STATEMENT
of the
Honorable Nydia M. Velázquez, Chairwoman
Committee on Small Business
Full Committee Legislative Hearing to Examine the “Small Business Innovation Research Program Reauthorization Act”
Thursday, March 13, 2008
Today we will examine legislation modernizing and extending the Small Business Innovation Research program. SBIR is one of the government’s largest sources of funding for innovation. It awards more than $2 billion dollars in research grants every year, which enables the work of thousands of America’s most inventive small firms. As science and technology evolve, however, so must this initiative.
The authors of the program had great foresight. 25 years ago they recognized early stage firms could make important contributions regarding technological development. SBIR made it practical for these small and innovative companies to conduct research on behalf of the Federal government. This has yielded groundbreaking advances, including: unmanned aviation, needle-less insulin patches, and a promising malaria vaccine.
SBIR awards have supported R&D that strengthens our country’s national security and public health infrastructure. In the process, it has helped launch leading technology companies such as Amgen, Qualcomm and Symantec – employing thousands of Americans.
From the Committee’s perspective, continuing this success is dependant on three primary issues. First, the number of small firms that apply for SBIR awards must increase. Second, awardees must have access to financing of all types, including venture capital. Third, the commercialization of SBIR-funded research projects must be more of a priority.
The draft legislation we will consider this morning seeks to address each of these elements. In order for more small firms to apply for SBIR, it doubles award sizes, providing more capital for important research projects. It also establishes a 90-day period for a decision on applications. These provisions will enable small firms to get more capital more quickly – and reduce the time it takes for research to go from the lab to the marketplace.
Emerging economic sectors—including women, veterans, and minorities—are also brought into SBIR. This is achieved through the reauthorization and expansion of the Federal and State Technology Partnership program. FAST will increase competition for federal research dollars—giving the taxpayer a better value.
While SBIR has been a successful program, one of the critiques we have heard is that it is difficult to take the next step. The legislation addresses this by establishing a new PRIMERS initiative, which will provide the technical “know-how” and assistance many small firms need.
The draft bill also ensures companies can choose from a wide array of external financing sources – and that the SBA does not make this decision for them. We have included a provision that is identical to the amendment offered by Ranking Member Chabot on the House floor last fall. This gives certainty that businesses can make their own financing choices. It also frees them from worrying about being second-guessed by the government.
SBIR-funded research needs must reach the consumer – whether it is the government or the private sector – and this legislation places a greater emphasis on commercialization. The changes consolidate the existing fragmented effort and expand it government-wide, which benefits all research sectors, including health care, energy, and agriculture.
These improvements will entice, enable and permit more small companies to advance the innovations that have made our economy so diverse and vibrant. They will help ensure that SBIR awards remain competitive, fund top-notch research, and produce cutting-edge breakthroughs.
As a result, the SBIR program will keep pace with the very innovation that it seeks to promote, and will continue to foster next-generation technologies and therapies. That also means it will solidify our efforts to increase U.S. competitiveness worldwide. I look forward to today’s hearing and I want to thank all the witnesses in advance for their testimony.
