Purdue University Libraries is a fee-based information retrieval service. Established in 1987 as an information service for Indiana business decision makers, it provides scientific, technical, and management information to clients around the world. TIS offers two major services: (1) document delivery from the Purdue University Libraries collection, and (2) research on a wide variety of subjects using both online databases and traditional reference methods. Documents from the Purdue Libraries are supplied within 48 hours and rush delivery options are available. Document delivery staff provide the option to place special orders for titles not owned at Purdue. By providing book loans, TIS makes the Purdue collection available to clients in North America. Since 1989, companies and individuals have received 3,769 information searches and 111,709 documents from this service. Questions fall into the following categories: specific engineering and technology questions marketing information management issues agricultural questions biological, veterinary, and pharmaceutical sciences The fees charged by the TIS are as follows:  Summer Intern Program Since 1988, almost 400 undergraduate and graduate engineering, technology and management students have worked for 239 Indiana employers through TAP's Summer Intern Program. In this program, TAP, the students, and employers negotiate salaries. Students can help in such areas as production process improvement, plant layout, product development, computer-aided design, construction inspection, and surveying. TAP feels that Purdue's students are one of the more valuable resources they offer Indiana companies and municipalities. They not only provide valuable manpower, but they also are a pipeline to the expertise of their faculty. Because of their backgrounds, TAP interns can fill almost any need. Among the many projects undertaken in the last 10 years, TAP interns established quality control standards for auto parts distributors, developed AutoCAD part design libraries, and supported environmental and safety programs. The program also allows employers to select local students whenever possible.  VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES The many achievements accomplished by TAP demonstrate the strong commitment of both Indiana companies and TAP to link together and work cooperatively to improve the state's economic competitiveness. The most often used collaboration by TAP is with the: Indiana Business Modernization and Technology Corporation (an MEP affiliate) Small Business Development Centers (SBDCs) in Indiana State Agencies such as the Departments of Commerce, Transportation, and Environmental Management Research Centers at Purdue University Agricultural Cooperative Extension Program   VIII. PROGRAM RESULTS TAP has compiled a benefit to cost ratio for its program of approximately 5:1. Follow-up with clients reveal that 90 percent of clients are satisfied with program services. Some specific accomplishments are: Heat treatment of automotive strut pistons allowed a company to increase its sales several times over, expand their facility, significantly increase their employment and open new markets. A materials engineering student, TAP's quality assurance manager, and a professor of materials engineering reviewed the production of pistons used in automotive struts for a company which produces automotive struts for the North American market. The development and careful control of heat treatments of the pistons is critical to the performance and longevity of the struts. TAP was asked to provide recommendations for heat treatment of pistons for a new customer with very demanding specifications. The TAP analysis and recommendations supported the successful development of the new business. The company will soon expand the facility and increase employment to produce struts for the new customer. A manufacturer of materials handling equipment asked TAP to assist in the design and testing of new pieces of equipment. The company designs and builds material handling and processing equipment for the automotive industry. Several TAP faculty assisted the company with design considerations for large lifting devices, bearing systems, and sliding hooks. The TAP input has helped the company implement specific product improvements, resulting in more competitive products, and increased sales. The project results shown in the following tables are based on material provided by the users of the program's services. One in three client evaluations returned included specific economic impact data which is summarized in this table. Most other evaluations include positive benefits that are not able to be quantified. In total, over 90 percent of the evaluations received stated that help from the Technical Assistance Program was beneficial and that the recommendations are being used.   Economic Impact of TAP Assistance Projects Based on Client Evaluations through June 30, 1998   Year 1* Year 2* Total Capital Investment $18,201,400 $9,140,600 $27,342,000 Cost Savings $7,302,350 $6,709,840 $14,012,370 Increased Sales $41,043,300 $104,366,100 $145,409,400 Jobs Added 345 798 1,143 Jobs Saved 1,114 932 2,046 * Following date of TAP assistance   Economic Impact of TAP Summer Intern Program Based on Client Evaluations of TAP Intern Projects for 1994 through 1998   Total Capital Investment $14,869,500 Cost Savings $2,298,900 Increased Sales $904,000 Prevented Losses $649,000 Productivity Improvements $437,500 Jobs Added 21 Jobs Saved 23   IX. STRENGTHS AND WEAKNESSES TAP is administered and supported by the School of Engineering at Purdue University. This affiliation gives the program a very high degree of credibility, which along with their policy of keeping the work they do for their clients confidential, has made them very successful over the years. TAP provides a high-quality service to business and industry in Indiana at a very affordable cost to the state government. It accomplishes this efficiency by hiring faculty and graduate students to handle its technical assistance projects. TAP's Technical Information System provides the business and industry community of Indiana with fee-based library retrieval and a vast amount of information from most of the major research universities across the United States. TAP's summer intern program for engineering students has been very successful. It has provided a great deal of assistance to the cooperating companies, and given a vast amount of experience to the students. The students' compensation is shared between TAP and the industrial employer. The major weakness of TAP is its well recognized geographical constraint. Currently only about half of the state's businesses are within a two-hour driving time of the three participating campuses. Although TAP personnel travel throughout the state, companies distant from campus utilize the program much less than those near the participating campuses. Purdue University has four campuses with engineering programs, and an additional fifteen sites with technology programs. TAP has requested additional legislative funding to add these campuses and two university affiliates to the program so that all companies are within a short distance of faculty who can assist them. It is expected that this expansion will double the activity level and economic impacts of the program. Back to Top   MODEL E STATEWIDE SYSTEM OF INDUSTRIAL EXTENSION THROUGH FIELD OFFICE NETWORK   EXAMPLE GEORGIA MANUFACTURING EXTENSION ALLIANCE (GMEA)   I. OVERVIEW AND FOCUS The Georgia Institute of Technology (GaTech), a research and teaching institution that focuses primarily on the sciences and engineering disciplines, has offered technical assistance to industry since 1961. In 1993, the federal Manufacturing Extension Partnership (MEP) provided additional funds to GaTech to augment its assistance to industries. This funding led to the creation of the Georgia Manufacturing Extension Alliance (GMEA), which incorporated existing extension activities and those of the MEP. GMEA now is a statewide system of industrial extension services and programs. GMEA aids manufacturing companies by conducting on-site technical assistance, assessments, seminars, workshops, manufacturing networks, and publications. Programs include process improvement, training, strategic planning, lean manufacturing, product design, management systems, marketing, productivity, quality assurance, ISO 9000, energy conservation, and safety. Through its 19 field offices located throughout the state, GMEA staff conduct approximately 1,000 projects each year. II. STRUCTURE GMEA is part of the university's Economic Development Institute (EDI). The EDI reports to GaTech's Vice-Provost for Research and Graduate Studies. EDI's activities encompass modernizing industry, developing new companies, conducting economic development planning in communities, attracting manufacturing enterprises, and transferring technologies to manufacturers and processors in the state. EDI has field offices strategically located throughout the state, special programs in training, lean manufacturing and information technologies, a center for quality and international standards, and several support and study groups in data searching, economic studies, and other specialties. The GMEA is composed of 19 field offices that provide technical and management services on behalf of the state's 10,000 manufacturing companies. The GMEA has linkages with the Small Business Development Centers (SBDCs), the state Department of Industry Trade and Tourism, technical colleges, and other state universities. It also has strong linkages with the Advanced Technology Development Center (ATDC), which is a system of incubators, one located on the university's campus and three additional incubators located elsewhere in the state. The Economic Development Institute and GMEA also have access to the faculty and numerous industrial research centers and programs on the campus. III. REVENUES AND EXPENDITURES GMEA funding is derived from a combination of federal, state, and private funding. The private funding comes primarily from fees-for-services and training. These sources provided the following funds in FY 1998: FY 1998 federal $2,115,533 42% state$2,234,074 44% private $ 734,705 14% EDI funds are used to: improve existing companies 60% grow new companies 15% attract new companies 12% prepare communities 13% IV. STAFFING GMEA has a total of 60 staff, 47 of whom are professionals. The professional staff is heavily weighted toward undergraduate engineering degrees with graduate degrees in business administration. All the professional staff have industrial experience and are computer and advanced manufacturing systems literate. The engineers are primarily industrial engineers, but others have degrees or specialties in agricultural, electrical, mechanical, aerospace, and textiles engineering. The staff of 47 professionals have competencies in the following areas: strategic planning facility planning and layout production methods and controls materials and product handling information technologies total quality management organizational development in-plant technical and human resource training graphic information systems market research cost analyses production and inventory controls ISO 9000, ISO 14000 manufacturing simulation energy conservation environmental health and safety hazardous materials management waste management In 1997, staff time was allocated as follows: GMEA Activity Allocation service delivery 27% courses 9% marketing 9% administrative 38% professional development 4% leave and sick time 13% V. CLIENTS Most of GMEA's client companies are predominately small and medium-sized enterprises. GMEA does not discriminate by size of company or type of product in providing services. However, most of the companies that it serves have less than 100 employees. In 1997, the percentage of projects by employment size was: 1-19 employees 32% 20-99 employees 33% 100-249 employees 17% 250-499 employees 9% 500 + employees 9% The most frequent clients were firms in industrial machinery, fabricated metal, textile, chemicals, electronics, rubber and plastics, food, lumber and wood, apparel, and transportation. VI. SERVICES GMEA offers a broad range of technical and management services to the manufacturers located in the State of Georgia. GMEA aids manufacturing companies by conducting on-site technical assistance, assessments, seminars, workshops, manufacturing networks, and producing technical publications. Programs include process improvement, training, strategic planning, lean manufacturing, product design, management systems, marketing, productivity, quality assurance, ISO 9000, energy conservation, and safety. GMEA generally provides 3-5 days of technical assistance at no cost to the company, with full- cost recovery after that period. Training activities have full-cost recovery. The GMEA personnel provide services directed at all phases of the manufacturing processes and management. These services include process management, material management, employee relations, shipping, information technologies, materials and supplies, computer integration, quality, and environmental issues. The focus of the field staff is on defining manufacturing problems and offering alternative solutions rather than on-site supervision of the remedy. When the same problem occurs in many plants, GMEA staff develop training for groups of firms and provide information to firms through dissemination channels such as newsletters and special seminars. The state has subsidized this service in the past, but recently there has been public pressure to collect fees. The impact of the fees has been a reduction in the number of short-term projects and services to the smaller firms. Currently, projects requiring less than 8 hours staff time are 38 percent of all projects, 8-24 hours are 32 percent, 25-40 hours are 12 percent, 41-120 hours are 13 percent, and over 121 hours are 2 percent. GMEA staff conduct approximately 1,000 project each year. GMEA surveys the manufacturers in Georgia every second year to determine the extent of specific problems and their importance to the success of the companies. GMEA also evaluates its services by obtaining a response from the clients on