[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
THE INNOVATION PIPELINE: FROM UNIVERSITIES TO SMALL BUSINESSES
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HEARING
BEFORE THE
SUBCOMMITTEE ON INNOVATION AND WORKFORCE DEVELOPMENT
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
FEBRUARY 11, 2020
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-071
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
39-605 WASHINGTON : 2021
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina
Melissa Jung, Majority Staff Director
Justin Pelletier, Majority Deputy Staff Director
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Jason Crow.................................................. 1
Hon. Troy Balderson.............................................. 2
WITNESSES
Dr. John Younger, Vice President of Science and Technology,
University City Science Center, Philadelphia, PA............... 5
Dr. Sheila Martin, Vice President of Economic Development and
Community Engagement, Association of Public and Land-grant
Universities, Washington, DC................................... 7
Dr. Ethan Mann, Vice President of Marketing and Business
Development, Sharklet Technologies, Inc., Aurora, CO........... 9
Dr. Gregory P. Crawford, President, Miami University, Oxford, OH. 10
APPENDIX
Prepared Statements:
Dr. John Younger, Vice President of Science and Technology,
University City Science Center, Philadelphia, PA........... 24
Dr. Sheila Martin, Vice President of Economic Development and
Community Engagement, Association of Public and Land-grant
Universities, Washington, DC............................... 30
Dr. Ethan Mann, Vice President of Marketing and Business
Development, Sharklet Technologies, Inc., Aurora, CO....... 40
Dr. Gregory P. Crawford, President, Miami University, Oxford,
OH......................................................... 42
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Association of Public & Land-Grant Univeresities............. 48
Engine....................................................... 53
Hon. Abby Finkenauer, Member of Congress..................... 57
Letter from Janeya Griffin, CEO, The Commercializer, LLC..... 59
THE INNOVATION PIPELINE: FROM UNIVERSITIES TO SMALL BUSINESSES
----------
TUESDAY, FEBRUARY 11, 2020
House of Representatives,
Committee on Small Business,
Subcommittee on Innovation and Workforce
Development,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:03 a.m., in
Room 2360, Rayburn House Office Building, Hon. Jason Crow
[chairman of the Subcommittee] presiding.
Present: Representatives Crow, Finkenauer, Kim, Davids,
Houlahan, Balderson, Chabot, Hern, Burchett, and Joyce.
Chairman CROW. Good morning. The Committee will come to
order.
We want to thank everyone for joining us this morning, and
especially to the witnesses here today. For those of you who
have not testified before a Committee, the way that these
Subcommittees usually work is members sometimes have
overlapping Subcommittees and obligations, so people will come
and go throughout the Committee and ask questions during the
time that we have allotted today.
So that that, I wanted to make an opening statement before
I turn it over to Mr. Balderson, the Ranking Member.
This past year, this Subcommittee has seen a lot of
inspiring examples of the value of innovation and
entrepreneurship. For decades, the U.S. has led the world as
the best place to innovate and start a small business. A large
driver behind this innovation, however, is our commitment to
publicly funding research and development in health care,
science, and technology. And as a result of that, hundreds of
patents are developed on our Nation' s college campuses every
year. Products like lifesaving drugs, groundbreaking medical
devices and advances in agriculture are the result of
collaboration among faculty, students and the business
community.
These innovations, made possible in some part by public
investment, are needed now more than ever as technology rapidly
changes every sector of our economy. However, as more states
cut funding for research-based universities, the Federal
Government' s role in supporting innovation is more important
than ever.
For an economy as large and diverse as ours, the only way
for sustained economic growth is through innovation that
results in new solutions or improvements in products or
services. The U.S. Government made Federal R&D funding a
priority starting in World War II, and those investments have
paid off. Federal funding is responsible now for approximately
30 percent of all new U.S. patents every year.
The story is different now and the U.S. is one of the only
OECD countries that has decreased public investment in R&D over
the past 25 years. I believe we should be working together to
support increased investment in research and development,
particularly at our colleges and universities where our next
generation of innovators are being developed.
But research and development funding is only one part of
the equation. Bringing an idea from a university lab to
consumers is no easy process as we have heard from a lot of
businesses and innovators over the past year. There are
numerous steps involved, from developing a business plan to
doing market research to licensing the technology and security
venture capital funding. Fortunately, universities and
organizations are working all around the country to make this
process easier. By providing space in incubators and
accelerators, universities can cultivate emerging technologies
and leverage their vast networks for fundraising and
mentorship.
The knowledge available to entrepreneurs in these
environments can help them through the so-called ``valley of
death,'' another thing that we have heard a lot about from
entrepeneurs directly. And that is where the technology is not
yet perfected, and investors are hesitant, and many startups
fail to get off the ground and get through the ``valley of
death.''
In my district, the Fitzsimmons Innovation Community, in
partnership with CU Anschutz, the Children' s Hospital of
Colorado and UC Health is providing vital support for
bioscience research, innovation, and commercialization. Another
example of the success of the intersection of small business
and Federal R&D are the SBIR and STTR programs, which work to
commercialize cutting-edge technology. Over the last 3 decades
the SBIR program has boasted significant return on investment
and has generated billions in tax revenue.
A priority for me as the Chair of this Subcommittee is to
identify how policymakers can help rebuild and develop the Main
Streets of our country. Whether it is a tax startup in Kansas,
a medical device company in Colorado, a pharmaceutical research
firm in Philadelphia, or any small business in any city or town
across the country, we know these public-private partnerships
accelerate innovation, provide jobs, and support our
communities.
So, I hope that today' s discussion will shed light on the
many benefits of the innovation pipeline taking place at our
Nation' s universities. And I look forward to working with my
colleagues in Congress so more small businesses can bring their
ideas to market.
So now I would like to yield to our Ranking Member, Mr.
Balderson, for his opening statement.
Mr. BALDERSON. Thank you, Chairman Crow. Thank you,
witnesses, for being here today.
Studies show that when universities and firms both have
close personal and geographical links, these connections help
produce greater innovation outcomes. Ohio colleges and
universities spent nearly $2.4 billion in fiscal year 2018 on
research and development activities, landing the 12th District
on the R&D state ranking. Ohio State University, which has
campuses in my district, led the state with $875 million in R&D
expenditures and is ranked 25th of American research
universities.
So how can close ties between universities and local firms
help business innovation? Just last week I participated in a
hearing about the SBIR/STTR programs held by the Research and
Technology Subcommittee of the Space, Science, and Technology
Committee. I asked the panel about the biggest burdens faced by
small businesses in the R&D space and learned that they need
help in two major ways--risk assessment of their technologies
and general startup resources for business planning and
management.
This is where the ties between universities and local firms
come in. Institutions that take advantage of both personal and
geographical links between R&D and entrepreneurship are able to
effectively transform potential into product and scientists
into businessmen, or women.
A recently published book, Jumpstarting America,
illustrates how two MIT professors developed an index system of
metro statistical areas or MSAs--very challenging words to put
all together there--to rank each one' s potential to becoming
the Nation' s next great tech hub. MSAs were ranked by
workforce size, four education measures, and three lifestyle
measures. The education measures qualify workforce and
production elements required to support research and
development systems. I am proud to say that six Ohio cities
made the list, including Columbus in my district, which was
ranked number 4 out of 102 metropolitan areas. Columbus and its
surrounding communities offer a great quality of life and have
unlimited potential for high-tech industries thanks to our
local colleges and universities.
