[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                          AMERICA'S SEED FUND:
                       A REVIEW OF SBIR AND STTR

=======================================================================

                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY

                                 OF THE

                      COMMITTEE ON SCIENCE, SPACE,
                             AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 5, 2020

                               __________

                           Serial No. 116-65

                               __________

 Printed for the use of the Committee on Science, Space, and Technology
 
 
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 


       Available via the World Wide Web: http://science.house.gov
       
       
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
39-569 PDF                  WASHINGTON : 2021                     
          
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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

             HON. EDDIE BERNICE JOHNSON, Texas, Chairwoman
ZOE LOFGREN, California              FRANK D. LUCAS, Oklahoma, 
DANIEL LIPINSKI, Illinois                Ranking Member
SUZANNE BONAMICI, Oregon             MO BROOKS, Alabama
AMI BERA, California,                BILL POSEY, Florida
    Vice Chair                       RANDY WEBER, Texas
LIZZIE FLETCHER, Texas               BRIAN BABIN, Texas
HALEY STEVENS, Michigan              ANDY BIGGS, Arizona
KENDRA HORN, Oklahoma                ROGER MARSHALL, Kansas
MIKIE SHERRILL, New Jersey           RALPH NORMAN, South Carolina
BRAD SHERMAN, California             MICHAEL CLOUD, Texas
STEVE COHEN, Tennessee               TROY BALDERSON, Ohio
JERRY McNERNEY, California           PETE OLSON, Texas
ED PERLMUTTER, Colorado              ANTHONY GONZALEZ, Ohio
PAUL TONKO, New York                 MICHAEL WALTZ, Florida
BILL FOSTER, Illinois                JIM BAIRD, Indiana
DON BEYER, Virginia                  FRANCIS ROONEY, Florida
CHARLIE CRIST, Florida               GREGORY F. MURPHY, North Carolina
SEAN CASTEN, Illinois                VACANCY
BEN McADAMS, Utah
JENNIFER WEXTON, Virginia
CONOR LAMB, Pennsylvania
VACANCY
                                 ------                                

                Subcommittee on Research and Technology

                HON. HALEY STEVENS, Michigan, Chairwoman
DANIEL LIPINSKI, Illinois            JIM BAIRD, Indiana, Ranking Member
MIKIE SHERRILL, New Jersey           ROGER MARSHALL, Kansas
BRAD SHERMAN, California             TROY BALDERSON, Ohio
PAUL TONKO, New York                 ANTHONY GONZALEZ, Ohio
BEN McADAMS, Utah                    VACANCY
STEVE COHEN, Tennessee
BILL FOSTER, Illinois
                         
                         C  O  N  T  E  N  T  S

                            February 5, 2020

                                                                   Page

Hearing Charter..................................................     2

                           Opening Statements

Statement by Representative Haley Stevens, Chairwoman, 
  Subcommittee on Research and Technology, Committee on Science, 
  Space, and Technology, U.S. House of Representatives...........     8
    Written Statement............................................     9

Statement by Representative Jim Baird, Ranking Member, 
  Subcommittee on Research and Technology, Committee on Science, 
  Space, and Technology, U.S. House of Representatives...........    10
    Written Statement............................................    11

Written statement by Representative Eddie Bernice Johnson, 
  Chairwoman, Committee on Science, Space, and Technology, U.S. 
  House of Representatives.......................................    12

                               Witnesses:

Dr. Dawn Tilbury, Assistant Director, Directorate for 
  Engineering, National Science Foundation
    Oral Statement...............................................    14
    Written Statement............................................    16

Dr. Maryann Feldman, S.K. Heninger Distinguished Professor of 
  Public Policy, Department of Public Policy; Adjunct Professor 
  of Finance, Kenan-Flagler Business School; Faculty Director, 
  CREATE, Kenan Institute of Private Enterprise; The University 
  of North Carolina at Chapel Hill
    Oral Statement...............................................    25
    Written Statement............................................    27

Mr. Nicholas Cucinelli, Chief Executive Officer, Endectra
    Oral Statement...............................................    32
    Written Statement............................................    34

Dr. Johnny Park, Chief Executive Officer, Wabash Heartland 
  Innovation Network
    Oral Statement...............................................    45
    Written Statement............................................    47

Discussion.......................................................    54

             Appendix I: Answers to Post-Hearing Questions

Dr. Dawn Tilbury, Assistant Director, Directorate for 
  Engineering, National Science Foundation.......................    68

Dr. Maryann Feldman, S.K. Heninger Distinguished Professor of 
  Public Policy, Department of Public Policy; Adjunct Professor 
  of Finance, Kenan-Flagler Business School; Faculty Director, 
  CREATE, Kenan Institute of Private Enterprise; The University 
  of North Carolina at Chapel Hill...............................    71

            Appendix II: Additional Material for the Record

Letters submitted by Representative Haley Stevens, Chairwoman, 
  Subcommittee on Research and Technology, Committee on Science, 
  Space, and Technology, U.S. House of Representatives...........    76

 
                          AMERICA'S SEED FUND:
                       A REVIEW OF SBIR AND STTR

                              ----------                              


                      WEDNESDAY, FEBRUARY 5, 2020

                  House of Representatives,
           Subcommittee on Research and Technology,
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittee met, pursuant to notice, at 2 p.m., in 
room 2318 of the Rayburn House Office Building, Hon. Haley 
Stevens [Chairwoman of the Subcommittee] presiding.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairwoman Stevens. This hearing will come to order. 
Without objection, the Chair is authorized to declare recess at 
any time. Good afternoon, and welcome to this hearing of the 
Subcommittee on Research and Technology to review opportunities 
and challenges for the Small Business Innovation Research 
(SBIR) and Small Business Technology Transfer (STTR) programs. 
I'd like to extend a warm welcome to our distinguished panel of 
witnesses. We look forward to hearing your testimony, and to 
having this discussion this afternoon. Today we're going to 
explore the role of these important programs in catalyzing the 
innovation and commercialization accomplishments from our 
Federal research investments to generate new economic growth, 
and further American leadership in innovation.
    The SBIR and STTR programs have helped entrepreneurs in my 
home State of Michigan to pursue their big ideas, and 
contribute to our thriving innovation economy. Since the 
creation of these programs, small businesses, as an example, in 
Michigan have been able to leverage $1.2 billion in funds to 
develop an amazing array of new technologies, while creating 
jobs and driving economic growth in our region. These 
investments transform communities and competitively grow small 
businesses.
    For instance, Variation Reduction Solutions, Incorporated, 
VRSI, is a small business located in my district in Plymouth, 
Michigan, and they're focused on manufacturing production 
technology. With our great roots in Southeastern Michigan in 
the auto industry, this, you know, we needed to kind of find a 
way to continue to grow our economy as we were coming out of 
the Great Recession that began in Michigan in 2007. So with the 
help of an SBIR grant, VRSI expanded into the aerospace 
industry. See, this is the plight of diversification, right? So 
we love our auto industry, but if there's a downturn, we want 
to be able to sell into other industries as well. And so they 
became involved with the F-35 Program, and generated 
relationships with the Department of Defense and large industry 
players, such as Lockheed-Martin and Northrop Grumman. The SBIR 
program was an essential piece of this successful transition to 
allow VRSI to not only weather through the transition of the 
Great Recession, but also to grow into a stronger and more 
thriving business.
    Today SBIR programs continue to allow small businesses in 
my district with the opportunity to scale into new industries 
and new markets, while building critical relationships with 
government and industry partners. It's because of successes 
like these that I am so proud to co-sponsor a bipartisan bill, 
and we did this earlier this Congress. I did this with my 
friend Ranking Member Baird, and two of our colleagues on the 
other Committee, on the House Small Business Committee, to 
further strengthen SBIR and STTR programs. H.R. 3774, the Small 
Business Innovation Research and Small Business Technology 
Transfer Improvement Act of 2019 encourages agencies to give 
high priority to funding small manufacturers and cybersecurity 
forums, right? These are places where we need and want to 
innovate, and it's absolutely critical for our economic and 
national security for the U.S. to maintain a domestic 
manufacturing base, and to develop the best cybersecurity tools 
for all businesses.
    For these entrepreneurs who are just getting started, early 
stage funding, right, helps them to get on the path for 
success. So this legislation, H.R. 3774, would require the 
Phase 0 proof of Concept Pilot Program currently carried out by 
NIH (National Institutes of Health) to be expanded to NSF 
(National Science Foundation), DOE (Department of Energy), and 
NASA (National Aeronautics and Space Administration). This 
pilot program has been instrumental in providing funds to 
innovators to identify research with commercial potential, 
engage in entrepreneurial training, and make technical 
validations. What could be greater? Phase Zero awards also 
allow researchers to take these important steps before company 
formation and before spending weeks to months to complete an 
SBIR application. Data from the NIH pilot program have clearly 
demonstrated the potential for this program to improve the 
overall outcomes of the SBIR program. Phase Zero efforts have 
also demonstrated success in broadening the participation of 
women and minorities in entrepreneurship, which is an important 
goal of the SBIR program that the agencies have long grappled 
with.
    SBIR has also been an important program in our overall 
Federal R&D (research and development) portfolio. It helps the 
agencies achieve their missions, and it supports innovative 
entrepreneurs who are creating jobs and generating economic 
growth in communities across the Nation. The improvements to 
the SBIR program proposed in H.R. 3774 will ensure that we can 
continue to build upon the program's successes and lessons 
learned. I cannot think of a more essential and exciting topic 
for us to explore and learn more about today. I want to thank 
our witnesses again for being here. We are really looking 
forward to your feedback on the legislation, and any other 
additional ideas that Congress should consider for improving 
the SBIR program.
    [The prepared statement of Chairwoman Stevens follows:]

