STATEMENT
of the
Honorable Nydia M. Velázquez, Chair
Committee on Small Business
Full Committee Hearing Entitled “SBIR: America’s National Technology Incubator”
Tuesday, January 29, 2008

This morning the Committee begins the process of reauthorizing the Small Business Innovation Research program.  This public-private partnership is key to the United States remaining a global leader in innovation and creating new jobs throughout all parts of the nation.  In fact, just last year, 5,000 small research firms – companies located in every state in the nation – received awards that totaled more than two billion dollars. 

As recent data demonstrates, the current economy is showing signs of a potential recession. During the last slowdown, it was the technology sector – led by small startups – that provided the foundation for stronger growth.  SBIR – with its emphasis on next-generation products – can help us emerge from these weak economic times stronger than before.

In order to play this role, however, the initiative must stay in synch with the very technology it seeks to promote.  When the Committee last authorized the program in 1999, the term googol was an obscure mathematical concept.  Today, Google is one of the most well-known – and largest – companies in the US.   As technology changes, this program has to keep pace.

During this modernization effort, the Committee will make certain that the SBIR program is providing the resources for economically viable technologies – and not wasting its efforts on second-rate science fair projects.  In order to ensure the full development of promising new products, the program should be given the capability to provide larger amounts of capital.  For businesses facing difficulties going to market, the necessary assistance should be made available.

New efforts must also be taken to reach the next generation of small companies, whether they are located in Silicon Valley or rural America.  Easing the regulatory burden associated with the program and streamlining the application process are essential to increasing the competition for these important awards. 
Finally, federal agencies need more flexibility to implement the program, both in terms of being creative, but also in using what they have learned.  These improvements will ultimately benefit the taxpayer in terms of greater competition for awards, and ultimately higher levels of innovation. 

Together, these changes will create an SBIR program that is responsive to today’s economic environment.  This includes creating more high-paying jobs, reducing our trade deficit, and emphasizing the importance of math and science education to America’s students.  If we are able to promote these very goals in the program, then we will be successful in our reauthorization efforts.

Our nation, now more than ever, needs a vibrant small business foundation to secure our economic future – and it is programs like SBIR that support this vision.  With the specter of a recession before us, entrepreneurial activity can provide a pathway to growth.   It has done so before, and it will do so again.  I want to thank all the witnesses for traveling here and I look forward to your testimony.