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Small Business Innovation Reauthorization on the 25th Program Anniversary

Thursday, April 26, 2007 - 12:00am
Washington, DC

Opening Statement By Chairman David Wu

I want to welcome everyone to this afternoon’s hearing of the Technology and Innovation Subcommittee on Small Business Innovation Research (or SBIR) Authorization.

This year represents significant milestones in the history of the SBIR as well as the Small Business Technology Transfer Program (STTR) program. July 22 will be the 25th anniversary of SBIR, and October 28 will be the 15th anniversary of STTR. Indeed, one of our witnesses, Mr. Baron, was counsel on the House Committee on Small Business where he led the effort to secure enactment of legislation establishing the STTR program in 1992.

SBIR is a highly competitive program that encourages small business to explore and develop innovative, high risk technical projects. By including qualified small businesses in the federal R&D arena, high-tech innovation is stimulated, strengthening US innovation and competitiveness.

SBIR and STTR were last reauthorized in 2000 and 2001 respectively. Today we invite our witnesses to address the overall effectiveness and efficiency of these programs in the intervening years, and to recommend changes to improve the programs. In addition we have invited federal agencies with both SBIR and STTR programs to submit written statements for the record with the same objective.

I would like to highlight a few key issues we will consider today:

Award Levels. Should award levels be larger for Phase I and II of the program? The “Valley of Death” for seed and early stage companies persists as venture capital firms continue to raise their minimum level of investment and focus on mid- and later stage investments where there is less technical risk. Moreover, the SBIR award levels have not been adjusted since 1992.

Small Business Participation. How do we broaden the participation of minority and disadvantaged firms, as well as expand the regional participation of innovative small business in federal R&D?

Financing/Commercialization. Agencies are currently prohibited from using SBIR program funds to support administrative costs. Would permitting the use of a percentage of SBIR program funds for technical and commercialization assistance and ongoing program evaluation improve commercialization rates?

Venture Capital. Finally, there has been debate about SBIR eligibility standards, and the program impact of permitting awards to firms when multiple venture capital firms hold majority ownership of the firm?

All these issues are on the table today for comment and discussion with our witnesses. We look forward to hearing your thoughts on how to improve both the effectiveness and efficiency of these programs.



1 - Mr. Jon Baron
Executive Director, Coalition for Evidence-Based Policy Council for Excellence in Government Council for Excellence in Government
Download the Witness Testimony

2 - Mr. Bruce Held
Director, Force Development and Technology Program Arroyo Center, The RAND Corporation Arroyo Center, The RAND Corporation
Download the Witness Testimony

3 - Mr. Robert Schmidt
Founder & Chairman Cleveland Medical Devices, Inc. and Orbital Research, Inc. Cleveland Medical Devices, Inc. and Orbital Research, Inc.
Download the Witness Testimony

4 - Dr. Gary McGarrity
Executive Vice President, Scientific and Clinical Affairs VIRxSYS Corporation VIRxSYS Corporation
Download the Witness Testimony

5 - Mr. Anthony R. Ignagni
President and CEO Synapse Biomedical, Inc. Synapse Biomedical, Inc.
Download the Witness Testimony

Witness Panel
Witnesses testify before Technology & Innovation Subcommittee
L-R: Mr. Held, Mr. Baron, Mr. Schmidt, Mr. McGarrity, Mr. Ignagni
For information on the witnesses, use the links at left
Additional Testimony Submitted for the Record

Department of Agriculture

Department of Defense

Deparment of Energy

National Institute of Health

National Aeronautics and Space Administration

National Science Foundation

110th Congress