timeliness, satisfaction, and certain economic measures related to jobs, sales, cost savings, investments, and similar criteria. VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES The GMEA is linked to the facilities at the Georgia Institute of Technology in an informal arrangement facilitated by personal friendships, department meetings, and other university gatherings, and through more formal contractual arrangements. Faculty members who provide consulting on sophisticated projects are paid a set daily rate regardless of rank. The funds may be expended for advancing teaching and research, but not for personal use. GMEA has full use of university facilities including the library and the administrative offices of GMEA are in a campus building. Special programs are also located on campus and off campus. GMEA, as an alliance, has contractual relationships with the community and technical colleges, state colleges and universities and Small Business Development Centers. Informal relationships are maintained with regional planning offices, the Georgia Department of Industry and Trade, the Georgia Department of Community Affairs, Georgia Ogelthorpe Quality Award, Georgians for Manufacturing, local chambers of commerce, Georgia Economic Development Association, and numerous professional groups. GMEA also has linkages to the National Aeronautics and Space Administration's laboratory in Huntsville, the Federal Laboratory Consortia, the NASA Regional Technology Transfer Center in Florida, University of Georgia Wood Products laboratory, and others. Field offices of GMEA are located in technical colleges, Small Business Development Offices, and industrial parks. Recently the Georgia Department of Industry and Trade has co-located in several field offices. Linkages to finance and investment firms are largely informal except in the case of EDI's Advanced Technology Development Center, which has more formal relationships with these groups. VIII. PROGRAM RESULTS Each project is measured for its impact on the firm. The most common measures relate to satisfaction level, sales, investment, cost savings, employment saved and gained, and the amount of time the firm invested in completing the project. Returns on the investment of GMEA are generally 8-10 times their investment. IX. STRENGTHS AND WEAKNESSES As an extension service, GMEA is unusual in several ways: It is based in a university that has been committed to manufacturing modernization since the university's establishment. Moreover, the administration of the university has steadily supported the concept of technical assistance to manufacturers and state economic development. Also there is a long history of state support for the program and the program is widely recognized by industry. The advantages of the model are: (1) the network of 19 field offices used for problem identification and service delivery, reaching firms throughout the state; (2) the use of experienced, skilled and cross-trained experts in the field offices; (3) access to a major research university's faculty experts; (4) continuing support from the university administration, (5) continuing state support and generous funding; (6) ability to offer clients a broad array of programs and services that address a wide range of manufacturing needs, and (7) strong leadership. Back to Top    MODEL F INDUSTRIAL EXTENSION SERVICES IN A RURAL STATE     BEST PRACTICE EXAMPLE IOWA CENTER FOR INDUSTRIAL RESEARCH AND SERVICE (CIRAS)    I. OVERVIEW AND FOCUS The Center for Industrial Research and Service (CIRAS) at Iowa State University of Science and Technology serves the entire State of Iowa with management and technical assistance services to manufacturing companies. CIRAS is one of the oldest industrial extension services in the United States and has operated continuously since it inception in 1961. Its focus is on developing a close relationship with the manufacturing companies and providing problem resolution services through field agents, a central staff, and faculty members. The vast majority of projects are referred to the central staff with the field agents acting as contact points and problem assessment specialists. Once the only industrial extension operation in the state, CIRAS has undertaken several reorganizations in recent years as (1) the federal Manufacturing Extension Partnership (MEP) program demanded matching funds and close working relationships with a variety of service providers, (2) the university has developed other programs to work with industry in transferring technology and developing new companies, and (3) the university has reorganized the university extension services. CIRAS has recently returned to its originating college, the College of Engineering, where it reports to the Dean. CIRAS is also now just one of the delivery systems in the state with another part of the university directing the NIST/MEP Manufacturing Technology Center (MTC) program. The CIRAS mission has remained largely unchanged throughout its history. That mission is to bring the resources and skills of the university to bear on the problems facing industry and processors in the state. This has been interpreted as technical and management assistance for management. The ultimate goal is to spur the rate of economic growth in the state by making the manufacturers more efficient and productive. Determination of the type of services offered has been the responsibility of the director, although an active advisory council composed of manufacturing executives recommends changes to the programs.  II. STRUCTURE The Center for Industrial Research and Service, although still a part of University Extension, is now within the College of Engineering and reports to the dean of the college. It is one of the many arms of the university that now assists industry. Among the others is an incubator, a research park, and several specialized centers funded by the National Science Foundation and industry. CIRAS has operated as a state-subsidized entity throughout its history, but in the last two years has transformed itself by making fees a larger element in funding and increasing the sophistication of the staff.  III. REVENUES AND EXPENDITURES The CIRAS budget is comprised of three elements: (1) state mandated funding via University Extension, (2) federal funding via the Iowa MTC, and (3) fee generation. The federal funding is expected to decline as mandated by the Manufacturing Extension Partnership legislation passed by Congress, while fee generation is expected to increase. The FY 1998 budget was: Federal MEP Funds $ 718,268 State Funds $1,084,403 Fees $ 91,163 Grants $ 90,000 IV. STAFFING CIRAS has 23 professional staff members located on campus and in field offices. The staff members have over 600 total years of experience and 375 years of manufacturing experience. All but three have graduate degrees, and five have doctorates. The group practices a team approach to problem solving that utilizes central and field staff plus a budget manager. The 14 field staff are located on the campuses of two-year technical colleges, while the central staff, now in the research park, will soon move to a new engineering building.  V. CLIENTS The clients of CIRAS are the manufacturing managers located throughout the State of Iowa. The states over three thousand manufacturers are served by CIRAS and the Iowa MTC affiliated delivery systems. Approximately 62 percent of the clients served have less than twenty employees, 20 percent have 21-50 employees, 11 percent have 51-100 employees, 10 percent have 101-250 employees and the remaining have more that 250 employees. CIRAS primarily serves the smaller manufacturers. The latest assessment shows that during 1996-1997, CIRAS conducted 502 projects of which 98 generated fees, 107 were referred to faculty and consultants, and 75 used members of the student body in finding solutions. Three hundred of the projects took less than eight hours of staff time, 100 took 8-15 hours, and only two took over 100 hours.  VI. SERVICES The services that CIRAS offers are concentrated in the management and technical areas. As in many other states the bulk of the client services are offered to manufacturers in fabricated metal products, 14 percent; industrial machinery, 19 percent; transportation, 8 percent; and electronics, 7 percent. Surprisingly, food processing makes up only 2 percent of the projects, but this may be because the Agricultural Extension Service offers this service to the food industry. In FY 1998, CIRAS conducted a total of 168 projects in business systems (36), product development (30), proce improvement (26), quality inspection (21), plan layout (20), human resources (16), materials (15), marketing (13), CAD/CAM (7), finance (7), environment (3), automation (6). Frequently, clients are served more than one time during the year. Forty-five of the clients requested help more than five times, 36 four times, 69 three times, and 102 two times. Other clients are served through training programs. During 1998, CIRAS held 38 public seminars, 14 focus groups, participated in 99 professional meetings, and made 61 technical presentations. CIRAS conducts occasional surveys of manufacturers to determine their needs. This information is used to adjust program services to ensure that they address pressing and current problems and opportunities. VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT SOURCES CIRAS has linkages with other delivery systems that are multiple and complex. On the campus it is linked to University Extension, which includes Continuing Education and the Agricultural Extension Service. It is also linked on campus to the research park, incubator, College of Engineering, and several research centers, including a federal laboratory in materials (Ames Laboratory). Off campus, CIRAS is affiliated with the Manufacturing Extension Partnership, has offices in technical colleges, and has a 28-member advisory council comprised of manufacturers.  VIII. PROGRAM RESULTS CIRAS has numerous case studies depicting the successes of their initiatives. The cases range from improvement in manufacturing processes to new products. A recent survey indicated that of 44 clients surveyed, 28 were satisfied with CIRAS' services. CIRAS does not measure return on investment or economic impact.  IX. STRENGTHS AND WEAKNESSES CIRAS has served many less advanced manufacturing clients in a rural setting for over thirty years. The service was subsidized by the state and little effort made to obtain additional funds, especially from fees. But the advent of the MEP, new partnerships, and the university's increasing focus on technology development and transfer has placed financial stress on CIRAS. As a result, CIRAS has shifted its resources from providing services to small, less advanced firms to providing services that will attract fees from larger and more advanced firms. As part of that effort, CIRAS has developed more sophisticated services, recruited more highly skilled staff and developed fee-for-service activities, especially training. The host university has not yet adapted to the changes, but increasingly recognizes the importance of industrial services. CIRAS is a strong example of a rural state offering technical services to industry. Back to Top   MODEL G UNIVERSITY-BASED INDUSTRIAL EXTENSION PARTNERSHIP   BEST PRACTICE EXAMPLE MARYLAND TECHNOLOGY EXTENSION SERVICES   I. OVERVIEW AND FOCUS The University of Maryland is a large land grant university located on 11 campuses throughout the State of Maryland. The main campus in College Park, a suburb of Washington, DC, has an enrollment of 27,000 undergraduate students and approximately 10,000 graduate students. In addition, the continuing education arm of the university has over 35,000 students. Undergraduate courses for the military and numerous overseas programs are included in its curriculum. During fiscal year 1984, the dean of the College of Engineering proposed that the university develop and fund the Engineering Research Center (ERC) to share joint industrial-university research capabilities with the Maryland Technology Extension Services program (TES). TES was envisioned as the outreach, or extension arm of the college, and ERC would be the administrator and the developer of research programs with the faculty. The proposal was accepted and became part of the university budget. A unique feature was that the dean obtained three-year funding that began with only $600,000 annually and increased to $2 million annually. The budget included personnel, equipment, and space so the directors of the programs could be employed immediately. TES opened for business in June 1983 after several months of planning on the services and linkages. An important planning element was the decision to name TES and emphasize "technology." The location of TES and ERC in the College of Engineering created the natural evolution of the industrial extension service to place emphasis on projects that demanded technical solutions, although TES does handle many "more mundane" projects that are neither advanced technology nor engineering, such as planning, marketing, and management structure. In 1988, ERC added an incubator to assist start-up small companies needing the facilities and skills found at the university. The incubator and a large industrial research partnership program increased ERC funding by $2 million annually. The industrial research partnership program provides funding for faculty and equipment doing joint research programs with Maryland industries. It also supports the purchase of equipment that industry needs and can use for testing that the companies cannot afford or know how to use at their own locations. TES obtained approximately $700,000 in U.S. Manufacturing Extension Partnership funds in 1995. This federal program supports the development of a national system of industrial extension centers. In the original contract with the State of Maryland, TES was the subcontractor, but the contract has since shifted directly to TES. The funding allowed TES to expand moderately, adding 2 staff positions. TES decided not to depend heavily on this federal program due to the need to assume more and more financial responsibility as the federal funds decline after year three. TES