July 27, 2022

CHIPS Act Adds Employee Ownership to Manufacturing and Innovation Training Programs

NCEO founder and senior staff member

Congress has passed HR 4346, the CHIPS Act (previously called the America Competes Act), which now heads to Presdient Biden for signature. The bipartisan bill is primarily designed to make it easier for American chip and other technology manufacturers to compete worldwide, but it also contains a pilot provision (Section 25B) that directs Manufacturing Extension Partnerships (MEPs) to provide awards for a variety of worker education and training programs, including employee ownership.

Section 28 of the Act creates regional technology and innovation hubs, organizations that create “new and constructive collaborations among local, State, Tribal, and Federal government entities, institutions of higher education, the private sector, economic development organizations, labor organizations, nonprofit organizations, and community organizations that promote broad-based regional innovation initiatives.” Included in a long list of eligible recipients for training grants from the program are “organizations that promote local economic stability, high-wage domestic jobs, and broad-based economic opportunities, such as employee ownership membership associations and State or local employee ownership and cooperative development centers.” Section 936 creates a regional clean energy technology program. The same language as in the innovation hubs is included in making employee ownership organizations eligible for awards. Both the regional hubs and the regional clean energy program will be funded under competitive grant processes.

MEPs are National Institute of Standards and Technology (NIST) public-private partnerships, often housed at universities, created to provide advice and training on manufacturing technology. Current MEP efforts focus on innovation and growth strategies, cybersecurity, commercialization, lean production, process improvements, workforce training, supply chain optimization, and exporting. A few MEPs in the past have connected companies with employee ownership organizations, including the NCEO, but the topic has not been a focus of their work.

Because the bill does not provide specific funding for employee ownership or a specific structure, it is unclear just how active this effort will be, and much will likely depend on how each MEP, regional hub, and regional clean energy program responds to the new law’s language.