    Good afternoon and welcome to this hearing of the 
Subcommittee on Research & Technology to review opportunities 
and challenges for the Small Business Innovation Research and 
Small Business Technology Transfer program. I'd also like to 
extend a warm welcome to our distinguished panel of witnesses. 
We look forward to your testimony and having this discussion 
this afternoon.
    Today, we will explore the role of these important programs 
in catalyzing the innovation and commercialization 
accomplishments from our federal research investments to 
generate new economic growth and further American leadership in 
innovation.
    The SBIR and STTR programs have helped entrepreneurs in 
Michigan pursue their big ideas and contribute to our thriving 
innovation economy. Since the creation of these programs, small 
businesses in Michigan have leveraged $1.2 billion in funds to 
develop an amazing array of new technologies while creating 
jobs and driving economic growth in our region.
    These investments transform communities and grow small 
businesses. For instance, Variation Reduction Solutions, 
Incorporated, VRSI, is a small business in my district in 
Plymouth, Michigan focused on manufacturing production 
technology. With its roots in the auto industry, it needed to 
find a way to succeed as the economy was crashing in 2007.
    With the help of an SBIR grant, VRSI expanded into the 
aerospace industry, becoming involved with the F-35 program and 
generating relationships with the Department of Defense and 
large industry players such as Lockheed Martin and Northrup 
Grumman. The SBIR program was an essential piece of this 
successful transition to allow VRSI to not only weather the 
Great Recession but to grow into a stronger and thriving 
business.
    Today the SBIR Program continues to allow small businesses 
in districts like mine the opportunity to scale into new 
industries and new markets while building critical 
relationships with government and industry partners.
    It is because of successes like these that I was proud to 
cosponsor a bipartisan bill earlier this Congress with Ranking 
Member Baird and two of our colleagues on the House Small 
Business Committee to further strengthen the SBIR and STTR 
programs. H.R. 3774, The Small Business Innovation Research and 
Small Business Technology Transfer Improvements Act of 2019, 
encourages agencies to give high priority to funding small 
manufacturers and cybersecurity firms. It is critical for our 
economic and national security for the U.S. to maintain a 
domestic manufacturing base and to develop the best 
cybersecurity tools for all businesses.
    For those entrepreneurs who are just getting started, early 
stage funding helps set them on the path to success. H.R. 3774 
would require the Phase 0 Proof of Concept pilot program 
currently carried out by NIH to be expanded to NSF, DOE, and 
NASA. This pilot program has been instrumental in providing 
funds to innovators to identify research with commercial 
potential, engage in entrepreneurial training, and make 
technical validations. Phase 0 awards allow researchers to take 
these important steps before company formation and before 
spending weeks to months to complete an SBIR application. Data 
from the NIH pilot program have clearly demonstrated the 
potential for this program to improve the overall outcomes of 
the SBIR program. Phase 0 efforts have also demonstrated 
success in broadening the participation of women and minorities 
in entrepreneurship. That is an important goal of the SBIR 
program that the agencies have long struggled with.
    SBIR has long been an important program in our Federal R&D 
portfolio. It helps the agencies achieve their missions and it 
supports innovative entrepreneurs who are creating jobs and 
generating economic growth in communities across the nation. 
The improvements to the SBIR program proposed in H.R. 3774 will 
ensure that we can continue to build upon the program's 
successes and lessons learned.
    I cannot think of a more essential and exciting topic for 
us to explore and learn more about today. I want to thank the 
witnesses for being here today. I look forward to your feedback 
on our legislation and any additional ideas Congress should 
consider for improving the SBIR Program.

    Chairwoman Stevens. Before I recognize Dr. Baird for his 
opening remarks, I would like to present for the record 
statements from the National Institutes of Health and Clean 
Energy Business Network regarding this hearing, so we have 
statements from both of these organizations for the official 
record today.
    And now, without further ado, our Chair is going to 
recognize Dr. Baird for an opening statement.
    Mr. Baird. Thank you, Chairwoman Stevens. Anyway, let's not 
get confused here. I really appreciate you holding this 
hearing, and you know I really appreciated the opportunity to 
work with you to introduce that H.R. 3774. And, you know, these 
are, you know, descriptive terms, I guess, but when you talk 
about small business innovation research, if you really think 
through that, that's extremely important, and then you add to 
it the small business technology transfer improvement, I mean, 
that's so important to our economy, to our country, and to our 
citizenship, so we really appreciate the opportunity to do that 
with you, and I appreciate all the witnesses being here.
    I'm really proud of America for our leadership in science 
and technology over the years and through the centuries, and as 
I mentioned, it is critical to our economy, and it's critical 
our national security. And so basic research, supported with 
taxpayer dollars through the National Science Foundation, 
through NASA, NIH, DOD (Department of Defense), and other 
Federal agencies have led to key scientific discoveries that 
have created today's world, the Internet, wireless 
communications, life-saving medicines, lasers, and so on. So 
when you think about the products and innovations that have 
evolved from this kind of research, it's phenomenal. So basic 
research produces the scientific fuel for innovation, risk-
taking small businesses are the engines for converting that 
knowledge, and into new products and services. Small businesses 
are the catalysts for economic growth for producing good paying 
jobs in our communities. So I think a lot of us recognize how 
important small businesses are to our communities, and to our 
States, and to the country.
    So SBIR and STTR programs help accelerate the 
commercialization of taxpayer funded research into new products 
and services. They also help the Department of Defense and 
other Federal agencies meet their research and development 
needs. The SBIR and STTR programs are funded from set-asides of 
the extramural research budget at Federal agencies to the tune 
of 3.2 percent for SBIR grants, and just less than half a 
percent for the STTR. These set-asides sound small, but they 
amount to about $2.7 billion for SBIR and $368 million for STTR 
on an annual basis, so this is a huge taxpayer investment, so 
it's important that we ensure that these programs are working. 
And I think that's why we have these kinds of hearings, to 
share with us, as Congress Members, how the programs are 
working.
    My legislation takes steps to improve the accountability 
portion of that. First, it reinforces the requirement that the 
Small Business Association give a comprehensive annual report 
to SBIR and STTR programs to Congress, and hold the Department 
of Defense accountable to stimulate technological innovation. 
The bill also sets priorities for SBIR and STTR--boy, programs 
to stimulate manufacturing and cybersecurity, and the products 
and services that we utilize in the United States.
    The bill extends the flexibility given to agencies for 
innovative funding mechanisms for those two programs. Congress 
acted to extend those two programs through Fiscal Year 2022, 
but our work must continue to ensure the success of these 
programs. They're vital to helping the Hoosier small 
businesses, and the other segments of our Nation. I'm proud to 
have one of those Hoosier success stories on the panel here 
today. Dr. Johnny Park took basic research he developed in his 
lab at Purdue University. Did you hear that? Purdue University, 
yes.
    Chairwoman Stevens. OK----
    Mr. Baird. Anyway----
    Chairwoman Stevens [continuing]. We heard you.
    Mr. Baird [continuing]. And started a company with the 
assistance of an SBIR award to develop his research, then he 
created products for farmers, and a thriving business that has 
been acquired since then. I look forward to hearing his 
testimony today as a great example of the innovation system in 
America. We must take every opportunity to strengthen 
investment in R&D so that we can continue breaking boundaries 
and moving our economy forward. I'm proud to work with our 
colleagues to encourage innovation and give our businesses the 
resources they need to thrive. I look forward to hearing ideas 
from our panel and witnesses on how we can continue to 
strengthen the two programs. And I yield back. Thank you.
    [The prepared statement of Mr. Baird follows:]

    Chairwoman Stevens, I appreciate you holding today's 
hearing to review the SBIR and STTR programs.
     I was proud to introduce H.R. 3774, the Small Business 
Innovation Research and Small Business Technology Transfer 
Improvements Act.
    I want to thank the Chairwoman for joining me in sponsoring 
the bill, and for advancing that effort with today's 
legislative hearing.
    America's leadership in science and technology is critical 
to our economic and national security. Basic research supported 
with taxpayer dollars through the National Science Foundation, 
NASA, NIH, DOD, and other federal agencies has led to the key 
scientific discoveries that have created today's world: the 
internet, wireless communications, life-saving medicines, 
lasers, and more.
    If basic research produces the scientific fuel for 
innovation, risk-taking small businesses are the engines for 
converting knowledge into new products and services. Small 
businesses are the catalysts for economic growth, for producing 
good-paying jobs in our communities.
    The SBIR and STTR programs help accelerate the 
commercialization of taxpayer-funded research into new products 
and services. They also help the Department of Defense and 
other federal agencies meet their research and development 
needs.
    The SBIR and STTR programs are funded from set-asides of 
the extramural research budgets at federal agencies--3.2% for 
SBIR grants and just less than half a percent for STTR. These 
set-asides sound small, but they amount to over $2.7 billion 
for SBIR and $368 million for STTR annually. This is a huge 
taxpayer investment, so it is important for Congress to ensure 
the programs are working.
    My legislation takes steps to improve accountability.
    First, it reinforces the requirement that the Small 
Business Administration (SBA) give a comprehensive annual 
report of the SBIR and STTR programs to Congress and holds the 
Department of Defense (DoD) accountable to stimulate 
technological innovation.
    The bill also sets priorities for the SBIR and STTR 
programs to stimulate manufacturing and cybersecurity products 
and services in the United States. The bill also extends 
flexibility given to agencies for innovative funding mechanisms 
under the SBIR and STTR programs.
    Congress acted to extend the SBIR and STTR programs through 
Fiscal Year 2022, but our work must continue to ensure the 
success of these programs. The SBIR and STTR programs are vital 
to helping our Hoosier small businesses and our nation.
    I am proud to have one of those Hoosier success stories on 
our panel today. Dr. Johnny Park took basic research he 
developed in his lab at Purdue University, and started a 
company with the assistance of SBIR awards to develop his 
research. He created products for farmers and a thriving 
business that was then acquired. I look forward to hearing his 
testimony today, as a great example of the innovation system in 
America.
    We must take every opportunity to strengthen investment in 
R&D so we can continue breaking boundaries and moving our 
economy forward. I'm proud to work with my colleagues to 
encourage innovation and give our businesses the resources they 
need to thrive.
    I look forward to hearing ideas from our panel of witnesses 
of how we can continue to strengthen the SBIR and STTR 
programs.
    I yield back.