headquarters is located on the main campus of the university and is housed in the Engineering Research Building. Field offices in the five regions of the state are located in Hagerstown, Baltimore, Rockville, Annapolis, and Salisbury. Maryland is a small state geographically but has large distances due to its long and narrow shape, almost like a cross, with the Chesapeake Bay separating the Eastern Shore from the mainland. The location of the field offices was determined by region rather than by the concentration of industry. The mission of TES is "to assist Maryland manufacturers increase their competitiveness through the tailored application of modern technologies and management practices." This mission statement is unusual among the industrial extension programs in the emphasis on technology. II. STRUCTURE TES reports administratively and programmatically to the director of the Engineering Research Center (ERC). The ERC serves as a "flow through" of funds to operating units such as TES, the Technology Advancement Center, Technology Initiatives Program, and the Maryland Industrial Partnerships Program. ERC does, however, coordination programs and facilitate projects that involve academic faculty, particularly in the College of Engineering. ERC also hosts periodic conferences that recognize industry and faculty on successful research projects, problem solving, and technology transfer. TES is examining its services and determining its future direction. It is attempting to determine the feasibility of providing all types of services to industry as it does today, or shifting to projects that will have a "higher payout" ( the impact will create greater economic benefits). TES sees itself as an arm of the university's economic development efforts, but also recognizes that the scarce resources allocated to it must be used effectively. This creates a conflict between public need and efficient allocation of resources. This is a continuing issue. TES has developed a personal approach to management rather than a bottom line approach. TES uses case studies effectively in explaining its impact upon industry and strongly resists a "numbers-oriented approach" to its impact and effectiveness. The ERC Director, Dean of the College of Engineering, and President of the university are vocally and financially supportive of TES. TES is highlighted in speeches, publications, conferences and press releases. Many faculty members are working on projects brought to them by TES.  III. REVENUES AND EXPENDITURES TES obtains funds from the state, federal government, and through fees-for-services. Approximately $400,000 comes from the federal government and $1,000,000 comes from state government and other sources. TES did not have a breakdown of the fee income since it is largely a pass-through to the university programs that assist TES on projects. Fees have become a focal point for all industrial extension programs affiliated with the Manufacturing Extension Partnership Program due to heavy administrative pressures from MEP. TES's goal, like all other MEP affiliates, is to have 33 percent of its income derived from fees. There is no plan to become financially self-sufficient. TES and most other university extension programs feel their public service role dictates providing services regardless of a client's ability to pay. TES is concerned that smaller companies that cannot pay the fees necessary to help them progress will lose staff to larger companies capable of larger contracts. Because of the need for fees and the high level of demand for its services, TES recently changed its approach to financing faculty members. Previously, TES paid for the first forty hours of faculty time. It now pays for the first 12 hours of time and then contracts for the company to pay the next 28 hours at the flat rate of $1,000. TES subsidizes any differences between the actual salary and the $1,000 with all funds being placed in a professional account that can be used only for improving research and teaching by that particular faculty member. Company contracting with the faculty member beyond the 40 hours is at full cost and does not involve TES.  IV. STAFFING TES hiring practices place a heavy emphasis upon engineering degrees and industrial experience. It prefers to assign experienced engineers to field offices so they can solve most problems they face with companies, hold intelligent discussions with faculty members, and maintain a rapport with the managers of the manufacturing companies. TES insists that field representatives maintain contacts with faculty members, and therefore there is constant pressure on staff to upgrade their skills and maintain relations with the faculty. The staff are tasked to find university expertise on the campus without the support of databases on employees. Due to the need to handle a variety of problems with a small staff, TES hires engineers with a variety of specialties. The staff is expected to use their expertise throughout the state and not confine themselves to their region. For example, the engineer on the Eastern Shore has an agricultural engineering degree, yet works on food processing issues in Baltimore. TES has 23 staff members. Seven are employed in the Director's office in College Park. The rest are assigned to the regional offices.  V. CLIENTS The State of Maryland has approximately 4,300 manufacturers. The dispersion of companies is statewide although most firms are in the Baltimore and Washington D.C. metropolitan areas. The area north of Washington D.C. is considered an emerging high technology corridor, with many companies specializing in biotechnology and electronic software. Baltimore has the normal dispersion of companies found in a metropolitan area, but with more shipping and freight handling operations due to its seaport. The Eastern Shore area has a preponderance of food and agricultural processors, while the Western Region is rural and mountainous calling for more skills in metal fabrication and wood products. During its 14-year history, TES has worked with approximately 1,500 companies in Maryland and handled more than 10,000 requests for information. TES now handles approximately 300 projects each year. Although TES does not place a restriction on services based on the size of the company, the very composition of industry in the state means that most customers in need of services are smaller firms.  VI. SERVICES The services provided by TES are restricted to manufacturers and processors located in the State of Maryland. The services are generally described as finding the resolution to problems identified by a manufacturer, but in reality TES conducts assessments that assist in identifying those problems and often refers the problems to faculty members for further research or problem resolution. TES also assists governments and other public agencies find solutions to technological problems. The problems range from product defects and production flow problems, to determining advanced new materials needed for high temperature applications. When it is necessary to use faculty, primarily in the College of Engineering, the payment system described in the revenue section of this report is used. Companies requiring testing may use the ERC testing equipment for a modest fee. Companies requesting research are referred to the Maryland Industrial Partnership program that provides funds for joint research projects. TES and ERC have numerous case studies of the successes they enjoy with projects and report on the economic impact of the project. VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES TES is a model for structuring linkages with state government, federal funding agencies, university faculty, and federal laboratories in a region. The Director of TES has regular meetings with the State Development Agency officials to discuss funding and programs. TES supported the state agency in its application for MEP funds and later assisted in a smooth transfer of the contract to the university. This transfer could have been contentious, but due to the close relationships and trust, the transfer of funds and contract did not impair any working relationship. TES also has developed agreements with eight federal laboratories. The agreement stipulates that manufacturers do joint research with the laboratories on property rights, costs, reporting, non-disclosure, and other similar items. The agreement allows the companies to use the laboratories and personnel using a one-page contract and approvals of only a few days rather than months. TES is attempting to expand this agreement to other laboratories. TES also has strong working relations with the Naval Research Laboratory and the Department of the Navy, particularly in the Navy Best Manufacturing Practices Program. This programs provides in-depth assessment of qualifying manufacturing companies and makes recommendations for improving the company. TES participates in these assessments and helps identify companies for the program. TES linkages within the university are also exceptional due to the ERC programs for funding research and technical assistance. Faculty members assisting the program are assured of being paid for their time and having opportunities for research and consulting dollars. TES pays the professors a fee equivalent to their salary and then these funds are placed in a professional development fund accessible by the faculty member. The process allows the faculty member to travel, attend conferences, and conduct research with non-taxable funds. Faculty members are allowed leave time with pay to conduct short-term research for TES. TES staff members are also a part of the College of Engineering and are considered peers, thus facilitating exchanges of information. Other linkages are with the Small Business Development Centers, community colleges, and other providers of consulting services to industry. VIII. PROGRAM RESULTS TES estimates that its current return on investment is 7:1; that is, seven dollars returned in benefits for each dollar expended on services for industry. It does not conduct impact evaluations, and instead prefers to rely on successful case examples. Some of those examples are: Assistance to a vending machine manufacturer in the design of a coin-collecting mechanism, the manufacturing process, and training employees in cellular manufacturing. Estimated savings -- $100,000 annually. Assistance in the design of a job costing system for a road sign manufacturer. Assistance in the design of a waste water treatment facility for a food manufacturer thereby avoiding a shut down and $20,000 in fines. Assistance in developing a cost reduction plan for an aluminum panel manufacturer requiring manufacturing redesign of welding and training of employees. Annual savings: $20,000. Assistance in the design and manufacture of vibration resistant gloves for a glove manufacturer. The result was a new design, better materials, and the installation of $40,000 in testing equipment at the company. The company awarded a $2,000 donation to the university testing lab.  IX. STRENGTHS AND WEAKNESSES The strengths of TES are numerous, some of which include: (1) close linkages to the university, funding organizations, and other technology sources such as federal laboratories; (2) concentration of resources on advanced technologies that were well accepted in the College of Engineering and that interested the faculty; and (3) a well-developed plan for using faculty and students in problem resolution for client firms. The program's weaknesses are its small size in comparison to the state's industrial base; and because of its small size, a need to have a more narrowly focused scope of services than in some other best practice programs. Back to Top   MODEL H STATEWIDE MANUFACTURING EXTENSION AND OUTREACH   BEST PRACTICE EXAMPLE NORTH CAROLINA INDUSTRIAL EXTENSION SERVICE (IES)   I. OVERVIEW AND FOCUS In 1955, the North Carolina General Assembly established the Industrial Extension Service (IES), the first in the nation, at North Carolina State University's (NCSU) College of Engineering. The IES is responsible for stimulating, coordinating, facilitating, and managing the extension function of the College of Engineering at North Carolina State University in Raleigh. The mission of IES is to transfer engineering science, technology, and industrial management to North Carolina business, industry, local government, and the engineering profession for the improvement of quality, productivity, and the environment. It develops and delivers superior professional development programs that meet the lifelong education needs of professional engineers, scientists, and industrial managers. It advocates the use of engineering science and technology for both economic development and improvement of the quality of life in the State of North Carolina. IES provides technical and industrial management assistance, conducts applied research, advocates industrial use of technology and modern management practices, as well as conducts education programs for business, industry, entrepreneurs, engineers, and local governments. As an affiliate of the North Carolina Alliance for Competitive Technologies, IES partners with other state service providers to offer more comprehensive services. Major service categories include: manufacturing engineering, and management plastics processing furniture manufacturing metalworking hosiery manufacturing construction energy systems environment, safety, and health distance education Funding for IES has always been provided by the North Carolina General Assembly and is transferred directly to NCSU/IES. The administrative body with oversight responsibility for IES is the Dean of the School of Engineering. The North Carolina Manufacturing Extension Partnership (NCMEP) program is the manufacturing industry program of IES. It was established by expanding the existing program with funds received from the U.S. National Institute for Standards and Technology (NIST) in 1995. NCMEP is one of over 60 centers supported by NIST. It expands the traditional IES services to North Carolina manufacturers by utilizing the resources of partnering organizations and campuses, adding engineering manpower, and building working linkages. II. STRUCTURE Organizational Structure The Executive Director of IES, who is a professional engineer, reports directly to the Dean of the College of Engineering and maintains control over all 96 employees of IES through his five program directors. These five directors are the Director of Video Communications Services, the Director of the NC Manufacturing Extension Partnership Program, the Director of Video-Based Engineering Education, the Director of Industrial Energy Programs, and the Director of Continuing Education Programs. Program Areas IES was originally established to provide research and experimental work leading to a greater utilization of North Carolina's raw materials and to the development of its small industries. The program also included the establishment and operation of a demonstration activity, which would make the findings comprehensive and useful to industry. In 1965, the State Technical Services Act broadened its technical services programs to include: disseminating technical information providing a reference service to identify sources of engineering and other scientific expertise sponsoring industrial workshops, seminars, training programs, extension courses, demonstrations, and field visits designed to encourage a more effective application of scientific and engineering information Information dissemination. IES has established several delivery mechanisms within its industrial liaison program that provide for one-on-one delivery of technical information in response to client needs and problems. IES maintains a cadre of extension specialists within the College of Engineering at NCSU as well as partnerships with numerous extension and outreach programs throughout North Carolina. Technical assistance and information dissemination are the core services provided by all IES programs. A federally-funded study states, A. . .there seems to be no substitute for high quality, active, one-on-one field service assistance. . .