Encouraging Small Business Innovation Act

Floor Speech

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Mr. ESPAILLAT. Mr. Speaker, I want to thank the new Chair of the House Small Business Committee Congresswoman Nydia Velazquez for her leadership on this issue and for working with me during the 115th Congress when the Encouraging Small Business Innovation Act first passed in the House. I also want to congratulate Congressman Rouda on his success in moving this issue forward in the 116th Congress and thank him for his commitment to spur innovation and address the issue of underrepresentation of minorities in the small business community.

The Encouraging Small Business Innovation Act is thoughtful and constructive legislation. Even in this modern day, we have heard from many minority and women-owned small businesses that they continue to face institutional challenges to growing their businesses. A 2013 report commissioned by the Small Business Administration found that women-owned small businesses do not have equal access to capital from the private sector as compared to their male peers. Furthermore, the Small Business Administration's own Office of Advocacy has said that, ``There are fewer minority-owned businesses representing high-patenting industries than in all industries.''

Through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, the Small Business Administration works with partners in eleven federal agencies ranging from the Department of Agriculture to NASA to support small businesses, especially those that are owned by members of identified disadvantaged communities. While these programs have made some headway in encouraging innovation and entrepreneurship among women and many minority communities, this vital investment can only be used for research and development. There is no consideration given for testing and evaluation, an extremely resource-heavy task for small businesses. What good is a product or a method when you don't know if it works effectively or efficiently? The Small Business Innovation Act addresses this problem by including ``testing'' and ``evaluation'' among the activities for which SBIR and STTR applicants can seek funding. This will empower more underrepresented entrepreneurs to develop new products, expand upon new ideas, and gain respected external validators.

The Small Business Innovation Act also includes a number of other provisions that I believe will significantly help expand entrepreneurship in underserved communities. For example, the bill incentivizes mentorship with previous SBIR- and STTR-recipient companies that have found success in the programs to impart their knowledge and share their experience. It also welcomes investment by Small Business Investment Companies into SBIR and STTR projects, which will increase the investment of capital from more diverse streams of funding. The bill also prioritizes data collection and reporting, ensuring that evaluation of the program leads to increased efficiency and additional participation. Finally, and most importantly, the bill makes explicit commitments to increasing the participation of underserved populations in the small business community.

So again, I thank my colleague, Mr. Rouda, and Chairwoman Velazquez for taking up this important cause and I congratulate them both on a job well done.

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