Ernst Works to Prevent China and Russia from Exploiting Small Business Research Programs

WASHINGTON—U.S. Senator Joni Ernst (R-Iowa), a senior member of the Senate Committee on Small Business and Entrepreneurship, is working to prevent China and Russia from exploiting Small Business Administration (SBA) programs intended to support research and development for small businesses in Iowa and across the country.

As the Senate debates legislation related to competitiveness with China, Ernst is leading an effort to reject reauthorization for the Small Business Innovation Research and Small Business Technology Transfer programs unless reforms are enacted to prevent Chinese and Russian shell companies from accessing these programs.

“We can and should take serious steps to compete with the Chinese Communist Party, but pouring billions of dollars into research and development with little oversight or accountability is not the answer. Hardworking Iowans’ tax dollars should never be used to subsidize Chinese and Russian shell companies, particularly at the expense of American small businesses, and this effort will defend against foreign influence within these programs and protect our national security,” said Senator Ernst.

Background:

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide critical innovation funding to American small businesses. While this program is celebrating 40 years in business, SBIR continues to be impacted by foreign adversaries that exploit the program’s lack of controls to stop the transfer of new technology developed by America’s innovators.

China has become one of the largest beneficiaries of the SBIR and STTR programs because of the lack of adequate oversight. China and other foreign adversaries have been establishing shell companies, acquiring beneficial ownership in American enterprises, selecting key awardee personnel for talent recruitment, and other state directed technology acquisition efforts.

Ernst’s measure would prevent Congress from reauthorizing the program without significant reforms to combat adversarial foreign influence in these programs and to protect our national security.

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