    Chairwoman Stevens. If there are Members who wish to submit 
additional opening statements, your statements will be added to 
the record at this point.
    [The prepared statement of Chairwoman Johnson follows:]

    Good afternoon and thank you to the Chair and Ranking 
Member for holding this hearing and for introducing a good, 
bipartisan bill making improvements to the SBIR and STTR 
programs. I would also like to welcome our witnesses to today's 
hearing and thank them for sharing their expertise with us on 
these important programs.
    The SBIR program is known as ``America's Seed Fund.'' A 
strength of the Federal scientific enterprise is its ability to 
harness research and ideas from a wide range of innovators 
including small businesses. Just a modest amount of early stage 
support for these ideas can propel them forward and open the 
door to significant private sector investment and commercial 
success.
    To build on these successes for the future, it is important 
to periodically evaluate the SBIR program and ensure policies 
are in place to help the agencies meet the goals of the 
program.
    There is no one size fits all assessment of SBIR because 
each agency implements a unique program. And Congress has 
recognized the need to provide agencies the flexibility to do 
so. Each agency has its own mission and research needs. 
However, the overarching goals are constant across the 
agencies, and Congress requires the National Academies of 
Science, Engineering, and Medicine to review these programs 
every four years with those goals in mind. The Academies has 
recently initiated a new round of reviews so we don't have new 
recommendations yet. However, in their last round in 2015-2016 
they found that overall, agencies were doing a good job in 
meeting the statutory goals, except when it came to achieving 
increased women and minority participation in SBIR and STTR.
    Whether this is a pipeline issue or an accessibility issue, 
the status quo is not good enough. Congress authorized agencies 
to use 3 percent of their SBIR funds for administrative 
activities, program evaluation, and outreach. I am interested 
in any feedback the witnesses might offer on the use of these 
funds for increasing the participation of underrepresented 
groups in the program. I am also eager to learn more from NSF 
about the promise of the Innovation Corps and other preSBIR 
activities in engaging more women and minorities in 
entrepreneurship. We should continue to experiment with these 
and other potential solutions to addressing the lack of 
diversity in the SBIR program and our innovation pipeline.
    Finally, this Committee has long advocated for early-stage 
funding. It takes business acumen, a solid technology 
foundation, and adequate resources to get an idea into the 
market. NIH recently reported a number of successes funded 
through a Congressionally mandated pilot program to fund 
activities to improve the commercialization potential of pre-
competitive technologies. Considering these successes, I would 
like to see other agencies carry out a similar program.
    I look forward to an informative hearing, and I appreciate 
the witnesses being with us to share their insights and 
legislative recommendations.
    Thank you, and I yield the balance of my time.

    Chairwoman Stevens. And at this time, I'd also like to 
introduce our witnesses in full.
    Our first witness is Dr. Dawn Tilbury. Dr. Tilbury is the 
Assistant Director of the Directorate of Engineering at the 
National Science Foundation. In this role she leads the 
directorate in its mission to support engineering research and 
education critical to the Nation's future. The engineering 
directorate also manages the National Science Foundation's SBIR 
and STTR programs. Dr. Tilbury is on temporary leave, wait for 
it, from the University of Michigan, where she has been a 
professor since 1995 in both mechanical and electrical 
engineering. She is also the inaugural chair of the Robotics 
Steering Committee, and served as an associate dean for 
research in the College of Engineering at the University of 
Michigan. And, as we just launched last week the Women in STEM 
(science, technology, engineering and mathematics) Caucus for 
the House of Representatives, we look forward to engaging you 
in that caucus as well in that Committee.
    And then our next witness is Dr. Maryann Feldman. Dr. 
Feldman is the Distinguished Professor in the Department of 
Public Policy and Adjunct Professor of Finance in the Kenan-
Flagler Business School at the University of North Carolina at 
Chapel Hill. Her research focuses on the geography of 
innovation, the commercialization of academic research, and the 
factors that promote technological change and economic growth. 
Dr. Feldman is also the co-chair of several assessments of the 
SBIR and STTR programs that are underway at the National 
Academies of Sciences, Engineering, and Medicine, and we're 
counting you in our Women in STEM Caucus too. We're promoting 
it, since we just launched it.
    And then next, and we're so delighted to have Mr. Nicholas 
Cucinelli. Mr. Cucinelli is the Chief Executive Officer of 
Endectra LLC, an SBIR funded spinout from the University of 
Michigan launched in 2015 that has a portfolio of photonic and 
nano-sensor technologies for defense, medical, and industrial 
applications. He is also an entrepreneurial leadership 
instructor at the University of Michigan Center for 
Entrepreneurship. And from 2013 to 2018 he served as a mentor 
in residence for the Tech Transfer Talent Network Program, 
supporting university startup teams Statewide. Mr. Cucinelli 
served 16 years with the U.S. Coast Guard, where he focused on 
environmental protection, and was named Coast Guard Hero in 
2000, and thank you so much for doing that important work.
    Our fourth witness, who we heard a little bit about, is Dr. 
Johnny Park. Dr. Park is the Chief Executive Officer of Wabash 
Heartland Innovation Network, a consortium of 10 counties in 
North Central Indiana devoted to developing the region into a 
global epicenter of digital agriculture and next generation 
manufacturing by using the Internet of Things. Prior to his 
position at this network, Dr. Park founded, scaled, and led a 
successful exit of an ag tech company, Spensa Technologies. He 
was previously a faculty member in the School of Electrical and 
Computer Engineering at Purdue University, where his research 
included projects on robotics, computer vision, machine 
learning, and distributed sensor networks. We will make note 
that not all SBIR funding goes through Michigan and Indiana, 
but we are very pleased to have these great witnesses here 
today. And there's one thing we know on this Committee, is that 
the Midwest is best.
    So, as our witnesses should know, you're each going to have 
5 minutes for your spoken testimony, and make sure to turn on 
your microphone when you're speaking. Your written testimony 
will be included in the record for the hearing, and then, after 
each of you have completed your spoken testimony, we'll begin 
with questions, and each Member will have 5 minutes to question 
the panel. And, with that, we're going to start with Dr. 
Tilbury.

                 TESTIMONY OF DR. DAWN TILBURY,

   ASSISTANT DIRECTOR, DIRECTORATE FOR ENGINEERING, NATIONAL 
                       SCIENCE FOUNDATION

    Dr. Tilbury. Great. Well, thank you very much, Chairwoman 
Stevens, Ranking Member Baird, and Members of the Subcommittee. 
Thank you for the opportunity to testify on the SBIR and STTR 
programs at the National Science Foundation. It's great to see 
a little Big Ten rivalry up there. So this year, as NSF 
celebrates its 70th anniversary, we reflect on the many 
breakthrough discoveries and innovations that have been enabled 
by NSF investments that sustain, accelerate, and transform 
America's globally preeminent research ecosystem. Some of the 
most well-known innovative companies of today, such as 
Qualcomm, started with NSF support, and specifically with 
support from SBIR and STTR. These programs are an integral part 
of the NSF strategy to stimulate innovation and address 
societal needs through the commercialization of the results of 
fundamental research.
    NSF is unique across the Federal Government, with a mission 
to support fundamental research across all fields of science, 
technology, engineering, and mathematics, or STEM, and all 
levels of STEM education. Given this unique role in supporting 
innovators, the agency recognized early on the potential for 
greater and faster commercialization of NSF funded research. 
That is why, in the late 1970s, NSF created the SBIR program. 
The primary objective of the SBIR and STTR programs is to 
transform scientific discoveries into products and services 
with commercial potential or societal benefits. Within NSF most 
of our SBIR and STTR Program officers are scientists, and also 
former entrepreneurs, investors, or both.
    At NSF, SBIR research topics cover the entire spectrum of 
the marketplace and the Nation, and I'll tell you a story about 
one of my colleagues from the University of Michigan, Dr. 
Shorya Awtar. Shorya started his career getting some early NSF 
funding for basic research into kinematics, which, if any of 
you are mechanical engineers, that's pretty old-fashioned 
mechanical engineering. However, he had an innovative idea 
about how to re-map the surgeon's hand movements in a 
laparoscopic surgical instrument using purely kinematics, so 
when the surgeon moves his fingers this way, the end-effector 
moves the same way, instead of the opposite way, as you would 
expect.
    Now, current technology, such as the DaVinci Robot, can do 
this remapping, but it takes a whole room of electronics and 
costs a million dollars. Shorya's mechanical device costs less 
than $500. So he went through I-Corps, one of NSF's programs, 
started a company, and got SBIR Phase 1 and Phase 2 awards, and 
his company is currently operating in Michigan with several 
dozen employees, producing these surgical devices as fast as 
they can. Now he's back at the university, has another basic 
research award, and possibly the cycle will start all over 
again. We'll wait and see.
    NSF's I-Corps Program provides training to potential 
entrepreneurs, faculty, graduate students, post-docs, teaching 
them about what the market needs are, and how they might 
commercialize their product. PIs who have been through the I-
Corps Program are three to four times more likely to receive an 
NSF SBIR Phase 1 award than the general population. So, 
building on this success, over the last year we have put more 
than 1,000 NSF SBIR and STTR Phase 1 awardees through a 
condensed version of the I-Corps Program called Beat the Odds 
Bootcamp.
    So, in conclusion, I'll echo what we heard earlier. Small 
businesses create jobs. They fuel the economy, and they support 
communities. For over 40 years NSF has helped startups and 
small businesses across the country transform their ideas into 
marketable products and services through our SBIR and STTR 
programs. NSF is constantly assessing its performance against 
the goals of these programs, and has taken on new initiatives, 
and new outreach, and new enhancements. We know that it takes 
more than the SBIR and STTR investment to translate a technical 
vision into a realized, economically viable company, but these 
SBIR and STTR Programs anchor our extensive activity in 
identifying and leveraging the opportunities for new 
technologies.
    On behalf of the National Science Foundation, and all of 
our awardees, I want to thank you for your support of NSF, and 
for this opportunity to highlight the programs that provide 
startups and small businesses with the means to keep America on 
the forefront of innovation. Thank you.
    [The prepared statement of Dr. Tilbury follows:]
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                TESTIMONY OF DR. MARYANN FELDMAN,

