When I was younger I was amazed at how sophisticated and advanced our federal government was in regard to science and technology and space travel in general. What I came to learn was the vast majority of advancements in space technology were provided by the private sector, many of which were small businesses. As we celebrate the 50th anniversary of America landing on the moon, we can also look back upon those ideas and inventions that helped us put the first man on the moon.
Through partnerships with NASA, small and medium-sized firms were tasked with researching and developing the necessary components to enable Americans to launch safely to the moon and back. In 1965, NASA awarded a small company, ILC Dover, with the contract to make the program’s spacesuits, a role it continues to fulfill today. The function of the federal government was not to manufacture products, but source them out to the most qualified businesses in the private sector. An image we all remember is the countdown to liftoff, watching the scientists and engineers in command control organize the final steps to launching. What we didn’t see were all the American businesses that built pieces and parts to allow this event to happen.
Many of the firms that produced products for NASA eventually found their way into the public marketplace, where there goods and services were sold to citizens, not astronauts. A much bigger target market. The Avco Corporation designed a heat shield to protect astronauts from burning up during reentry into Earth’s atmosphere. They would go on from this to create the world’s first intumescent epoxy material, which has been transformed to prevent high-rise buildings from catching on fire.
Perhaps this would never have happened if it had not been for NASA contracting with the private sector. Similarly, NASA contracted with the Celanese Corporation to produce a textile that would not melt or combust when exposed to high temperatures for use in spacefaring vehicles and flight suits. That partnership resulted in a clothing material that firefighters, welders, and other workers wear to protect themselves against the extraordinary on-the-job hazards they encounter every day.
The current environment for business and its relationship with NASA and other government entities has floundered since our moon landings. Corporate mission statements have always been to increase the net worth of shareholders, but of recent decades it has forced companies to be more parochial in their quarterly financials, with the pressure from stockholders to perform in the short run. Companies are more likely to place emphasis on projects that will return short term benefits for shareholders at the expense of longer term development. This has been one reason why pundits like Warren Buffett and Bill Gates have been proponents of eliminating the quarterly corporate SEC filings (10Q).
Senator Marco Rubio calls for reauthorizing the Small Business Act (SBA), which has not been comprehensively updated since 2000, and the constellation of programs it authorizes is the next critical step. Rubio is right stating that public contracts to private business will not only achieve federal macroeconomic goals, but will again induce small business to produce products for the long term. Rubio adds, “The next American to step foot on lunar soil, or Mars, or even beyond, will do so thanks to our small businesses and the raft of technologies they have designed, invested in, and assembled on the nation’s behalf.”