NY budget cuts threaten to idle engines of productivity

CNY Business Journal (1994-95), May 01, 1995 by Hadley, Mark

ALBANY--Solid economic development needs engines to drive it. And two of the engines New York state relies on are technology and business productivity. But an examination of Gov. George Pataki's proposed budget reveals that these engines may soon begin to cough and sputter for lack of fuel.

The linchpin for using technology to make New York's factories more efficient is a cadre of manufacturing consultants around the state. Business owners who want to adapt the latest technology to their factory floors can use state funds to help pay the consultants' substantial fees. Some of the consultants maintain a private practice and work for the state on an as needed basis. Others work for the state full-time out of a far-flung network of offices called Technology Development Organizations (TDOs), drawing funds from the New York State Science and Technology Foundation and from local sources. Federal funds and the state's Department of Economic Development fund some programs operating from TDO offices.

Under the controversial Pataki budget, funding for the TDOs would be reduced.

It's hard to generalize about the New York TDOs. Each has a local board of directors and a slightly different focus, depending on the particular needs and characteristics of its area.

For Syracuse and Central New York, there is the Central New York Technology Development Organization (CNYTDO). The North Country is served by the Council for International Trade, Technology, Education, and Communication (CITTEC) in Potsdam. The Mohawk Valley Applied Technology Commission (MVATC), in Utica, focuses on Herkimer and Oneida counties. And the University Industry Partnership for Economic Growth, known as UNIPeg, is headquartered in Endicott.

While each organization shares certain responsibilities under its mission for the Science and Technology Foundation, the boards of directors and their local business and educational resources vary. AU are charged with helping turn new technology into viable business. Each offers services and assistance through the state's Industrial Effectiveness Program (IEP) and the Industrial Technology Extension Service ES). IEP is funded by the state Department of Economic Development; and ES, by the Science and Technology Foundation.

While the TDOs and ITES, under Pataki's budget, would draw the same funding that they received in 1994, $1.1 million and $1.11 million respectively, the work of the TDOs may suffer significant cuts. Pataki cut funding for the state's share of the Manufacturing Extension Partnership (MEP), a federal program that requires matching funds from state sources.

Robert I. Trachtenberg, president and CEO of the CNYTDO, says that the state and federal funding flowing into his and other TDOs under the MEP program make up as much as 50 percent of the organizations' budgets. And, he notes. funding for another federal program. Manufacturing Outreach Centers, also may disappear. That could have a major impact on the operations of some TDOs, because they have been working very closely with the outreach centers, Trachtenberg says.

Paul MacEnroe, of the MVATC, fears the worst 'You look at my budget and you will see that roughly half the funds for my organization will disappear. That means that half of the program is likely to disappear, too," MacEnroe complains. And he speculates that budding businesses, as well as existing businesses looking to refine their operations, may suffer.

It might mean that the success stories that the MVATC has played a part become less frequent. Perhaps the next potential Infrared Components Corp. may remain a two-person micro-business rather than growing to a 25-person small business with a customer base that reaches around the world.

Or a company seeking refine operations and institute a total quality program, may find the expert advice harder to come by than management at Gloversville's Spalding Sporting Goods golf-ball plant did a couple of years ago. MacEnroe claims at least some credit in that plant becoming efficient enough to win an additional facility and more jobs from Spalding. Now Gloversville makes not only the golf balls but also the clubs to drive them.

Tachtenberg is not quite ready to write off half of his budget. While Pataki has eliminated the state's share of funding for the MEP program and the four Manufacturing Outreach Centers that bolster the technical resources TDOs can offer, Trachtenberg says that actual impact is unclear.

"How much we really lose depends on how creative state officials can be and how effective they are in negotiating with federal officials in defining matching funds," he says. Perhaps, he speculates, the funds could come from other existing sources in the state budget. But that depends on officials finding appropriate sources for those funds and on the federal officials accepting them as the state's contribution, Trachtenberg concedes.

Christopher Burke, of the state Science and Technology Foundation, says that even if other sources for funds are tapped to provide the state's share, that may not help much. "Everything is in flux right now--at both the state and the federal levels. We have a pretty good idea what is happening at the state level, but it is anyone's guess at the national level" he says.