Upjohn: ROI of Manufacturing Extension Partnership eclipses 14:1

May 30, 2019

The National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP) Program generates a sizeable financial return on investment for the federal government, according to a recent study by the Michigan-based W.E. Upjohn Institute. The $140 million invested in MEP during FY 2018 by the federal government generated more than $2.0 billion in increased federal personal income tax, a ROI of roughly 14.4:1 according to Upjohn researchers Jim Robey, Randall Eberts, Brian Pittelko, and Claudette Robey. Based on direct, indirect, and induced jobs generated by projects at MEP centers, the authors also find evidence that total employment in the U.S. was nearly 240,000 jobs higher than it would have been without the program.

Additional economic impacts of the program identified by Upjohn include personal income that is $15.0 billion higher and overall GDP is nearly $25.0 billion greater. In a previous study, Upjohn economist Tim Bartik found that customized business services such as manufacturing extension can be up to 10 times as effective for job creation as traditional tax incentives.

The study, The National-Level Economic Impact of the Manufacturing Extension Partnership (MEP), uses an economic impact model developed by Regional Economic Models Inc. (REMI) to forecast the indirect and induced effects of reported increases in jobs, sales, cost savings, and investments by MEP clients.

This return is slightly smaller than the 14.5:1 ROI identified in last year’s study (based on FY 2017 data), but considerably higher than the 8.7:1 ROI identified in the original study (based on FY 2016 data).

 

mep, manufacturing