Jumpstarting America and similar economic development
studies are limited in scope for various reasons to urban
areas. But, what about our rural areas? Surely, there are great
innovations coming from the heartland universities.
Last month, the Subcommittee discussed ag tech
entrepreneurship as a catalyst for rural revitalization
efforts. Our witness for the hearing, Dr. Douglas Jackson-Smith
represented Ohio State University' s Innovation for Food and
Agricultural Transformation, a project that embodies many of
the themes we will be discussing today. At this hearing, we
will examine the local impact of universities as centers of
innovation. While some excel at technology transfer and
commercialization, others act as a keystone of entrepreneurial
ecosystems.
I appreciate the witnesses' work in this space and look
forward to hearing your success stories.
I yield back, Mr. Chairman.
Chairman CROW. Thank you, Mr. Balderson. The gentleman
yields back.
And if Committee members have an opening statement, I would
just ask that they be submitted for the record.
I want to take just take a few minutes to explain the
timing rules for those of you who have not testified before.
Each witness gets 5 minutes to testify at the beginning, and
then member get 5 minutes for questioning. There is a lighting
system to assist you right in front of you. So, the green light
comes on when you begin. The yellow light will come on when you
have 1 minute. And then the red light comes on when your time
is completed. And we do ask that you try to stick with those
timing limits so that the members can get questions in and we
can move the questions around between the witnesses as well.
So, I would now like to begin by introducing our first
witness, Dr. John Younger. Dr. Younger is the vice president of
Science and Technology at the University City Science Center.
With extensive clinical research and extraimperial experience,
Dr. Younger is working on the Science Center' s
Commercialization Startup Investment and Business Acceleration
Program. Dr. Younger also founded Akadeum--did I get that
right, Dr. Younger? Close enough. Akadeum Life Sciences, a
venture-backed life science company out of his lab at the
University of Michigan and serves on the National Advisory
Council of the National Institute of General Medical Sciences.
Welcome, Dr. Younger.
Our second witness is Dr. Sheila Martin. Dr. Martin is vice
president for Economic Development and Community Engagement at
the Association of Public and Land-grant Universities. Dr.
Martin leads and engages with senior university leaders and
stakeholders on talent and workforce development, innovation
and entrepreneurship, and social, cultural, and community
engagement. She also directs APLU' s Commission on Economic and
Community Engagement. Dr. Martin earned a B.A. from Southern
Illinois University, an M.A. from the Patterson School of
Diplomacy and International Commerce at the University of
Kentucky, and a Ph.D. from Iowa State University. Welcome, Dr.
Martin.
Our third witness today is Dr. Ethan Mann. Dr. Mann is a
vice president of Sharklet Technologies, an innovative surface
technology company based in Aurora, Colorado. Dr. Mann has led
many of Sharklet' s translational scientific studies aimed at
demonstrating the use of microtextures for biological control.
Dr. Mann holds a Bachelor of Science from Chadron State
College, and a Ph.D. from the University of Nebraska. He
trained as a post-doctoral fellow in infections disease at The
Ohio State University, which I am sure Congressman Balderson is
happy to hear. Do not let it go to your head, Troy. Dr. Mann
currently serves on NIH review panels to evaluate small
business innovation research grants which support
commercialization of innovative technologies. Thank you, Dr.
Mann, for being here today.
I would like to now yield to our Ranking Member, Mr.
Balderson, to introduce our final witness.
Mr. BALDERSON. And just so you know, my deputy chief of
staff is a graduate of Miami.
I am turning the reins over. I did not see him come in yet,
so I am turning it over to the Ranking Member Chabot for the
introduction.
Mr. CHABOT. Thank you. Just trying to be part of the
woodwork over here, Mr. Chairman.
I want to thank the Chairman and Ranking Member, Mr.
Balderson, for allowing me to introduce our fourth and final
witness here today, Dr. Gregory P. Crawford, the 22nd president
of Miami University, one of the great universities in Ohio. And
I would note that our staff director, Mr. Kevin Fitzpatrick, is
a graduate of Miami; as is my son, Randy; as is my younger
brother, Dave. And so, a great university. Excuse me.
Aside from being an Ohio native, Dr. Crawford is uniquely
suited to present on today' s topic. He has bachelor' s degrees
in mathematics and physics, a master' s degree in physics, and
a doctorate in chemical physics from Kent State University. His
work includes more than 400 research and education
publications, review articles and book chapters. Dr. Crawford
has an extensive track record of guiding research to
commercialization. He has participated in spinoff and startup
companies and is credited with 21 U.S. patents and patent
applications. Before coming to Miami, he launched research
commercialization initiatives at Brown University and at Notre
Dame. He is currently a member of the board of directors at
Cintrifuse, the incubator and accelerator dedicated to creating
a stronger technology presence in the Greater Cincinnati area.
Dr. Crawford' s administration emphasizes diversity, inclusion,
and interdisciplinary collaboration across all of Miami' s
campuses and colleges.
We thank you for joining us today as we do all the
witnesses on this distinguished panel. I want to thank you for
your dedication to Miami University and the Greater Cincinnati
area and the state. Thank you very much, Doctor.
Chairman CROW. Thank you. The gentleman yields back.
And the members, we got through our introductions which
whenever folks from academia come is really the most
challenging part for us. There are a lot of acronyms here. So,
thank you for bearing with us.
So, let' s start with Dr. Younger. You are recognized for 5
minutes, Doctor.
STATEMENTS OF DR. JOHN YOUNGER, VICE PRESIDENT OF SCIENCE AND
TECHNOLOGY, UNIVERSITY CITY SCIENCE CENTER; DR. SHEILA MARTIN,
VICE PRESIDENT OF ECONOMIC DEVELOPMENT AND COMMUNITY
ENGAGEMENT, ASSOCIATION OF PUBLIC AND LAND-GRANT UNIVERSITIES;
DR. ETHAN MANN, VICE PRESIDENT OF MARKETING AND BUSINESS
DEVELOPMENT, SHARKLET TECHNOLOGIES, INC.; DR. GREGORY P.
CRAWFORD, PRESIDENT, MIAMI UNIVERSITY
STATEMENT OF DR. JOHN YOUNGER
Mr. YOUNGER. Great, thank you.
Chairman Crow, Ranking Member Balderson, and members of the
Subcommittee, thank you for the opportunity to testify today.
It is an honor to join my distinguished colleagues on today' s
panel, and I will suppress my Wolverine access for the rest of
the morning.
Before a great idea becomes a business, or creates a
sustained new job, or generates a dollar of export, it must
spend time in what you have called the ``valley of death.'' The
term applies to a period of commercial development in which
really critical questions have to be answered--does anyone
actually need the idea that is being put forward? If so, how
many people actually want it? What are they willing to pay?
If you have an adverse answer to any of these questions, a
really great idea can be shown the door very quickly. In most
instances, that is the appropriate outcome. A lot of ideas turn
out to be much better on paper than they are in practice.
The concept of the ``valley of death'' applies to any new
undertaking but it is really acutely relevant to startups, in
which there is no predefined market and there is no proven
business model to draw from. Startups often die on the vine.