@. Industry-experienced IES specialists provide this assistance to North Carolina business and industry, including engineering assistance on the factory floor. They refer clients to faculty, library, partner institutions, consultants, and other resources and frequently develop industry-funded application projects involving faculty members and students. In 1997-1998, IES responded to 4,422 requests from companies, individuals, and government. The North Carolina Manufacturing Extension Partnership (NCMEP) program is the heart of the dissemination effort. It is the manufacturing industry technical assistance program of IES, and was established by expanding the existing program with funds received from the National Institute for Standards and Technology (NIST) in 1995. NCMEP is one of over 60 centers supported by NIST and constituting a national network. It expands traditional IES services to North Carolina manufacturers by utilizing the resources of partnering organizations and campuses, adding engineering manpower, and building working linkages. Reference service. IES has also established a Technical Information Center (TIC) that helps clients to identify sources of engineering and other scientific expertise. The TIC conducts a full service of information retrieval, database searching, and library information services. Workshops and other training activities. IES also sponsors industrial workshops, seminars, training programs, extension courses, field visits, and demonstrations that are designed to encourage a more effective application of scientific and engineering information is accomplished through workshops, short courses, and conferences. They fill a great industrial education need for North Carolina industry by providing low-cost, high-quality learning opportunities and by sharing the knowledge and the expertise of faculty, extension specialists, consultants, and others. Non-credit courses address timely topics in manufacturing, energy, engineering, industrial management, construction, quality, and environmental issues. Applications-oriented, these courses are of immediate benefit to practicing engineers and technical managers and often lead to more detailed industry service projects. The Continuing Education Program offered by NCMEP is tailored to the needs of North Carolina industry. In response to those needs, 95 workshops and short courses, attended by 1,369 people, were conducted on such topics as cellular manufacturing, geometric dimensioning and tolerancing, material selection and substitution, and plant layout.  III. REVENUES AND EXPENDITURES The IES's total funding for FY 98 was about $11.4 million, with the following breakdown by source: NC General Assembly $2.6 million federal agency contracts $4.5 million state agency contracts $1.1 million contracts with industries $0.7 million continuing education revenues $2.5 million No budget figures were available on expenditures for the various programs.  IV. STAFFING The Center has a total of 96 staff, 37 of whom are professionals. The professional staff is structured as follows: technology services 33 investment services 0 marketing 2 research and information retrieval 1 management information systems 1 Implementation of so many programs and projects requires a large number of design, coordination, and support personnel. IES has developed a very cost effective and efficient design. There has been no significant change in the staffing design since the program began, except to meet the increased demands of its clients and contractors.  V. CLIENTS IES services are available to all owners and operators of business and industrial operations located in the State of North Carolina. The only criteria in place for qualifying for IES assistance is that the outcome of the project must have the potential for providing economic benefit to the economy of the company or the state. Large and small industries representing a broad spectrum of products and services reported economic gains from reduced costs, increased sales, improved productivity, and better quality resulting from IES services provided to them.  VI. SERVICES IES provides services that range from graduate level courses via telecommunication, to textile extension, to one-on-one technical assistance to manufacturers. These services are conducted through the North Carolina Manufacturing Extension Partnership, Polymers Extension Program, Technical Information Program, Industrial Energy Program, Industrial Assessment Center, Construction Extension, Industrial Continuing Education, Air Pollution Distance Learning Network, Video-based engineering education, and Video Communications Services. During 1998, the IES provided: free engineering and industrial management assistance and information services continuing education on quality, productivity, manufacturing, construction, energy, environmental, safety and other engineering and industrial issues student/faculty participation in over 100 senior and graduate design projects to engineer practical solutions for companies in the state continuing education programs attended by people from construction companies, local governments, and other organizations industrial energy audits by IES and the Industrial Assessment Center forums for Competitive Advantage at exemplary North Carolina manufacturing firms demonstrating new technologies and best practices to managers from other manufacturing firms graduate-level courses for engineers and scientists at their company facilities via videotape and satellite broadcast delivery systems environmental teleconferences and the Air Pollution Distance Learning network broadcast to over 115 downlink sites throughout North America responses to requests for solar energy technical assistance by the North Carolina Solar Center which conducted workshops, distributed publications on a variety of solar energy issues, and hosted visitors to the North Carolina State University Solar House training and services by the Nuclear Reactor and Services Programs that included neutron activation analysis, prompt gamma analysis, neutron radiography, production of radioisotopes, spectroscopy and associated analysis of samples for environmental monitoring, product quality certification, law enforcement analysis, and medical uses   One-on-One Technical Assistance This service is primarily conducted by the NCMEP within the IES. When a request for assistance is received, IES receives the call and obtains a problem statement from the caller. Once it is determined the request is of an appropriate nature and has the potential to have a significant economic benefit to the client and the state, the project is assigned to a faculty member who has the expertise to solve the problem and is geographically located near the client. The faculty member calls the client to expand the problem statement in greater detail and to schedule a visit to the facility where a visual assessment of the problem and the conditions at the facility is made. A decision is then made whether or not solving the problem will require assistance from a team of available technical specialists. Within a 5-day period, if the faculty member can provide the client with a solution to the problem, the service will be free of charge. If more time is required, the client will be contacted and informed that because of the complexity of the problem, IES's services will be fee-based. At that point, IES will negotiate a contract with the company to formalize the arrangement. If the problem is extremely complex and/or beyond the capabilities of the IES, the client will be referred to a consultant that can address the problem. Shortly after solution of the problem by the IES, the faculty member in charge of the project will call or visit the client to determine how the solution was implemented and the level of succes achieved. Shortly after that contact, a survey questionnaire will be sent to the client by the IES main office to determine the benefits of the project in greater detail. In 1997-1998, IES handled 4,422 requests for information. These requests fell into the following categories: Requests Technical Information Center literature searches 328 Solar Center 438 Polymers Extension Program 1,157 NC Manufacturing. Extension Partnership 2,107 Other (construction, energy, environment, etc.) 392 Total 4,422 In 1997-1998, NCMEP (including its associated Polymers Extension Program and Technical Information Center) provided direct technical assistance to 3,009 firms. These interactions offered the client useful information, advice, or problem solving at no fee. As part of the technical service, specialists offer executive briefings, also at no charge. The briefings by a team of specialists acquaint the customer's executives with a technology and the feasibility of implementation. The purpose of these meetings is to inform the customer while building a relationship between IES and the client firm, which may lead to substantive, fee-based projects resulting in improved business performance in the firm. Fee-based services are also a large part of IES's effort. Applied research projects, employing graduate and undergraduate students, faculty or consultants, and IES specialists constitute the principal mechanism by which current technologies and best practices are deployed into the state's manufacturing businesses. In 1997-1998, NCMEP engineers arranged and managed 98 such projects funded for a total of $544,840. A typical project example is the assistance given to the Herald Sun, a Durham newspaper publisher with 50 employees. This small company wished to reduce quality problems such as missing ads, missing sections, and torn pages. Extension Specialist, Dr. Joe Davis, assisted by Dr. Wilbur Meier and a team of his students from the NCSU Industrial Engineering Department, determined the causes of the recurring problems and implemented quality control procedures. This led to correcting the problems at their source. The company estimated cost reductions of $10,000 and sales increases of $50,000 annually were attributable to this work.  Reference Services Reference services at IES are conducted by the Technical Information Center (TIC). Services provided by the TIC include: Library Loans: The Center assists users in obtaining loans of books, government documents, theses, and technical reports from the collections of the NCSU Libraries, provided these are available for circulation. Photocopies: Journal articles, standards, conference papers, and information in books can be obtained in photocopy form, subject to U.S. copyright laws. Paper copies from microfilm or microfiche format are available as well as actual duplication of microfiche. Information: Factual questions (addresses, statistics, prices, etc.) can generally be answered on the the same day. More complex questions requiring in-depth searching take more time. Literature Searches: When questions require a review of the subject literature, TIC staff selects the appropriate databases and searches them for useful references. Copies of the most relevant articles are provided, if available. A list of other pertinent references is also furnished. Bibliographic Verification: If references are incomplete, TIC staff attempts to correct and verify these references. If available, copies of the verified citation are supplied. Location and Referral: If the information requested is not available from the NCSU Libraries, the Center attempts to identify other sources or information centers. Specialized Publications: The Center annually prepares six or more selective bibliographies on topics of current interest to business and industrial firms. Information guides and technical briefs are prepared at regular intervals.   Continuing and Distance Education Conference, workshop, and media education are conducted by four of the five divisions of IES. The only exception is the NCMEP. In 1997-1998, these divisions conducted a total of 349 workshops, short courses, and conferences for 9,403 people from more than 2,000 North Carolina companies and governmental units. Seventy percent of the advertised public courses were held. One hundred five courses were conducted at company facilities for their employees. Continuing education programs in environmental and civil engineering/construction were in the greatest demand, accounting for 125 courses and 55 percent of the total registrations. Manufacturing competitiveness and technology topics are NCMEP's major emphases. Seventy-three courses were conducted for 1,180 people. The Forum for Competitive Advantage series continues as the major vehicle for demonstrating manufacturing excellence, highlighting exemplary approaches to productivity and environmental issues. Ninety-six manufacturers joined the Forum and sent 456 of their manufacturing managers and engineers to 11 sessions at industry sites.  VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT SOURCES  The state's industries, along with NCSU students, faculty, research centers, and academic departments benefit from IES' continued success at linking issues and solutions by integrating extension activities with the academic studies, research programs, and industrial operations throughout North Carolina and across the nation. IES has strengthened its own engineering outreach activities across North Carolina through collaboration with the NC MEP program. The partnership brings together universities, community colleges, and government to help small and medium- sized industries improve their management practices, use new technology, and train employees to improve their productivity. IES now has seven partner office locations throughout North Carolina. Partnership agreements and contracts have also been established with the Southern Technology Application Center (STAC), NASA's Marshall Space Flight Center, Oak Ridge National Laboratory, and the Edison Welding Institute to make their capabilities available to assist North Carolina industries. The IES has linkages with 44 different entities which include professional associations, industry trade groups, federal laboratories, research and outreach programs in North Carolina, community colleges, state universities and colleges, federal agencies, and power companies. Among these are special centers in furniture, hosiery, energy, welding, biotechnology, aerospace, and integrated manufacturing. These linkages are used as resources in resolving the problems facing North Carolina manufacturing companies and to gain referrals. IES Continuing Education Programs actively seek to partner with industry, professional organizations, education, and government organizations.  VIII. PROGRAM RESULTS During 1997-1998, IES extension specialists made 2,643 face-to-face contacts with representatives from North Carolina business and industry and presented 118 talks to professional societies, industry groups, and other business gatherings. These contacts resulted in 4,422 technical assistance services and over 300 training programs being provided to industries throughout the state. Examples include in-depth literature and Internet searches, distribution of training workbooks and manuals, making recommendations to manufacturers for improving process throughout, and presentation of workshops, short courses, and conferences. IES provided technical assistance, information, applied research, and continuing education to over 34,000 people in 5,000 companies during 1997-1998. The industrial economic benefit is estimated at $122 million or over a $45 return for each dollar the state invested in the programs. New annual tax revenues of $5.9 million are projected. This broad-based program also had 9,400 people in continuing education courses, 107 new contracts, and involved 950 engineers in its efforts. Technical assistance was provided to 3,000 companies. Those companies experienced sales of $122 million in 1997-1998, a 31 percent increase over the prior year, due not only to increased sales, but also to reduced costs, improved productivity, and improved quality. Three specific accomplishments are: Employees at a sensor manufacturing facility were experiencing discomfort and cumulative trauma disorder (CTD) injuries, such as carpal tunnel syndrome, in their hands and wrists while working at their production workstations. An IES specialist for industrial engineering and ergonomics developed a project to find the problems and find solutions. Workers were videotaped at their workstations and assessments made by analyzing videotaped job movements, comparing risk-factor checklists, and on-site measurements of forces. Ergonomic improvements were made by changing workstation fixtures, work methods, and adding ergonomically contoured hand-tools. The company was very pleased with the results of the project because employees reported feeling more comfortable at their workstations. CTD injuries decreased dramatically and improvements continue. Based on the NC Department of labor's reported average hand/wrist CTD per-case cost of $13,920, the project produced an economic benefit of $139,200 for the company. An electronics components manufacturer producing crystals used in laser applications for surgical procedures, measurement, and communications, had an existing package design for its product that was cumbersome and had become a problem for customers. An IES NCMEP specialist was asked to find a cost-effective solution for re-working the packaging system. The specialist combined NCMEP resources, staff, technicians, and staff from commercial vendors. This team successfully completed the design, development, initial production, and testing phases for the new packaging and identified a commercial vendor to mass-produce the containers. The company now has a user-friendly package to protect its products. The packaging solution was developed in less than half the time required if the company used only internal resources. The company believes the new package will increase buyer satisfaction and be a significant benefit to them. A boat manufacturer had a problem some business owners can only dream of -- a growth problem. With the introduction of a new product line for the facility, company officials needed to find ways to maximize space utilization on the plant floor. An in-depth study was conducted of the layout and space allocation of the plant by a team of NCMEP specialists and plant personnel. Data was collected on all existing equipment and production reports were studied to determine certain cycle times and capacity constraints on equipment and personnel. A scaled CAD template layout of the facility was developed to help the team find the most efficient use of the available production floor space and to allow Aon the table@ changes and rearrangements. Using the CAD template, the plant was able to change and rearrange the production floor, add in the new line, and study the effect of the company's daily operations prior to shutting down production or moving any of the production machinery. This saved substantial time and money and enabled the production machinery to be moved only one time. IX. STRENGTHS AND WEAKNESSES The North Carolina program successfully links education and training with technical assistance. The heavy continuing education element, which provides fee-based programs for industry in North Carolina, dominates the programs of NCSU; but there is also a very strong technical assistance element that has been expanding as the federal government has added funds via MEP. These funds have allowed the IES portion to add offices and personnel and the education elements have integrated IES into the university. NCSU has also utilized industry advisory groups well, including using them as a training mechanism where model companies Ashow off@ their systems through a regular series of meetings at company facilities. The disadvantages of the North Carolina model are that education and training are the driving forces for the university rather than technical services. This heavy concentration on training tends to drive the programs toward regulatory compliance issues and the strengths of the university rather than the technical and management concerns of the companies, particularly the smaller firms. North Carolina has attempted to balance this by offering courses identified by companies and capable of producing revenues. Back to Top   MODEL I MEMBERSHIP-BASED ADVANCED TECHNOLOGY CENTER    BEST PRACTICE EXAMPLE EDISON WELDING INSTITUTE (EWI)   I. OVERVIEW AND FOCUS The Edison Welding Institute ( EWI) is one of seven Edison technology institutes in Ohio. EWI is the largest welding and materials joining center in the United States. Although it receives funding from the State of Ohio, EWI also receives funds from their members who come from almost every state in the United States and from other countries. They help clients in a variety of ways with their welding problems, with the goals of enhancing productivity, product quality, and cost effectiveness. They are primarily interested in new methods, materials, and processes for joining materials.  II. STRUCTURE EWI is a non-profit engineering organization with a membership of over 1,000 private companies and subsidiaries that use or seek new joining techniques. The center was established in 1984 as part of Ohio's Thomas Edison Program, but it is administered by a board of directors, a majority of whom are businessmen and women representing EWI clients. In addition, there is an Industry Advisory Board and several advisory committees that provide guidance on various programs and initiatives, such as the cooperative research projects.   III. REVENUES AND EXPENDITURES The Edison Welding Institute has a large budget from state, federal, and industry sources. Each Edison Center must match state funds 1:1, although they can use any funds at their disposal for the match, including federal funds, cash, and donated labor. The total two-year budget of the EWI from state sources is $7.6 million. They receive an additional $10 million from the U.S. Navy to fund the operations of the Navy Joining Center. Member companies pay annual dues on a sliding scale that range from $100 for a very small company to $85,000 for a Fortune 500 firm. Almost the entire budget of EWI is expended on staff salaries, training engineers and technical personnel in member firms, and various research and development projects undertaken for businesses, such as the cooperative research program. They also spend part of their budget on publications mailed to member firms.  IV. STAFFING The staff of the EWI consists of over 150 individuals, most of whom are engineers and scientists engaged in research in one of EWI's divisions, such as plastics or polymers. Most of the divisions are organized by the type of materials joining technology or material. V. CLIENTS EWI's clients are nationally and internationally based. They include automobile manufacturers, oil companies, steel companies, aerospace firms, and government agencies. VI. SERVICES Clients must join EWI in order to access the services they provide. Members receive a significant array of services. Since the Edison Centers primarily help technology-based companies, most of their efforts are in the area of technology services. However, there is also a range of business and financing assistance provided to EWI's members. Business and Management Assistance EWI provides the following services in this area: Consulting services. These include: process improvement such as reducing product contamination and reducing labor needs adaptation of environmentally-friendly technology linkage to resources, especially linking small start-ups in need of specialized capability with older firms with extra capacity automation of new joining processes to reduce rejects and allow sales growth assistance entering new markets by obtaining federal approval of a proposed product so it can be marketed to federal agencies or developing new civilian markets for a new product testing and experiment design of new welding techniques   High-Impact Assessment. This program is designed to help small and medium-sized manufacturers better utilize modern manufacturing techniques. The process is conducted in six steps: pre-assessment meeting financial analysis report on-site data collection data analysis and report generation assessment review and improvement planning improvement plan implementation During these steps, EWI evaluates the company using multiple factors: business product or service sales and marketing manufacturing operations financial information quality of products or processes materials management product design or engineering personnel facilities management information systems environmental safety Workforce Training. EWI provides training for managers, engineers, technicians, and production personnel. This is done through seminars, training programs, workshops, and publications. Video conferences are used for in-house training. Group-Sponsored Projects. In a group-sponsored project a number of companies get together to share the cost of research or engineering issues on new welding techniques. Afterwards, EWI prepares a report of the group's findings. Reports are disseminated only to sponsoring companies and are held as confidential. Sponsors, through their own board, decide on the nature and length of the projects. Technology Assistance EWI provides direct access to leading researchers at universities, networks from federal labs, technology information from international sources, national research centers, and professional and industrial associations. The EWI staff also helps firms with computerized research and patent research. In addition, EWI has implemented or has access to several different types of technology-oriented assistance for firms including the Cooperative Research Program, Navy Joining Center, Great Lakes Industrial Technology Center, and Wright Technology Network. Financing Assistance Many of the EWI's programs have as one of their objectives to improve the financial performance and efficiency of a business firm. Many of their projects address issues such as gaining new markets for new products, improving labor productivity, and reducing labor costs. EWI and the other Edison Centers in Ohio do not have direct financing assistance for firms. However, the business incubator run by EWI does attempt to link new business start-ups with different sources of financing. They also try to link new start-ups and small businesses with other large businesses that can help them. Moreover, the state offers a tax credit to Ohio taxpayers who invest in small R&D or technology-oriented businesses. VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES