Manufacturing generally involves the mechanical, physical, or chemical transformation of materials, substances, or components into new products, including the production of food, automobiles, and clothing, among many other things. The materials that manufacturers transform into new products include raw materials from agricultural, forestry, fishing, mining, or quarrying businesses as well as component items produced by other manufacturers. Manufacturing also includes the assembly of components into manufactured products. Businesses engaged in manufacturing often are referred to as plants, factories, or mills, and most use power-driven machines and materials-handling equipment. However, products that are made by hand, or in a worker’s home, and businesses that both make and sell products at the same location, such as bakeries, also qualify as manufacturers. In its narrowest sense, manufacturing consists of “factory floor” activities that contribute directly to the production of goods, such as cutting, grinding, and assembly. More broadly, manufacturing can include a range of activities that both precede and follow factory floor activities. Some activities, such as product design, process improvements, and quality management, are more specific to the manufacturing enterprise. Other activities are common to many types of businesses, such as the effective use of information technology, strategic planning, and administrative operations. Although no standard definition for small manufacturing businesses exists, two systems that are widely used to classify businesses by type and size can be used to define small businesses engaged in manufacturing (referred to in this report as “small manufacturers”). Specifically, the North American Industry Classification System (NAICS), which categorizes businesses according to the principal activity in which they engage, has three general classifications for businesses engaged in manufacturing. In addition, the Small Business Administration (SBA) has size standards that define small businesses on the basis of average annual revenue or number of employees (typically, 500 or fewer). For this report, we define small manufacturers as those businesses that have a NAICS manufacturing classification and meet SBA’s criteria for small businesses. Small manufacturers are an important component of the manufacturing sector. These businesses numbered over 300,000 in 2004 and accounted for almost 45 percent of all U.S. manufacturing jobs. Many small manufacturers also export their goods directly or indirectly as suppliers or contractors for larger companies. In addition, small manufacturers are a significant source of innovation in the U.S. economy. On average, small manufacturers produce patents that are more frequently cited as important contributors to new patents than do large manufacturers. Over the past 14 years, studies have reported that small manufacturers possess many strengths due to their size, such as the ability to respond quickly to market changes. On the other hand, small manufacturers, like small businesses in general, lack the staff, resources, and expertise of their larger competitors and consequently face numerous challenges, including (1) finding sources of operating capital and investment funds (financial assistance); (2) bringing new products to market or finding new uses for existing technology (technology development and deployment assistance); (3) becoming familiar with new technologies, production techniques, and business management practices (technology, business, and management assistance); (4) competing in overseas markets (export assistance); and (5) obtaining skilled employees (worker training assistance). Federal programs offer a wide range of services to help businesses of all sizes and types address these challenges. For example, federal programs may offer financial services, such as grants, loans, loan guarantees, or insurance. These financial services may be for general business purposes, such as providing working capital or acquiring new equipment, or targeted to a specific need, such as covering the expenses necessary to export goods. Programs that offer nonfinancial services may include those that help businesses acquire the various types of specialized knowledge and skills they need to begin, operate, and expand their businesses; commercialize the results of their research projects; export their goods; or appropriately train their workforce. Federal programs also may provide financial and nonfinancial services using federal employees or through agreements with state governments, private entities, and nonprofit organizations that act on behalf of the federal government. Some federal programs are targeted to the needs of businesses of a specific size, regardless of type, such as the assistance SBA offers to small businesses. In other cases, federal programs target services to any size business but of a specific type, such as the assistance that the Farm Service Agency offers to food processors regardless of their size. Assistance also may be targeted to businesses adversely affected by trade policies or local disasters. Federal attention to the needs of manufacturers increased following the economic recession that began in 2001 when manufacturing job losses were substantial and recovery in the manufacturing sector lagged behind other sectors. The extent to which agencies track program funding, the number of businesses they assist, and the type of businesses they assist varies. Agencies tend to track the financial services they provide in the form of grants, loans, loan guarantees, letters of credit, or insurance, in terms of both the value and the number of financial services. In addition, agencies may track financial data according to the source of their funds. For example, agencies may track