Senator Gillibrand Announces New Legislation To Help Expand Small Businesses, Boost Manufacturing
Legislation Increases Access to Capital & Helps Smalls Businesses Create & Keep High-Paying, High Skilled Manufacturing Jobs in the U.S.
Greece, NY – Standing at Intrinsiq Materials, U.S. Senator Kirsten Gillibrand today announced new legislation to help small businesses expand their advanced manufacturing operations and create and keep high-paying, high skilled manufacturing jobs in the United States. Gillibrand introduced the Scale-Up Manufacturing Investment Company Act of 2015, a bill that would increase capital for entrepreneurs and small businesses looking to scale-up and commercialize their advanced manufacturing and innovation operations.
Earlier this month, Gillibrand hosted a series of round tables across New York with the Economic Development Administration to hear from community leaders and entrepreneurs about ways to help grow businesses in the state. This is second bill Gillibrand has introduced aimed at bolstering manufacturing; in March, she announced the bipartisan Manufacturing Universities Act (S.771) to enhance advanced workforce training for the 21st century economy.
“With the highly anticipated photonics site, Rochester is poised to be a national manufacturing hub and we have to put the resources in place to help develop the innovation economy,” said Senator Gillibrand. “The Scale-Up Manufacturing Investment Company Act will provide critical resources and opportunities for local entrepreneurs and small businesses to bring their innovations to market, and ensure that new technologies are made here in America, creating more jobs and growing our economy.”
“Intrinsiq Materials, a U.S. Electronic Manufacturing start-up, has benefited from the support and investment of U.S. based funds, allowing growth, employment, and manufacturing in the U.S. We are so pleased to see an effort to increase access to capital which is so critical to small businesses,” said Robert Nead, CEO Intrinsiq Materials Inc.
“As a fund with extensive experience in investment in high tech manufacturing companies in New York State, we are excited to support increasing access to capital that will allow these types of companies to continue to grow here,” said Jennifer Tegan, Partner, Cayuga Venture Fund.
American manufacturers support an estimated 17.6 million jobs in the United States and account for 12 percent of U.S. GDP. Manufacturing also has a higher multiplier effect than any other sector, meaning job creation in manufacturing has an increased impact on the local economy. At the same time, small businesses employ more than 50 percent of the U.S. workforce and have generated over 65 percent of net new jobs since 1995 and are hotbeds of innovation.
Yet many small businesses looking to expand their innovation and manufacturing operations cannot get access to the capital they need to do so. As a result of this lack of access to capital, many small innovative businesses that are beginning to succeed and need to expand their manufacturing operations in order to continue to grow are forced to move their ideas and jobs abroad to our international competitors who can provide the financing options these small businesses need to manufacture and commercialize their innovations. For example, a study of manufacturing technology-intensive start-ups licensed by the Massachusetts Institute of Technology found that almost all that scaled up into commercial production did so overseas largely because of far more attractive capital and investment opportunities for manufacturing start-ups. The lack of access to capital not only forces small American business to move their innovations overseas, but it also means New York loses out on high-paying, high-skilled manufacturing jobs that are created when these small businesses expand and commercialize their products.
Gillibrand’s legislation would help these small businesses expand and create jobs here instead of overseas by giving them access to the capital they need to scale-up and commercialize their innovations. The bill creates a loan program that allows private investment firms to leverage funds provided by the government to help emerging manufacturers commercialize their products. The program, modeled on the Small Business Administration’s (SBA) Small Business Investment Companies (SBIC) program, would allow approved participating investment firms to raise capital that would then be invested into emerging manufacturers’ businesses. Any fees, interest, and profits received from the investments would be used to offset the cost of the program.
Gillibrand introduced the legislation on August 4th along with U.S. Senators Corey Booker (D-NJ), Patty Murray (D-WA), Chris Coons (D-DE) and Gary Peters (D-MI). This legislation is supported by the Information Technology and Innovation Foundation, National Venture Capital Association, Association for Corporate Growth, and the Small Business Investor Alliance.
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