Nobody buys, the intellectual property is not defensible, a
capable founding team cannot be recruited. That is common and a
key tenet of startup thinking is that poor ideas should be
identified as such as quickly as possible and abandoned as
quickly and efficiently as possible. That saves investment and
it saves time for the entrepreneurs that are working on that
ideas to move on to more promising ideas.
I began my career as a physician scientist and pursued that
path for 20 years. However, for the last 6 years of my career,
I have spent a really great time working in the ``valley of
death,'' first as an entrepreneur of a Michigan-based biotech
startup, and most recently as part of a team that is doing
everything possible to make the journey of that valley as
quick, if not painless, as we can for new ideas and new
companies.
I now work at the University City Science Center of the
Nation' s oldest and largest urban research park, founded in
1963 and based in Philadelphia. As the Science Center' s vice
president for Science and Technology, I lead all of our efforts
to help universities and startups move their technologies
beyond the valley, including a program that provides grants to
research universities to better prepare their most promising
technologies for entry into the world, a portfolio of some of
the most effective business incubators on the East Coast, and
an early stage investment fund that provides critical early
capital to biotech and healthcare IT startups in their most
vulnerable formative days.
Our Nation' s economy faces persistent and intensifying
challenges. Innovation is the key to addressing many of those
concerns, but how best to support innovation is an especially
tough nut to crack. There is no question that research funding
is essential to creating ideas and universities that may become
great new companies.
However, I am here today to draw your attention to what
must happen after those ideas come out of universities as they
mature through formation, commercialization, job creation, and
economic impact.
In 2010, Steve Blank, a seminal thought leader in
entrepreneurial theory, defined a start-up as an organization
formed to search for a repeatable and scalable business model.
Having launched my own startup, I whole-heartedly endorse that
idea. Startups are not small versions of established
businesses. They are harsh, marketplace experiments seeking to
determine if a business idea has legs or not. These experiments
are risky. They are often heart-breaking. They are typically
expensive, and in most instances, end up with a decision to
call it quits. But they are an unavoidable and unblinking
prerequisite for commercial success.
The nature of startups suggests that the predominant models
of Federal support are not really well-suited for these
endeavors.
The measured pace of grant submission, review, and award
operate at a speed that does not match the tempo of intense
innovation. A startup applying for an SBIR or STTR award
typically will not see that money for over a year after
application. In that time, many companies will fold or pivot so
strongly away from the original plan that even when the SBIR
arrives, the idea is no longer in alignment with the grant was
meant to pay for.
Much like the patent process, the SBIR/STTR mechanism is a
funding approach that favors teams that have the luxury of
being able to take things slowly. In my opinion, taking things
slowly is not part of an effective formula for a national
innovation strategy.
Startups do not necessarily need a lot of money; they need
money right away. It is not practical for the government to
implement a mechanism to quickly release small amounts of cash.
Fifty thousand, $100,000 dollars can be transformative. In my
experience, the best approach instead is to provide funding to
reliable and proven incubator and accelerator programs and
organizations, such as the Science Center, which has helped
over 400 companies launch. These enterprises have boots-on-the-
ground familiarity with the core ingredients that companies
will need. Who are the talent? Who are the local advisors? What
is the behavior of local investors? These startups require
these ideas to move forward, and the companies we help launch
grow benefit from our decades of experience in this space.
My sense is that the best practical means of facilitating
and monetizing the innovation that turns academic research into
business development is to specifically support the growth of
private sector organizations that can make rapid, unbiased
determinations of which early-stage ideas have sufficient
commercial promise to attract investment. This is a role we
currently play for BARDA using our multistate tech transfer
network to identify biotechnology ideas that may be of interest
to Health and Human Services.
I am going to--wait, am I past time? All right. I am going
to give up my negative time and say the rest of my remarks are
in written comments. Thanks.
Chairman CROW. All right. Thanks, Dr. Younger.
Dr. Martin, you are recognized for 5 minutes.
STATEMENT OF DR. SHEILA MARTIN
Ms. MARTIN. Thank you, Chairman Crow, Ranking Member
Balderson, and members of the Committee. I am grateful to be
here to testify today. It happens to be National Inventors'
Day. So Happy National Inventors' Day to all of you.
The subject of today' s hearing is important to public
research universities who work with small businesses to improve
their success in three important ways:
The first one is talent. The most important form of
technology transfer happens when businesses hire our graduates.
When our students participate in federal research grants, they
benefit by learning about scientific discovery, participating
in cutting?edge research, and working in teams. And they bring
that knowledge to the companies that hire them.
The second way that public research universities work with
small businesses is through innovation, the discovery that
generates new products, greater productivity, and entirely new
industries, while solving important social problems.
Third, universities are important to improving the quality
of life in their local communities. They generate prosperous
economies, offer cultural activities, enrich civic life, and
partner with local organizations to address important community
issues. And thriving regions are a magnet for the talent that
small businesses need to innovate and flourish.
In thinking about the innovation pipeline, we really have
to take the long view. We cannot always predict what area of
basic research will lead to an invention that transforms our
economy, cures a widespread disease, or allows us to lead more
fulfilling lives.
Because the benefits of basic research are so diffuse and
long term, few private sector companies will fund it. And
therefore, it makes economic sense that basic research is
funded by Federal agencies. So, maintaining or increasing that
Federal basic research funding is essential to ensuring that
the font of scientific knowledge that feeds the innovation
pipeline continues to flow.
University researchers are anxious to see their discoveries
put into practice by businesses. And they often launch their
own businesses. But before those ideas reach the market,
someone has to invest in the engineering, design, and market
research that is necessary for commercial success.
That is why programs like SBIR and STTR are so important.
They provide funding to help companies work through some of the
more difficult technical risks, evaluate the market potential,
and take ideas to the point where the private sector is willing
to invest.
Public and land-grant universities are important sources of
both ideas and talent to companies who benefit from SBIRs and
STTRs. Empirical studies of these programs demonstrate that
SBIR projects that have a connection to a university are more
likely to be successful commercially.
And while there are many examples of companies that have
successfully used an SBIR grant to commercialize a university
technology, I will highlight just two here and there are many
more provided in my testimony.
The first I will talk about is Solid Power. It is a
Louisville, Colorado company that spun out of the University of
Colorado at Boulder and is developing solid state battery
technology for the electric vehicle market. Its SBIR awards
have led to successful funding by strategic investors. And so,
these Federal investments have not only helped us make progress
in clean mobility technology but also have spurred success for
this small company.
The second is Core Quantum Technologies, a Columbus, Ohio
firm that developed a method for speeding diagnoses and
identification of cancer treatment options. The company' s
founder is Professor Jessica Winter from The Ohio State
University' s College of Engineering. She benefitted from Ohio
State' s NSF-funded Advance Program which develops the
entrepreneurial capacity of women faculty. It helped her start
her company, win the SBIR grant, and connect to additional
investors. And that project also illustrates the importance of
programs that diversify STEM fields and provide resources for
women, minority, and student entrepeneurs so that they, too,
can be successful with SBIR and with their companies.
Because as great as they are, SBIR and STTR are not enough.
Funding for basic research and complimentary programs, like NIH
Reach, NSF I-Corps, EDA' s Regional Innovation Strategies, and
NIST' s MEP partnership are also important for successful small
businesses.
