[Congressional Record Volume 143, Number 85 (Wednesday, June 18, 1997)]
[Senate]
[Pages S5927-S5928]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself, Mr. Cleland, Mr. Wellstone, Mr. Robb, 
        Ms. Landrieu, Mr. Harkin, Mr. Bumpers, and Ms. Mikulski):
  S. 929. A bill to amend the Small Business Act to promote the 
partnership of small businesses and federally sponsored research 
entities to develop commercial applications for research projects, and 
for other purposes; to the Committee on Small Business.


           THE SMALL BUSINESS TECHNOLOGY TRANSFER ACT OF 1997

  Mr. KERRY. Mr. President, today I am introducing along with Senators 
Cleland, Wellstone, Robb, Landrieu, and Harkin, the Small Business 
Technology Transfer Act of 1997. I ask unanimous consent that those 
senators listed in my statement be named original co-sponsors. This 
legislation would reauthorize the Small Business Administration's Small 
Business Technology Transfer Pilot Program through fiscal year 2003. 
The STTR program was originally authorized five years ago to combine 
the technological innovation of America's universities and research 
institutions with the business know-how and entrepreneurial spirit of 
our country's small businesses.
  The fact is that other countries are significantly more aggressive in 
many ways about their joint ventures or partnerships between government 
and business in order to try to steal market share or create market 
where there may not even be one. Recently we learned that even as the 
United States was cutting back on basic research in our budget, Japan 
had committed a 50-percent increase to its budget because they 
understand that basic research is the foundation for the future 
products of the world, and those countries that are able to capitalize 
on this research are in a much better position to expand their job 
base.
  Millions of dollars each year go to federally sponsored research 
projects at America's universities, non-profit research centers and 
federal research laboratories. The innovations that are developed are 
amazing but the people who conduct the research are not always the best 
ones to market the product and develop it for commercial use.
  We have seen case after case where somebody at a university or at a 
federally sponsored research facility is sitting on top of a gold mine 
of information and technology, or even a specific product, but they do 
not know how to identify the proper target market, gain access to 
capital, or do the other things necessary to move that product from the 
laboratory to the marketplace. The STTR program was developed by those 
of us who feel very strongly that we need to help bridge that gap; that 
it is an important function in this modern marketplace for us to 
leverage the ability of those small entrepreneurs by partnering them 
with the researchers to take the technology out into the marketplace. 
Because the core competency of research institutions lies in research 
and not business, fewer practical applications for federally sponsored 
research were developed than was originally desired. It was Congress' 
intention to reconcile this problem by coupling non-profit research 
institutions with small businesses in order to promote the transfer of 
valuable technology into the commercial sector. This not only benefits 
the economy, but it ensures that the sponsoring Federal agencies get 
far more results for the dollars that we invest in research. I know 
taxpayers are much happier when we do that.
  Small business is a more effective mechanism for transferring 
technology from research institutions to industry where the technology 
can be used to improve the economy. This is important because even 
though our research institutions lead the world in science and 
engineering research, we have had difficulty successfully developing 
them into commercial applications. Transferring technology from 
research forums to the commercial marketplace not only benefits the 
American economy, but also further serves the needs of the sponsoring 
federal agency by providing better products as a result of the 
collaboration between the non-profit and for-profit sectors.
  Research for federal agencies is conducted in very diverse areas. 
Because the STTR program is limited to federal agencies with at least 
one billion dollars designated for outside research, currently five 
federal agencies participate in the STTR program. Through a series of 
three phases, research in areas of defense, health and transportation 
is transformed by small businesses into products and innovations that 
can be applied in the commercial marketplace. In the first three years 
of the STTR program, over $115 million have been awarded by the five 
participating federal agencies. In fiscal year 1996 alone, over $60 
million in awards were made to over 320 projects. My home state of 
Massachusetts had 50 projects receive awards in fiscal year 1996 for a 
total of over $8.7 million. Among the recipients of these awards were 
Harvard Medical School, Worcester Polytech and Boston University.
  The STTR program helps American businesses compete in the highly 
competitive marketplace of science and technology. Most of the small 
businesses participating in this program do not have their own research 
departments and could not afford to conduct the research needed to 
produce these products. But by collaborating with the various research 
institutions, these small businesses gain the access to

[[Page S5928]]

technology and advanced research they need to bring quality products to 
the private sector.
  I want to tell you about one company whose experience with the STTR 
program exemplifies how the small business/research institution 
partnership has succeeded in bringing ideas to market. Metal Matrix 
Cast Composites is a small business located in Waltham, Massachusetts. 
MMCC is working with the Massachusetts Institute of Technology to 
develop and test aluminum alloys reinforced with ceramic particulates. 
Besides having potential military applications, these new materials 
have many commercial applications including brake systems for cars and 
landing gears for airplanes. Under a previous STTR contract, MMCC 
developed a product along with Northeastern University in Boston, that 
allowed them to provide advanced composite parts to its customers. 
Under that contract, MMCC has already sold these parts to aerospace, 
electrical, computer and medical instrument suppliers.
  The lesson of Metal Matrix Cast Composites is clear. When given the 
opportunity to collaborate with each other, small businesses and 
research institutions can produce quality products with real commercial 
applications that otherwise may not have reached the marketplace.
  We are not talking about substituting for what the sector does 
already. We are not talking about taking the place of something that 
the private sector figured out it could do better by itself or wanted 
to do. We are talking about providing something where it did not exist, 
where it will not exist, where in most instances it cannot without the 
proper kind of leverage and the proper kind of coordination. As much as 
all of us would like to feel that Adam Smith's rules are the ones that 
ought to prevail in the marketplace, the fact is that every other one 
of our industrial competitors is playing today by a different set of 
rules, by a set of, in many cases, unfair trade practices where they 
are willing to dump, willing to joint venture, willing to subsidize, 
willing to engage in a host of practices that undermine our capacity to 
move to those markets.
  By reauthorizing the STTR program, we will be giving more small 
businesses the opportunity to gain access to technology and then to 
succeed in the marketplace. I urge my colleagues to support this worthy 
program.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record, and I also ask unanimous consent that the 
bill be available for other sponsors who wish to cosponsor it through 
the course of the day.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 929

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Technology 
     Transfer Act of 1977''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) federally sponsored research at nonprofit institutions 
     has not been adequately applied to commercial purposes in the 
     past;
       (2) small businesses have the entrepreneurial spirit and 
     business experience to apply research for commercial uses;
       (3) the partnership between small businesses and research 
     institutions will create more commercial uses for innovative 
     ideas that will spur the economy; and
       (4) although to date the Small Business Technology Transfer 
     program has produced quality research proposals, an 
     additional evaluation period is warranted before the program 
     is expanded or made permanent.

     SEC. 3. PURPOSES.

       The purpose of this act is to reauthorize the Small 
     Business Technology Transfer program for fiscal years 1998 
     through 2003 to allow for a more complete assessment of the 
     impact and effectiveness of the program.

     SEC. 4. SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM.

       (a) In General.--Section 9(n) of the Small Business Act (15 
     U.S.C. 638(n) is amended by striking paragraph (1) and 
     inserting the following:
       ``(1) Required expenditure amounts.--With respect to fiscal 
     years 1998, 1999, 2000, 2001, 2002, or 2003, each Federal 
     agency that has an extramural budget for research, or 
     research and development, in excess of $1,000,000,000 for 
     that fiscal year, may expend with small business concerns not 
     less than 0.15 percent of that extramural budget specifically 
     in connection with STTR programs that meet the requirements 
     of this section and any policy directives and regulations 
     issued under this section.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on October 1, 1997.
                                 ______