News From the
Committee on Small Business
Subcommittee on Contracting and Technology
Glenn Nye, Chairman

For Immediate Release                       CONTACT:  Clark Pettig
June 4, 2009                                                     202-225-4215

House Panel Examines Legislation to Update Small Business Research Programs

WASHINGTON, D.C. — Members of Congress began work Thursday to reauthorize the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs with a hearing on draft legislation to modernize the two initiatives. Rep. Glenn Nye (D-VA), the Chairman of the House Small Business Committee’s Subcommittee on Contracting and Technology, said that the programs, which require federal agencies to reserve a portion of their research and development (R&D) budgets for small businesses, are badly in need of an update in order to meet new challenges.

“The SBIR and the STTR programs have proven extremely valuable, not only in ensuring that small firms receive their fair share of federal R&D funds, but also in promoting our nation’s competitiveness,” Nye said. “These programs have not been changed in almost ten years and the legislation considered by the Committee will strengthen them, so that America’s entrepreneurs continue leading the way in cutting edge research.”

The hearing focused on four pieces of legislation that would revamp the SBIR and STTR programs. Taken together, the bills are expected to provide capital for small business owners that participate in SBIR and STTR, send to market more products that are developed through the programs, and streamline the initiatives, so they better foster entrepreneurship and innovation. The bills will also expand outreach to rural small businesses and businesses owned by veterans, women and minorities to encourage their participation.

“Too many good ideas never make it from the drawing board to the marketplace because the small firms developing them run out of funding,” Nye said. “With this legislation, we will help entrepreneurs access the capital they need, assist them in commercializing their products and streamline SBIR and STTR programs, so they better serve small businesses.”

Witnesses at the hearing described the two programs as important investments in the economy. It has been estimated that, every year, SBIR and STTR help 1,500 companies launch. Witnesses also noted that economic downturns tend to serve as catalysts for technological innovation, making the SBIR and STTR programs even more important as the nation struggles to recover from the recession.

“Innovation will play a central role in our nation’s economic resurgence,” Nye said. “Modernizing the SBIR and STTR programs is an important investment in the ingenuity that will drive our nation’s economic recovery and, ultimately, create new jobs.”

The Small Business Innovation Research program was established in 1982 to increase federal funding for small firms conducting research and development with commercial potential. The SBIR program has been responsible for everything from advances in state of the art lithium ion batteries for hybrid engine technology to life-saving therapies and drugs. The STTR was established in 1992 and provides government funding to joint venture opportunities for small businesses and nonprofit research institutions such as universities and colleges. Absent action by Congress, both programs are set to expire later this year.

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Click here for video of the hearing.