APLU and its member universities are grateful for the
Committee' s support for these programs. To see for yourself
how our universities are supporting the universities' small
business innovation pipeline, I invite all of you to meet
inventors at the Innovation and Entrepreneurship Showcase,
sponsored jointly by APLU and the Association of American
Universities, on April 28 at 5 PM here in the Rayburn
Cafeteria. I look forward to seeing you there.
Chairman CROW. Thank you, Dr. Martin.
Dr. Mann, you are recognized for 5 minutes.
STATEMENT OF DR. ETHAN MANN
Mr. MANN. Thank you for inviting me. It is truly an honor
to be here.
I want to talk a little bit about Sharklet Technologies,
which has been a recipient of several SBIR awards over the
years. Sharklet is a startup company based in Aurora, Colorado,
developing novel surface textures applied to consumer and
medical products to prevent the spread of germs that cause
infections. The novel paradigm-shifting concept was the
brainchild of Dr. Anthony Brennan, a professor of Engineering
at the University of Florida in Gainesville. Dr. Brennan
noticed that tiny surface structures impact biological response
of cells, like bacteria. He noticed also that sharks are not
susceptible to fouling like whales, manatees, and sea turtles.
When he studied shark skin, he noticed that that specific
texture is responsible for preventing fouling, and when
reproduced on plastic surfaces, it is able to prevent the
accumulation of bacteria.
Sharklet has been developing numerous applications for this
technology now based in Colorado ever since Dr. Brennan' s
original discovery.
Developing novel innovations for market readiness requires
significant investment regardless of the sector involved.
Science Direct reports that medical device development requires
about 7 years to go from concept to commercialization, and
costs more than $31 million. Biomedical technologies require
substantial safety and efficacy testing, usually to the
molecular level, to satisfy regulatory approvals. Other
advanced industry fields are similar due to the intricacies of
the technology. Manufacturing and development steps are
completed with the utmost scrutiny to ensure consistency and
safety of the products used by customers.
Innovations with high likelihood of success are those that
have been de-risked to the point where certainty of value
surpasses the risk of failure for these new ventures. More
quickly, driving technologies to this value inflection step
should be the step of technology transfer offices around the
country. Activity of these offices is critically important to
ensure taxpayers are allowed to benefit from the technologies
they have had a part in funding.
Offices of technology licensing should be appropriately
resourced to support the quantities of emerging innovations
that are in our amazing universities.
Resources may need to be expanded to track with the fast
pace of science occurring in these academic research centers.
Perhaps one of the best examples to support de-risking
innovations is the SBIR and STTR grant programs which serve to
fund proof of concept and early R&D activities for these
innovations. Small businesses taking advantage of these
mechanisms are at a distinct advantage. They have improved
their technology and added value without selling equity which
dilutes investors.
Delivering technologies to the marketplace provides a value
beyond the obvious use of the technology. Supporting small
businesses and innovation fuels entire community growth. For
example, the life science industry in Colorado in my home state
has been invaluable for the state's economy. The life sciences
industry provides more than 30,000 high-paying jobs with an
average annual salary of more than $89,000. Moreover, these
direct jobs lead to estimated indirect jobs of about 92,700.
I sit on the board of directors for the Colorado Bioscience
Association, CBSA. CBSA is a state organization that creates
co-opportunity for the Colorado life sciences community. CBSA
champions a collaborative life sciences ecosystem and advocates
for a supportive business climate.
Workforce collaboration is key to the growth and maturation
of any industry. CBSA and the life science industry together
work to cultivate a strong life sciences talent pipeline in
Colorado with several different workforce development and
skilled training programs including various interactive
educational experiences, mentoring, internships, and workforce
skill building.
And Colorado life sciences companies see the value of
engaging not only in K-12 but in higher deduction. In fact,
Sharklet Technologies, for example, engaged with CSU, Colorado
State University, biomedical engineering students each of the
last 4 years to complete a senior design project as part of
their senior-level course work. These projects included core
components to the Sharklet product development activities.
Support from the Committee on Small Businesses and the
Subcommittee on Innovation and Workforce Development is
critical to reduce barriers and ease the ability to bring
technologies to life.
Chairman CROW. Thank you, Dr. Mann. I just love that
Colorado is leading the way on shark-based technologies.
Dr. Crawford, you are recognized for 5 minutes.
STATEMENT OF DR. GREGORY P. CRAWFORD
Mr. CRAWFORD. Good morning, Chairman Crow, Ranking Member
Balderson, and Committee members. I truly appreciate the
opportunity to testify in front of the Committee today.
Today, I wish to answer how universities and small town
American and rural America can create a vibrant economy based
on innovation, creativity, and entrepreneurship.
I wish to make three points today.
First, pulling in innovation that you do not necessarily
have to grow it at home, but you can pull it into your
institution.
Second, educating innovators for innovation. How technology
acceleration and the global world today requires a new set of
skills for our students.
And three, keeping innovators and innovation at home. How
do we attract talented graduates to stay in small town America
and work at small companies to create vibrant communities?
Number one. Pulling innovation into our ecosystem.
Oftentimes, universities use a push strategy. They invent, they
patent, and they try to push it out through a startup company
and/or license it to a big co. We also do that, but we have
also started a new kind of process and we call it the pull
strategy. And pull strategy means that we go to our partners
and we pull in patents into our ecosystem and then develop them
with our students, faculty, and staff.
And so, two examples there: We work with Wright-Patterson
Air Force Base in Dayton, Ohio, and they have over 1,000
patents for defense-oriented applications, and we have access
to that portfolio to try to find commercial applications for
their use.
And second, we work with companies. And so, there may be an
idle technology that may just be too small for a company
developer, not on their critical path but then they decide to
push it our way. We will pull it into our ecosystem and develop
it, which is great for a small, entrepreneurial company.
Entrepreneurship is about shots on goal and pulling these
patents into our ecosystem is a way in which we can accomplish
that.
And three, in the great state of Ohio--got to put a plug in
there--but working with Lieutenant Governor Husted and also all
the Ohio public universities, we just created an IP promise in
Ohio which is a really simple way for companies and
universities to work together with a very simple agreement and
a very simple technology transfer contract.
Second, educating innovators for innovation. Jobs today are
not blue collar or white collar, but they are new collar jobs.
Industry 4.0 and artificial intelligence is driving change all
across our industries from biomedicine to advanced
manufacturing the materials to climate and the environment. And
how do we train students in this new area? Well, one is to
train them in humanics or humanics, however you want to call
it. And it is the convergence of learning a little bit of
science and technology, the quantitative aspects, statistics
and mathematics, but also the humanities. And pulling those all
together makes somebody actually very robot-proof. I always get
asked, how do you make sure your students are robot-proof in
this new world? And I say, the best way to do that is to be
good at being human first.
And second of all, we want to educate in entrepreneurship.
We want students to deal with ambiguity. We want students to
fail and to use that steppingstone to pivot to something
successful. And we do that through many different avenues with
business plan competitions and a top entrepreneurship institute
in the country. But more importantly, we also put students and
they spend a semester in Silicon Valley where they work at the
most innovative companies in the world and also take courses
out there. And we also have a specific internship program for
students to work at small startup companies, not just the big
cos.
And third, experiential learning. We just started something
I am very excited about. It is called the Work Plus program.
But we place students in our local companies, and they work 24
hours a week. They get a salary. Then, that company actually
pays off their tuition. It is a debt-free education. And one
example is Thyssenkrupp Bilstein, company in our area which
makes shock absorbers, and our students are working in their
industry 4.0 robotics laboratory.
