Signals For An Upturn?

The Small Business High Technology Institute stands ready to mobilize the private sector and to stimulate the federal governemnt toward maximizing innovation.

Tweet

This is news for thinkers and doers. At the grass roots, there is the sense of an economic upturn -- not in every place or in every line of business, but in enough places and businesses to be noticeable. I have seen and heard about the return of risk taking in Waltham, Mass.; Decatur, Ill., Portland, Oreg.; Chandler, Ariz.; and Great Falls, Mont. If it is really there, it may be advance notice from the grass roots to Wall Street and Washington.

Three news items within two weeks clarify what our long-range problems and potentials are. First, California's Commission on Industrial Innovation made 50 recommendations based, in part, on a report from the Stanford Research Institute. Said the report: "At no time in history has there been a broader range of new inventions and technologies poised for commercial development and diffusion. . . . The range of emerging or fastgrowing technologies is broad, diverse, and advancing with increasing rapidity. Similarly, the range of applications of these technologies is continuously expanding. There is as much invention in the applications area as there are in the technologies themselves."

Second, 15 business and community leaders from 14 states -- individuals who obviously agree with the Stanford forecast -- formed the Small Business High Technology Institute a week after the California report was released. "We have founded this institute," said its chairman, Roger Hill, of Racine, Wis., "as a direct response to the expressed desire of the President and the Congress that this program be carried on by a vigorous partnership of government and small business. In signing [the Small Business Innovation Development Act] five weeks ago, the President said that 'small business is a tonic for what ails this country. By passing and signing this Act we are showing our resolve to unleash this most innovative sector. The Act recognizes that we in government work in partnership with small business.' " He hopes to draw into the institute's program people from all over the country, including people who have founded and built growth businesses, such professionals as engineers, bankers, accountants, and lawyers; and venture capitalists who work most closely with technology entrepreneurs

No one doubts that we have a long, hard road to recovery still ahead. Peter Passell, writing that same week in The New York Times, said it well:

These are not times that breed optimists. After a decade of economic stagnation, the American standard of living has slipped to 11th in the world, well below those of northern Europe. Autos and steel, the industries on which the postwar expansion was based, are in steep decline. Our road, bridge, mass-transit, and water systems are literally collapsing. Our banks are loaded with the debts of overdeveloped companies and underdeveloped countries. Our energy supplies are vulnerable to the whims of desert nomads. Our farmers rely on our enemies to buy their surplus. Millions can't find jobs; millions who have them don't bother paying taxes on their earnings.

It is easy to find hard statistics to back Passell's assertions. And there is more he doesn't say. At this writing, for example, we are losing about 600 business enterprises a week through bankruptcies. And I estimate that 6 to 10 times that number of companies are simply paying their bills and shutting their doors.

The nation's task is not limited to putting 10 million Americans back to work. We have to start the economy growing again, we need to add perhaps 15 million more jobs in the next 10 years. Without a noninflationary, full-employment economy, there can be no balanced federal budget. Without a massive national retraining effort there will be no revolution in skills to equip our management and labor forces to compete in tomorrow's fast-track, high-tech economy.

But formation of the Small Business High-Technology Institute underscores that passage of the Small Business Innovation Act this past summer may have good ripple effects beyond its direct intent. The program set in motion by the act directs nine federal agencies that spend more than $100 million annually on research and development to launch small business programs, beginning on October 1, 1982. In its first year, each agency must set aside not less than 0.2% of its extramural R&D budget for small business R&D. (The one exception is the Department of Defense, which must set aside 0.1%.) Over the next five years, the set-aside requirement for all of these agencies will rise to 1.25%.

 1 | 2 | 3  NEXT