HOUSE BILL REPORT

SSB 6325

BYSenate Committee on Economic Development & Labor (originally sponsored by Senators Lee, Williams and Smitherman)

Creating the industrial competitiveness program.

House Committe on Trade & Economic Development

Majority Report:  Do pass as amended.  (11)

      Signed by Representatives Cantwell, Chair; Wineberry, Vice Chair; Doty, Ranking Republican Member; G. Fisher, Kirby, Kremen, Moyer, Raiter, Rasmussen, Rector and Tate.

Minority Report:  Do not pass.  (2)

      Signed by Representatives Schoon and Youngsman.

House Staff:Charlie Gavigan (786-7340)

AS REPORTED BY COMMITTEE ON TRADE & ECONOMIC DEVELOPMENT

FEBRUARY 23, 1990

BACKGROUND:

Manufacturing provides approximately 20 percent of the jobs in Washington state.  Nearly one-third of the manufacturing jobs are in aerospace; wood products, food processing, and machine manufacturing are other major manufacturing industries.  Other significant manufacturing-based employers include firms in printing and publishing, paper products, chemical products, apparel, and metals.

Recent studies, such as those done by the Economic Development Board and the Northwest Policy Center, argue that many small and medium-sized manufacturing firms are experiencing increased competition and reduced productivity and earnings because of the emergence of a global economy.  These studies also argue that to be competitive in this global economy, small and medium-sized manufacturing businesses must modernize their equipment, focus on more high-quality value-added products, and pool their resources.

There are several public sector programs to assist small and medium-sized businesses.  These services are available to manufacturing firms, and include:

      (1)technical assistance, provided primarily by the Business Assistance Center in the Department of Trade and Economic Development and the Small Business Development Centers, to businesses for start-up, planning, and expansion;

      (2)industrial extension services, provided by many educational and vocational institutions, that provide basic business assistance services, problem-solving and business management assistance, and technical assistance and research in applied technology;

      (3)marketing and export assistance through such organizations as the Departments of Trade and Economic Development and Agriculture, the International Market Program for Agriculture and Trade (IMPACT), the Center for International and Forest Products (CENTRIFOR), the Small Business Export Assistance Center, and Washington ports; and

      (4)advanced technology transfer and commercialization, provided primarily by the University of Washington, Washington State University, and the Washington Technology Center.

SUMMARY:

BILL AS AMENDED:  An Industrial Competitiveness Program is established in the Department of Trade and Economic Development.  The program includes: (1) developing a state-wide strategy and delivery system for improving the competitiveness of manufacturing sectors; (2) contracting with educational institutions and non-profit organizations to operate pilot projects for increasing the competitiveness of selected sectors of the economy; (3) conducting an industrial census to provide an information base for identifying targets for assistance; and (4) working with industry associations to develop cooperative programs for enhancing the competitiveness of their members.

The department is required to establish an advisory council to assist in the administration of the Industrial Competitiveness Program and to help select the pilot projects.

AMENDED BILL COMPARED TO SUBSTITUTE:  Language is added to the intent section to clarify that this program is to augment private sector efforts, not displace private sector efforts.  Two vendors of automated equipment are added to the advisory council.

Fiscal Note:      Requested February 20, 1990.

House Committee ‑ Testified For:    Senator Eleanor Lee, prime sponsor of original bill; David Dougherty, Assistant Director, Department of Trade and Economic Development; and Bill Fritz, Washington Food Processors Council.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    The bill is needed to help small manufacturing businesses modernize and become more competitive in the global economy.  Successful models in other states and Europe on improving industrial competitiveness should be tested in Washington.

House Committee - Testimony Against:      None.