CONTENTS Page Goodnight, Jo Anne, SBIR/STTR Coordinator, National Institute of Health Carroll, Richard, CEO, Digital System Resources THE SMALL BUSINESS TECHNOLOGY WEDNESDAY, JUNE 20, 2001 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON RURAL Washington, DC. The subcommittees met, pursuant to call, at 3 p.m. in room 2360, Rayburn House Office Building, Hon. John Thune (chairman of the subcommittee) presiding. Chairman THUNE. This hearing will come to order finally, and I apologize to our witnesses. Sometimes the Floor schedule gets a little bit in the way of the business we are trying to conduct around here, but that is the business we are trying to conduct. But let me just say good afternoon. It is a pleasure to welcome all of our witnesses to our joint hearing between the Subcommittee on Rural Enterprises, Agriculture and Technology and the Subcommittee on Workforce, Empowerment and Government Pro grams. Today's hearing has been called to discuss the Small Business Technology Transfer Program, which is up for reauthorization this year. The technology transfer program, commonly known as STTR, was created in 1992, for the purpose of utilizing the vast reservoir of commercially promising ideas at our nation's research institutions. Authorization for this important small business program expires in September, and it is the committee's intent to work with the Senate Small Business Committee to reauthorize this important program by September 30 of this year. The STTR is a competitive federal grant program that reserves a specific percentage of research and development dollars for small businesses and their nonprofit research institution partners. The success of STTR is that it requires a cooperative venture between a for-profit small business and a researcher from a university, federal laboratory, or a nonprofit research institution for the purpose of developing commercially viable products from ideas. spawned in a laboratory environment. While the Small Business Administration is the coordinating agency for STTR, five federal departments and agencies actually implement STTR, and designate research and development projects and accept proposals from the private sector. These agencies-Department of Defense, Department of Energy, Department of Health and Human Services, National Science Foundation, and the Na tional Aeronautics and Space Administration-reserve a portion of their R&D funds to award contracts to STTR partnerships. This program has enjoyed a wide range of success and the small business and research communities are very supportive of its continuation. The STTR has helped create new jobs and stimulate our economy by bringing new technologies to the marketplace and helping new business ventures develop into stable small businesses. As a representative from a rural state, I can tell you that job creation is vital to the small communities in South Dakota. The establishment of just one new small business makes a huge difference on main street. A small business with 100 employees in a town adds on average 351 more people, 79 more school children, 97 more families, $490,000 more in bank deposits, $565,000 more in retail sales per year, and over $1 million more in personal income per year. I want to again thank the witnesses for appearing before the two subcommittee today, and we will look forward to your testimony, and I would now yield to Ms. Millender-McDonald for an opening statement if you choose to make one. Ms. MILLENDER-MCDONALD. That is okay. Thank you, Mr. Chairman, and it is indeed a pleasure to see all of you here today. We thank you so much for you indulgence. We do have to do the peoples' business in a different sense than having hearings. But today I am pleased to participate in this timely hearing on Small Technology Transfer Program. Technology and its associated applications is the engine that is driving our economy. But it is important to remember that small businesses have fueled the recent economic expansion and they serve as the conduit to delivery of service and good in the twenty-first century. Virtually nothing we do on a daily basis remain unaffected by technological growth and/or research and development. In our homes, we use programmable microwaves, in addition to advanced technology related to personal medical devices. Our cars have global positioning systems, and our portable phones allow us to access. the internet. Indeed, we have entered into a new and exciting frontier. This new frontier, however, must be navigated and that is our purpose today; to examine how the STTR Program administered by the SBA is enabling and supporting the interest of our economy and small businesses. The STTR was designed to address the lack of capital that small business research firms experience. It achieves this objective by partnering small firms with private research institutions, federally funded R&D centers and/or nonprofit organizations. I am particularly interested in determining what can be done to enhance partnerships between private research institutions and minority and female-owned small businesses. As the September 30 deadline for reauthorization approaches for STTR, I am concerned about whether this program is doing enough to meet the needs of the small business research and development sector. I am very curious about why of the 864 STTR awards from FY-1994 through FY-1998, only 13 or 1.5 percent were to women owned businesses, and why only 2.8 percent went to minorityowned businesses. While I acknowledge the strides that have been made regarding partnerships between historically black colleges and universities, minority institutions and SBA, so much more needs to be done, and I am looking forward to listening and hearing that today, hopefully. Therefore, I am very interested in determining what has to happen in order to assist small businesses to gain access to opportunities that much larger companies enjoy. I also want to explore why inner-city, especially my district of Watt and Coemption and Lynwood, and the rural communities of my colleagues and friends on this dias with me are being left behind in technology partnerships that are occurring. So I look forward to all of you speaking to us today and talking with us and hopefully we can come to resolves that will be positive. And thank you, Mr. Chairman. Chairman THUNE. I thank the gentlelady for her statement. And the Chair now recognizes the gentleman from New Mexico, who is the ranking member on the Subcommittee on Rural Enterprises, Agriculture and Technology, Mr. Udall. Mr. UDALL. Thank you, Chairman Thune, and Ranking Member Millender-McDonald, and thank you members of the panel for being here and indulging us and your patience during the vote, and I know the long wait here. I appreciate being here today to participate in this joint subcommittee as we review the Small Business Technology Transfer Program scheduled to be authorized by September 30, 2001. The STTR Program is designed to address the lack of capital that small business research and development firms experience when getting started. Another unique aspect of the program is that small businesses can partner for research projects with research institutions, federally funded research and development centers or nonprofit organizations. It is my hope that through today's hearing we can, if possible, identify what works within the STTR Program and what does not work or what needs improvement. My concerns lie around the limitation of the STTR Program and its project funding, assistance. As Ranking Member Millender-McDonald has said, minority and women-owned businesses and assistance to rural and low-income areas. And what astonishes me is that in fiscal year 1994 through 1998 there were 31 STTR grants awarded in New Mexico. Of the 31 awards, only four were awarded in my congressional district and none were awarded in the second congressional district, which is also predominantly rural. For fiscal year 1999, one STTR grant was awarded in New Mexico. Basically, of the grants awarded in my state, my congressional district received only 13 percent of the grant funding; in the second district, no grants were received; and yet the first district, which is the urban one, received 87 percent of the funding. My district is rural, has a large number of low-income areas, a high amount of minority- and women-owned businesses. Although the SBA has been creative in developing initiatives to expand the STTR Program in rural and low-income areas, something is obviously not working. |