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During my tenure on this committee, I’ve seen countless examples of how small businesses drive American innovation. Technology has changed rapidly over the years, thanks to pioneering entrepreneurs leading the way.

Congress has facilitated this innovation through investments in federally funded research and development, also known as R&D. As a result, federally funded R&D has produced countless inventions and discoveries that have changed our country for the better.

From doppler radar to computers to the first wind energy turbines, government-funded research has a rich legacy of helping launch groundbreaking inventions. But for innovative small businesses, it can often be a struggle to access early funding critical to building new products.

To reduce risks of investment in small businesses and encourage entrepreneurs to commercialize federal R&D innovations, SBA launched the Small Business Innovation Research, or SBIR program in 1982.

Ten years later, the agency launched the Small Business Technology Transfer, or STTR program to stimulate partnerships between small businesses and non-profit research institutions.

These programs are funded through federal set-asides of government agencies’ extramural research and development funds.

SBIR and STTR have an impact on small businesses across a variety of different sectors every year. In FY 2020, agencies contributed $454 million for 1,030 awards to 744 small businesses. Not only do these figures represent an investment in our nation’s small firms, they are also funding our country’s future.

Over the course of the last 3 decades, SBIR/STTR have funded small businesses that are now economic powerhouses. The programs provided companies like 23andMe, Qualcomm, Symantec, and Da Vinci Surgical Systems with the early funding they needed to develop new technologies and build their enterprises into what they are today.

These programs also have the potential to address persistent barriers that hold back women and people of color operating in the STEM fields. Minorities often have a harder time accessing seed capital to pursue the creation of new technologies, and this program helps bridge that gap.

Women hold less than 20 percent of U.S. tech jobs, and only 5 percent are in leadership positions at technology companies. According to a recent survey by PEW Research, Asian Americans hold 13 percent of STEM jobs, while African Americans hold 9 percent and Latinos hold 8 percent.

These numbers are staggering and show we have a long way to go. And I may add – increasing the number of women and minorities who participate in the SBIR/STTR program is a top priority of mine.  

Today, our country is at a crossroads when it comes to our innovative capacity, just as we were when Congress created SBIR/STTR. In the latest Bloomberg Innovation Index, the United States dropped out of the top ten entirely.

Regaining our footing as one of the world’s most innovative nations should be a bipartisan goal. If we are to accomplish it, it’s vital that we utilize the power of small businesses.

I hope that today’s discussion sheds light on the importance of small business innovation, and I look forward to working with my colleagues to improve these critical programs.