Washington, DC - Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Small Business Committee, delivered the following statement today during floor debate on H.R. 2965, the "Enhancing Small Business Research and Innovation Act of 2009":
"I rise in support of H.R. 2965, which will reauthorize and improve the SBA's SBIR and STTR programs. This bill has strong bipartisan support, and will work to invest in entrepreneurial innovation and job growth. While our economy is recovering, it still has a ways to go. Even now, we need to be focused on putting Americans back to work. We need growth that is lasting, and industries that are sustainable. We need jobs that can't be shipped overseas, and that won't evaporate in the next cycle of boom and bust. But those jobs aren't going to appear out of thin air. They need to be created. By expanding existing industries and unlocking new ones, H.R. 2965 will generate the jobs we need.
"The SBIR and STTR programs are vital to small business growth. Year after year, they help jumpstart 1,500 new companies. At the very least, that's 1,500 new employers. Over time, that's millions and millions of direct and indirect positions. But while these initiatives are crucial, they are not living up to their full potential. Through H.R. 2965, we can improve SBIR and STTR so they are running at maximum capacity.
"Job creation is the primary goal of R&D. But in order to generate new positions, we have to first develop new industries. Commercialization is critical to that process. But unfortunately, most research never makes it to market. To address that issue, we are creating commercialization benchmarks. We're also encouraging conversations between SBIR officers and purchasing agencies. Ultimately, those dialogues will enhance the flow of information between buyers and sellers, helping more ideas move from the drawing board to the marketplace.
"When all is said and done, commercialization means more than new products - it means new jobs. Once a product hits the mainstream, it opens up a world of opportunity in a wide range of industries, from retail to manufacturing. By stimulating these sectors, we can help our economy on its route to recovery.
"Even as our economy rebounds, small firms still struggle to find funding - particularly equity investment. Just a year ago, venture capital firms drove $5.7 billion into small companies. Today, we've seen almost a 50 percent decline. In terms of what that means for the economy, there are now $3.7 billion fewer dollars to help our small businesses create jobs. The programs' current regulations only compound those challenges.
"By shutting venture capital out of SBIR and STTR, we are blocking billions of dollars to create jobs, and limiting our ability to innovate. What are we supposed to say to a venture-backed firm that is researching cures for pancreatic cancer? Are we supposed to shake our heads and say, 'Sorry, you've done some promising research, but we just can't help you find a cure.' This program is better than that. That's why H.R. 2965 gives small firms - not Washington bureaucrats - the final say in how their firms are financed. This bill provides for the reasonable use of venture capital, while maintaining important safeguards. Make no mistake, SBIR and STTR are - and forever will be - small business programs. This provision doesn't change that. What it does do is give small firms the funding they need to develop new products.
"Even with the necessary capital, small firms struggle to see R&D from start to finish. That's because it is a complex process. Measures to block funding delays and increase efficiency will streamline R&D, helping more products make it out of the laboratory and into the marketplace. Meanwhile, we're going to broaden the scope of American invention. Silicon Valley doesn't hold the franchise on innovation, which is why H.R. 2965 reaches out to underserved rural areas. Through cutting edge technology and grassroots marketing, it also seeks to bring women, minorities and veterans into the SBIR and STTR programs.
"Innovation is the first stop on the path to prosperity. By enhancing and expanding SBIR and STTR, we can encourage small business growth in all parts of the country. In doing so, we will help our small firms to grow, innovate and - most importantly - create homegrown jobs.
"Today, we have an opportunity to invest in the two greatest sources of economic growth - entrepreneurship and innovation. We know that small firms create roughly 70 percent of all new jobs, and we recognize that new markets are the surest path to prosperity. So it only makes sense to strengthen small business innovation. H.R. 2965 does exactly that.
"This is a bipartisan bill, one that could not have been drafted without contributions from my colleagues Mr. Graves, Mr. Schock, Ms. Halvorson and Mr. Bright. Importantly, this legislation has the support of 66 different organizations, including the U.S. Women's Chamber of Commerce, the Advanced Medical Technology Association, and the Bio Technology Industry Organization.
"The SBIR and STTR programs are critical small business resources. They help 1,500 firms get off the ground every year and, in the past, have sparked breakthroughs in everything from anti-virus software to defense technology.
"Clearly, these programs hold enormous value. Even so, they haven't been modernized in over 8 years, and are in sore need of enhancement. In improving SBIR and STTR, we're going to increase efficiency, expand the small business talent pool, and boost commercialization. Meanwhile, we're also going to give entrepreneurs more options for funding their ventures. Taken together, these measures will do more than spark invention - they will help small firms market new products, open new industries, and put more Americans back to work."