Ernst Pushes to Safeguard American Innovation From China

WASHINGTON – After releasing a bombshell report detailing how critical technology is vulnerable to espionage by the Chinese Communist Party, Senate Small Business and Entrepreneurship Committee Chair Joni Ernst (R-Iowa) detailed why Congress must pass her INNOVATE Act to protect and advance American innovation.

Ernst laid out how her bill to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs would cut red tape, ensure that funding goes to truly small businesses and startups, and strengthen protections against China’s attempts to steal taxpayer-funded intellectual property.

Watch Senator Ernst’s full remark here.

Ernst’s full remarks:

“Today’s hearing comes at a pivotal moment.

“America has consistently been at the forefront of technological innovation.

“Nonetheless, our adversaries — especially China — are working overtime to undermine us.

“Over the past 100 years, the United States of America has catalyzed the world’s most consequential technology breakthroughs.

“From putting mankind on the moon, to unlocking a whole new digital frontier, Americans didn’t just invent. We built.

“We turned those big dreams into real-world breakthroughs, securing a long and prosperous period of economic might and global leadership.

“But after a century of wins, we cannot become complacent.

“Over the past 20 years, those in power in Washington have looked the other way as China initiated a comprehensive industrial espionage strategy.

“They’re not hiding it either. The Chinese Communist Party, through its Made in China 2025 plan, has made crystal clear its goal to eliminate U.S. technological leadership in critical industries.

“We need to be more clear-eyed, folks. China desires nothing more than to surpass the United States technologically and militarily.

“They want to impose their authoritarian ideology on the world and destroy the West.

“If we want any shot at preserving America’s leadership and warfighting capabilities, we have to lock down our innovation pipeline.

“The truth is, America has left its door wide open, effectively inviting our adversaries to take advantage.

“As a result, sensitive industries have become vulnerable to exploitation, allowing countries like China to use well-known techniques— including talent recruitment programs— to steal our innovations.

“The CCP forces innovators across our vibrant startup economy to hand over trade secrets and intellectual property as a cost of doing business.

“They invest in American firms, not to help, but to scheme, snoop, and steal.

“The United States Trade Representative and FBI estimate intellectual property theft by China costs our economy between $225-600 billion per year.

“The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are no exception.

“In 2021, the Pentagon first sounded the alarm, revealing the pervasive exploitation of the SBIR program by foreign bad actors and recommended a foreign ties due diligence review process for applicants.

“That’s why, through the SBIR STTR Extension Act of 2022, I fought to establish a framework to identify the extent of foreign risk, vet each company coming through the doors, and stop awarding awards to malicious actors.

“It was a strong start, but it isn’t enough. Congress must take further action to secure the critical technologies being cultivated in these programs.

“In fact, my recent report on this subject showed that 64 percent of applications flagged for foreign risk were still eligible to receive taxpayer dollars. That’s unacceptable. I ask unanimous consent to enter this report into the record.

“We cannot afford to keep investing taxpayer dollars to develop and deploy our best homegrown technologies, while failing to safeguard them against theft by our adversaries.

“This is why earlier this year I introduced the INNOVATE Act.

“It would tighten our defenses, standardizing foreign ties due diligence in SBIR across participating agencies and giving agencies more muscle to claw back award dollars when our national security is threatened. It’s just common sense.

“Let me be clear, this is only a first step. The disturbing reality is that China is already conducting economic warfare in our homeland by targeting our farmland and critical infrastructure.

“If we want to win the next century and beyond, we must protect our innovators, our intellectual property, and the technologies that will shape our future.

“I am looking forward to hearing from our expert witnesses today on the scale of these threats and response measures for Congress to consider.”

###