And third, keeping innovators at home. Small and rural
towns need talent to live, work, play, and enjoy, to build
these powerful small towns in America. People and ideas are the
key to these thriving small towns.
A couple of things that we are doing as we looked at the
Department of Ag' s report by Wojan, and to attract that talent
to small towns, innovation and creativity was important so the
arts was just equally as important as the technology side. So,
with Oxford, Ohio, we work together, and we have a space that
we use jointly where we have creatives come in. It is called
our Center for the Arts. And the second floor and third floors
have spaces for photographers, architects, artists, musicians,
and sculptures, and these sole proprietors actually add to our
local economy.
And the next phase of that is taking a second building on
that same block and moving towards putting our technologists
and innovators in there so that we truly combine an innovation
block in small town Oxford, Ohio, which pulls together both the
creatives and the technologists in one space and one place.
And I am so happy to have joining with me today our
assistant city manager, Jessica Greene.
That concludes my comments.
Chairman CROW. Thank you, Dr. Crawford. As a wayward
liberal arts major, I share your passion for the humanities,
so.
I am going to begin by recognizing myself for 5 minutes.
And I appreciate the opening statements from all of you.
Let me begin by a comment that Dr. Younger, you had made
about the difference between accelerators and incubators and
just direct SBIR/STTR funding and some of the kind of vetting
role that some of those kinds of intermediary organizations
might play. And I would like to hear from all four of you.
Is it your view that more of the funding and more of the
support should go to kind of some of these intermediate
incubators and accelerators on the ground as opposed to kind of
direct funding directly to companies and that would be more
helpful for folks? Or is there kind of a middle ground here?
Let' s start with Dr. Younger.
Mr. YOUNGER. It is a great question. So, the question at
hand is how do you make that money as rapidly deployable and as
accountable as possible; right? You want the money to succeed.
And for better or for worse, startups are local endeavors. You
can attempt to be global, but your advisors are likely local.
Your first investors are probably going to want to visit you on
a frequent basis. They are not going to be a world away. And so
being able to put resources right at the spot where the company
is starting, I think is really key because everything is going
to happen locally, at least in the first 6 months to a year.
The role that we play is that we have the ability of knowing
pretty much all the facts on the ground. Who is active? Who is
doing what? Who do these people need to connect with? And that
is something that the study sections for SBIRs/STTRs just do
not have at their fingertips. And their ability to evaluate the
novelty of the technology is unquestioned, but their ability to
sort of very effectively and wisely put the money to play
quickly is limited. And that is just the nature of the beast.
So, I think that there is actually a role for using incubators,
not as an alternate sort of recipient of the money but as the
decider for how that money is going to get deployed most
effectively. And that is the way that I would frame it.
Ms. MARTIN. I think the important thing to remember in this
is that each of these places needs to build a complete
innovation and entrepreneurship ecosystem. And we all have a
different role to play in that. And each of those pieces needs
to be strong. And so, I think the answer to that question
probably varies depending on where you are and where that
ecosystem is strong and where it might have some weak points.
Certainly, capital is a challenge for many different companies
and many different stages of the development of those
companies. So, you know, it is important to remember that we do
need to continue to fund basic research to make sure we have
the basis for those discoveries. Capital and mentorship and,
you know, the incubators and accelerators are all very
important, but I think the answer really depends on where you
are and where the strengths and pain points are.
Mr. MANN. I think the incubators around the country really
serve as the support structure for a lot of the ecosystems that
these small companies exist in. I know in Colorado there is a
number of incubator-type facilities. Sharklet has been located
in the Fitzsimmons Innovation Campus for a period of time now
and really have developed strong relationships with mentors on
an unofficial basis, but also with the staff at the incubator
facility. So, I think there is a case to be made for sharing
funding with the incubator facilities to be able to leverage
some of those assets that are kind of company agnostic and be
able to kind of rapidly deploy those systems. But I agree in
some cases the companies themselves have made the case for what
they are doing and could quickly utilize those funds as well.
So, I would agree that at times the answer is kind of both, but
there are circumstances where those can be identified.
Mr. CRAWFORD. Thank you. I agree with those statements that
we should put dollars into the incubators and accelerators and
greenhouses and so forth. I just do believe in that principle
of subsidiarity, getting the resources down on the ground where
those folks can make those decisions that know that area the
best. But more importantly, I think when you put dollars there,
really look for that co-investment. And if those dollars are
highly leveraged with angel investors, venture capitalists, and
other city and state constituencies and so forth so you get the
most bang for your buck so to speak.
Chairman CROW. Thank you.
I am going to end my time here and then I will recognize
the filling in Ranking Member, Mr. Hern, for 5 minutes.
Mr. HERN. I would like to thank the Chairman. I would like
to thank the witnesses for being here today.
As an engineer and a small business owner, former small
business owner for 35 years, I certainly understand the value
of our research universities we have around the country and how
valuable they are to small business.
With the localities across the United States constantly
evolving their policies to create environments that are
conducive to small business growth, research universities help
to serve as a significant resource for small businesses looking
to capitalize on technological and entrepreneurial knowledge.
This is why I am glad to have such great research universities,
not only in our district but in our state, University of Tulsa,
Oklahoma State University, and University of Oklahoma. These
universities are assets to Oklahomans, and I believe it is our
job in this Committee to help universities like these to
continue to have these types of relationships with small local
business owners.
As a part of this, I think it is necessary for members of
this Committee to try to work, and we do this a lot, work in a
very bipartisan way to reduce the onerous regulatory burdens
which have been placed on these institutions. This is something
that I would like to spend the remaining amount of my time to
ask each of you to elaborate, what are the most significant
regulatory and administrative requirements of federally-funded
research programs, and what do you think--let' s talk about
that. So, if we could just go through, and maybe think in your
mind about what some of those solutions might be as we go
through.
Dr. Crawford, we will start with you and come this way.
Mr. CRAWFORD. What I wanted to mention about that is one of
the areas, you know, I have also started a couple of companies
based on my inventions, and so I saw it from the side of being
a professor and trying to struggle to get the intellectual
property out of the university. And then as a leadership role,
actually trying to make it a little bit more conducive to great
cooperation.
One of the areas that you see with small businesses and
companies and so forth is just the complexity of the contracts
and so forth that have to kind of take place to get that
relationship developed. And I am going to kind of embellish a
little bit here but there will be a stack of papers that you
put down on the company and here at the university and they are
like, this is the contract.
Well, what we did in Ohio is we wanted to kind of crunch
that sort of piece down into something that was reasonable, a
page or two, so that we could create these kinds of agreements.
And so, when there was an interest and an idea coming out of a
university, a research project, that we could move on it much
quicker. We were not negotiating over something that may or may
not happen in the future, but we actually agreed to moving it
forward today and then coming back to the table when that was
successful. And so I think from that perspective of always
having sort of something simple and that is easy to understand
and moving forward that you can actually pull together the
company and the university and get things off the ground much
quicker than I think we ever could in the past.
Mr. HERN. Thank you.
Dr. Mann?
Mr. MANN. Yeah. I think your point is well brought. I think
that certainly as a small company is starting off and licensing
and technology or developing and technology, they have to think
not only in that short window but they have to think, you know,
10 years down the road when they are trying to exit to a
strategic or disclose things publicly. So, all of the
agreements have to accommodate that.
