Washington, DC – U.S. Sens. Cory Booker (D-NJ), Kirsten Gillibrand (D-NY), Patty Murray (D-WA), Chris Coons (D-DE), and Gary Peters (D-MI) today introduced the Scale-Up Manufacturing Investment Company (SUMIC) Act of 2015, legislation that increases access to capital for entrepreneurs looking to scale-up and commercialize their advanced manufacturing innovations.
“Small businesses are the backbone of the U.S. economy and a tremendous engine for innovation and job growth,” Sen. Booker said. “But small manufacturing firms often struggle to find the capital to finance expansion plans and develop and implement new technologies that can help their businesses grow and create jobs. While we are falling short, our competitors are investing in American home-grown advanced manufacturing firms, and in many cases moving their high-quality jobs and operations overseas. To remain competitive and keep innovative technologies and capabilities in the U.S., the federal government must partner with the private sector to increase access to capital for all entrepreneurs. This bill invests in the potential of entrepreneurs in the advanced manufacturing sector by providing them with the funding they need to scale-up and commercialize new technologies and create jobs for Americans.”
“If we want our economy to grow and create more jobs, we need to give small businesses the tools they need to turn their innovative ideas in new business opportunities, expanding their manufacturing operations instead of being forced to outsource that work in order to stay competitive,” Sen. Gillibrand said. “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.”
“If we want to support sustainable economic growth in the U.S., we need to do it from the middle out, not the top down—and we need to make sure our emerging manufacturing companies can access the capital they need to grow and succeed,” Sen. Murray said. “I’m proud to support this bill to support public-private investment partnerships and assist small and mid-sized manufacturers so that they can continue to innovate and expand their manufacturing base to create more good-paying jobs for workers in Washington state and across the country.”
“America’s small and medium-sized companies are among the most innovative in the world and are critical drivers of our economy,” Sen. Coons said. “Too often, though, young manufacturing companies can’t access the same resources available to large, established firms, forcing them to move manufacturing and jobs overseas to secure the investment they need to thrive. We must do everything we can to help these innovative companies grow and prosper here at home so they can create American jobs and grow our economy. I’m proud to join Senator Booker in this effort and support his Scale-Up Manufacturing Company Act of 2015.”
“Access to capital is a significant obstacle for startups and entrepreneurs who want to grow, commercialize and launch their innovative products,” Sen. Peters said. “This new program at the Small Business Administration will encourage private investment to help our advanced manufacturing sector thrive and create good-paying middle class jobs in Michigan and across the country.”
Lack of access to capital pushes emerging manufacturing entrepreneurs to move their advanced manufacturing technologies abroad to other nations that provide financing opportunities for small businesses looking to commercialize their innovations. Not only does this migration drain the United States of innovative manufacturing capabilities, it also causes us to lose out on high-paying, high-skilled manufacturing jobs that accompany the commercialization of new ideas. We must do more to keep these jobs and opportunities for innovation here at home.
Not only do small businesses employ more than 50 percent of the U.S. workforce, they have also generated over 65 percent of net new jobs since 1995. Small businesses have also proven themselves to be hotbeds of innovation. To survive in today’s increasingly competitive economy, entrepreneurs often must expand quickly, growing on their own or in collaboration with larger firms to help scale-up their innovations into commercialized products which often require highly complex, advanced manufacturing capabilities that demand more time and capital to scale than nonproduction firms. However, our nation’s financing mechanisms have not kept up with this changing landscape and make it difficult for these companies to find the capital needed to demonstrate viability of their technology at a commercial scale.
The SUMIC Act creates a 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 invest in securities and issue debentures to raise capital that would then be invested into emerging manufacturers’ businesses. Any fees, interest, and profits received from the debentures and securities investments would offset the costs of the program
The SUMIC Act is supported by the following organizations:
Information Technology and Innovation Foundation
National Venture Capital Association
Association for Corporate Growth
Small Business Investor Alliance
New Jersey Manufacturing Extension Program
Rutgers University’s Business School in Supply Chain Management
New Jersey Business Incubation Network
NJ Innovation Institute
New Jersey Business & Industry Association