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and the research phase, and which then may commercialize the resulting 

 product or technology. The percentage of research and development 

 dollars set aside for small business increases every two years, from 1.5% 

 in 1993 and 1994, to 2% for 1995 and 1996, and not less than 2.5% 

 thereafter. 



In 1992, Congress added a pilot program entitled the Small Business 

 Technology Transfer program, which directs small businesses which wish 

 to apply for STTR grants to partner with a nonprofit research institution, 

 normally a university, with the small business doing not less than 40% of 

 the work. We will be interested in hearing how the pilot has been 

 proceeding, and if there is any measurable difference between the work 

 product small businesses generate under SBIR as opposed to that which 

 they generate under STTR. 



SBIR has, by all accounts, been a tremendous success. Through 1994, 

 almost $5 billion in awards has been made, funding 33,000 projects out of 

 the 215,000 proposals which agencies have received. In 1995, it is 

 expected that almost a billion dollars of Federally-sponsored research, 

 funding 5500 projects, will be awarded. These projects range from neural 

 network computers to natural insect control compounds to tumor detection 

 drugs. 



But despite this success, the program must be examined and several 

 critical questions asked. How can we continue the growth of this program 

 with ever-shrinking defense and other dollars? What effect will this 

 Congress' efforts to reduce the deficit have on extramural research? How 

 can we increase the numbers of small businesses which participate and 

 which are successful in getting awards? How do we guarantee that these 

 companies' intellectual property rights are preserved and protected? 



We hope that these and many other questions will be answered today. 



At this time, I will yield to the ranking member, Mr Poshard, for an 

 opening statement. 



