an environment in which these firms can gain more rapid and efficient access to the latest technological developments, especially advanced manufacturing technologies.

Given these factors, one of the most compelling arguments for the technology access program envisioned in your bill is that it is uniquely tailored to meet the needs of the small manufacturer by making the whole universe of technology available to him at or near his place of work, in a readily accessible format, on a continuing basis and at little or no cost. I noted Mr. Kammer's mention of Federal technology programs. I think that some of the statements I have just made about the slow rates at which smaller companies are adopting advanced technologies indicates that this technology is simply not getting through to the smaller companies.

I think that there is a very strong argument indeed for taking a hard look at seeing if a new database system can be created which integrates not only Federal programs but existing commercial technologies and also international databases. The experience of Teltech and other firms indicates this can be done.

So, in terms of the two sides of the argument I tilt clearly, and I think we all tilt clearly, toward Mr. Shuster's view of this. My principal reservation about this bill is that it is too modest in its pretensions. This committee, the Congress, and the Nation are deeply concerned over the relative decline of America's industrial competitiveness. The fact that the public ranks only one American car in the top 10 in terms of reliability and quality is a further indication that those concerns are justified.

To correct this situation, the Nation needs bold programs which can have an early impact and which reach all corners of American industry. The Technology Access Program which your bill would establish foresees the completion of a five-State model by fiscal year 1995. To have a national impact and to make a significant dent in the problems of American economic competitiveness and standard of living, this program should be broadened and strengthened.

For example, I would suggest the following changes in the bill as drafted. First, I would expand the number of States participating in the pilot program from 5 to 15. This would provide a much stronger foundation for moving more rapidly to a full national program, assuming that the pilot program proves successful. A larger number of participants would also permit organizing the pilot by three to four regions. A regional approach to these issues has usually proved more effective. Regions tend to have economic structures and industries with distinctive characteristics and are often organized to work together on economic development issues.

Second, I would amplify the number of public access points for this technology by not confining it only to Small Business Development Centers. Without in anyway detracting from the key role of those centers, the bill might give the Secretary of Commerce the authority to designate other centers as participants in the program. In addition to the Small Business Development Centers, there are also well-established extension service programs organized by some State Governments, by community colleges, by tech centers, and State universities. The Secretary would need to establish criteria for their participation. For example, they should have

an established program for industrial extension, well-defined mechanisms for communicating and coordinating with industry in their area, including with small manufacturers, a well-qualified staff for this purpose, and an ability to offer matching funds. Inclusion of these additional centers would also amplify the number of public access points and make the entire program that much more accessible to small business.

Third, I would increase the funding for this program at least three fold and State specifically that, if the pilot program succeeds, a substantial expansion of this program on a national scale is envisaged. I can assure you that the members of the National Coalition for Advanced Manufacturing will stand squarely behind an effort to secure more adequate funds.

Finally, I would accelerate the timetable for this program. Systems for identifying experts in various fields of technology already exist and have proven their effectiveness in several States. H.R. 4659 stipulates that the pilot program will last until fiscal year 1995, with the first evaluation by the Secretary of Commerce taking place after 3 years. Given the fact that the Technology Access Program would be building upon established systems and would not be starting from scratch, this schedule could safely be reduced by one year.

Mr. Chairman, the Technology Access Program proposed by H.R. 4659 represents a remarkable opportunity. If implemented on a national scale, this program would help reach that heretofore elusive goal: effective, timely transfer of technology from the Federal establishment into the private sector. It would use the leverage of modern data collection and dissemination technology to make the knowledge of the Nation's leading experts in any given technical field immediately available where it is most needed: In the hands of the plant engineer.

The benefits of this program far outweigh the cost. Indeed, the most compelling argument for this approach is the extraordinarily high return on investment. It is hard to imagine any program which could more directly and promptly improve industrial productivity, growth, and competitiveness than this one.

[Mr. Reddy's statement may be found in the appendix.] Chairman LAFALCE. Thank you very much, Mr. Reddy. Mr. Anderson.