I would take, maybe as an example, something like the Bayh-
Dole Act has provisions in it that are extremely ambiguous that
are challenging for even legal counsel with a small business to
be able to understand some of the restrictions associated with
how the use of Federal funding and productization occurs. And
so just simple ambiguity can lead to stacks of legal agreements
where you have to be able to decide around how you are going to
handle ambiguity.
So, from a simplistic sense, perhaps even looking at the
current regulations and providing more detail for what is
trying to be accomplished could be dramatically impactful for
small businesses.
Mr. HERN. Thank you.
Dr. Martin?
Ms. MARTIN. Thank you, Congressman Hern.
I would just say that developing patents is very expensive,
and it is really important that our institutions be able to
defend those patents in court. And so, I will follow up with
you in writing on other aspects of the regulatory system that
our institutions might need some relief with. But I would just
like to mention that it is very important that companies be
able to defend their patents in court because not only is it
expensive, but getting a patent also makes it much more likely
that that company will be successful in getting venture
capital.
Mr. HERN. Thank you.
Dr. Younger, I am sorry, but I have got to close out here.
But I just want to take your thoughts, and I know you have got
great thoughts there, and encapsulate those in this Committee
as we go forward and looking at how we continue to do what I
like to say is, you know, when I ran for this office, was to
get government out of the way so we can help entrepeneurs
create jobs and put Americans to work. I have said that
statement so many times and this is a classic example of people
who are right in the fray, especially when you have been on
both sides of this you know exactly what to do. And so I have
also been one to claim that a lot of people talk about a lot of
things in Congress they know nothing about, so it is always
refreshing to come to this Committee because we always have
great witnesses that are either nonpartisan or bipartisan in
what they are trying to get accomplished. So, thank you so much
for being here.
And Mr. Chairman, I yield back.
Chairman CROW. Thank you, Mr. Hern. Appreciate your
comments and questions.
So now the gentleman from New Jersey, Mr. Kim, who is also
the Chairman of the Subcommittee on Economic Growth, Tax, and
Capital access is recognized for 5 minutes.
Mr. KIM. Thank you, Chairman. I am really glad we have an
opportunity to talk about this issue. I represent a district in
South Jersey and the Shore, Burlington County, Ocean County,
about 120,000 small businesses in that area. And I am trying to
think about not just where my district is tomorrow or next year
but what do we think our district is going to look like 20, 30
years from now when my kids are adults, and what is it going to
look like at that point? So, I am trying to piece this
together. We have some great assets. We have a joint military
base on the district, a lot of innovation happening there and
other things. But we do not necessarily have sort of a top
research university. And I guess some of my thinking is, you
know, Dr. Younger, you are right across the bridge from us, so
you are maybe familiar with our area. I guess what I am trying
to get a sense of is I have a deep respect for the work that
your organization does, the partnerships that your
organizations have with the universities. What about places
that are more suburban and rural? I think Dr. Crawford, you
kind of got to some of this. But I am trying to think about
this. Is that model Dr. Younger of what your organization is
doing, how can that be replicated, or should it be replicated
in places that might not have a top research-type university?
Are there examples of how this partnership has happened with
community colleges or other types of examples? I would just
love to get your thoughts on that.
Mr. YOUNGER. That is a great question.
So, for the record, the Science Center now has
relationships with four out of five research institutions in
New Jersey, and we love working with them. There is quite a
spectrum of talent there. So, I think that some of these issues
come down to sort of population density. How many people are
around to come up with new ideas? How many people are there to
work in new companies? How many people around that potentially
serve in the capacity of angel investors?
But I think that in the end I do not believe that a
research university is absolutely a requirement for making
something remarkable happen. And I think the Miami example is
just right. I grew up in a little town in Missouri. Things can
be innovative in lots of different places. I think what you
need is you need local champions. So, you need folks who are
really going to stand up and try to make something happen. You
need imaginative capital that can come in from potentially a
farther distance than you would otherwise expect that can make
the trip and come in and try to support things. And you need
founders who can have a pretty broad sense of sort of what
region are they in. Right? So, am I in Cape May or am I on the
East Coast; right? And that is a mindset that really matters,
that makes a difference. But I do not really think that there
is any reason to believe that--institution is required for
something remarkable to happen. I think things can happen in
lots of different capacities if you have the right resources.
Mr. KIM. Well, I certainly hope so. And our district,
certainly a lot of innovation going on there but I think, you
know, some of the points you mentioned about the local
champions, the founders, a lot of it also comes down to just,
you know, the sheer infrastructure, ensuring that we have the
broadband infrastructure and the other types of just sheer
capacity components.
Dr. Crawford, I would not mind getting some of your further
thoughts on this type of approach.
Mr. CRAWFORD. That is actually a great question, and I grew
up on the track of, you know, Ph.D. programs, post-docs,
inventing things, patents and spinning things out of the
university. But as I have been in this career now for over 25
years in academics and seeing what is happening today, you
know, it is quite interesting because it is not necessarily the
sole property of graduate students, faculty, and post-docs
anymore. But we are seeing undergraduates come in because they
can do an app. They can do coding. They can do all kinds of
great things. And I think if you put more emphasis on looking
at some of that talent, they are younger in their career, of
course, but they can just do some spectacular things. It may
not be a farmer or the billion-dollar molecule, but it can be
some great, neat things going on.
And we are doing it in Ohio to building up a network of
universities and putting their entrepreneurship centers
together. We are on our path for doing that. And I do think
that one of the things that we should all be thinking of, too,
is just going down in that pipeline of the training of
undergraduates, also going into the high schools, because some
may not go to college and some may become plumbers or
electricians or what have it, but the entrepreneurial skillset
is going to be very important to them. So, trying to figure out
ways which you can train high school students and making sure
your local community colleges and local undergraduate
institutions can also play a role in this very vibrant and
accelerating economy.
Mr. KIM. I think that is right. I mean, look, we pride
ourselves in New Jersey for having top public schools, K-12,
and having developed that kind of workforce, but we also see
such an exodus of that young talent going to other places. And
I think for me, I am really trying to get to this understanding
that, you know, innovation is what you do, not where you do it.
And how do we then try to have that sense of spreading that out
and not just further, you know, siloing our society in terms of
where innovation and that type of technology can be done. So, I
appreciate your thoughts.
Chairman, I yield back.
Chairman CROW. The gentleman yields back.
I now recognize the gentleman from Pennsylvania, Dr. Joyce,
for 5 minutes.
Mr. JOYCE. Thank you, Mr. Chairman.
What a great presentation you have brought to the table
today.
Dr. Younger, I, too, come from a medical background, and
having trained at Temple University School of Medicine, my wife
at Drexel University School of Medicine. And I find it really
fascinating that you are here today with a background in
emergency medicine and talking from the city with an incredible
history in medicine. And bringing that forward into these
discussions. You and I recognize that Pennsylvania has more
medical schools than any state in the union. And with the
addition of another medical school in 2022 at Duquesne in
Pittsburgh, that will even be further expanded.
Would you please comment on the importance of you setting
up a program in West Philadelphia, really in the hub of medical
science in the northeast?
Mr. YOUNGER. Sure. So, Philadelphia is remarkable.