             S.K. HENINGER DISTINGUISHED PROFESSOR

         OF PUBLIC POLICY, DEPARTMENT OF PUBLIC POLICY,

                 ADJUNCT PROFESSOR OF FINANCE,

                 KENAN-FLAGLER BUSINESS SCHOOL,

                   FACULTY DIRECTOR, CREATE,

             KENAN INSTITUTE OF PRIVATE ENTERPRISE,

        THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL

    Dr. Feldman. So, Chair Stevens, Ranking Member Baird, and 
Members of the Committee, thank you so much for inviting me to 
testify. And I am the Co-Chair of several ongoing National 
Academies assessments of the SBIR program. Our first assessment 
of the Department of Energy will be released at the end of 
March, so I'm not able to speak to any of the findings or 
recommendations of the Committee. I'm appearing today in my 
capacity as an expert in innovation, and as a scholar who was 
studied the SBIR program, its impacts, and also the ways in 
which those impacts may be broadened. And so this program is 
highly successful. It's copied around the world, and it 
deserves Congress' continued and enthusiastic support.
    The program strengthens the capacity for private sector 
innovation in the U.S., but there are opportunities. States 
have been experimenting with programs to encourage technology 
commercialization, but these State resources are not evenly 
distributed, and there's a tendency for the States that have a 
lot of activity to get more. And so an example of the way that 
we could level the playing field are increased funding for the 
Phase Zero Proof of Concept centers, and about half of the 
States currently have these programs. With small amounts of 
money in the range of $2 to $10,000, they increase the 
competitiveness of the SBIR proposals, and this is very 
important for first time applicants, but also, when people have 
an unsuccessful application, they can then revise it.
    Another example is the SBIR State match, and these are for 
companies that have been awarded funding, and it tops off the 
amount of the funding, and there are currently 15 States that 
offer a match that will increase the amount of funding. My own 
research with Lauren Lanahan has examined this program. We find 
that small amounts of money, in the range of $25 to $50,000, 
increase the probability of a firm moving from a Phase 1 to a 
Phase 2. That suggests that increasing the amount of funding 
will increase the success of the program. Now, these State 
programs are copied on an ad hoc basis, and having them be a 
national program might increase the success of the program. 
Many States simply don't have the access to adopt these 
programs, and these are the States where there is the greatest 
need.
    The evidence suggests that the SBIR program is working 
well, but the SBIR program is only one component of a larger 
system of innovation. The program's called America's Seed Fund, 
and it is meant to address this colorfully named funding gap, 
the Valley of Death, but venture capital has not been moving in 
with follow-on funding. Many SBIR recipients are unable to 
secure the needed funding to move forward, and this is 
especially true for the high risk, high reward technologies 
that are central in energy independence, providing new and 
better industrial materials, and really those technologies that 
have the potential to create new industries. Venture capital 
(VC) has increasingly been moving toward software investments, 
and this is where you have lower--shorter development times, 
lower capital cost, and less market uncertainty. The VC model 
is also predicated on returning moneys to investors within 5 to 
10 years, and that's not enough time to develop these 
technologies, where there is such great uncertainty.
    I'd also like to suggest that these wonderful pilot 
programs you've been trying should be part of this landscape, 
and should be institutionalized, and so this is a way of 
nesting the companies in support organization. The idea of 
public/private partnerships which would blend funding, bringing 
together different users will help validate discoveries, and 
move business forward. NSF, excuse me, NIH has tried this very 
successful with their REACH Program, that's Research Evaluation 
and Commercialization Hubs, but this could be extended to other 
agencies.
    And so I think that, as we think of reforming the SBIR 
program, it's important to remember it works very well, and 
that we need to get other components of the system supporting 
SBIR in a better way. Thank you.
    [The prepared statement of Dr. Feldman follows:]
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              TESTIMONY OF MR. NICHOLAS CUCINELLI,

             CHIEF EXECUTIVE OFFICER, ENDECTRA, LLC

    Mr. Cucinelli. Chairwoman Stevens, Ranking Member Baird, 
and Members of the Subcommittee, thank you for inviting me here 
today to offer an entrepreneur's perspective on H.R. 3774 and 
the overall SBIR/STTR program. Apologies in advance for saying 
that acronym over and over again. I offer my perspective 
through the unique lens of having professionally mentored or 
personally managed more than 15 technology ventures that have 
received approximately eight million in seed funding from the 
SBIR/STTR program over the last 12 years. This funding has 
spanned the NSF, NIH, DOE, NASA, and the DOD, and in many cases 
led to follow-on angel, venture capital, and strategic 
investment, and the commercialization of technologies that now 
meet important civilian and military needs, and keep the U.S. 
at the forefront of global technological innovation.
    One great example is Intralase, which launched out of the 
University of Michigan in 1997, and commercialized the blade 
free laser technology used in LASIK eye surgery. The company 
received about 2.2 million in SBIR seed funding in the 1990s, 
and was eventually acquired for over 800 million in 2007. More 
than 40 million people worldwide have benefited from this life-
changing technology, including me, and probably many people in 
this chamber. It has created high tech jobs, economic growth, 
and contributed to our technological leadership. The inventor 
of this platform laser technology received a Nobel Prize in 
Physics in 2018, and is now working on a way to use it to 
render nuclear waste harmless. These are truly remarkable 
economic and societal dividends for a $2.2 million seed 
investment by the U.S. Government.
    More recent examples from the past decade include H3D, a 
2013 spinout from the University of Michigan with a novel 
radiation imaging technology, and SkySpecs, a company launched 
by Michigan grad students in 2012, which uses autonomous drones 
to conduct wind turbine inspections. Together these companies 
have received a total of about 2.3 million in SBIR funding, and 
have gone on to create over 85 high tech jobs, reach in excess 
of 15 million in combined annual revenue, and deliver 
revolutionary technologies into the global energy industry. 70 
percent of the U.S. nuclear power plant fleet now uses H3D 
radiation detectors, while SkySpecs has completed over 30,000 
wind turbine inspections in 19 countries. Again, this is a 
remarkable return on a relatively small investment by the U.S. 
Government.
    Some ongoing projects with which I am involved include 
Enertia Microsystems, with NSF SBIR funding to develop a high 
precision gyroscope that can enable autonomous vehicles to 
operate on inertial navigation alone for up to 15 minutes, and 
iReprogram, with DARPA (Defense Advanced Research Projects 
Agency)/STTR funding to develop a biocomputational platform for 
cellular reprogramming. Imagine having a simple skin biopsy and 
converting your own body's cells into personalized treatments 
for wound healing, obesity, diabetes, cancer, and even aging. 
My own company, Endectra, has received $1.3 million in SBIR and 
STTR funding from NSF and the DOD, resulting in a broad 
portfolio of sensor technologies for defense, medical, and 
industrial applications, including distributed radiation and 
gas detectors, bio-photonic probes for cancer radiotherapy and 
real-time diabetes monitoring, and power meters for enterprise 
energy management.
    These, and thousands of other high potential companies, are 
currently using SBIR and STTR funding to move federally funded 
research across the wide chasm that exists between laboratory 
and marketplace. But like Intralase, H3D, and SkySpecs, they 
will typically not succeed overnight, but rather require seven 
to 10 years, exceptional dedication, and the patient bridge 
capital that the SBIR/STTR program provides. I applaud the 
Subcommittee's ongoing support of this program, and its efforts 
to prioritize small manufacturers, cybersecurity, and diversity 
in H.R. 3774. I would also recommend that in future you 
prioritize small businesses developing low carbon energy and 
climate mitigation technologies in order to address the 
existential threat of global warming.
    In closing, SBIR/STTR funded innovations have a long record 
of creating American jobs, improving our lives, and meeting 
strategic national needs. Thank you for the opportunity to 
participate in today's hearing, and for your continued support 
of this important program. I'll be pleased to answer any 
questions you may have, and, for the record, I was born in Fort 
Wayne.
    [The prepared statement of Mr. Cucinelli follows:]
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                  TESTIMONY OF DR. JOHNNY PARK,

