Enhancing Small Business Research And Innovation Act Of 2009

Floor Speech

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Mr. WU. I yield myself such time as I may consume. In today's economy, small business is where innovation happens. The Science and Technology Committee intends to promote science and technology research that drives an innovation economy. That is why I rise in support of H.R. 2965, the Enhancing Small Business Research and Innovation Act.

At more than $2.3 billion per year, the Small Business Innovation and Research and Small Business Technology Transfer programs comprise the largest source of Federal support for technological innovation in the private sector. Given the current economic climate, we need robust SBIR and STTR programs to create the next generation of companies that will provide high-paying jobs and grow our economy.

However, these programs originated more than 25 years ago. Given the economic changes we have seen during the past two decades, we need to update these programs to reflect the current economic realities of our increasingly competitive innovation economy.

The Committee on Small Business and the Committee on Science and Technology have held numerous hearings on SBIR and STTR over the past several years. Witnesses shared many recommendations about how SBIR and STTR can be strengthened.

Recently, both committees overwhelmingly supported H.R. 2965, with each committee voting favorably to reauthorize SBIR and STTR through 2011 with some much needed modernization and changes.

The legislation has been endorsed by more than 100 organizations, including the American Association of Universities, BIO, the National Venture Capital Association, the Energy Sciences Coalition, and the Cystic Fibrosis Foundation.

The bill increases the award sizes for phase 1 and phase II to reflect the actual cost of doing high-tech research today. It also increases the flexibility of the SBIR by allowing cross-agency awards and allowing applicants to apply directly for phase II funding.

H.R. 2965 allows venture capital-backed small businesses to once again apply for awards and specifically defines their eligibility requirements. This temporary ban on venture capital majority ownership was the result of a ruling in 2003 by an administrative law judge in Boston.

For 20 years--from the inception of the program in 1983--to 2003, venture capital-funded companies could freely participate in these programs. There is no evidence, there is no evidence anywhere, that during that time there was any crowd-out of other businesses by VC-backed businesses.

There has been a lot of debate over the role of venture capital participation, but the National Academies recently released a report that states that venture-backed companies are important. They contribute greatly to technologic development and they do not--emphatically, do not--crowd out other small businesses.

The goal of SBIR is to encourage innovation. It is time that we fix the administrative ruling of a single judge and support more innovative small businesses and the best technology that we can help bring to market.

Today, we recognize our leadership by reauthorizing SBIR and STTR. I want to commend Chairwoman Velázquez in particular for her commitment to small business innovation. I urge my colleagues to support this bill.

I reserve the balance of my time.

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