STATEMENT
of the
The Honorable Nydia Velazquez, Chairwoman
House Committee on Small Business
Full Committee Hearing on Legislation Modernizing SBA’s SBIR and STTR Programs
Wednesday, June 17, 2009

            An innovative economy is a resilient economy. After all, the ability to adapt has helped our country bounce back from countless recessions. The best example of this is the downturn of the mid 1990’s, during which an army of innovators brought us economic recovery and an IT revolution. Not surprisingly, that revolution was led by small firms. Today, as we continue to work our way out of recession, we can look to that same small business community. With the proper tools, they can help lead the way back to prosperity. 

            For years, the SBIR and STTR programs have helped entrepreneurs do what they do best-- pioneer new products. Nearly thirty years after they were first created, these programs still spur innovation. In fact, we can thank SBIR for everything from needleless insulin patches to wireless technology for Blackberrys. Those inventions are more than everyday conveniences--they represent growth in our economy and countless homegrown jobs. But while SBIR and STTR are inherently valuable programs, they are in need of modernization. Today, we are going to take steps to not only update these programs, but to enhance them.

            I think we can all agree that a lot has changed in the last few years. Our economy has transformed, and so have the needs of small firms. Yet regardless of those changes, neither SBIR nor STTR has been updated in nearly a decade. The legislation we are examining this morning will turn that around. It will modernize the programs to reflect today’s economy, and will enhance them to boost commercialization. Just as importantly, this bill is going to cut through the program’s red tape. To begin, it authorizes agencies to create fast-track programs. Doing so will eliminate funding delays for Phase Two awards, streamlining the R&D process, and allowing innovators to spend more time in the lab.

            Entrepreneurs are prolific inventors. In fact, they churn out 14 times more patents than big businesses do. But there is a process for turning dreams into products, and many good ideas get lost along the way. By creating commercialization benchmarks, we’re placing new emphasis on bringing products to market. We’re also improving communication between SBIR officers and purchasing agencies. That way, entrepreneurs will know what the agencies are looking for, and will have a better shot at bringing their projects to the marketplace. 

            As any inventor will tell you, commercial appeal isn’t always enough.  R&D is an expensive process, and entrepreneurs often lack the capital to see it through. The legislation we’re discussing today recognizes that, and promises small firms increased financial freedom. It’s no secret that capital is scarce these days, which is why all options should be on the table. This bill gives entrepreneurs-- not Washington bureaucrats-- the final say in how their firms are financed. 

            While both SBIR and STTR are critical programs, their value has historically been limited to certain regions. Through workshops and local marketing campaigns, we’re going to change that. Outreach in rural regions and amongst underrepresented communities--such as women and veterans-- will expand our R&D programs. Tools like training workshops and podcast seminars will help these groups do everything from select a purchasing agency to file an SBIR application. That’s important, because higher program participation means a deeper talent pool and, ultimately, more products brought to market.

            In the last few years, our country has faced profound challenges. Today, we stand at a crossroads on a wide range of issues, from healthcare reform to energy policy. In addressing these obstacles, one thing is very clear--we need a new approach. That’s why this morning’s legislation is so important. It invests in America’s innovators, the entrepreneurs who realize that--with a little ingenuity-- we can turn the page on the old way of doing business, and usher in a new era of prosperity.