2020 Upjohn Report Identifies Significant Returns on State Investment in PAMEP and IRCs

January 27, 2020

Study asserts significant economic impact from Pennsylvania Manufacturing Extension Partnership efforts
WILKES-BARRE, PA (Jan. 27, 2020) 

 

A study released earlier this month by the W.E. Upjohn Institute for Employment Research concluded that Pennsylvania Manufacturing Extension Partnership (PA MEP) operations, as implemented by statewide Industrial Resource Centers (IRCs), provide a one-year return of $7.5:$1 on state funds invested in the program.

PA MEP serves as Pennsylvania’s center for the Hollings Manufacturing Extension Partnership Program and direct recipient of federal funding through the National Institute of Standards and Technology, which it invests in the IRCs. Each IRC then matches that investment with Commonwealth of Pennsylvania resources secured through Manufacturing PA, a program of the Department of Community & Economic Development. That backing, along with private sector funds, enables the seven statewide IRCs to provide advanced technology, continuous improvement, quality system, workforce training and other services to the commonwealth’s 15,000 manufacturers.

The W.E. Upjohn Institute was engaged by PA MEP to quantitatively analyze the overall effect of IRC client engagements on Pennsylvania’s economy. The findings were impressive.

The study estimated that in 2018, total state employment was impacted by an additional 20,272 jobs because of the IRCs’ work with small and mid-sized manufacturers. That estimate includes 6,382 direct manufacturing jobs plus another 13,890 jobs in manufacturer supply chains, service firms that support manufacturer operations and careers outside of the industrial sector.

In addition to calculating job impacts, Upjohn examined IRC engagement impact on Pennsylvania’s Gross Domestic Product (GDP), statewide output and statewide personal income. Pennsylvania’s GDP increased by $2.12 billion in 2018 as a result of IRC engagements. Statewide output and personal income rose by $4.56 billion and $1.26 billion, respectively, during the same year.

The study explored the extent to which IRC efforts provide a positive return on the Commonwealth of Pennsylvania funding the IRCs collectively receive. Based upon 2018 support of $5.3 million from Pennsylvania, Upjohn projected that the commonwealth is realizing a one-year return in excess of $7.50 for each $1 invested in the program. Expressed in net dollar impact to the treasury, the 2018 return was estimated at $39.8 million.

Upjohn considered only incremental personal income tax growth and did not factor business, sales, use or other taxes generated as a result of IRC client engagements into their calculations. Thus, figures presented in the study reflect a conservative estimate of the return on investment. Furthermore, Upjohn analysts used only data voluntarily reported by IRC clients through independently-administered surveys and did not consider potential additional impacts from clients that opted to not participate in the effort.

More information regarding the study can be found by clicking here. For more information about the IRC Network, contact Eric Joseph Esoda, President & CEO of the Northeastern Pennsylvania Industrial Resource Center, at Eric@NEPIRC.com.