Subcommittee Democrats Emphasize the Importance of the Federal Role in the Creation of Innovative Small Businesses
(Washington, DC) – Today, the House Committee on Science, Space, and Technology’s Subcommittee on Technology and Innovation held a hearing entitled, “Creating and Growing New Businesses: Fostering U.S. Innovation.” The purpose of the hearing was to examine the current state of small, innovative start-up companies and their role in transformative innovations and job creation.
Ranking Member Donna Edwards (D-MD) said, “I am certain that there isn’t a person in this hearing room today that does not recognize how important small businesses are to our economy. Small businesses, particularly new small businesses, spur innovation and create new jobs. In fact, according to the Small Business Administration, small businesses generated 65 percent of net new jobs over the past 17 years. That being said, as we continue our efforts to put our economy back on track, we should be committed to doing what we can to foster the creation of small businesses and give them the support they need to succeed.”
Witnesses and Democratic Members emphasized the importance of the role of the Federal government in promoting new business creation and growth.
Ms. Edwards spoke about the important role that the Federal government can play in helping innovative small business succeed, including continuing robust investment in Federal research and development, improving Federal technology transfer from Federal and university labs to startups, and helping small businesses commercialize promising new technologies.
Martek Biosciences is a biotech company based in Columbia, Maryland that produces nutritional supplements, including the omega-3 fatty acid DHA which is included in 99% of infant formula sold in the United States and in at least 100 other food products. The Federal government had a significant role in the success of Martek: Martek’s technology originated out of a NASA program and it received more than 30 Small Business Innovative Research (SBIR) awards from DOD, DOE, HHS, USDA, and NSF. In addition, Martek was a part of a business incubator, the Technology Advancement Program at the University of Maryland. Mr. Steve Dubin, former CEO of Martek Biosciences said, “Our business today produces revenue in excess of $470 million per year and supports more than 600 employees in Maryland, South Carolina, Colorado, Kentucky, and Connecticut, and more than 100 additional employees at DSM’s Belvidere, New Jersey, manufacturing facility. Without the above-mentioned programs that were available to Martek, I am certain that the company and the jobs that support many families today would not exist.”
Mr. Ray Rothrock, member of the Board of Directors of the national Venture Capital Association and General Partner of capital venture firm Venrock, also testified to the importance of the Federal role. He warned that Federal funding of basic research is essential to keep the America’s global innovation advantage saying, “The U.S. must maintain its commitment to funding basic research at its labs and universities. That means keeping current funding levels where they are – even in the face of deficit reduction. In difficult economic times, budgets for basic R&D may look like easy targets, but future costs in lost innovation and economic growth are nearly impossible to estimate. But the costs in jobs, economic benefits, and societal well-being are easily imagined when you consider if Sun, Google, and Genetech were never created.” Mr. Rothrock also spoke of the importance of the Advanced Reseach Projects Agency – Energy (ARPA-E), SBIR, and efforts to foster the development of regional innovation clusters.
Finally, Mr. Julian Mann, Co-Founder and Vice President of Product Development and Research at Silicon Valley-based Skybox Imaging, also recognized the important role that the Federal government can play in helping position innovative small businesses for success in the market. “Venture capitalists take technologies that have been substantially validated and target them at markets,” said Mr. Mann. “The government should be investing in technologies bringing them up to that level of being ready for venture capitalists.”
In her prepared statement, Ms. Edwards said, “The truth is that when our Federal government has stepped up to the plate and taken an active role in private sector innovation – whether through the widely popular Small Business Innovation Research program or the Advanced Technology Program at NIST – we’ve witnessed great success. I am hopeful that we can begin to move past historical debates about industrial policy and picking winners and losers, and acknowledge that this is instead about ensuring that our country and our small businesses win in the global market.”
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