Friday, December 16, 2011

Congress Does Something Right: the SBIR Program is Reauthorized

What do  Symantec, Qualcomm, Genentech, DaVinci, iRobot and Enable IPC all have in common?

They have each benefited greatly from the US government's Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

Congress did a wise thing yesterday: they reauthorized the SBIR and STTR programs -- and even allowed for some expansion -- through 2017.

These programs, which began in 1982, provide funding for innovative ideas and products that can be used by the US government and/or for the direct benefit of its citizens -- e.g., military innovations, cures for diseases, advanced medical equipment, energy breakthroughs, etc.

In an age where Congressional approval hovers around 12% (and disapproval over 80%, according to the website Real Clear Politics), SBIR and STTR are examples of the US government doing something right. 

The idea is simple, and has been wildly successful: various government agencies identify needs they have, or needs they have seen in their respective areas.  Small businesses with ideas relating to the issues then submit proposals, which can turn into solutions for the government and products for the small business (e.g., the National Institutes of Health might provide funding for a small business that has a breakthrough in biomarkers for the early detection of cancer; or the Department of Defense might provide funding for a small business that has developed a lighter battery pack for soldiers).

Providing a relatively small amount of funding to develop these ideas is good for the government, which can then use them to its benefit, and it's good for the economy, because these ideas can become commercialized to benefit society as a whole.

Here's a good example: several years ago, the Department of Defense and the National Science Foundation provided about $1.5 million through several SBIR programs to a small company.  That company, Qualcomm, now has 17,000 employees and a market capitalization of $80 billion (read more about it here). 

Symantec, with 17,500 employees in 40 countries, also started with an SBIR grant.  iRobot started with SBIR funds from the Department of Defense.  SBIR success stories involving these companies, as well as Genentech, DaVinci, Balfour Technologies, Martek Biosciences and many others can be found at

Here at Enable IPC, we have experienced the programs' success first hand as well.  SolRayo, Enable IPC's subsidiary, recently completed work under a Phase I STTR award and has applied for a Phase II.  The award could lead to a major breakthrough in battery technologies. 

The formula for SBIR/STTR awards is simple.  The government uses experts to analyze proposals and suggest awards for a proof of concept or initial investigation to determine its feasibility -- this is designated as "Phase I".  If the Phase I effort is successful, awardee can apply for additional funds under "Phase II" to bring the idea to commercialization. 

The SBIR and STTR programs had been on life support, funded by short-term extensions for the past several years, until yesterday when Congress passed a full reauthorization through 2017.  They also have provisions allowing for the expansion of the programs over the course of the reauthorization.

So, let's recap: a program that benefits everyone has been reauthorized through 2017 by Congress and even expanded a little. 

It sounds like they actually can do some things right after all!

Read more about this in an opinion column at written by Rep. Sam Graves, Chairman of the House Small Business Committee:

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