SHAHEEN: SMALL BUSINESS PROGRAM KEY TO FUTURE PROSPERITY

The Senator delivered the following remarks today on the Senate floor.

March 16, 2011

As prepared for delivery:

Our future economic prosperity depends on whether this country continues to be a leader in science and innovation. We can't compete with India and China for low-wage manufacturing jobs. That is not our future. America’s future is to be the global leader in science and technology. America makes the best, most innovative products and services. That ingenuity and excellence is our chief economic strength as a nation.

As a former small business owner, I know it is business, not government, that creates jobs, but I believe government has a critical role to play in fostering the positive business climate we need to remain competitive.  I believe there are a few things we need to do to unleash the innovative spirit that is so alive and well in New Hampshire. One action that is central to maintaining the creative dominance that has allowed us to lead the world in innovation is to enact a long-term reauthorization of the Small Business Innovation Research, or SBIR, program.

SBIR is not just a typical grant program. Under the SBIR program a small business is able to compete for research that federal agencies need to accomplish their missions, agencies like the Department of Defense. Small businesses employ about one-third of America's scientists and engineers and produce more patents than large businesses and universities. Yet, small business receives only about 4 percent of federal research and development dollars. SBIR ensures that small business gets a tiny fraction of existing federal research dollars.

In just the last few weeks I visited three New Hampshire companies - Airex in Somersworth, Spire Semiconductor in Hudson, and Active Shock in Manchester – that are doing cutting-edge research because of the SBIR program. This research has allowed them to develop new products, add customers and hire new workers. All three have done essential research for the Department of Defense. Airex , for example, developed a state-of-the-art program to manufacture critical components for our nation’s strategic missiles.  This SBIR award positioned them perfectly to compete and win a contract to manufacture motors for use in military programs and to commercialize their research and they’ve been able to expand from a workforce of 10 to 25 since obtaining an SBIR award are continuing to grow. Creare in Hanover is a poster child for the economic benefits reaped by the SBIR program. The firm can trace more than $670 million of revenues earned at Creare, its spin-offs, and technology licensees to the commercialization of its SBIR projects.

Many New Hampshire small businesses have successfully competed for SBIR funding in the 28 years SBIR has been in existence. All across New Hampshire, small businesses that otherwise would not be able to compete for federal R&D funding have won competitive SBIR grants that advance technology and science and create good jobs. In just the last two years, New Hampshire firms have won 80 SBIR awards. In fact, despite its small size, New Hampshire is ranked 22nd in the nation for total grants awarded through the Department of Defense since SBIR began.

As a Senator from New Hampshire, I take particular pride in the SBIR program. It was New Hampshire Senator Warren Rudman who in 1982 sponsored the Small Business Innovation Development Act which established the SBIR program.

SBIR has a proven track record and its cost is minimal. CBO estimates that implementing this bill would cost only $150 million over the next five years, and most of that minimal cost would have zero effect on the budget. That’s because this bill would establish a three-year pilot program that authorizes participating agencies to use the same dollars they set aside anyway for SBIR research to pay for administrative costs. That means we won’t be using general operating funds to pay for administrative costs. And this bill imposes no mandates on business and imposes no costs on state and local governments.

We need to address the long-term deficit. We all know that. The best way we do that is through more robust economic growth. Objecting to the SBIR program, as some have done, on the grounds that we should be focusing on the deficit alone, makes no sense at all. The jobs created by the SBIR program lower the deficit.

Just like stop-gap budgeting is bad for business, so are the stop-gap extensions of the SBIR program. Unfortunately, SBIR has been operating under short-term extensions – 10 of them – since 2008. Short-term extensions are a problem because, as I hear from businesses regularly, they need certainty in planning. This bill reauthorizes the SBIR program for 8 years, a reasonable period of time which will allow small businesses and federal agencies to effectively plan their research.

Mr. President, I know that in some quarters it’s become fashionable to say this country’s best days are behind us. I don’t believe that for a moment. As I travel around New Hampshire I see cutting-edge innovators who are creating jobs. We in the Senate know what needs to be done. We just need the will to do it. I urge my colleagues to join me in voting to reauthorize and strengthen the SBIR program.