TESTIMONY OF LLOYD E. ANDERSON, INTERIM DIRECTOR, CENTER FOR INDUSTRIAL RESEARCH AND SERVICE, IOWA STATE UNIVERSITY OF SCIENCE AND TECNOLOGY

Chairman LAFALCE. Our next and final witness will be Mr. Lloyd Anderson, director, Center for Industrial Research and Service, Iowa State University of Science and Technology.

Mr. ANDERSON. Thank you, Mr. Chairman. The center is an industrial extension service funded by the State of Iowa. Its purpose is to provide technical and management assistance to Iowa manufacturers. Since its establishment in 1963, the center has responded to nearly 30,000 requests from Iowa manufacturing firms.

The center provides these types of assistance: Problem solving in technical and management areas, relying heavily on faculty and

other university resources for assistance; decision support by assisting firms with business plans, expansion plans, product development, equipment and process selection; technology transfer through linkages with faculty, researchers, NASA, Federal Laboratory Consortium and data base searches; information dissemination and exchange through interactive contacts with manufacturers and a quarterly newsletter that is mailed to manufacturing owners and managers; continuing education through the development of workshops and conferences.

Center personnel include a field staff of six who maintain daily contact with manufacturers through on-site visits, a central staff of 6.5 persons who function as specialists in engineering, marketing, and management, and three administrative support personnel.

I was asked to comment on the importance of technology transfer to small business, the strength of Teltech's form of technology transfer and finally how the bill might be improved.

Concerning the importance of technology transfer to small manufacturers, I would like to comment with respect to Iowa. Manufacturing in Iowa is the most important source of personal incomegenerating nearly three times as much as farming. Contrary to common perception, more than 70 percent of Iowa manufacturing employment is not related to agriculture. Given this degree of dependence, it is essential that Iowa manufacturers must become world class order in order to compete both domestically and internationally.

In order to compete successfully, awareness of new and existing technology, technical expertise, marketing information, and management techniques is critical. Of the estimated 4,100 manufacturing firms in Iowa, more than 3,100 employ less than 100 persons. Therefore, they do not have large internal staffs of specialists to draw on. In addition, many of these firms are located in rural areas where the opportunity for peer interaction is limited.

Our experience with computerized data base searches stems from our designation as a NASA Industrial Application Center. Since our participation began, we have conducted more than 700 searches for manufacturing clients. These include searches for highly specific technical information, marketing information, preliminary trademark and patent searches. User evaluations indicate this service has been highly beneficial.

We believe electronic access to expertise and technical information is an essential tool for a modern technical or industrial extension service. As stated previously, this method of delivery is particularly beneficial for small and medium manufacturers.

I would like to relate one experience in one small company. A firm located in a small community that manufacturers waste recycling trailers has made several requests for CIRAS assistance. Verl Anders, a CIRAS field staff member for northeast Iowa, assisted the firm with a preliminary patent data base search. Several months later, the company president provided comments about the search:

Our firm was able to enhance our relations with a major customer because of added expertise. We avoided costs in chasing ideas already patented. We can now check information previously unavailable to small companies such as ours. This makes us much more professional and competitive. Mr. Anders did an excellent job

in every respect, and the service he provided exceeded my expectations. CIRAS made a small Iowa manufacturer look good to a major out-of-State customer because we had current information available promptly. This helped us maintain contracts worth over $500,000 annually.

I have included several other examples in attachment II.

With respect to Teltech's method of technology transfer we think their capabilities represent an advance in the use of data bases to efficiently match the needs of users with appropriate expertise and information. Teltech's strengths include access to experts, as well as to technical literature, expanded data bases and an effort to make the system more user friendly. As Mr. Shuster pointed out, there are a lot of programs, small and fragmented. This is making it difficult for a center such as ours to be aware of all of them.

These are our suggestions, that in our opinion, would improve the bill. H.R. 4659 would be strengthened if the existing data base program could be consolidated into a single Federal effort. NASA experience could be very valuable to a new and enhanced technical extension program.

We suggest that existing State industrial extension programs that are not a part of the Small Business Development Center program be allowed to apply for grants to be used to increase access of small manufacturers to on-line data bases. This would be similar to the provisions regarding the Small Business Development Center Technical Assistance Program.