The Edison Welding Institute, like the other Edison Institutes, is directly affiliated with an Ohio university. EWI is located at Ohio State University in Columbus. In addition to its services outlined above, EWI also operates the Navy Joining Center, MANTECH, and the Center-of-Excellence with the purpose of modernizing the Navy's ship welding capabilities. EWI's involvement with the Navy has resulted in linkages between businesses and the military. EWI provides its member companies with access to the most recent research at universities, federal labs, and industrial and professional organizations. This is accomplished through video conferencing, seminars, workshops, training programs, and a variety of research and development projects on an individual and group basis. In addition, there are linkages with the Great Lakes Industrial Technology Center in Cleveland and the Wright Technology Network in Dayton, which has allowed significant technology transfer from NASA and Air Force labs. VIII. PROGRAM RESULTS Although current data is not available, during 1995 the Edison Technology Centers reported that they provided 18,000 instances of assistance. The centers created 2,200 jobs and retained an additional 4,300 jobs. Almost 13,000 people attended 260 Edison Center classes and seminars during the period. EWI performs 40 or more cooperative research projects each year, and they conduct 30 different education and training programs. IX. STRENGTHS AND WEAKNESSES The EWI is one of the most successful Edison Centers in Ohio. The Institute, like the other Edison Technology Centers, operates with an unusual blend of state, university, and business funding. All of the centers are membership organizations. They rely on their main university partners, federal agencies, and other centers located in Ohio for technology transfer activities. EWI has been one of the most successful U.S. technology centers in attracting a wide range and high number of business clients and in deriving a significant part of its revenues from fees-for-service. Back to Top   MODEL J CENTRALIZED TECHNOLOGY DEVELOPMENT AND TRANSFER INSTITUTE   BEST PRACTICE EXAMPLE DANISH TECHNOLOGY INSTITUTE (DTI)   I. OVERVIEW AND FOCUS The Danish Technology Institute (DTI) model is an example of a successful integrated national body that is found in several smaller member states of the European Union. It is core funded by the national government, Ministry of Trade and Industry, and gains an increasing proportion of its revenue from jointly sponsored work with Danish industry. Revenue comes from contract research and training programs. DTI is an independent, not-for-profit institution. It has a staff complement of some 1,000 people grouped into five broad divisions that reflect the priorities for technology services of the Danish economy: energy, environment, building technology, industry, and industrial and business development. Each of the groups is organized into a set of centers and projects that specialize in particular technology areas within their groupings. Some of these centers have been established for many years, while others are relatively new, which reflects the flexibility of the organization in its search to meet the needs of Danish industry. Annual funding is about 650 million DKr (approximately $100 million) of which an increasing proportion is funded by private sector organizations for whom DTI works on a contractual basis.  II. STRUCTURE DTI is a quasi-independent agency with a not-for-profit status. It is governed by a board of trustees that reports to a Council of Representatives and guides its executive board which has the chief executive as its president. DTI's main location is on a large site within the greater Copenhagen metropolitan area at Taastrup where the majority of the staff work and the main technical and training facilities are located. There are several regional centers, for example, West Zealand and South Jutland, that add to the accessibility of DTI to Danish industry. International services are also organized from the main site and involve spreading the expertise of DTI to partner nations through contracts with international assistance programs. The bulk of the DTI work is organized into five divisions that reflect the priorities of its clients. Each of these divisions is made up of more specific groupings that are organized either on a geographic basis or around a particular client base or technology area. The main divisions are:   DTI Building Technology Building Planning Systems Center Clothing and Textiles Component Center Concrete Center Masonry Center Productivity Center Pipe Center Wood Technology   DTI Energy Energy Production Energy Distribution Energy Consumption in Buildings Energy Consumption in Industry Energy Consumption in Transport   DTI Environment Biotechnology Chemical Technology Jutland Chemical Technology Sealand Environmental Management Environmental Management Jutland Air and Working Environment Water Technology Swimming Pool Technology Waste   DTI Industry Center for IT Systems Center for Information Technology Supplementary Training Center Danish Packaging and Transportation Research Institute Center for Industrial Metallurgy DTI Manufacturing Center for Materials Testing Center for Meteorology and Quality Control Center for Plastics Technology Center for Product Development Tribology Center IT Education & Training   DTI Industrial And Business Development Center for Human Resources Development Center for Industrial Analyses Euroinfo Center Center for Industrial Management Danish Innovation Center Center for Competence and Media Integration Market Service Center for Organization and Leadership South Jutland Regional Center Technology Partnership West Zealand Regional Center Center for Enterprise Management  DTI International DTI International is organized as a unit of DTI, charged with coordination, development, and implementation of international consultancy, training and transfer projects. For the implementation of these projects, DTI draws upon the almost 1,000 specialists from its five divisions, as well as other resources drawn from its network of national and international partners and collaborating institutions. The secretariat of the World Association of Industrial and Technological Research Organizations (WAITRO) is hosted by DTI International. With about 200 members in over 70 countries, WAITRO's activities are directed at institutional capacity building in developing countries. III. REVENUES AND EXPENDITURES Core funding for DTI comes from the Ministry of Trade and Industry, but this is now a much smaller element of the funding than was initially the case. Overall spending by the DTI has been relatively stable during the 1990s, but has risen from just under DKr 600 million to a current level of just over DKr650 million ($100 million). Importantly, over the decade the composition of income has been changing with a rising proportion now coming directly from customers and a declining proportion from projects. The core funding from government has been a static proportion at around 18 percent of the total. The element that has been funded from projects done largely for public programs has in absolute terms remained static, but in overall proportion has fallen from over 30 percent to around 25 percent. Direct services -- technology transfer and training related -- for customers has correspondingly risen from just over 50 percent to close to 60 percent. An important parameter that is watched by the management of DTI is the turnover per unit of personnel costs. This figure has risen from 1:1.3 to a level of 1:1.5. This indicates a growing level of income generation per employee and a rising trend in staff productivity.  IV. STAFFING DTI's current staffing complement stands at around 1,000 employees the majority of whom are qualified and experienced technologists who have had careers before joining DTI that range from business to academia. An increasing proportion of the staff also have training in business administration and a significant number are drawn from the social sciences to ensure that the softer sides of technology and innovation are adequately covered. V. CLIENTS The DTI client base is the whole of Danish business with a strong emphasis on the technical areas represented in its permanent centers. The fact that DTI is long established within the technological and innovation communities of Denmark mean that it participates in every forum of relevance. Its status as a quasi autonomous public agency means that it is equally well networked within the formal circles of the state, and from these into the programs of the European Union. It uses this position both to generate commercially important information for its corporate clients and to generate income for its own contract-based programs.  VI. SERVICES The objective of the DTI is to address the needs of industry and society through the development and dissemination of technological innovation. Technology is understood to embrace the purely technical as well as the interrelated areas of business administration and management expertise including its practical application. DTI meets this objective by establishing and maintaining a readily accessible R&D and service network. Resources and activities seek to meet the current needs of Danish manufacturing and service companies as well as technology-based artisan, transport, and distribution companies. The Institute's activities are implemented in collaboration with industry and its organizations as well as other domestic and foreign centers of expertise and government institutions. The services of DTI to its target group of Danish industry include applied research and development, consultancy, testing, training, and the dissemination of information and documentation. VII. LINKAGES TO TECHNOLOGY, BUSINESS, AND INVESTMENT RESOURCES DTI's central role and integrated character means it is the key contact organization for Danish technology and it is automatically linked to all other programs. It participates at the design stage for public programs, and through its industrial networks is involved in articulating their needs. Its success in raising its proportion of income from commercial clients demonstrates that it stays close to business as well as to the public sector networks. VIII. PROGRAM RESULTS The growing proportion of DTI's funds are coming from direct client services. This means it is increasingly surviving in a commercial context, so program result questions are diminishing in relevance. This move towards self-financing is prevalent through many of the previously publicly- funded institutes of European Union member states and is arising as much from changing thinking about relevance as from a desire to reduce the public budget contribution. According to its latest annual report, the Institute was rated Denmark's best provider of professional training courses for the fifth year in a row, while also significantly increasing its range of publications.  IX. STRENGTHS AND WEAKNESSES The strengths of this model are in the integration of all technology relevant services in one agency. This allows for flexible and interdisciplinary working and for efficient utilization of specialized equipment. However, it equally creates a single body that can be vulnerable in that the reputation of any part is dependent on the quality of all the others. This model also requires a strong early funding commitment from public sources even though the current movement is to encourage a growth in the revenue generated from direct client services. Client generated revenue only comes once the institute has established its reputation for providing quality services and having a commercial orientation that makes it a sensible partner for business. While the emphasis in public programs is on services to small business, the emphasis of DTI overall is for all industry in Denmark and this inclusiveness is important to its credibility. This business services culture is the central message from the DTI model that should be emulated by Polish agencies. Back to Top   MODEL K NATIONAL SYSTEM OF TECHNOLOGY TRANSFER CENTERS   BEST PRACTICE EXAMPLE FRAUNHOFER-GESELLSCHAFT   I. OVERVIEW AND FOCUS Fraunhofer-Gesellschaft is Germany's leading organization of institutes of applied research. Founded in 1949, today it operates 47 research establishments throughout Germany with over 9,000 staff, about half of whom are scientists and engineers. It undertakes contract research on behalf of industry, the service sector, and government. The market for contract research has changed radically in recent years, both in quantitative and qualitative terms. Fraunhofer-Gesellschaft has responded with new concepts and working models exploiting its strengths, such as the organization's decentralized structure and the entrepreneurial market focus of the Institutes, to meet the new parameters of demand. The new requirements made of contract research are a reflection of the challenges facing enterprises today, which compete on a global basis. Among other factors, these involve: internationalization of markets, production, and research and development activities shortening of product life-cycles, as well as fluctuating and more greatly differentiated demand, calling for more rapid responses to the market and low production costs without detriment to quality introduction and implementation of new models of corporate organization, including, for example, the virtual company concentration of in-house R&D on key fields, which favor the global procurement of know-how and technology increased importance attached to system solutions involving multi-disciplinary approaches increased interaction and interdependence between basic research, industrial research, and product development calling for still closer collaboration between industry and publicly funded R&D establishments shift in the creation of value added from manufacturing to the service sector The structure of the Fraunhofer-Gesellschaft, which emphasizes autonomy and self-determination, and the expressly desired high level of fluctuation among scientific staff, represent the dual basis of the Association's flexibility. It is possible at any time to establish