January 21, 2010
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Subcommittee Examines Innovation and Entrepreneurship Programs at the Department of Commerce
(Washington, DC) – Today, the House Committee on Science and Technology’s Subcommittee on Technology and Innovation held a hearing to discuss the challenges faced by small- and medium-sized manufacturers, as well as Department of Commerce initiatives to support entrepreneurship and job creation and retention.
“The health of the manufacturing sector is critically important to the health of the economy as a whole, since it was responsible for the creation of over $1.637 trillion worth of goods in 2008,” said Subcommittee Chairman David Wu (D-OR). “This sector employs between 11 and 13 million Americans and accounts for over half of the nation’s exports. Small- and medium-sized manufacturers play a particularly important role, representing the vast majority of the 286,000 manufacturing firms in the U.S.”
Even before the economic crisis, American firms faced difficult economic circumstances including increasing competition from foreign manufacturers. Today, manufacturers confront challenges such as adjusting to the slowdown of large customers, accessing credit, and finding skilled workers. Today’s hearing explored how Department of Commerce programs can most effectively strengthen small- and medium-sized manufacturers and help them create more jobs.
“In the face of increasing foreign competition, capitalizing on our research and development to strengthen American firms and create local jobs is crucial” stated Wu. “Firms that are able to transition and manufacture new technology will be vital to our future economic growth.”
“The manufacturing sector is a critical piece of our economy and our small- and medium-sized manufactures need our support now more than ever,” said Subcommittee Vice Chair Ben Ray Luján (D-NM). “Today’s witnesses highlighted a key component to boosting innovation: the transfer of technology from our universities and federal laboratories to the market place. I look forward to working with these experts to identify how we can improve technology transfer pathways to promote job growth and innovation.”
Rep. Paul Tonko (D-NY) asked witnesses how successful manufacturers have dealt with the tough economy.
“The current economic downturn has forced many manufacturers to adapt to radically different market conditions just to survive,” said Tonko. “The witnesses at today’s hearing said the most significant barrier they face right now is access to capital. We must address this issue as quickly as possible to support our innovative entrepreneurs and the workers they employ.”
“It is imperative to the health of our economy that we create jobs by supporting our manufacturers. We bailed out Wall Street and now we need to make sure that manufacturers and other small businesses have access to credit too,” said Rep. John Garamendi (D-CA). “There are many small business owners in my district ready, willing, and able to expand their businesses and hire new workers. Unfortunately, too many lenders refuse to offer even modest credit lines to small business owners, even with work orders on hand. This has to change.”
During today’s hearing, Members and witnesses met to discuss initiatives to address these challenges. The Manufacturing Extension Partnership (MEP) program run through the Department of Commerce’s National Institute of Standards and Technology (NIST) is a network of centers that advise manufacturers on how to improve their competitiveness. NIST reports that assistance from the MEP program has helped create or retain more than 57,000 jobs and created or retained $10.5 billion in sales in 2007 alone. MEP was reauthorized as part of the 2007 America COMPETES Act and will be included in the reauthorization that the Committee is currently working towards.
Rep. Gary Peters (D-MI) asked witnesses MEP and efforts of the Commerce Department to help hard-hit states like Michigan:
“MEP is an essential public-private program for small local manufacturers that are providing good jobs in my district and across the country,” said Peters. “Unfortunately, the recent economic downturn has jeopardized the program in many areas across the country because states are struggling with massive budget shortfalls and are unable to provide the matching funds necessary to receive federal support. The Commerce Department should prioritize helping manufacturers in hard hit states like Michigan through greater support for MEP and other programs designed to help small manufacturers access capital, innovate and create jobs now.”
“Programs like the NIST Manufacturing Extension Partnership have a proven track record of helping small- and medium-sized manufacturing firms become more competitive and retain and create jobs,” stated Wu. “Manufacturing jobs are good jobs and I hope the success of MEP can be replicated in other Commerce Department initiatives.”
CommerceConnect is a new initiative that provides a “one-stop shop” where businesses can access available Department of Commerce programs to improve their operations. Witnesses testified that assistance navigating Federal programs is greatly needed for beleaguered small- and medium-sized businesses. The CommerceConnect pilot in Plymouth, Michigan, has focused on providing these services for manufacturers.
The Department of Commerce has also created the Office of Innovation and Entrepreneurship, which will focus on a range of issues including cultivating entrepreneurship, improving access to governmental data, accelerating technology commercialization of federal R&D, and increasing access to capital for seed and early-stage innovation-based companies.
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