                    CHIEF EXECUTIVE OFFICER,

               WABASH HEARTLAND INNOVATION NETWORK

    Dr. Park. Thank you for the opportunity to speak to you 
today about the SBIR and STTR program. I hope you'll find that 
my own experience provides compelling evidence of the value of 
this very important program. I was a professor at Purdue doing 
research in robotics, machine learning, and wireless system 
networks. In 2008 I received a grant from USDA (United States 
Department of Agriculture) to develop technologies that could 
automate labor intensive activities in agriculture. I knew very 
little about agriculture back then, so this project served as 
an entry door for me to this very important industry.
    In that USDA project, my work focused on automating the 
process of monitoring insect populations. Traditionally, 
monitoring insect populations is done by deploying a large 
number of cardboard sticky traps in the field. Each week, 
workers have to go in the field, first find a trap, open it up, 
count the number of bugs that are caught in the trap, write the 
number down on a piece of paper, clean the trap up, hang it 
back up, and repeat that process for hundreds of traps deployed 
in the field. As you can imagine, this is very labor intensive, 
but it's critically important because those trap numbers 
determine and inform when, where, and how much insecticide to 
apply.
    About a year of research and development at Purdue, we were 
able to demonstrate the feasibility of automatically monitoring 
insect populations with a wireless network of highly 
specialized sensors. Because of the potential for this 
technology to drastically improve the practice of pest 
management, I started a company, Spensa, to commercialize the 
research. But as with many technology startups that stem from 
university research, commercialization took much longer than 
anticipated. We had several problems to resolve in order to 
take our lab prototype into a full commercial product.
    The SBIR program helped us in two specific ways. First, it 
provided a necessary infusion of money to allow us to complete 
the research and development to the point where venture capital 
could participate. Second, the SBIR program taught me, through 
its very well organized SBIR grantee workshops, how to navigate 
between the paradigms of scientific research and 
entrepreneurship. Both were critically important to an 
academic-turned-entrepreneur like myself.
    Spensa received approximately $1.5 million in SBIR grants 
from USDA and NSF. Spensa was named by Forbes as one of the top 
25 most innovative ag tech startups in 2017. Spensa created 
jobs, hiring over 70 technical and business professionals. Its 
products helped growers reduce the labor costs associated with 
pest management, and helped them make more informed and timely, 
judicious spray decisions. On average, Spensa doubled its 
annual revenue in each of the last 5 years before it was 
acquired by DTN, which continues to operate the business from 
the Purdue research park where Spensa was founded.
    But well beyond this impact on Spensa was SBIR's impact on 
me. The program taught me to understand entrepreneurship as a 
customer-centered engine for innovation that accelerates change 
through the strategic, value sensitive, and nimble deployment 
of resources. And resources include not only financial capital 
and intellectual property, but also the team's talents, time, 
and passion. The entrepreneurship model is thus a resource 
engine, as each new asset comes to fruition, becomes the basis 
for the new deployment and generation of value, ultimately 
helping others in need, and making their lives better.
    As I mentioned earlier, Spensa was ultimately acquired, but 
my current role as CEO of the Wabash Heartland Innovation 
Network, or WHIN, is an even greater and truly unique 
opportunity to put research and entrepreneurship together to 
meet the needs of rural America. With very generous funding 
from the Lilly Endowment, WHIN was created by the 10 county 
rural region of Indiana with the goal of enabling the region to 
leverage its many assets, especially Purdue University, Ivy 
Tech Community College, and strong manufacturing and 
agricultural sectors to improve the region's economic 
prospects. WHIN is a nonprofit organization with a very 
ambitious goal, and I am leading this organization like a 
startup. I believe WHIN is benefiting tremendously from lessons 
learned from Spensa. I believe its story illustrates how the 
SBR program, in action with Spensa, continues to generate 
economic growth. In the long run, WHIN envisions the Wabash 
heartland as the global epicenter of digital ag and next 
generation manufacturing, powered by IoT technology. That is 
quite a return for $1.5 million in SBR grant funding to a 
little startup in West Lafayette, Indiana.
    I hope this gives you an idea of both the short and the 
long-term impact of the SBR program. I hope you will continue 
to give it your full support. Thank you.
    [The prepared statement of Dr. Park follows:]
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    Chairwoman Stevens. And, with that, we're going to begin 
with our first round of 5 minute questions, and the Chair is 
going to recognize herself at this time.
    Thank you again for the very informative testimony. A lot 
to unpack here, and I think where I'd like to start is kind of 
where we left off on the commercialization and the flexibility 
component of things. Obviously we're always in such a rush, 
commercialize, commercialize, but we also need a little bit of 
flexibility and some time with that. We need to recognize not 
everything is going to have the same turnaround for 
commercialization. In fact, Dr. Park, I almost believe--I can 
guarantee you that I was at a venture connector's presentation 
in Louisville, Kentucky, where I heard about your company in 
2014, and thought, wow, what a neat idea, and fascinating six 
years on to see what Spensa's been able to achieve and do.
    But if you don't mind, just--Mr. Cucinelli and Dr. Park, 
just talking a little bit more about the flexibility, 
particularly even at the beginning stages, when you're, you 
know, processing the award, getting the dollars, you know, 
working with the agency, and then also maybe some thoughts that 
you might have around allowing the agencies to implement more 
flexible award structures to make them more compatible with the 
pace of innovation? If you don't mind shedding light on that? 
And I'll let you two duke it out for who goes first. Yes.
    Dr. Park. I'll get started. Yes, so, again, I'm a first-
time entrepreneur, and SBR program was something that I was not 
very familiar with. But as any businesses--as we embark on 
commercializing a research project to a commercial market, you 
are embarked with very different scenarios, something that you 
had not anticipated. And because I believe SBR programs and 
program managers stem from kind of research related projects, 
they understand the uncertainty of the path that we're on. So I 
was very appreciative of our program manager at NSF being very 
flexible and understanding of our need for pivoting, even 
during the project.
    For instance, we had--in our proposal was to develop a 
certain type of sensor that we believed would solve a certain 
issue that we had in mind, but in about 2 to 3 months into the 
project, we quickly realized that the sensor type was not 
viable commercially, and so we requested to the program manager 
that we think we need to change the type of sensor that we need 
to research on, and program manager was very, very flexible on 
allowing us to do that because he saw ultimately is this type 
of flexibility and pivoting was a critical piece of making sure 
the research moves on, and successful commercialization path.
    Chairwoman Stevens. Yes. Great.
    Dr. Park. Um-hum.
    Mr. Cucinelli. So I have two observations. One is that I 
really like the idea in the legislation of the second Phase 2, 
the follow-on funding. So the idea that the government can 
double down, so to speak, on the investments that are going 
pretty well, but need a little more push into the private 
sector. I think, from what you've heard about these different 
companies that have succeeded, you can tell that there's a 
significant return on investment here, and I think, especially 
with what I call the hard tech, physical science-based 
companies that have a really big chasm to cross, a big Valley 
of Death, they can really be helped by that second Phase 2, 
when it's appropriate. It has to be vetted properly.
    My second observation is it would be really helpful if the 
agencies that award SBIRs and STTRs by contract, as opposed to 
as a grant, push more of their funding up front so that the 
money isn't tranched in small drips and drabs along the way. 
So, for example, with the $150,000--I'm--not to pick on DOD, 
but with a DOD contract, you're going to get $30,000 every 2 
months along the way, and then a final project payment, as 
opposed to an NSF grant, where you're going to get $150,000, 
now $225, right up front. If you're talking about a brand new 
company that's trying to jump out of the lab and into the 
private sector, that DOD contract is very difficult to manage 
because you don't have any working capital yet, whereas the NSF 
is giving you that money right up front. So if there was a way 
to encourage the contracting agencies to just move some of that 
funding earlier, I think it would be very, very helpful.
    Chairwoman Stevens. Yes, as needed. OK. I'm going to cede 
my time to the next questioner, but we are going to do another 
round of questions. So, with that, I'm going to recognize Dr. 
Baird, and then we'll go through everyone that's here, and then 
we'll start again.
    Mr. Baird. Well, I'm going to continue on, Mr. Cucinelli, 
and have Dr. Park give his impression of, you know, you started 
with an SBIR award from USDA, and then you went to one from 
NSF, so can you share your experiences in those two programs, 
and how effective or efficient they were to work with?
    Dr. Park. Right. So USDA SBIR, we only received Phase 1, 
and then we received NSF Phase 1, 2, and 2B. We did apply for a 
USA Phase B--I'm sorry, Phase 2, but we did not get it, so I 
have a lot more experience with NSF than USDA. But both cases 
we were awarded the full amount up front, at least for Phase 1, 
but Phase 2 was tranched. But I think it was very helpful for 
us to get--again, I agree that, as a startup, you need working 
capital, and this is already a very competitive process, and 
this has been vetted for, you know, maybe 10, 20 percent of the 
applications only get Phase 1. So I think having that--going 
through the vetting process, at least in Phase 1, my 
recommendation is also to have all that money put in up front.
    I would also say that NSF has wonderful grantee workshops. 
Every time I attend the workshops, I am so energized and 
inspired, and I learn so much because, again, the business 
formation, venture capital raising--and that is something that, 