new, project-related teams and introduce innovative working methods. Fraunhofer-Gesellschaft has set up the following focal strategy for the final years of the present decade: to further increase customer value through greater internal, multi-disciplinary co-operation and systematized solutions to further enhance the Association's market position through entrepreneurial extension of the Fraunhofer model to expand existing business fields and international scientific collaboration through the foundation of further associated establishments abroad Fraunhofer-Gesellschaft works within the framework of the European Union's technology programs, striving to improve the competitiveness of European industry through the enhancement of technical systems and processes. Apart from the collaboration with numerous companies and research establishments within Europe, Fraunhofer-Gesellschaft operates resource centers and research units in the United States and in Asia. II. STRUCTURE Fraunhofer-Gesellschaft responds to a changing environment with constant internal improvements and new forms of collaboration. Research Fields: A living research organization that wishes to adapt flexibly to the changing market must be prepared to undergo constant internal renewal. This includes the creation of new fields of research and, equally, capacity reductions in areas of technology where demand is declining. Eight fields form the core of Fraunhofer research. The current research fields are: Research Field 1: materials technology, component behavior Research Field 2: production technology Research Field 3: information and communication technology Research Field 4: microelectronics, microsystems technology Research Field 5: sensor systems, testing, and measurement technology Research Field 6: process engineering Research Field 7: energy and construction technology, environmental and health research Research Field 8: technical and economic studies, information transfer Application Centers: Fraunhofer-Gesellschaft has been extending its traditional collaborations with universities since 1994 by inviting professors working in industry-related research to head so-called Fraunhofer Application Centers as branches of an existing Fraunhofer Institute. Innovation Centers: Innovation centers are set up to complement Fraunhofer Institutes. They serve as a new instrument in the innovation process, closing the gap between potentially applicable R&D results generated by the Institutes and the market introduction of new products by means of field tests, prototypes, and pilot plants. In 1997, Fraunhofer-Gesellschaft was able to found two Innovation Ccenters. Run by commercial managers and incorporated as limited companies (GmbH), innovation centers are assigned to existing Fraunhofer Institutes to provide support in the marketing of the results of their research. Innovation Centers do not receive any institutional funding, either directly from granting agencies or indirectly via the associated Fraunhofer Institute. The typical services of an Innovation Center will lie in such activities as production of materials, component modules, and devices in small quantities for field trials and test markets. It is expected that Innovation Centers will stimulate the formation of spin-off companies. Staff from the Institutes takes the technology they have developed and form their own company. The main areas in which this happens are microelectronics, software engineering, and biotechnology. Spin-offs from Fraunhofer Institutes are deliberately encouraged. In early 1997, Fraunhofer-Gesellschaft, with the approval of the German Research Ministry (BMBF), published guidelines for the promotion of technology transfer through the formation of new companies, based on the procedures that had already been put in practice. The guidelines define conditions under which spin-offs can be formed and what support their managers can expect during the initial stages of independent operation. Fraunhofer Patent Center for German Research: The Fraunhofer Patent Department acts on behalf of Fraunhofer-Gesellschaft in all intellectual property and licence law matters. As such, it is responsible for filing applications for inventions resulting from Fraunhofer Institute research and development activities as well as for their maintenance and enforcement. It negotiates licence agreements for industrial and commercial exploitation of Fraunhofer patents. The Patent Department purchases, promotes, and markets inventions stemming from university and non-university research, small companies, and other private sector sources. In addition to this, it supports and advises companies in planning new products, procuring innovative technologies, and developing and realizing patent strategies.  III. REVENUES AND EXPENDITURES Fraunhofer Institutes are required to obtain a significant amount of their funding from industry through contract research projects. The overall budget for 1997 was 1.3 billion marks (US$ 800 million) of which 83 percent was allocated to contract research, 5 percent to defense research, and 12 percent to building construction and investment in equipment. Industrial revenue accounts for more than one-third of expenditure on contract research. In order to stabilize and encourage demand from industry, initial preparatory research needs to be prudently but adequately funded. In this context, shortcomings are increasingly evident. Whereas in 1991, public funding of projects accounted for 34 percent of the contract research budget, in 1997 the figure had fallen to a mere 18 percent. The lack of funding for preliminary research acutely hampers the stable ongoing growth and development of Fraunhofer-Gesellschaft. Therefore, Fraunhofer pursues a dual interlinked strategy: to secure public funding for preliminary research and to expand its market share in contract research.  IV. STAFFING Fraunhofer-Gesellschaft employs over 9,000 staff, between 500 and 1,900 in each research field. They are employed with the different Fraunhofer Institutes throughout Germany. As an example, the Institute for Technology Development Group employs 30 people full-time, whereas the Institute for Manufacturing Engineering and Automation has over 200 staff. The Patent Department employs a staff of 55. The Fraunhofer-Gesellschaft gives young scientists and graduates the possibility of acquiring further qualification and experience on limited contracts. After five years at a Fraunhofer Institute, career opportunities elsewhere customarily become available. Fraunhofer actively supports this transfer of minds. In addition to ensuring its own flexibility in specialization through new recruitment, it creates a network of Fraunhofer Aalumni.  V. CLIENTS Fraunhofer-Gesellschaft bridges the gap between industry, the public sector, and the university. Target groups and beneficiaries of Fraunhofer's research are both the public and private sectors. Commissioned and funded by the federal and Länder governments, Fraunhofer-Gesellschaft undertakes strategic research projects for the public sector that contribute to the development of innovations in key technologies and spheres of major public concern, such as energy, transport, and the environment. Fraunhofer also participates in the European Union's technology programs. On behalf of the private sector, Fraunhofer-Gesellschaft develops economical and immediately applicable solutions to technical and organizational problems and contributes to the transfer of new technology. Fraunhofer is an important provider of innovative know-how for small and medium-sized enterprises without their own R&D departments. In 1997, Fraunhofer-Gesellschaft undertook work on behalf of 2,700 customers, 70 percent of which were small and medium-sized enterprises with fewer than 500 employees. Around one-third of industrial revenue generated in 1997 was from contracts with customers who had no direct relationships with Fraunhofer during the previous five years. With the total volume of research contracted to universities and publicly funded scientific establishments in Germany valued at DM 1.4 billion (US$ 830 million), the market share held by Fraunhofer-Gesellschaft is above 25 percent.  VI. SERVICES Fraunhofer-Gesellschaft develops products and processes available for introduction into the market. Through direct collaboration, customers are provided with applicable solutions to technical and organizational problems. If necessary, Fraunhofer institutes work together to solve complex problems. In particular, Fraunhofer offers the following services: prototype development development of technologies and production processes assistance with the introduction of new technologies testing demonstration center with the latest equipment staff training service provision after introduction of new process/technologies and products profitability analyses feasibility studies market assessments trend analysis environmental impact analysis profitability calculations other services such as consultancy, particularly for SMEs Fraunhofer Technology Development Group (TDG): As an example of how elements of the Institute function, TDG works primarily in design and development of new products, innovative manufacturing processes, and material-flow component technology. All methods and technologies employed are state-of-the-art. These include simulation and quality-assurance techniques, such as Quality Function Deployment and analyses of fault potential and correction, and experimental testing methodologies. These services are complemented by project collaborations with specialized Fraunhofer Institutes. Therefore, TDG is in a position to ensure customers a wealth of in-depth and interdisciplinary expertise in the teams contracted to work on their behalf. The broad range of services provided encompasses knowledge transfer, feasibility studies, development of laboratory models and prototypes, and construction of production plant and equipment. The Institute's long-term activities involve further development of the tools, processes and techniques implemented, based on the results of projects carried out. TDG employs a full-time staff of 30 and works in the following research fields: < TEG.1 Product Engineering and Material Handling: Technical studies (rationalization, feasibility), planning of work processes, machine interlinkage, production and assembly cells, development of transport and interlinkage facilities, production engineering consultancy, warehouse (material administration), production automation, plant engineering and simulation. < TDG.2 Project Development: Development of prototypes, design, specialized developments (e.g., handling facilities), function model (sample), conception of laboratory and experimental facilities, product and patent utilization, including patent consultancy; continuous improvement. < TDG.3 Management and Methods: Implementation of latest technologies (involvement of associated Institutes), project management, QFD, FMEA, value engineering, quality standards and norms (ISO 9000, CE trade marks), implementation of environmental technologies, implementation of system solutions, development of medical engineering and products, consulting trade and small companies.  VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES Fraunhofer is a significant player in all the technology and business networks in Germany and has specialist teams that connect it to all the other related networks including the business and investment sector.  VIII. PROGRAM RESULTS Fraunhofer-Gesellschaft's program results are best described in terms of the growth in activity of the institute's income and customer base. In the last ten years revenue from industrial sources has grown more than three times to in excess of Dm 360 million (US$ 200 million). Over the same time period the number of industrial customers has grown to just under 3,000, and the number of patent applications has risen to 400 (a four-fold increase). IX. STRENGTHS AND WEAKNESSES The Fraunhofer model is a particularly well-resourced technology transfer institute with a wide range of interests spread in an entrepreneurial structure over many different operational units. Thereforel, it gains the best features of the small and flexible agencies, while enjoying the prominence of a very large pool of resources that form a national network. It also benefits from the well organized German technology development and management system, which has developed over the last half century. Back to Top   MODEL L TECHNOLOGY EXTENSION AND NETWORK DEVELOPMENT   BEST PRACTICE EXAMPLE TEKES AND THE FINNISH TECHNOLOGY CLINICS   I. OVERVIEW AND FOCUS TEKES is the Finnish national agency for technology development and was founded as a technology development center in 1983. It provides financing for research and development (R&D) in Finland with an annual budget of over US$300 million. Its role is to build a national system of innovation. Its strengths lie in its combination of three networks: a technological expertise network, a local and regional outreach network, and an international counselor network. The TEKES clinics program has proved a fertile tool in bringing together firms with particular needs and R&D sources with knowledge and skills to offer. The program is demand driven and seed funded by TEKES, but requires a strong financial commitment from the SMEs involved. The clinics have fallen into one of six categories, which are selected by the participants rather than imposed. They are: technology-based clinics theme-based clinics cutting-edge clinics catch-up clinics methodology clinics demonstration models   II. STRUCTURE TEKES' structure is project-based and has spread into a wide variety of fields -- around 2,000 projects are funded each year. Its spending is calculated to represent around one-sixth of Finland's total R&D spending. The network concept is at the heart of its thinking. It has international networks through its counselors in Finnish embassies and local networks through its outreach offices in the Finnish regions. Additionally, its central funding role means that it is well networked within the Finnish R&D system, although it is not a deliverer of R&D in its own right. Since September 1997, the former TEKES regional offices have been renamed as Technology