Pennsylvania is remarkable. I just got back from Pittsburgh. It
is a remarkable commonwealth.
I think that we are trying to do some heavy lifting; right?
We are trying to do some difficult things. There is amazing
technology. There are diseases that will be gone in my career
that are going to come out of West Philadelphia. There is no
question about that. Treatments are going to be just
remarkable.
We are trying to find out how do we take this idea forward?
There is a traditional model. The Science Center is trying to
innovate at the same time that we are trying to support people.
We are in some ways a startup like a lot of our startups are in
trying to figure out what is the best path to try to make some
of these things happen? I spend a lot of my day in that regard.
I think if there was one thing I could do to the physicians
in Pennsylvania, the physicians, the academic scientists
everywhere, is I would look for a way to lower the boundary by
which someone can do what I did, which is to do the math and
say I am going to be okay leaving the university to go try to
launch an idea. The math is very much against that move; right?
Having a tenured position. Having a clinical practice. There is
hardly any reason to go innovate because you are pretty well
taken care of. And I think that if there is one thing this
Subcommittee can do is to look at existing policies and
regulations and say how can we make it so that that balance is
a little bit more in favor of people taking a shot as opposed
to staying in their sort of usual position. And I think I have
some great ideas I can follow up on that but I think that one
of the things that we are trying to do is there is a lot of
talent sitting in universities that is most comfortable there
but that might be most impactful outside. And I would love to
think about ways in which simple things could be implemented to
allow people to take a shot coming out of university to try to
make a remarkable thing happen.
Mr. JOYCE. Do you think your background, the presence of a
strong science base allows for innovation in a different line
than we might traditionally see in engineering or in math?
Mr. YOUNGER. Perhaps. I guess the proof of the pudding is
in the eating. We will see. I think I have a fairly broad
technical background and so I think I try to put my skills to
use wherever I can. But I think clearly just physicians, just
engineers, just physicists, that is not enough. I think the
crossover is where amazing things happen, and it requires
people to be relatively flexible in how they define their
backgrounds.
Mr. JOYCE. What can we see in students in training these
days? What can we expect? How can we raise that bar so that the
students that you work with, the innovators that we will see
tomorrow, how can they be better prepared?
Mr. YOUNGER. So I think two things. One was alluded to here
before which is just embracing ambiguity; right? Being able to
work in very uncertain circumstances is a great skill. Frankly,
just personally I will say that numeracy matters, and we train
a lot of folks in a lot of skills but just being able to
quantitatively think about problems I think is something that
always needs sort of reemphasis. But I think those two points
would be the ones that I would say deserve a lot of respect.
Mr. JOYCE. Thank you.
I yield the rest of my time.
Chairman CROW. Thank you. The gentleman yields back.
I will now recognize the gentlelady from Pennsylvania, who
is no stranger to entrepreneurship and starting and growing
businesses, is now recognized for 5 minutes.
Ms. HOULAHAN. Thank you. And I am really appreciative, Dr.
Joyce, of your conversation as well. Philly is where it is
definitely happening. And I am from just outside of
Philadelphia as well and I am going to carry on with your line
of questioning as well as with Mr. Kim' s line of questioning
because I have been struck by in the couple years that I have
been running for Congress and now the one that I have been here
how many people I meet who say, oh, yeah, I am from
Philadelphia, or yeah, I am from Pittsburgh, but yet they are
not there anymore. And I really want to figure out not just for
my community, for Philadelphia, for Pennsylvania, and for
Pittsburgh, why that is happening but also for places all over
our country where people are going to places like the Silicon
Valley or like Boston with the talent that they have learned
and gained from places like Pittsburgh and places like
Philadelphia because there is definitely a brain drain going on
and I am trying to figure out as an entrepreneur who came to
Philly and stayed in Philly, you know, how do we make that
happen more?
And so, I would like to dig in a little bit more on what
Dr. Joyce was asking, which is how do you incentivize people to
take their shot?
I was very, very fortunate because I had a ROTC scholarship
and then I had a research assistantship first at Stanford and
then at MIT. I ended up coming out with no debt from both of
those experiences, and that allowed me to take chances and
allowed me to take a shot at being entrepreneurial. And I just
wonder if you could dig a little bit deeper, first Dr. Younger
and then anybody else who would like to answer, what can we do
to provide more incentive for people to not be scared?
Mr. YOUNGER. So I think it is mostly leading by example;
right? I think that it is a process that takes time. You need
to have some local success. There need to be some high
visibility successes. And I think that you need to have the
ability of folks who understand that going into an early stage
company is a career path that actually counts.
I am a very big proponent of having greater influence of
business, but frankly, small business in really sort of core
university processes, like when a training grant is under
evaluation at the NIH, should there be folks who represent more
of an industrial perspective looking at the science and the
training programs? So, if we are going to be training people to
go into biotechnology companies or go into engineering
technology companies, should there be company representation in
evaluating what those training programs look like? I think it
is a great question, and if you make small changes to the
curriculum, then these decisions to go into early stage
companies become much more reflexive. It just seems like a
natural thing to do because your training curriculum has
focused on this idea of how to innovate and how to move quickly
into a new idea.
So, I think that there are processes that go all the way
back to make students more comfortable in making a decision to
do something fairly risky right out of the gate. So, I think
that is certainly part of it. But then once they are out, how
do you prevent local brain drain? That is outside of my
wheelhouse. I will not make much of a shot at that except to
say I think examples count; right? And once you can stand up
someone, you know, if you can sit down and have coffee with
someone who has pulled it off, then it looks like something
that can exist and then you can move on.
Ms. HOULAHAN. So I say this a lot as a woman and as a STEM
professional, you cannot be what you cannot see. If nobody is
there that you can see, and you cannot look at success then it
makes it pretty easy for you to go somewhere else.
And I am interested in also Dr. Crawford, you know, what
role do universities play in trying to create those centers of
gravity and trying to capture people' s minds and attention so
that they stay?
Mr. CRAWFORD. That is a great question. I know our
graduates, they are pretty enthusiastic, and they want to go to
the right and left coast, or they want to go to Austin, Texas,
or Chicago, Illinois. And we obviously would love to keep them
in Oxford. And I do think that ag report that I mentioned in
the beginning by Wojan about bringing the creativity, creatives
together along with the technologists can actually build more
of a vibrant community around small towns rural America where
you can actually keep and attract that talent to kind of stay
locally.
I do think also following up on the other remarks, it is
important, I think, for us to see that you can be an
entrepreneur early on in people' s thinking. I think in some
cases, by the time you go through graduate school--
undergraduate, grad school, you may go to medical school or
whatever--you are already thinking about how to pay off your
debt and how to do all these different things. And you have a
car and a house and so forth but that seed early on in the
education is great. And I think there is no better experience
than an entrepreneurial experience as an undergraduate where
you get in there and you can fail a bunch of times and nothing
matters and you have all the support of professors around you.
And so, I think the more that we can offer those experiences it
will get that mindset going so that when they do graduate, they
will think about something on more of a startup rather than the
status quo.
Ms. HOULAHAN. Yeah. And I only have 7 seconds. I just want
to emphasize the importance of it is easy to create
opportunities to dream, but if you do not provide places and
pathways for the people to do that and also the freedom to be
able to dream where you are not burdened by so much debt that
you cannot make good choices, we need to work on that, and I
would look forward to working with our Small Business Committee
on those particular issues as well.
