[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] THE INNOVATION PIPELINE: FROM UNIVERSITIES TO SMALL BUSINESSES ======================================================================= 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 -------------------------------------------------------------------------------------- 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.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]