Units and are located at the following Employment and Economic Development Centers: Uusimaa, Helsinki Central Finland, Jyväskylä Häme, Lahti Kainuu, Kajaani Kymi, Lappeenranta Lapland, Lappi North Carelia, Joensuu North Savo, Kuopio Northern Ostrobothnia, Oulu Ostrobothni, Vaasa Pirkanmaa, Tampere Satakunta, Pori South Ostrobothnia, Seinäjoki South Savo, Mikkeli Varsinais-Suomi, Turku Its international network reaches important centers through placements in the Finnish embassies. The embassies are responsible for both disseminating information on and providing contacts to Finnish companies, research institutes, and universities in all fields of technology. Industrial attachés promote technological cooperation between their base country and Finland. They transfer information about new technological innovations, emerging technologies, technical standards and requirements, and product specifications. Industrial attachés actively promote Finnish technology and are always pleased to provide more information. TEKES attachés are located at the following embassies: Europe: Bonn, Brussels, and London North America: United States of America (Boston, Los Angeles and Washington, DC) Asia and the Pacific: Tokyo Its central organization is divided into three main program areas: production and engineering, chemical and biological, and technology advice and technological programed. It is the work of the latter division that this model describes. III. REVENUES AND EXPENDITURES Funding for TEKES comes from the national government budget. It spends roughly two-thirds of its overall US$300 million budget on R&D projects and one-third on applied and technical research including technology extension services. IV. STAFFING The technology clinics program requires a few dedicated staff to market the scheme and to seed new groups, but then the clinics become distinct operation units with their own budgets. V. CLIENTS The clients of the technology clinics program are SMEs who are encouraged to join or to develop new clinics around their own specification of needs, which are identified during the TEKES sponsored marketing phase. They are spread throughout Finland and are nurtured by the technology counselors and local level networks. VI. SERVICES The Technology Clinic initiative was started in 1992 to bring together technological service providers, SMEs, and financiers of technological support activities. By September 1997, there had been a total of 15 clinics (many of which are still operating) that carried out a total of over 250 assignments for SMEs. In essence, technology clinics are an organizational innovation that responds to the needs of both suppliers and users in SME-technology supplier relationships. Technology clinics can be used to develop both the demand and supply sides of these relationships. By making it easier for SMEs to tap into sources of external technological assistance, technology clinics can be used to teach SMEs to use the expertise of technological service providers. By providing incentives and assistance to technological service providers, technology clinics can be used to develop the responsiveness of these to SME needs. In each technology clinic, there are four organizations involved: the customer SME (even though not all customers of technology clinics are SMEs), TEKES, the clinic coordinator, and the technological service provider. Sometimes the roles may overlap. In some technology clinics, the food hygiene clinic for example, the coordination responsibility has been allocated to the main technological service provider. The public funding for individual technology clinic projects is provided through TEKES. The financial support for SME projects can cover up to 50 percent of the costs of the project. The remaining 50 percent is covered by the customer SME. If the assignment is substantially larger than 20 000 ECU, the project will be channeled through the normal project application pipeline, the processing time of which is considerably longer. TEKES also pays a management fee for the coordinator of the clinic and allocates funding for the marketing and planning budget of the clinic. In terms of themes, at least six generic types of technology clinics can be identified. In individual clinics, it is typical that characteristics of several generic types may be present. The six generic types of technology clinics are described below. 1. Technology-based clinics focus on a specific technology. The mission of these clinics is to diffuse this technology into the SME sector. Typical technology-based clinics include, for example, the beam welding clinic, computational fluid dynamics clinic, and the surface coating clinic. 2. Theme-based clinics aim at promoting awareness of, and offering solutions to, a specific theme, problem or regulatory change. In theme-based clinics it is typical that the problem can be solved using several alternative technologies or methods. Typical theme-based clinics include, for example, the usability clinic and the noise and vibration clinic. 3. Cutting-edge clinics aim at keeping Finnish SMEs at the forefront of technological development in some areas of technology, or possibly at helping them increase their lead over international competition. Examples include the surface coating clinic, the light structures and composite materials clinic, and the rapid prototyping clinic. 4. Catching-up clinics aim at helping Finnish SMEs catch up to international standards in some areas of technology. Examples of catching-up clinics include the usability clinic and the electro-magnetic compatibility clinic. 5. Methodology clinics aim at disseminating good management practices and methodologies into the SME sector. Examples include the technology strategy clinic and to some extent the rapid prototyping clinic. 6. Demonstration clinics aim at offering demonstration services to a selected group of customers in a particular sector. One example is the recycled materials in road bench construction clinic. In choosing topics for technology clinics, both supply and demand side issues are considered. Typically, technology clinics address both of these, even though the relative emphasis between the two may vary. Practically all technology clinics aim at developing the demand side by promoting SME awareness of the topic of the clinic and by teaching SMEs to use technological services. In addition, many technology clinics address supply side issues by attempting to strengthen the domestic supply of technological services in selected areas. The theme for a technology clinic can be proposed by anyone. So far, the themes of most clinics have been proposed by either TEKES experts or by technological service providers. Once the topic is selected and key themes defined, the commitment of the organizations possessing the best expertise in Finland is secured, and the clinic facilities are marketed to the target SMEs. This marketing effort is normally the responsibility of both the clinic coordinator and the technological service provider. The regional offices of TEKES support the clinics by acting as a marketing interface. Clinic assignments may be proposed by SMEs at any time when the clinic is open. A technology clinic may be open for up to three years, even though individual clinic assignments within technology clinics are carried out rapidly. In most cases, the coordinator of the technology clinic is a specialized clinic coordinator, such as Finntech Ltd or Tamlink Ltd. Typically, clinic coordinators do not participate in the technological service provision. Some technology clinics are organized as extensions of the national technology programmed of TEKES. In such clinics, for example the Machine Vision Clinic, the coordinator of the national technology programed also performs the tasks of the clinic coordinator. For these, the expertise brought together through the national technology program provides an obvious basis on which to organize the supply side. Typically, technology clinics are marketed through a number of channels. The clinic coordinator or the technological service provider usually builds a database of SMEs that are potential customers. The address databases are often obtained from relevant industry associations. In addition to mass mailings, marketing seminars are usually organized. The marketing seminars serve demonstration purposes and have a mission to teach SMEs of the importance of the topic of the clinic. The most important marketing mechanism is based on direct contacts with SMEs. However, SMEs may be contacted by the clinic coordinator, by TEKES officers, or by the technological service providers. First, a contact is established between the SME and the clinic. The SME may either contact the clinic on its own initiative or it may have been contacted by the technological service provider. After the first contact, a problem analysis within the SME typically follows. The technological service provider often helps the SME draft an application for clinic support. This process entails defining the clinic assignment. The one- or two-page application is then submitted either to the clinic coordinator or directly to TEKES. The applications are processed very rapidly, typically within three days. A one-page contract is drafted with signatures from the clinic coordinator assuring that the project is eligible for the clinic, with TEKES guaranteeing part of the funding, and the SME confirming its participation in the assignment. The clinic assignment itself is typically carried out within a matter of weeks, even though there have been assignments that have lasted more than one year. After the assignment has ended, there may be follow-up projects between the SME and the technological service provider. These are typically not carried out through the clinic any more. In the clinics carried out so far, the nature of the customer SMEs has varied considerably. The majority of the SME customers have not been very technologically sophisticated, even though there may be major differences between technology clinics in this regard. The industry sectors represented by the SMEs served may also vary considerably. A typical clinic assignment can entail a feasibility study prior to an R&D project, a technological investment, or a plainly technological issue such as upgrading a method for material testing. Examples of typical assignments include: selecting the optimal raw material prototyping changing the composition of a raw material testing a piece of new equipment or a new material improvement of production methods improvement and development of measurement systems adaptation of products or materials to a regulatory change certification of a product or material TEKES has a number of instruments it uses to further its programs. They include: < Grants for Companies: Grants run from 25 percent to 50 percent of the costs of salaries, raw materials, machinery, subcontracting, travel and patents.  Small and medium sized companies qualify for an additional 10 percent of funding. < Risk Loans for Companies: Loans can range to up to 60 percent of the costs of salaries, raw materials, machinery, subcontracting, travel and patents. Small and medium sized companies qualify for an additional 10 percent of funding. < Grants for Applied Technical Research/Research Institutes and Universities: Grants can range from 50 percent to 100 percent of the cost of salaries, raw materials, machinery, subcontracting, travel and patents. The grants are directed to the research work done at research institutes and universities. The technology clinics with which this model is particularly concerned is a shared-cost program, which requires a significant contribution from the SMEs that are involved in the clinics. This is in line with its demand-led philosophy.  VII. LINKAGES TO TECHNOLOGICAL, BUSINESS, AND INVESTMENT RESOURCES The linkages to the rest of the technology environment is achieved through the local and national level networks that have already been fully described in the prior section. These linkages include, at the national level, connections with the Finnish R&D System and Employment and Economic Development Centers; and at the international level, outreach through Finnish embassies. VIII. PROGRAM RESULTS The technology clinics program has had fifteen active clinics that have provided services to over 150 companies. The category and main focus of the clinics can be derived from their titles. The most frequent clinics are found in food hygiene and surface coating. Food Hygiene Clinic 62 Surface Coating Clinic 50 Product Approval Clinic 27 Noise and Vibration Clinic 24 Machine Vision Clinic 19 Beam Welding Clinic 18 Rapid Prototyping Clinic 15 Wood Drying Clinic 13 Plastic Composites & Light Structures Clinic 11 Technology Strategy Clinic 6 Usability Clinic 6 Recycled Road Bench Material Clinic 5 Electro-Magnetic Compatibility Clinic 3 Intelligent Systems Clinic 3 Lon-Works Clinic 2 IX. STRENGTHS AND WEAKNESSES Finland's network of clinics works well and the clinic system has become an important part of the outreach and technology transfer infrastructure. They are owned by the participants and bring together in a focused way the supply and demand side. They have taken some time to be established, but are now flourishing. These networks need a strong and credible national organization that has itself an established infrastructure upon which new networks can be built. They also need a continuing funding source to ensure that during the seeding stage of the clinics there is sufficient backing to become established. Eventually, they also need to be transferred to full cost-covering status with the companies covering all the costs involved in their operations. The message of linking demand and supply within a structure that focuses on real problems or opportunities for which the companies pay to participate is a clear signal of what is needed. The difficulty will be to assemble the core funding in the first instance and to sell the participation idea to the companies who may be reluctant to pay. A pilot program on a topical technology may be a good way of at least testing the concept on the Polish conditions and establishing a demonstration of what can be done. Back to Top

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