Economy & Business

Small-Business Moonshot: How to Revive the U.S. Economy

A Wall Street sign hangs outside the New York Stock Exchange in Manhattan, N.Y., December 28, 2016. (Andrew Kelly/REUTERS)
U.S. firms have shifted their focus from investment in tangible, real assets to prioritizing financial returns to investors. Let’s reverse that trend.

Fifty years ago last week, the world watched as America’s giant leap for mankind reached its zenith in the form of Neil Armstrong and Buzz Aldrin taking their first steps on the moon. The Apollo lunar landing represents a high point for all of us, undoubtedly the greatest technical achievement in human history. It was also a moment that exhibited America’s ability to achieve the seemingly impossible when our commitment to national development is strong.

The first moon landing remains an enduring symbol of American ingenuity. Indeed, it took an entire nation to put man on the moon, and small businesses were vital to that success.

Through partnerships with NASA, small and medium-sized firms were tasked with researching and developing the necessary components to enable Americans to launch safely to the moon and back. In 1965, NASA awarded a small company, ILC Dover, with the contract to make the program’s spacesuits, a role it continues to fulfill today.

Many of these businesses’ inventions later made their way into American hands, homes, and workplaces. The Avco Corporation designed a heat shield to protect astronauts from burning up during reentry into Earth’s atmosphere. After its successful implementation, NASA hired Avco to invest and expand its shield technology into other applications, leading to the creation of the world’s first intumescent epoxy material, which has been transformed to prevent high-rise buildings from catching on fire.

Similarly, NASA contracted with the Celanese Corporation to produce a textile that would not melt or combust when exposed to high temperatures for use in spacefaring vehicles and flight suits. That partnership resulted in a clothing material that firefighters, welders, and other workers wear to protect themselves against the extraordinary on-the-job hazards they encounter every day.

Many Americans see the national unity and political imagination that culminated in the Apollo missions as a product of a bygone era. They are not wrong. Over the past several decades, the American economy has undergone a precarious migration away from traditional business development, as firms shift their focus from investment in tangible, real assets to prioritizing financial returns to investors.

Research spending has plummeted since America’s last visit to the moon, and the interim economic consensus has allowed far too many advanced manufacturing jobs to slip away. Instead of devoting resources to longer-term development, too many businesses are risk-averse and instead look for short-term payoff. It is the type of narrow thinking that chokes innovation and delays our next groundbreaking discovery.

We have an obligation to shift gears and get things back in order.

NASA itself is taking a big step to stem the tide, with its decision to invest over $45 million in these types of businesses, as part of its Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program. Beneficiaries of the partnerships include firms such as Made In Space, which is developing massive 3D printers to manufacture structures in microgravity. It just received a new contract to build solar arrays in space. Iris AO, which produces the ultra-precise mirrors used by NASA to detect planets far outside our solar system, is another. Closer to home, Black Swift Technologies has created a small, unmanned aircraft system, which can determine soil moisture and improve crop productivity.

These are the small businesses pulling the future of American space exploration into near-Earth orbit. As they supply NASA with the technology it needs, they also give us a compelling example of how our government can collaborate with and support private firms to spur research and innovation.

Reauthorizing the Small Business Act (SBA), which has not been comprehensively updated since 2000, and the constellation of programs it authorizes is the next critical step. By boosting SBIR and STTR, the renewed act would ramp up the amount of federal funding for research and development available to small businesses, all at no cost to taxpayers. Reauthorization means strategic investment in high-growth, high-potential firms, empowering them to devote resources to research and put the fruits of those efforts into the market.

Using the SBA to help our businesses flourish is not just one option at our disposal but a necessary part of boosting our national competitive advantage.

At home and in the stars, our nation’s economic destiny is driven by ingenuity in the production of real assets — polymer fabrics, heat shields, and extrasolar mirrors. The next American to step foot on lunar soil — or Mars, or even beyond — will do so thanks to our small businesses and the raft of technologies they have designed, invested in, and assembled on the nation’s behalf.

Marco Rubio, the senior U.S. senator from Florida, is the chairman of the Senate Committee on Small Business and Entrepreneurship.

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