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Wu: Congress Should Ensure SBIR Program Continues To Support High-Tech Small Business Sector

Jun 28, 2005
Press Release

(Washington, DC) Today, the House Science Subcommittee on Environment, Technology and Standards reviewed the popular Small Business Innovation Research (SBIR) Program.

The Subcommittee's specific focus was the issue of venture capital investment in small businesses which participate in SBIR.  Currently, SBIR regulations allow small businesses with venture capital investment to participate in the program only if the venture capital investor is a minority investor (less than 51%).  Today's hearing was a first step in exploring the possibility of changing the SBIR eligibility criteria.

"In Oregon we have several vibrant high-tech start-up companies," stated Subcommittee Ranking Member David Wu (D-OR).  "Accordingly, I am aware of the difficulties they have in bringing research ideas to proof-of-concept and the need to create a bridge across this gap.  As this committee begins to focus on this issue, I am hopeful that today's hearing will provide appropriate guidance.  It is this committee's responsibility to ensure the SBIR program continues to support the high-tech business sector while promoting U.S. economic competitiveness."

Congressman Wu acknowledged that, along with the SBIR program, venture capital has been a critical factor in determining the success of start-up companies and supports changing the eligibility criteria.

Rep. Wu's full opening statement from the hearing follows:

I want to join Chairman Ehlers in welcoming everyone to this afternoon's hearing.

The Small Business Innovation Research (SBIR) Program is the largest federal program to support the development of new technologies.  SBIR awards in 2003 total almost $1.7 billion - this compares to the $44.5 million in awards made in the first year of its operation.  It is doubtful that anyone would have been able to forecast the size and scope of this program back in 1982.

Last year I sponsored a roundtable in my district focusing on programs such as the SBIR and the Advanced Technology Program (ATP).  In Oregon we have a group of vibrant high-tech start-up companies.  I wanted to make them aware of opportunities for support.  I am also aware of the difficulties they have in bringing research ideas to proof-of-concept, the so-called "valley of death" and the need to create a bridge across this gap.

Today we are going to learn about one current SBIR issue, that is, the appropriate role of venture capital firms who invest in small high-tech. businesses.  We have a balanced panel of witnesses who will present their views on this issue.  I would like to add that we shouldn't discount either the role of venture capital or the SBIR program in supporting the development of new technologies in the U.S..  As Congress begins to focus on this issue, today's hearing will provide us some guidance.  I also want to thank my colleague and neighbor, Rep. Brian Baird, for bringing this issue to the Committee's attention.

Before I close, I would like to say that I hope the Committee will conduct a thorough review of the SBIR program before it sunsets in 2008.  The fundamental goals of the program have not changed much since its inception in 1982.  However, few could argue that the economic and business climate have not changed considerably since then.  It is this Committee's responsibility to ensure that the program supports the high-tech small business sector while promoting US economic competitiveness.  I hope our witnesses will have some insight on this issue as well.

109th Congress