I yield back.
Chairman CROW. Thank you. The gentlelady yields back.
And now I recognize the gentleman from Tennessee, whose own
experience starting and running businesses adds a lot to the
depth of this Subcommittee as well. Mr. Burchett, you are
recognized for 5 minutes.
Mr. BURCHETT. Thank you, Mr. Chairman. I think my business
knowledge is sort of like my stock knowledge. If you see me
invest in something, do not or short it and then you will come
out on top.
I want to thank you all so much. And Mr. Ranking Member,
who really is not the Ranking Member but is sitting in the
chair, thank you for your hard work.
And this is the part where I praise the Chairman for our
bipartisan work on our two bills, but I will just sort of leave
that up to the historians to figure out what those two bills
are because their names are very long. But I do appreciate you,
brother. We work very close on them and dealing with
technology.
I have questions for the panel. I will just kind of throw
it out there. And I appreciate academia. My parents were
lifelong educators. Have a degree in education, and so I
appreciate all the research and things that you all have been a
part of.
What are the biggest barriers to technology transfer from
Federally funded laboratories and universities to the private
sector?
This is totally off the record, so just go ahead and speak
your mind.
Ms. MARTIN. Thank you, Congressman.
I would say that first of all, developing intellectual
property is very expensive. And many of our universities are
under resourced in their technology transfer offices. Of all of
the ideas that are disclosed to universities every year, only a
small fraction of them are developed because this process is so
expensive. So that is one barrier.
The second, of course, is the capital that is not always
available in order to develop those technologies into
commercializable ideas. And certainly, programs like SBIR and
STTR are important for that early stage funding when the
private sector is not yet willing to invest because it is too
risky. But there is also capital that is needed before a small
business is formed and so it is not yet eligible for SBIR. So
what they call phase zero programs, like the NIH Reach program
are also important because it helps the faculty develop the
technology a little bit more to the point where they are able
to form a small business and apply for an SBIR and STTR
program.
So, as I mentioned earlier, these complementary programs to
SBIR and STTR are also important, as well as continuing to fund
our basic research.
Mr. MANN. Yeah, I think to that I would just add, you know,
as someone who has dealt with license agreements that were put
together 10 years ago and probably had 10 or 12 amendments,
maybe more than one a year, and looked at licensing additional
technologies, I think one of the components that you deal with
in a technology transfer or licensing office is that those
offices are not aligned with the same levels of success as what
the small businesses, meaning that those offices are
essentially protecting a political capital by making sure that
they do not miss an opportunity on some unicorn; right? So,
nobody wants the Gatorade story. So then when you go through a
licensing conversation with somebody, it is very challenging to
be able to get broad terms that are going to be supportive of
raising capital and developing a technology, and not
necessarily knowing where you are going to end up but that you
are going to end up somewhere valuable.
And so, I think that maybe merging what a technology
transfer office' s interest is would be critical. And perhaps
part of the way to do that is their resources are so
restrictive that they only get to pick a few winners a year.
So, they do not want to miss, so they have got to pick what is
going to be the Gatorade. What do I not want to miss, is what
is going to be some billion-dollar unicorn? Because if it comes
out that we passed on some unicorn, you know, then we are in
real trouble.
Mr. YOUNGER. Yeah, I would just add, I cannot say that
better. I think the reason why university is pursuing
intellectual property is different than the way a small
business pursues intellectual property. The small business is
having that intellectual property pulled by market forces. The
university is pushing that intellectual property to protect
sort of academic assets. Both of them are legitimate behaviors
but they are just very different. And so that is why I think
you see an accumulation of IP in universities where you would
never see that kind of accumulation of unused IP inside of a
business.
Mr. BURCHETT. All right. My wife is very supportive of me
and my crazy inventions. She always says, baby, I am sure
somebody laughed at the pool noodle. You know, if you have got
a pool, you have got a pool noodle. And they cost like 6 bucks,
and I am sure they were probably just some insulation on a pipe
somewhere and somebody took one home, some plumber and their
kid was swimming around in a pool somewhere. So, there you go.
What is the best way to measure the economic impact of
university R&D? Is there a way to do it? I get aggravated
sometimes, and I am running out of time and I have got a great
story, but I will tell it later. You can read it in my book.
But go ahead one of you all quickly.
Chairman CROW. Yeah, I will extend. I will extend for a few
minutes so you can answer the question.
Mr. BURCHETT. Thank you, Mr. Chairman. I appreciate your
effort at bipartisanship.
Should I tell my story now or should they read it in my
book?
Chairman CROW. I am not going to extend it for the story,
but I will extend it for the answers.
Mr. BURCHETT. Okay. All right. Well played, Mr. Chairman.
Well played. And I appreciate the cameraman occasionally taking
the camera of me because my nose was really itching back there
and I could not scratch it because, you know. Go ahead.
Ms. MARTIN. Well, that is a tough act to follow.
I would just say that the long-term impact of university
R&D is a very difficult thing to measure. In fact, I was asked
once if I would do that for my dissertation and I said I will
move on to the next subject now, please.
You need to look at long-term growth of industries. There
are entire industries that have grown from university R&D. The
most recent winner of the Nobel Prize in Chemistry developed
the lithium ion battery that we are all carrying around in our
pocket. And you do not always know where that impact will be.
And so, it is a very difficult nut to crack. We try to do it;
the Association of University Technology Managers has some
measures that we can track that are useful metrics. But you
have to look at the whole equation and how universities and the
companies that they spin off affects their communities in the
long run.
Mr. BURCHETT. Thank you, Mr. Chairman.
Chairman CROW. Thank you. The gentleman' s time has
expired.
So, I am going to thank all the witnesses for coming in and
taking time away from your busy schedules to share all your
experience and your knowledge with us. I think this is one of
the most bipartisan Committees in Congress as a matter of fact.
We pride ourselves on that because these are not political
issues; these are issues that I think we can do a lot of great
work on and we have been. And I think we also pride ourselves
on this Committee that we have passed over 30 bills I think in
the past year unanimously out of the Small Business Committee.
So, we have some great ideas that we continue to hear in
hearings like this that we will follow up and take some action
on. And to the extent that you have additional information to
supplement your testimony, we would love to receive that
through the staff so that we can have discussions about what we
can do to kind of fulfill our dual purpose. As Mr. Hern
mentioned, I think we all share this view that we have a dual
purpose here. One is to kind of reduce barriers and kind of get
red tape and bureaucracy out of the way of innovation when it
is necessary when we can do that. And as a matter of fact, the
broader Committee merged two programs in the Federal Government
last year to make it easier for veterans to certify their own
small businesses and reduce some barriers and red tape. And I
think that is a great example of us working together to make
things easier for folks.
But the secondary purpose is really finding ways to promote
and boost up and where government can get involved in a
positive way through very directed funding to accelerate and to
help businesses through the ``valley of death'' or other
difficult areas where the market does not necessarily work
perfectly but where there might be tremendous innovations that
can benefit all of us as a society. And if we can shepherd
those through very targeted investments, we want to find ways
to do that.
So, we appreciate you all sharing your time and experiences
with all of us.
And I would ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, that is so ordered.
And if there is no further business to come before the
Committee, we are adjourned.
[Whereupon, at 11:13 a.m., the subcommittee was adjourned.]
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