Re: Proposal for Small Business IP program to create jobs

Mark Borgerson <mborgerson@xxxxxxxxxxx> wrote in
news:MPG.258c005a33c44ad98999c@xxxxxxxxxxxxxxxxxxxxxxxxxx:

In article <Xns9CDE184CB816jyaniklocalnetcom@xxxxxxxxxxxx>,
jyanik@xxxxxxxxx says...
Mark Borgerson <mborgerson@xxxxxxxxxxx> wrote in
news:MPG.258b16e72b5dec8598999a@xxxxxxxxxxxxxxxxxxxxxxxxxx:

In article <hfr9ng$iq9$1@xxxxxxxxxxxxxxxxxxxxxxxxxx>, raymond-
ohara@xxxxxxxxxxx says...

"Frogwatch" <dbohara@xxxxxxxxxxxxxx> wrote in message
news:10b43b88-55cd-4a49-a322-0be0be79576b@xxxxxxxxxxxxxxxxxxxxxxxxx
com ... I propose to use part of the returned TARP funds for a new
version of the Small Business Innovative Research (SBIR) program.
Under the SBIR program, every federal agency with a research
budget must give 3.5% of said research budget to the SBIR program.
It is intended to be for high risk, high payoff research that
solves a govt problem AND results in a commercial product. SBIR
is the largest source of start-up funding for such high risk
research in the USA and has been a success in spite of much abuse.
I propose a variation that unlike the SBIR that is a pure grant to
small business, will re-pay the govt funds. Basically, I propose
to make the Govt an =3Fangel=3F investor for small start-up
business ideas that are not yet patented but are protectable by
patents. This distinction over patents is necessary because I
know from personal experience that it is easy to cut the govt out
of SBIR patent rights by simply applying for the patent before
writing he SBIR proposal. Most of the funded projects will be
failures and this si expected. However, enough should be
successful so the resulting patents can be sold or licensed by the
govt. Such sales would occurr after giving the small business 7
years to develop the business resulting from the patent (the
patent would then have 14 years remaining) Like the SBIR program,
this would result in numerous small high technology start-ups but
it would be self sustaining because of the revenue from the
patents. It would only be available to businesses with less than
25 employees. As the major component of the idea is the resulting
patent, proposal reviewers would have to be familiar with patents
and able to do a preliminary patent search to make sure there was
no prior art. Like SBIR, it would be a 2 phase program. Phase I
would bea feasibility study and provisional patent application and
would take about 9 months and would be for about $100,000 (same as
for current SBIR Phase I). Phase II would be broken into 2 parts,
more R&D and then product development. The Phase II part could be
up to 36 months and might be for up to $1 million.
What would this cost? Well, 10,000 Phase I programs would cost $1
billion for the funding and probably another billiuon to
administer and would result in a minimum of 10,000 new jobs, very
efficient by federal job creation standards.

LOL! Reviewing 10,000 Phase I proposals probably requires 500 new
reviewers, so you can add those 500 jobs to the government
payroll.


I assume that 30% of the Phase I
programs would go on to Phase II and this would cost
$3,333,000,000 for the direct funding and double that for
administration by the government. We can safely assume that each
of these $1 million programs would employ 3 people too. IF you
want to expand this program, multiply by an appropriate amount.
This program will work because it actually produces something of
value that produces return on investment whereas most govt job
creation programs do not.
Thoughts?

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advocating socialism now Dave?



Mark Borgerson




what's the point of doling out TARP funds to small business start-ups
if the Government is just going to tax and regulate them to death?

the proposed healthcare tax and penalty provisions put a huge damper
on small businesses.Then just wait for the EPA regulating CO2 and
carbon(fossil fuels),and Obama wanting to raise gas prices to
$10/gal. (but slowly,so the frog doesn't hop out of the pot)

you won't see many new jobs created,nor current employers hiring,and
you will see more businesses closing or moving production to China.

The whole taxes vs jobs argument always puzzles me a bit. In every
company I've worked for, employee salaries and support costs have
been a pre-tax expense. Hiring someone new increases costs and
provides more deductible expenses---thus reducing taxes paid by the
company.

I really doubt that deductions make up for the increase in costs.

(Of course, the hired individual will pay taxes from the
salary.) It seems the real argument is: "If you raise tax rates, my
company will have to cut costs to maintain current profitability
levels and executive bonuses."


Guess how they "cut costs".... by cutting personnel.
They make fewer people do the same,or more work.
Or by not hiring as planned.

I suppose it is because Wall Street
is allergic to reduced profits, even if it means maintaining or
increasing the number of employees. That's probably not the reason
for small businesses---most of which are not exchange-traded
corporations. The major problem for small businesses isn't
taxes--
it's access to capital for expansion. The big banks just
aren't lending like they used to.


Mark Borgerson






--
Jim Yanik
jyanik
at
localnet
dot com
.

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