Finally, we believe that the time is proper to establish a permanent Federal/State Cooperative Technical or Industrial Extension Service. Need for a Federal/State Cooperative Technical/Industrial Extension Service. Within the last 12 months, three studies have been published which examined in-depth existing Federal, State and European industrial/technical extension efforts. The studies were performed for the National Governors Association, the Economic Policy Institute and the Economic Development Administration. A brief summary of each of the studies is included in attachment II.

The studies of Federal and State programs indicated that the existing industrial/technical extension services have generated substantial economic benefits, but their effectiveness is hampered by lack of funding. Because the studies have already profiled successful industrial/technical extension models, we do not believe it is necessary to embark on yet another pilot study.

There is a vital need for an adequately funded industrial/technical extension service. As indicated earlier, small manufacturers must become world class to survive. Product life cycles are shrinking, manufacturing processes and methods are undergoing rapid change and international competition is intensifying. European and Pacific rim nations are making major commitments in assisting their small- and medium-sized manufacturers. Without a similar commitment, our small- and medium-sized manufacturers will be at a serious disadvantage.

Each of the studies emphasized the need for ongoing interactive contact with manufacturers on their premises as a key factor in successful industrial/technical extension services. This has certainly been our experience. Whereas electronic access to data bases is an increasingly important tool in technology transfer, professional

assistance is required to help clients identify problems and needs, formulate inquiries, and finally, to assist clients in acting on the information that is provided.

It is our belief that a Federal/State Cooperative Industrial/Technical Extension Service should be established in order to substantially increase our industrial outreach capabilities, that it be permanently funded and that emphasis be placed on assisting existing small and medium-sized manufacturers. Thank you, Mr. Chairman. [Mr. Anderson's statement may be found in the appendix.] Chairman LAFALCE. Thank you, Mr. Anderson. We thank all the members of the panel. I will defer my questioning until after the other members of the committee have had an opportunity to ask their questions. Our first questioner is Congressman Wyden.

Mr. WYDEN. Thank you very much, Mr. Chairman. Mr. Kammer, let me start with you since you represented the administration today. Dr. Bromley testified almost a year ago, describing the process in his words as one filled with Byzantine complexities. Can you cite me specific steps that the administration has taken in the last year to reduce the Byzantine complexities Dr. Bromley referred to? Mr. KAMMER. I can cite a number of examples where I think the objectives have been advanced but the complexities increased, not decreased, I would say, in the last year. Part of my reservations about the bill that I presented is that it seems to add another idea to the process without simplifying the process.

Mr. WYDEN. What has the administration done in the last year? Dr. Bromley promised my Subcommittee on Regulation a plan for reducing the complexities, yet, we still have nothing on paper. That is one of the reasons we need this bill and I think Chairman LaFalce's legislation is so important.

Name me one specific step in the last year that the administration has taken to do what my constituents in Oregon, in the newspapers, and in letters to my office call getting the lead out.

Mr. KAMMER. I think the implementation of the Boehlert-Rockefeller program and the information technology centers in the last year have been useful steps.

Mr. WYDEN. I identified five separate roadblocks in technology transfer here with Dr. Bromley. First, that the labs did not have technology transfer officers; second, that they did not have the legal staff to help process legal concerns; third, that the DOE labs did not promptly issue security clearances; four, that there was not a clearinghouse to address these issues; and the fifth roadblock was that it was not even a priority for the managers. Has anything been done on those five roadblocks?

Mr. KAMMER. With respect to the clearinghouse, as you probably know, one was mandated by the Competitiveness Act of 1988. It has been set up now. It is just beginning operation but it is funded. That is in the Technology Administration. The head of that is Rob Atkinson. His phone number is 202-377-8100.

Mr. WYDEN. Let me ask Mr. Shuster. Mr. Shuster, are your people aware of a clearinghouse being in place where they can now go to get what we envisage and what you in Minnesota have been talking about, this one-stop service?

Mr. SHUSTER. Frankly, we are confused. We hear the word, clearinghouse. We don't even know what it means.