SME Policy Design and Evaluation: Insights from Research on Entrepreneurship and Innovation Winslow Sargeant, Ph.D. Vice President of Data and Policy, ICSB Email: wsarge2010@me.com October 13, 2016
Background Education: Ph.D., Electrical Engineering, Univ. of Wisconsin-Madison, Kauffman Fellow (Class 11), Adj. Professor, UPenn (2001-2005) Private Sector: Member of the Technical Staff, IBM, AT&T Bell Labs, Lucent, MIT Lincoln Labs, General Electric, Venture Capital (Partner) Co-Founder: Aanetcom (acquired by PMC-Sierra), Silatronix, and S&T, LLC National Science Foundation: Small Business Innovation Research Program Official (2001-2005) (invested more $50m in 300 early-stage companies) US Small Business Administration: Boards: 6 th Chief Counsel for Advocacy (2010-2015), Office of Advocacy, Nominated by President Obama, Unanimously confirmed by US Senate (2011). Independent representative of 28M SMEs. IEEE (2002-2010), WARF, Northeastern University, Stevens Inst. of Tech, NSF (2005-2010), Silatronix, Pattern Insight, MyQVO 2
Government vs. Private Sector Constructive partner or Tipping the scale? 3
US Constitution, Article 1, Section 8. The Congress shall have the power:... To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. In 1790, Patent Act established (under which the Secretary of State and Executive signed off on patents). On July 13, 1790, the first U.S. Patent was issued to Samuel Hopkins for an improvement in the making of Pot as and Pearl ash by a new Apparatus and Process. The patent was signed by then President George Washington. Patents are a property right issued by the United States Patent and Trademark Office (USPTO) to inventors applicable within the U.S., it territories, and possessions. 4
Samuel F. B. Morse Invented Telegraph YEAR: 1836 US Patent # 1647 Made instantaneous, long range communication possible. System of wires stretched hundreds of miles. More Code was a special language used 5
Alexander Graham Bell Invented Telephone YEAR: 1876, US Patent # 174,465 Allowed for instantaneous communication between individuals from their own homes. Rapidly increased the flow of information between businesses. 6
Nikola Tesla Induction Electric Motor YEAR: 1894, US Patent # 512,340 Made electricity a commercially available power source. Used to power lighting and machinery. Revolutionized quality of life for people everywhere. 7
SBA Office of Advocacy The Federal Watchdog for Small Business Created in 1976 as an independent voice for small business Headed by the Chief Counsel for Advocacy Oversee agency compliance with the Regulatory Flexibility Act (RFA) (passed in 1980) requires federal agencies to assess the impact of their regulations on small business and consider less burdensome alternatives Added small business consideration to the rulemaking process Agencies prepare IRFA and FRFA (or certify)
Office of Advocacy s Primary functions Conduct Research on the Small Business sector of the economy Monitor and Report on Federal Agency compliance with the RFA Provide comments on proposed Rules Train Federal regulatory officials to assist them on complying with the RFA s provisions.
Importance to Small Businesses to The US Economy Source: U.S. Small Business Administration, Office of Advocacy. 10
The Starts and Stops of Small Businesses Source: U.S. Small Business Administration, Office of Advocacy. 11
Small Businesses Demographics Source: U.S. Small Business Administration, Office of Advocacy. 12
Prior to 1980 The title (ownership) to any invention created using federal funding was owned by the U.S. Government No uniform policy among federal agencies for the transfer of the invention into private sector commercialization Government controlled the patents Wouldn t grant exclusive licenses Separation of inventor from invention In 1978 Government owned over 28,000 patents but had licensed less than 4% Little incentive to develop any technology Inventions reported to the Government began to decline even though there was a boom in funding Source: U.S. Small Business Administration, Office of Advocacy. 13
Bayh-Dole Act 1980 http://biospectrumindia.ciol.com/content/topstory/10507072.asp Created uniform federal intellectual property policy Nonprofits and small business could elect title to inventions that were created in whole or in part with federal funding However, universities would have to agree to a set of duediligence requirements
Regulatory Flexibility Act of 1980 Applies to rules that must undergo notice and comment rulemaking under the APA or any other statute Agencies must determine whether the rule, if promulgated, would have a significant economic impact on a substantial number of small entities Small entities include small businesses, small non-profits, and small governmental jurisdictions
Why We Fund The SBIR program exists at 11 government agencies. Congress designated 4 major goals for SBIR (broadly) in the Small Business Innovation Development Act of 1982: Stimulate technological innovation in the private sector Use small business to meet federal R&D needs Foster and encourage participation by minorities and disadvantaged persons in technological innovation Increase private-sector commercialization of innovations derived from federal R&D
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Discovery to Commercialization Funding Ditch of Death NSF Grants Industry $ SBIR Investors University Discovery Development Commercialization Time
Analysis of Internet Sales Taxation and the Small Seller Exemption Source: U.S. Small Business Administration, Office of Advocacy. 19
Share of Total Estimated U.S. Online Retail Sales among the Top Retailers Source: U.S. Small Business Administration, Office of Advocacy. 20
State Sales Tax Collections as a Share of Total State Tax Revenues Source: U.S. Small Business Administration, Office of Advocacy. 21
Imported Entrepreneurs: Foreign-Born Scientists and Engineers in U.S. STEM Fields Entrepreneurship Source: U.S. Small Business Administration, Office of Advocacy. 22
SME and Stem workforce Source: U.S. Small Business Administration, Office of Advocacy. 23
STEM participants and SMEs Source: U.S. Small Business Administration, Office of Advocacy. 24
U.S. Foreign STEM Entrepreneurship Gap The U.S. Educational Edge Foreign-Educated STEM Grads Are Valuable Startup Employees Policy Implications Addressing High-Skilled Immigrant Underemployment Creating Post-Graduation Pathways to STEM Entrepreneurship. Supporting STEM Mentorship and New Venture Joiners. Expanding H-1B and F1/OPT Visa Programs Creating a New Startup Visa Overall Findings Expanding the E-2 Investor Visa to More Countries and to STEM Startups Source: U.S. Small Business Administration, Office of Advocacy. 25
Sensible Government Policy Matters!! 26
Thank you! Winslow Sargeant, Ph.D. Email: wsarge2010@me.com 27