you know, you don't really learn much, and--but having the 
experience of like-minded entrepreneurs and experienced VCs as 
a speaker, and learn from them firsthand, for me, it was 
extremely valuable as a first time entrepreneur.
    Mr. Baird. Thank you. My next question, Dr. Tilbury, what 
steps does the NSF take to measure the success of its two 
programs?
    Dr. Tilbury. So we do a lot of assessment of all of our 
programs at NSF. We certainly survey the awardees and get their 
feedback on what they're doing, and we've made quite a lot of 
changes in the last few years. In fact, a couple years ago we 
changed the program so people could submit a pitch before they 
had to register with the Federal Government, and fill out 37 
forms before they could write a 15 page proposal, and hear that 
their project wasn't appropriate for NSF. So we try to 
streamline, based on the assessment that we had, and the 
feedback from the PIs, and we, you know, take data.
    So there's some data in my written testimony, but a new 
number that I got this morning was that, if you look at awards 
we've made since 2014 there's been more than $9 billion in 
subsequent funding that these companies have received from 
venture capital, or other awards, and more than 100 of those 
companies have been acquired, which is often a goal, as Johnny 
Park talked about with this company. Do you have more specific 
questions, or----
    Mr. Baird. No, I think that's good. Dr. Feldman, would you 
continue that on, what you look for, what criteria you used to 
measure the success?
    Dr. Feldman. The success of the program, I think, extends 
way beyond just the individual companies, and so the SBIR 
program at universities has really helped to change the culture 
and to put more emphasis on commercializing academic 
discoveries, and so that has been very positive. We also know 
that, through the program, agencies are able to source great 
ideas from small companies, and those companies will have ideas 
that have escaped larger corporations. And in--we have some 
evidence that this induces other people to look at those 
topics, so that fundamental discoveries that result from SBIR 
projects actually help to cede scientific fields that work--
that result in translational, additional follow-on work. And so 
that is sort of an indirect effect. There are lots of effects 
in creating follow-on products, generating patents, but the 
generation of fundamental knowledge really helps to keep 
America competitive.
    Mr. Baird. Thank you, and I'm out of time. Mr. Cucinelli, 
your answer to the previous question is going to have to count 
as my question to you. So thank you, and I yield back.
    Chairwoman Stevens. And with that, the Chair would like 
recognize Congressman Tonko for 5 minutes of questioning.
    Mr. Tonko. Well, the Member would like to acknowledge your 
recognition, so thank you, Chair, and welcome, to our 
witnesses. America's SBIR and STTR programs support our 
Nation's most forward-thinking entrepreneurs and innovators. 
The Small Business Innovation Research and Technology Transfer 
Programs have proven to be among the most successful Federal 
programs for driving technological innovation in U.S. history. 
Combined, they, excuse me, have delivered more than 70,000 
patents, including extraordinary innovations in agriculture, 
defense, energy, health sciences, homeland security, space 
transportation, and other fields. Phase 1 and Phase 2 SBIR 
awards have made it possible for countless jobs to be created 
in my district in the capital region of New York. Thanks to 
these, and other similar programs, our region has built itself 
into a boom in high technology innovation and economic 
development.
    Among our many success stories, four stand out from our 
capital region. The first is Kitware. A company based in 
Clifton Park, New York, Kitware's first round of funding came 
from the SBIR program in 1998, when they received a Phase 1 
award from the Air Force to develop technology related to the 
visualization of uncertainty in data. While this effort did not 
progress to Phase 2, they were able to attract additional 
customers with the developed technology to fuel their early 
growth. Since then they've relied upon SBIR/STTR program to 
develop advanced technology that improves lives, grows 
businesses, and meets the critical needs of the Federal 
Government.
    Kitware's story is inspiring, but in many ways it is also 
entirely typical of SBIR companies. New York's capital region 
is also home to another SBIR success story, that being 
Automated Dynamics, which credits their existing technology to 
the SBIR program. In fact, Automated Dynamics was one of the 
original inventors of 3D printing in the 1980's, with the help 
of a National Science Foundation SBIR grant. This is now an $8 
billion a year industry that is expected to grow 30 percent 
this year. Automated Dynamics also helped to develop its core 
technology, namely additive manufacturing of advanced 
composites--composite structures through Army and Navy SBIR 
awards. They remain the world leader in this technology, and 
while they have managed to outgrow the SBIR program, as they 
are no longer a small business, they continue to credit the 
program as a springboard for their success.
    Speaking of grateful SBIR winners, International Electronic 
Machines, IEM, a small company located currently in Troy, New 
York, has said they, quote, and I quote, ``have had the great 
privilege and honor of participating multiple times in the SBIR 
Program''. SBIR contracts that IEM has won have helped support 
the company over the three decades that IEM has been in 
business, and have resulted in more than 50 patents, both here 
and overseas. Some of the products that have resulted from 
their SBIR work have generated millions of dollars in revenue 
over the years, supporting the success of the business, and 
their employees, consultants, vendors, and broader community.
    Last, but not least, Innovative Technology, Inc., or MITI 
for short, has been in business in the capital district for 25 
years, and is a previous recipient of the prestigious SBIR 
Tibbetts Award. They shared how they believe that they, and the 
capital district tech valley, have benefited greatly from the 
SBIR/STTR program by making it possible to keep engineers and 
scientists locally, but also to attract and retain high caliber 
international technologists and researchers.
    These extraordinary successes demonstrate, to me, clearly 
that research funding has a powerful economic return, and we 
need to continue to fight to ensure these agencies have the 
funding they need, and, in turn, ensure productive funding 
levels for the SBIR/STTR programs. To me, the reinvestment in 
the community from SBIR and STTR is absolutely amazing. It's 
keeping talent at work, it's providing for additional people to 
claim my district as their now homefront, and is unleashing 
untold amounts of progress and success that obviously 
percolates into the greater society, so that we're all 
benefited by it.
    So--wanted to share those on the record in the 5 minutes 
that was allotted, but I think it's important to document the 
real-life outcomes in our given congressional districts, and 
for that we thank you. I yield back.
    Chairwoman Stevens. With that, the Chair's going to 
recognize Mr. Balderson for 5 minutes of questioning.
    Mr. Balderson. Thank you, Madam Chair. Thank you, panel, 
for being here, and this first question that I'm going to ask I 
can direct it to the whole panel, and Dr. Tilbury, you could 
start from there, and we'll go down along. But thank you all 
again for being here, and when I'm talking to small business 
owners in central Ohio, I often hear about the most important 
things that Congress and the Administration can do to help 
small businesses grow and create new jobs is to reduce taxes on 
businesses, make the tax code simpler, and clear away 
unnecessary and excessive government regulations. In the small 
businesses you work with, what barriers to success do you see?
    Dr. Tilbury. So, at NSF, we fund small businesses to try to 
take the technological risk out of their ideas, so these are 
the high tech companies, and this is the stage before venture 
capital really has an appetite to come in. The companies that 
we fund, in fact, 92 percent of them have fewer than 10 
employees, and 77 percent are less than 5 years old. So these 
are really young, really small companies with really high tech 
ideas, and they need this SBIR or STTR funding to get over that 
technological risk.
    Dr. Feldman. So as I'm sitting on a panel with people from 
Michigan and Indiana, let me reveal that I'm from Ohio, and I'm 
a Midwesterner who had to go south----
    Mr. Balderson. Thank you very much. I will ask my staff why 
they didn't tell me that.
    Dr. Feldman. Sorry. And--it's probably somewhere on a very 
deep resume. But let me mention, for these innovative small 
firms, taxes are not the problem because they're not profitable 
yet. Really what they require is more in terms of resources and 
support. I think that, you know, it is encouraging to hear the 
importance of training things with the I-Corps Program. So 
really smart scientists, who are then suddenly confronted with 
starting a business, that's a completely different set of 
skills, so providing that type of expertise is costly. I'm a 
great believer in the State Technology Economic Development 
Programs, and, you know, that, again, provides incredible 
resources to small companies.
    Mr. Cucinelli. So, again, to comment on the taxes issue, 
boots on the ground perspective, I don't pay any taxes because 
I spend every single penny of my SBIR funding as fast as I get 
it. I spend it every year. I work with my accountant to make 
sure that I don't pay taxes until I become profitable, so 
that's how I manage that. I get really frustrated when people 
talk about small business, and they're talking about the sort 
of Main Street bricks and mortar small business, whereas I'm 
doing scalable tech startup business. They're very different in 
terms of their needs, and that's an example where that dialog 
can go sideways. It sounds like you've got a great handle on 
that.
    Second point is to build on something Dr. Feldman said, but 
from a different perspective, the idea that the SBIR program 
can provide cultural benefits in the universities. As a mentor 
in residence, or entrepreneur in residence, what I've seen is I 
can use the SBIR program as a way to help influence that 
culture shift when I'm coaching a senior faculty member. You 
know, if I'm working with someone who has built a laboratory 
over the course of 20 years, and knows how to manage graduate 
students, Ph.D.'s, post-docs, they don't know how to run a 
small business yet, and I can use the SBIR program to have a 
framework to help them begin to adopt the right mindsets.
    Dr. Park. I would concur, tax was not at all an issue for 
us throughout our--the course of Spensa. I would say, yes, I 
think the impact the small business or tech startups has in the 
