Washington, D.C.— Yesterday, the House Committee on Small Business Subcommittee on Innovation and Workforce Development, led by Rep. Jason Crow (D-CO), examined the collaborative relationship between research universities and small businesses that fuels technological innovation. Each year, universities and research institutions create thousands of patents that are then commercialized by small businesses through public-private partnerships.
“Products like lifesaving drugs, groundbreaking medical devices, and advancements in agriculture are the result of collaboration among faculty, students, and the business community,” said Chairman Crow. “These innovations – only made possible by public investment – are needed now more than ever as technology is rapidly changing every sector of the economy. However, as more and more states cut funding for research-based universities, the federal government’s role in supporting innovation at our nation’s colleges and universities is more important than ever.”
In addition to educating millions of Americans every year, with the backing of federal funding, universities also serve as the epicenter of technological research and springboard for new companies. For example, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs administered by the Small Business Administration (SBA) have provided billions in funding to small firms that have gone on to generate 70,000 patents, launch 700 initial public offerings, and attain $41 billion in follow-on private investment. Overall, between 1996 and 2015, technological transfer has created over $1.3 trillion in gross industrial product and more than 4.3 million new jobs. Despite this substantial economic impact, public R&D funding is rapidly declining as a percentage of GDP with federal R&D currently half of what it was in the mid-1960s.
During the hearing, members questioned academics and technology experts about ways that Congress can improve federally funded R&D and ensure strong partnerships between universities and research institutions and small businesses.
“There’s no question that research funding is essential to creating a healthy stream of ideas from within universities that may find success in the marketplace,” said Dr. John Younger Vice President of Science and Technology University City Science Center in Philadelphia, PA. “Nevertheless, it should be no surprise to this Subcommittee that in real dollars the United States significantly lags countries like China, which has dedicated hundreds of billions of dollars to fund the research and development of new technologies. Funding of leading-edge academic research is an important consideration in securing and strengthening our country’s innovation and entrepreneurial pipeline.”
“Because the benefits of basic research are so diffuse and long‐term, few private sector companies are willing to fund it on their own,” said Dr. Sheila Martin, Vice President of Economic Development and Community Engagement Association of Public and Land-grant Universities. “Yet without it we would not have the scientific basis for today’s economy. Therefore, it makes economic sense that basic research is funded by federal agencies such as the NSF, NIH, NASA, DOD, DOE, and the USDA. Maintaining or increasing the funding to these agencies is essential to ensuring that the font of scientific knowledge that feeds the innovation pipeline to small businesses continues to flow.”
“As industry and the business community continue to collaborate and work together to support life sciences and these important innovations the industry will continue to grow and thrive while seeing more innovations coming out of our great state and the entire country,” said Dr. Ethan Mann, Vice President of Marketing and Business Development Sharklet Technologies, Inc. in Aurora, CO. “With this work, ultimately, innovations will improve lives. We will also see continued job creation which provide high-paying, globally engaging and rewarding opportunities, and students young and old are provided relevant experiences while discerning opportunities of interest.”
“The United States has been such a powerful force in technological innovation over the past 80 years largely because of our understanding of its importance to our economy,” said Chairman Crow. “Not only can this technology coming out of our universities have the power to change our everyday lives, but it can also empower small businesses to create jobs and enhance quality of life in their communities and throughout the country. On this committee we understand this connection and remain fully committed to ensuring the continued support of startups and entrepreneurship fueled by university research and development.”