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trade and international trade activities. So, what we do is we work 

 very closely with our economic development office of international 

 trade to make available the list, so that when they are out on trade 

 missions or working with foreign nations, that they can make firms 

 that are interested in new technology and high technology firms 

 aware of the firms that we have working in our SBIR and STTR 

 Programs. 



So we do exchange that information and we encourage the SBIR 

 firms to utilize the other services of the SEA. That is where we 

 spend a great of our time and effort right now in trying to further 

 integrate the other services that are provided and make it available 

 to participants of the program. 



Chairman TORKILDSEN. Would anyone else like to comment in 

 that area? The final subject that I would like everyone just to deal 

 with is one that several of you mentioned in your testimony and 

 I mentioned in my opening remarks is that we are looking at de- 

 clining budgets all around. I think most people accept that as re- 

 ality. There has been some suggestion of changing the percentage 

 that has been set aside, but could all of you just walk through what 

 you think the appropriate balance would be, still targeting funds 

 for small business under SBIR where incubation of great tech- 

 nologies happens quite oflen, but without putting in unrealistic 

 constrain on what our scarcer dollars in virtually, or what I think 

 will be every department of the U.S. Government. Who would like 

 to start? 



Dr. Norwood. I will start. In 1992, a NASA representative testi- 

 fied before a committee. Small Business Committee, and this issue 

 was raised then. Essentially the NASA view was that we would 

 prefer to keep the set-aside percentage rate at the level that it was. 

 The upcoming and ongoing budget cuts and reductions to the 

 NASA, in particular R&D Program, it puts severe strain on our 

 ability to do R&D. Consequently, if the rate, for example, that is 

 planned to go up in 1997 from 2 percent to 2.5 percent, if that in- 

 creases is, in fact, going to occur, it is going to take those resources 

 that would have gone into programs and put them into SBIR. 



We do support SBIR and believe it is an important and valuable 

 program, but the issue is one of balance and whether or not you 

 wanted to put more into SBIR when your overall R&D budget is 

 decreasing is an issue that we need to revisit. So, if the opportunity 

 arises, we would like to see that change in the planned increasing 

 rate revisited. 



Chairman ToRKILDSEN. Mr. Glover, you might want to say some- 

 thing on that. 



Mr. Glover. Yes, I would be delighted to share a contrary view. 

 Small businesses represent about 50 percent of the gross domestic 

 product in the United States. Certainly the majority of innovations 

 come out of small businesses. Scientific costs at large firms and 

 universities and Government labs is several times higher than at 

 small businesses, so we are far more efficient at providing good 

 quality research at lower prices. 



I think as we see that number shrink, it is important that we 

 look to see if we cannot expand the percentage that small business 

 has, provided that we do not push it beyond where the quality is 

 there. 