economy is great, but I would also like to emphasize its impact 
on people, the entrepreneurs, the researchers and scientists 
who may not have gone to entrepreneurship if it wasn't for 
SBIR, like myself, right? I was an academic, but SBIR really 
opened an opportunity for me to get into starting a startup, 
which led to now leading something that I had never imagined 
that I could do.
    I would really consider and encourage you to think about 
not just the company's impact on the economy. How about the--
all the people that have been touched by SBIR? What's their 
second career or third career looks like? How have they really 
changed the way they lead, the way they run businesses because 
of the impact of SBIR?
    Mr. Balderson. Thank you all very much. I yield back.
    Chairwoman Stevens. The Chair would like to recognize Mr. 
Gonzalez for 5 minutes of questioning.
    Mr. Gonzalez. Thank you, Madam Chair, and thank you to our 
panel. Dr. Feldman, I too am from Ohio, went to Ohio State. Mr. 
Cucinelli, you will see that, in this Committee, not only are 
we bipartisan, but we can actually work across enemy lines 
geographically as well. This is a fantastic Committee in that 
regard. So, as many folks here would know, I'm somebody who 
wants to make sure that we are properly funding our research 
enterprise, that we're supporting entrepreneurs in particular 
in fast growing industries, and so, as a general premise, as 
somebody who'd be very supportive of SBIR and STTR, I do have 
some questions around how we're measuring success, and I want 
to start with Dr. Tilbury.
    So you kind of highlighted some brief data points at the 
end, but I'd love to hear kind of any numbers you have, or any 
barriers to acquiring these numbers, around, you know, percent 
of companies that receive follow-on private investment, dollars 
raised, percent still operating versus acquired employment 
numbers, geographical split. I'm trying to figure out kind of 
how we're tracking from funding to viable company.
    Dr. Tilbury. So I might defer that to Dr. Feldman----
    Mr. Gonzalez. OK.
    Dr. Tilbury [continuing]. But I will say we are trying to 
track all of those numbers, and we have data on people who get 
the Phase 2B, which is a matching. If you're----
    Mr. Gonzalez. Right.
    Dr. Tilbury [continuing]. In a Phase 2, and you get 
external input, then NSF will match that up to a certain 
amount, so that number we absolutely know, because we gave them 
matching.
    Mr. Gonzalez. Right.
    Dr. Tilbury. But as was also mentioned earlier, some of 
these companies, you know, the Phase 2 is a couple of years, 
and it might take many more years until they're commercially 
viable, or they're acquired. And so, during that lag time, I 
think we are absolutely interested in acquiring that data, and 
that's why we work with the National Academies. And you may not 
be able to say yet, but----
    Dr. Feldman. Yes, and so I am co-chairing the National 
Academies assessment of the SBIR program----
    Mr. Gonzalez. OK.
    Dr. Feldman [continuing]. And I'm not able to really talk 
about our findings yet, and I'm happy to come back. Our report 
on the Department of Energy will be released in March.
    Mr. Gonzalez. OK.
    Dr. Feldman. But, you know, this is an important question 
because we have a need for government investment because these 
technologies are so early stage, and so risky----
    Mr. Gonzalez. Yes. Absolutely.
    Dr. Feldman [continuing]. And so it's very complicated, and 
this is where we're now able, with new digital technologies 
scraping the web, to sort of be able to follow this sort of 
initial receipt of a grant to companies.
    Mr. Gonzalez. Right.
    Dr. Feldman. Sometimes when companies fail, that might be 
appropriate, right?
    Mr. Gonzalez. Yes.
    Dr. Feldman. Because the technology----
    Mr. Gonzalez. That happens.
    Dr. Feldman [continuing]. Right--wasn't----
    Mr. Gonzalez. Yes.
    Dr. Feldman [continuing]. Going anywhere. And then I think 
the entrepreneur, the entrepreneurial team, other people in the 
company, will then be recycled and do other things in a local 
economy.
    Mr. Gonzalez. And then, if I could step in for a second? 
Dr. Tilbury, the average grant size is what? So you talk about 
there's some who are kind of operating for years before they 
receive the follow-on funding. I ran a venture-backed company 
at one point. We didn't have years, right? You know, you're 
usually doing it in 18-month increments.
    Dr. Tilbury. So I believe that--so it's not an average. So 
the Phase 1, if you get it from NSF, is $225,000----
    Mr. Gonzalez. OK.
    Dr. Tilbury [continuing]. All in one shot----
    Mr. Gonzalez. And that'll be----
    Dr. Tilbury [continuing]. And then----
    Mr. Gonzalez [continuing]. Two to three----
    Dr. Tilbury [continuing]. Phase 2----
    Mr. Gonzalez [continuing]. Employees.
    Dr. Tilbury [continuing]. Has been increased now to 
700,000.
    Mr. Gonzalez. Yes.
    Dr. Tilbury. And then they can get matching on top of that, 
and there's----
    Mr. Gonzalez. Got it.
    Dr. Tilbury [continuing]. Supplements on top of that. So 
there's a lot of--even though that's the base number, there's a 
lot of extra supplements, opportunities.
    Mr. Gonzalez. OK. And then, with my last minute, Dr. 
Feldman, without getting into specifics of your report, and 
what's you're going to release, what are the key barriers, that 
you're seeing to acquiring the data that I outlined that I 
think would be helpful, in terms of collecting it?
    Dr. Feldman. Well--and--so ideally we would like to know 
who was applying to the program, right, and then not only--we 
now know, through the SBA, who was awarded funding, but if we 
could follow those who applied and didn't get funding, or did 
they come back, that's capturing another kind of learning, so 
that would be very valuable. It would also be much easier for 
us if we could access some of the census data centers, and the 
data that is behind that sort of security wall.
    Mr. Gonzalez. All right. Thank you. Yes, sure, Mr. 
Cucinelli.
    Mr. Cucinelli. I don't have this in front of me, I 
apologize, but in preparing my written testimony, I found an 
Air Force report from I believe 2014 that is worth taking a 
look at. I'll followup with your staff, if you'd like----
    Mr. Gonzalez. That'd be great.
    Mr. Cucinelli [continuing]. But it did this across hundreds 
and hundreds of SBIR awards, and came up with metrics----
    Mr. Gonzalez. Thank you. And, as I said at the beginning, I 
want to be helpful, I want to empower you guys, but we need 
some data so we can just measure how we're doing. With that, I 
yield back.
    Chairwoman Stevens. Thank you, Mr. Gonzalez. We're going to 
do one more round of questions. It might just be Dr. Baird and 
myself, but we've got a lot to chew on here. I wanted to go 
back to the geographic diversity component that you brought up, 
Dr. Feldman. You talked about the pockets of prosperity in 
university towns, and then you also talked about how this 
system, with SBIR and STTR funding, works well in some places, 
but not everywhere. And I know the other part of what you do is 
the research on the geography of innovation. And I'd love to 
hear a little bit more about how we can better democratize 
innovation, especially through the SBIR program, so that towns 
all throughout this country can participate in our innovation 
economy. And if you have any thoughts, I'd really appreciate 
it.
    Dr. Feldman. Thank you. And so, you know, as we study this, 
we do see these pockets of prosperity, mainly in college towns, 
where the SBIR program is working well. But one of the problems 
when we rely on venture capital funding, when you take money 
from outside, and, you know, it--you're not going to be able to 
stay, in many cases, so companies will relocate. And also, 
given that the venture capital model is predicated on a 5 to 7 
year return, what that means is that there will be an exit, and 
with that exit it's very likely that you would have the company 
relocating as it was acquired. And so it doesn't really keep 
the company local, and grow to employment. And I think one of 
the things about the Phase 2B additional funding helps stream 
tips--bring that along. Also, having more proof of concept 
centers.
    But, you know, as we talk about these companies, SBIR is 
not really meant to be a jobs program. It is an innovation 
program, but we need something else in place to give us the 
jobs that we need in many parts of the country to spread that 
prosperity more widely.
    Chairwoman Stevens. Right. And it's, you know, spanning 11 
agencies for SBIR, five for STTR funding, and you sort of 
wonder, you know, does it help to have regions as designated--
self-designated areas, for instance. I know the Economic 
Development Administration has looked at this. Obviously that 
might get overly prescriptive, and too quick--it could get 
overly prescriptive too quickly, however, you know, when we're 
looking at how do we make sure that we're spreading the peanut 
butter throughout our--all of these great towns and 
communities, and into the hands of innovators. I mean, part of 
why we are having this hearing, and having this go into the 
congressional record, is that we want America to hear this. We 
want people to know that this is available, and whether you're 
at one of the big universities or not, that these 11 agencies, 
right, are coordinated in this way, and in their own research 
areas.
    And this is a small point, but I just wanted to ask about 
it, which is the administrative fee that Congress has 
authorized that these pilot programs, you know, it's allowing 
agencies to use the 3-percent of their SBIR funds for new 
activities such as outreach, and commercialization, and 
oversight, and administration of the program, and this is known 
as the administrative fee pilot. There was this 2016 GAO 
(Government Accountability Office) report that found 7 of the 
11 SBIR agencies spent $19.1 million of these funds. This is 
going back to Fiscal Year 2014. And, Dr. Tilbury or Dr. 
Feldman, do you have, you know, any examples of this that you 
can elaborate on for us, particularly how agencies are tracking 
the outcomes of these efforts? I know this is a little bit of 
what Congressman Gonzalez was talking about, but--question 
about--should we be--is this one of the pilot programs we 
should be expanding? Is this helpful?
    Dr. Tilbury. Absolutely, it's a helpful program. I can tell 
you that we use some of those administrative fees to send our 
program directors on outreach trips to underserved geographic 
areas, underserved communities. We have a joint program right 
now with GEM, the Graduate Education for Minorities.
    Chairwoman Stevens. Yes.
    Dr. Tilbury. We use some of those funds for the Beat the 
Odds Bootcamp that we put the SBIR Phase 1----
    Chairwoman Stevens. Right.
    Dr. Tilbury [continuing]. People through. We sponsor trade 
shows that provide commercialization opportunities for 
grantees. We use that to launch this project pitch that I told 
