AN ACT Relating to the industrial competitiveness program; adding new sections to chapter 43.31 RCW; creating a new section; and making an appropriation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds and declares that enhancing the productivity and competitiveness of Washington manufacturing sectors is essential to the state's economic future. Although substantial manufacturing employment has shifted to smaller firms over the last twenty years, many small and medium-scale manufacturers lag far behind their counterparts in Japan and western Europe in automation, productivity, and quality control. Individual small manufacturers rarely have the time or resources to gain access to sophisticated market information, technology, research, testing, or labor force training that are essential for competing in the global marketplace. Current state-wide business assistance efforts are neither designed nor equipped to help manufacturers compete in an increasingly globalized and complex marketplace in which rapidly shifting markets and technologies, specialized production, and quality assurance dictate which firms survive. The legislature finds and declares that it is the policy of the state to strengthen the productivity and competitiveness of Washington manufacturers by working with the private sector to provide specialized services to manufacturing sectors that are vital to the state's economic future.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definition in this section applies throughout this chapter.

"Manufacturing" means all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different, or useful substance or article of tangible personal property is produced for sale or commercial or industrial use and shall include the production or fabrication of specially made or custom made articles. "Manufacturing" also includes computer programming, the production of computer software, and other computer-related services, and the activities performed by research and development laboratories and commercial testing laboratories.

NEW SECTION. Sec. 3. The department of trade and economic development shall administer an industrial competitiveness program, which is hereby established within the department. The program shall include:

(1) Contracting with educational institutions, industry associations, or other nonprofit organizations for the operation of pilot projects to improve the competitiveness of selected sectors of the state's economy;

(2) Developing a state-wide strategy and delivery system for improving the competitiveness of new and mature manufacturing sectors in the state. The strategy shall include:

(a) The identification of appropriate educational institutions to provide self-supporting technology transfer centers that will directly apply research technology to the problems of individual manufacturers or manufacturing sectors;

(b) Recommendations for a long-term, state-wide approach to applications of technology developed at state institutions;

(c) Identification of an appropriate third-party broker in the private sector for directing business requests to the appropriate institution for service; and

(d) Evaluation of the pilot projects under subsection (1) of this section;

(3) Conducting an industrial census to provide an information base to be used in identifying targets for sectoral assistance; and

(4) Working with and helping to create industry associations to develop cooperative programs for enhancing the competitiveness of their members.

NEW SECTION. Sec. 4. (1) The department shall establish an industrial competitiveness advisory board. The advisory board shall assist and advise the department in the development of its industrial competitiveness program, including the selection of applicants to operate pilot projects.

(2) The advisory board shall be composed of representatives of small and medium-scale manufacturers, labor unions, educational institutions, and economic development organizations. At least one-half of the advisory board shall be representatives of small and medium-scale manufacturers. The director of the department shall select one advisory board member as chair.

(3) The department shall provide staff as necessary to carry out the work of the advisory board.

(4) Members of the board shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 5. Eligible activities for the pilot projects provided for under section 2 of this act include:

(1) Recruitment, training, and designation of independent brokers or field representatives to identify critical needs of manufacturers and develop, along with industry representatives, appropriate service strategies;

(2) Compilation of a competitiveness audit to identify the products, technologies, skill levels, and capacities of existing manufacturers as identified by brokers;

(3) Recruitment of firms to participate in a consortium or flexible network of manufacturers who can then benefit from economies of scale through shared technology, information, training, or other services in sectors identified as most critical in the competitiveness audit;

(4) Assistance in formation or coordination of appropriate technology, information, training, or other services, and the development of delivery vehicles such as industry service centers for networks formed in the identified sectors;

(5) Aid in establishing contacts, relationships, and agreements with vendors, consultants, and others to provide additional resources to sector network members; and

(6) Development of a long-term work plan for competitiveness enhancement in other sectors, including a plan for establishing networks of additional firms.

Successful applicants shall provide whatever information the department deems necessary to evaluate the effectiveness of the pilot project.

NEW SECTION. Sec. 6. The sum of four hundred fifty thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1991, from the general fund to the department of trade and economic development for the purposes of this act.

NEW SECTION. Sec. 7. Sections 2 through 5 of this act are each added to chapter 43.31 RCW.