A mere $10,000 hardly seems meaningful in the realm of high-tech research and development, but state Assemblyman David Buchwald thinks that is exactly what small businesses need to spur innovation.
The White Plains lawmaker recently won legislative approval for a voucher program for small businesses. If the governor signs it into law, he said, money could start flowing in 2018.
“It’s a relatively small incentive,” Buchwald said, “but it will get folks to focus on ideas and dreams and make them a reality.”
Buchwald believes that new technology is the key to job growth. Small businesses have lots of great ideas, but typically do not have research budgets. Colleges and universities and research institutions have the expertise and are often looking for projects. The idea, he said, is to link the two groups.
The notion that small incentives can produce big results, he said, has been tested and validated in several countries. A program in Holland, for instance, claims that eight of every 10 vouchers have produced something and 80 percent of new research and development jobs since 2005 can be attributed to vouchers.
Buchwald, a Democrat, first introduced the voucher bill in 2015 but it went no further than the Assembly, where Democrats are the majority party. This year Rich Funke, a Republican from Fairport, sponsored the bill in the Republican-controlled Senate.
It got strong bipartisan support, passing in the Assembly by 139 to 3 and in the Senate by 61 to 1. It has not yet been submitted to Gov. Andrew Cuomo, but Buchwald is optimistic that he will sign it into law.
The program would be administered by Empire State Development Corp. Businesses with up to 100 employees would be eligible to submit proposals.
Empire would select pitches on the strength of the ideas. In rare instances, for exceptional applications, the agency could award up to $50,000.
Businesses must match vouchers dollar-for-dollar with their own money. “It’s important that they have skin in the game,” Buchwald said.
Ultimately, the money would go to the research institutions working with those small business.
Buchwald didn’t want to constrain the vision of entrepreneurs, so the legislation is open-ended on what exactly the money can be used for. Proposals can be submitted for apps, prototypes, consumer products, engineering services, “anything under the rubric of innovation,” he said.
He expects vouchers to create new R&D jobs and new products and services. But the money is not even the most important aspect of the program.
By linking small businesses with research institutions, Buchwald said, New York will create a marketplace for exchanging information and stimulating innovation. Each side of the transaction will become bigger and stronger than if left alone and the state economy will grow.
The legislation has one significant hitch. It does not provide for funding.
It will be up to Empire to allocate vouchers from existing funds. If the agency chooses to do so and if it implements the program correctly, Buchwald said, it will justify itself.
He would like to see the state commit $10 million to innovation vouchers, and he plans to ask for funding in next year’s state budget.
Mere $10,000 vouchers, he said, “have the potential for improving many lives across New York state.”