you about, which allows people to come in at any time with a 
brief pitch about their idea and see if it's appropriate for 
NSF, to fund this National Academies study about the impact of 
the SBIR program. So those are the kinds of things that we do 
with the administrative fee that are not directly to small 
business, but absolutely supporting the program.
    Chairwoman Stevens. Right. Thank you. Thanks so much. All 
right, with--I'm out of time.
    Mr. Baird. Thank you. You know, I'm a veteran, so I'm kind 
of partial to veterans. In fact, I think we've got a bill 
that'll be signed hopefully next week or so that encourages an 
increased outreach for veterans in the STEM program. So, Dr. 
Tilbury, you mentioned in your testimony that there's a 
veterans research supplement that attracts veterans into the 
STEM enterprise. Would you care to elaborate on that a little?
    Dr. Tilbury. So we have a lot of programs to attract 
veterans into the research enterprise, research experience for 
veterans, and I believe they can work with a small business 
through an SBIR, so the small business would get a supplement 
to bring in a veteran to help them in their activities. I know 
we certainly do that for all the basic research awards that we 
offer.
    Mr. Baird. Any others want to comment about that, regarding 
veterans, and----
    Dr. Feldman. Regarding veterans, what we see is 
disproportionately veterans come from rural areas in the south 
and west, and they're more sort of geographically isolated. 
People would like to return to their small towns, but there are 
not necessarily opportunities for them. And veterans make great 
entrepreneurs, right? They're just disciplined, and they know 
how to work together, so I think this is an area where we could 
have more fruitful engagement.
    Mr. Baird. Anyone else?
    Mr. Cucinelli. Yes, I completely agree. I have a number of 
friends who are currently running small businesses started from 
scratch, and the skillsets required to do that are a perfect 
overlap with what many people experience in the military, both 
in terms of their training and their experience, the creativity 
under fire, so to speak, the discipline, the dedication that it 
takes to see something through for 7 to 10 years. So pulling 
more veterans in is going to be invaluable in increasing the 
success of the program.
    Dr. Park. I would just mention, in relation to rural 
communities, there are--the Midwest region has traditionally 
been kind of labeled as there's not enough capital, but 
investors are waking up, and there's--increasingly more 
investors are targeting Midwestern companies, including rural 
communities. So I think, to me, SBIR is a form of investment 
from the government, and so if venture capital is waking up to 
invest more, I think there is a case to be made for SBIR 
program to consider geographically diverse investments to 
support rural communities.
    Mr. Baird. Well, what I just heard was good news, because 
most of those veterans, if they've been deployed, or been in 
the service for a period of time, they probably just want to go 
home, and a lot of those, you just mentioned, from rural areas, 
so----
    Dr. Park. That's right.
    Mr. Baird [continuing]. That's good news. Thank you very 
much.
    Dr. Park. Um-hum.
    Chairwoman Stevens. Thank you. And now the Chair will 
recognize the gentleman from the great State of New York again 
for 5 minutes of questioning.
    Mr. Tonko. Thank you, Madam Chair. The many, many hearings 
that we've had recently have spoken to the need for us to 
maintain a very strong competitive edge, especially when it 
comes to critical technologies, so my question to any and all 
of our witnesses is what role do you believe the SBIR and STTR 
programs can play in the United States' innovation policy, and 
in helping our Nation maintain science and technology 
leadership in what is that increasingly competitive world?
    Dr. Tilbury. So I believe the SBIR program is a critical 
component of that increasing competitiveness because it allows 
the results of basic fundamental research, which is primarily 
funded by the Federal Government, to make the transition into 
commercialization. And, as we've heard, it can be a long and 
slow road to commercialization, and it takes not only 
investment, but also patience, and passion, perseverance. And 
so I think the SBIR program helps that transition into the 
current industries that we have, to strengthen them, as well as 
create new industries that we haven't imagined yet.
    Mr. Tonko. Thank you. Anyone else?
    Mr. Cucinelli. I had the privilege of being involved in a 
fuel cell startup between 2009 and 2011 in Europe, and it was 
very, very difficult to get the initial seed capital. I saw 
just a fundamental difference between here and there, and we 
talked constantly--some of the people who had been on this side 
of the pond would lament with me in the pub at lunch about how, 
you know, I wish we had the SBIR/STTR program to get us to the 
venture capital. And we eventually raised about I think 3.2 
million Euros, or something like that, but it was incredibly 
difficult. So I think our system here works much, much better 
to get these early stage companies out of the gate, and get us 
to a position where we might eventually be able to double down 
on some of this innovation, and maintain that leadership.
    Mr. Tonko. All right. Yes? Dr. Feldman.
    Dr. Feldman. I think also it's important to remember that 
this program is just part of our larger innovation system, and 
we really need to make sure that basic research is going on, 
these sort of fundamental discoveries, the serendipitous 
inquiry that will, you know, sort of provide the seed corn for 
moving things forward, and we don't get too far out of balance 
by focusing on things that are immediately commercializable and 
more short range.
    Mr. Tonko. Well, there are some of those--some fiscally 
conservative think tanks that monitor action on the Hill that 
would advocate that there be no Federal dollars shared with 
research, that--they don't believe it's appropriate. What would 
your response to that be?
    Dr. Feldman. That they are wrong, and that would be an 
awfully fun debate to engage in, because I think it's 
critically important. And so in the U.S. for a long time we 
have issued the idea of industrial policy, yet the, you know, 
we see that in Asia there is a lot of industrial policy, and a 
lot of targeted investment, and I think this is the wrong time 
for us to be questioning government's role.
    Mr. Tonko. Dr. Tilbury?
    Dr. Tilbury. We talked about the commercialization. NSF is 
celebrating its 70th anniversary this week, and he mentioned 
the LASIK eye surgery. Now, that came out of fundamental 
research in lasers. They weren't trying to build eye surgery 
when they did that fundamental, basic research. They were 
trying to understand high energy physics. And so I think we 
need to continue to fund that fundamental basic research that 
you're not sure where it's going to lead, because it might lead 
someplace really interesting.
    Mr. Tonko. Right. And--yes, sir?
    Mr. Cucinelli. So I'm----
    Mr. Tonko. Mr. Cucinelli.
    Mr. Cucinelli [continuing]. Teaching a course in 
entrepreneurial leadership to graduate students, Ph.D.s, MBAs, 
and they asked me the other day, well, where do we get our 
ideas from? And I said, well, you know, you find a pain point, 
and you think about it, and you live it, and then you go and 
fix it, but you can also go and look to the labs. Look around. 
Look to your engineering colleagues who are taking courses in 
aeronautics, or whatever, and you'll find innovation there. 
That's the basic research, and it's being looked for by these 
bright young innovators who are going to see the idea that maps 
over to the pain point they've identified, and then go find the 
professor and his or her lab team, and make a company out of 
it, and make it go. And they'll use SBIR/STTR to do that. But 
they can't do it if they don't have the basic research in 
place.
    Mr. Tonko. Thank you. So I'm hearing, with sound rationale, 
you would reject the advice of those who suggest the Federal 
Government not apply any dollars toward research. Thank you so 
much. That's encouraging. I yield back.
    Chairwoman Stevens. Thank you, Mr. Tonko. We didn't invite 
them to the hearing, so--and, you know, a big thank you to our 
witnesses. You know, we're so proud of the NSF, and your 
leadership as one of the 11 SBIR agencies, and what I think we 
kept hearing today, which is that you're such an example, and a 
leader of how to do this right.
    And, you know, thank you, Dr. Tilbury, for your leadership, 
and Dr. Feldman for not only your leadership at the Academies 
at this time, but also for your great research contributions, 
something that I know is very important to the economic 
development conversation, as well as how States look to do that 
technology-based economic development strategies, and so we 
work very closely with our State partners as well. And then, 
obviously, a treat to have you here, Mr. Cucinelli, from 
Michigan, and, you know, thanks for your fabulous leadership, 
not only as an entrepreneur, but also as an educator, and 
that's the other piece of it. And, Dr. Park, you know, just 
wonderful to hear not only about your business success, but 
what you're also doing with WHIN and the network that I think 
is going to have some tremendous effects.
    We like to say this will--I'll say this, this was all Dr. 
Baird's idea, OK? The legislation, the hearing, and it's the 
best in business here on the Science Committee, which is that, 
you know, we talk about the things that bring people together, 
and this is what the country wants to see. This is part of the 
doing and delivering agenda for our country, and we are looking 
forward to having you back when we get this legislation marked 
up, passed, and signed into law, and continuing to see the 
growth of SBIR, and the lives that are changed and influenced. 
And, yes, as an innovation program, because that is what 
America does really well. Our plight of innovation in the post-
9/11 era, in particular over these last 20 years--we were the 
ones who proliferated the Internet, propagated the iPhone, 
mobile apps, just to name one segment of our innovation economy 
that's really quite tangible to all, so thank you again.
    The record's going to remain open for two weeks for 
additional statements from Members, and for any additional 
questions that the Committee Members may have of our witnesses. 
And at this time our witnesses are excused, and the hearing is 
adjourned.
    [Whereupon, at 3:20 p.m., the Subcommittee was adjourned.]

                               Appendix I

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                   Answers to Post-Hearing Questions
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                              Appendix II

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                   Additional Material for the Record
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