In this lesson, you will learn:
- What are the SBIR and STTR programs?
- Why did the government establish these programs?
- How much money is available through these programs?
The Small Business Innovation Research (SBIR) program is a federal government program administered by 11 federal agencies for the purpose of helping provide early stage research and development funding to small technology companies (or individual entrepreneurs who form a company). Solicitations are released periodically from each of the agencies and present technical topics of R&D, which the agency is interested in funding. Companies are invited to compete for funding by submitting proposals answering the technical topic needs of the agency’s solicitation. Each of these 11 agencies have various needs and slightly different versions of the SBIR program.
Since its enactment in 1982 as part of the Small Business Innovation Development Act, the SBIR program has helped thousands of small businesses to compete for federal research and development dollars. Their contributions have enhanced the nation’s defense, advanced health care and welfare, protected the environment, improved our manufacturing capability and improved our ability to manage information and manipulate data. The current SBIR budget is more than $2 billion.
Since inception, approximately $30 billion in SBIR awards have been granted to U.S. businesses.
SBIR is highly competitive, funds small business to mature their technological innovations and provides the incentive to profit from its commercialization. Funding qualified U.S. small businesses helps meet the nation’s R&D needs, high-tech innovation is stimulated and the United States gains the economic benefits of job creation while meeting each government agency’s needs.
Did you know?
Policy Directive (as written in the legislation) – Section 1 Purpose …(c) The statutory purpose of the SBIR Program is to strengthen the role of innovative small business concerns (SBCs) in Federally-funded research or research and development (R/R&D). Specific program purposes are to: (1) Stimulate technological innovation; (2) use small business to meet Federal R/R&D needs; (3) foster and encourage participation by socially and economically disadvantaged SBCs, and by SBCs that are 51-percent owned and controlled by women, in technological innovation; and (4) increase private sector commercialization of innovations derived from Federal R/R&D, thereby increasing competition, productivity and economic growth.
The Small Business Technology Transfer Program (STTR) is a highly competitive program that reserves a specific percentage of federal R&D funding for awards to small businesses and nonprofit research institution partners. Small business has long been where innovation and innovators thrive. But the risk and expense of conducting serious R&D efforts can be beyond the means of many small businesses.
Conversely, nonprofit research laboratories are instrumental in developing high-tech innovations. But frequently, innovation is confined to the theoretical and does not leave the laboratory for real-world application.
The goal of the STTR program is to combine the strengths of both entities by applying small business entrepreneurial skills to high-tech research efforts. The resuting technologies and products are transferred from the laboratory to the marketplace. The small business profits from the commercialization, in turn, stimulate the U.S. economy.
STTR requires a partnership with a research institution such as a university, federal lab, or private research institute.
Small business is widely recognized as the engine of innovation in America and the catalyst for developing ground-breaking technology and novel products. The U.S. Small Business Administration’s (SBA) Office of Advocacy reported that small businesses employed just more than half (53-percent) of the U.S. workforce, more than one-third (36-percent) of the degreed engineers and scientists and accounted for 14-percent of all non-federal expenditures of R&D in the U.S. Approximately 1.45 million people are employed with SBIR firms. About one in nine firms have attracted equity financing. Of the current SBIR-funded firms, the government has funded $3 billion, which has attracted $35 billion in equity funding.
SMALL BUSINESS ADMINISTRATION’S (SBA) ROLE
The U.S. Small Business Administration plays an important role as the coordinating agency for the SBIR program. It directs the various agencies’ implementations of the SBIR/STTR program, reviews their progress, and reports annually to Congress on its operation. SBA is also the information link to SBIR. SBA collects solicitation information from all participating agencies and publishes it quarterly in a Pre-Solicitation Announcement (PSA). The PSA is a single source for the topics and anticipated release and closing dates for each agency’s solicitations.
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