Washington, D.C.— Today, the House Small Business Committee Subcommittee on Economic Growth, Tax, and Capital Access, under Chairwoman Sharice Davids (D-KS), examined current Small Business Administration (SBA) initiatives designed to encourage innovation. The hearing focused on ways innovation can benefit small businesses, drive recovery from the pandemic, and boost the country’s long-term economic prospects.
“Today's hearing allows us to examine existing programs and find ways to improve SBA's innovation initiatives to ensure they are encouraging startups and supporting our economy,” said Chairwoman Davids. “As our country recovers from COVID, boosting innovation will be vital to getting our economy back on track. By focusing on expanding innovation to underserved entrepreneurs, Congress can unleash economic potential that has long been untapped.”
Since the 1970’s, the United States has gradually lost its standing as the world’s most innovative nation. In 2021, the Bloomberg Innovation Index ranked the U.S. outside the world’s top 10 most innovative countries. Declining innovation can have severe consequences including lower wages, decreased productivity, and higher prices for goods and services. As the country works to revive the economy in the wake of the pandemic, boosting innovation will be key to achieving full recovery.
During the hearing, lawmakers reviewed current SBA initiatives run by the Office of Investment and Innovation and considered potential improvements. Discussion centered on policies with the potential to increase federal investment in innovation and provide additional resources to innovative entrepreneurs. Members also discussed diversity shortfalls in the innovation space and ways Congress can help make the sector more inclusive.
“Roughly 70% of Park companies are early-stage startups, most of which are still working on developing their core technologies and intellectual property, and most of which are in the pre-revenue stages,” said E. LaVerne Epp, Executive Chair of KU Innovation Park in Lawrence, KS. “Because of this, many of the traditional SBA programs, such as small business loans and the HubZone program, are difficult for companies to take advantage of. Thus, GAFC funding has been a critically important way for the SBA to support these companies.”
“Since the needs are different for technology entrepreneurs, so too are the resource needs in our communities. The U.S. invests billions in research and development, which makes us home to the greatest ideas and innovation in the world,” said Benjamin Robert Johnson, Chairman of the Innovation Advocacy Council in Westerville, OH. “But, we often assume that R&D is going to be pulled into the marketplace without further assistance when, in fact, it takes immense work to cross the gap from lab to market – especially in rural communities and for women and minorities often underrepresented in innovation industries.”
“Technology startup companies experience a myriad of hurdles along the path towards successful commercialization. We are grateful and attribute our successes thus far to generous and timely support from the National Science Foundation, Small Business Administration, our business collaborators, Illinois EnterpriseWorks Incubator, University of Illinois, and the hardworking sweat equity of our team,” said Dr. Gabriel R. Burks, Vice President and Head of Research and Development at FrostDefense Envirotech Inc. “We have had the ability to test our original ideas and pivot towards ideas that are more effective and in alignment with societal needs. Due to foundational federal support, we anticipate the creation of many new tech jobs to support the United States and global economies.”