the funds by their annual appropriations, the obligations to which they dedicate the appropriated funds, or the amount of dollars they expended in financial assistance. Agencies less often track the funding for and participation in nonfinancial service programs. Such services may be offered in single- or multipurpose “service centers” that offer assistance on a range of issues, and may involve the specialized expertise of staff from multiple agencies. Service centers may track the number of individuals or firms they serve but not the specific type of service provided to each business. Moreover, agencies may not gather NAICS codes or other information on the type of businesses they serve. Because of these differences, agencies may not track funding and participation data in a consistent manner. Federal agencies also may form interagency groups to coordinate the operations of their programs and help ensure that resources are used efficiently. These interagency efforts may focus on a specific program; for example, multiple federal agencies share responsibility for administering the Small Business Innovation Research Program and have created an interagency group to help ensure that the program is being implemented consistently across all of the agencies. Similarly, agencies may form an interagency effort to address specific activities, such as ensuring that small businesses have access to federal procurement opportunities. In addition, multiple agencies may be tasked by the President to focus their efforts on a specific topic of relevance to the business community. These agencies may create interagency groups consisting of representatives from multiple federal agencies to better coordinate their individual programs and crosscutting activities. For example, Commerce created an interagency group to implement its 2003 Manufacturing Initiative, which called for a comprehensive review of issues affecting manufacturers’ competitiveness and a strategy to foster competition. Interagency groups that are set up to coordinate task-specific efforts may disband upon completion of the assigned task. Of the 254 federal programs we identified that provide financial or nonfinancial services or both to support the U.S. business sector, 5 programs provide services specifically to small businesses engaged in manufacturing, while an additional 15 programs target manufacturers, regardless of their size. In addition, we identified 127 programs that offer financial or nonfinancial assistance or both to small businesses, regardless of type, and 107 other federal programs designed to support all types of businesses, regardless of their size or type. Appendixes II through XX provide detailed information on all 254 programs, by agency. We identified 5 federal programs that specifically provide services to support small manufacturers. Each of the 5 programs offers various types of nonfinancial business, management, and technical assistance that are specifically related to manufacturing operations, processes, and problems. Only 1 of the 5 programs offered financial assistance in addition to its nonfinancial services. The types of services provided by the 5 programs were generally aligned with the mission of the administering agency and included the following: The Outreach to Small and Very Small Plants program is administered by Agriculture’s Food Safety and Inspection Service (FSIS), which regulates manufacturers of meat, poultry, and egg products of all sizes, and helps small meat and poultry processors comply with food safety regulations. FSIS delivers information through partnerships with colleges, universities, and other Agriculture agencies. Its services to small manufacturers include informational materials about regulatory compliance; referrals to other sources of information; funding for university workshops; and training materials such as videos. FSIS also offers education sessions to small and very small plant owners and operators on how to improve their food safety and food defense systems, and provides guidance regarding federal inspection of their products to small and very small plant owners who want to start operations. MilTech, administered in the Office of the Secretary, is a partnership between Defense’s TechLink Program and the Montana Manufacturing Extension Partnership Center. MilTech provides companies with engineering, manufacturing, and business development assistance to help accelerate the transition of new technology to the U.S. warfighter, lower the cost and cycle time of technology acquisition, and help Defense more fully benefit from its small business research and development investment. The Defense Small Business Technology and Readiness Resources Program (DSTARR), is administered by the Navy. DSTARR provides assessments of participating small manufacturers’ operational processes at their places of business, and develops detailed continuous improvement plans to help participants implement industry best practices, gain knowledge, and improve operations. In addition, DSTARR offers online access to information and training, and access to technical experts who provide both on-site and remote technical assistance and training in manufacturing and business processes. The goal of DSTARR is to develop a national network of small manufacturers and specialized information technology companies to meet Defense’s needs. Prior to December 2006, DSTARR was known as the Manufacturing Technical Assistance Partnership Program, The Next Generation. The Manufacturing Technical Assistance Production Program (MTAPP) is administered by the Air Force. MTAPP provides technical and managerial assistance to enhance the capabilities of small manufacturers and increase their ability to deliver high-quality products to the Air Force, as well as to Defense, and its major contractors.