Small Business Innovation Research

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Not to be confused with SBIRS.

The Small Business Innovation Research (or SBIR) program is a United States Government program, coordinated by the Small Business Administration, intended to help certain small businesses conduct research and development (R&D). Funding takes the form of contracts or grants. The recipient projects must have the potential for commercialization and must meet specific U.S. Government R&D needs.

The SBIR program was created to support scientific excellence and technological innovation through the investment of federal research funds in critical American priorities to build a strong national economy ... one business at a time.[1] In the words of program founder Roland Tibbetts: "to provide funding for some of the best early-stage innovation ideas -- ideas that, however promising, are still too high risk for private investors, including venture capital firms."[2] For the purposes of the SBIR program, the term "small business" is defined as a for-profit business with fewer than 500 employees, owned by one or more individuals who are citizens of, or permanent resident aliens in, the United States of America.

Funds are obtained by allocating a certain percentage of the total extramural (R&D) budgets of the 11 federal agencies with extramural research budgets in excess of $100 million. Approximately $2.5 billion is awarded through this program each year. The United States Department of Defense (DoD) is the largest agency in this program with approximately $1 billion in SBIR grants annually. Over half the awards from the DoD are to firms with fewer than 25 people and a third to firms of fewer than 10. A fifth are minority or women-owned businesses. Historically a quarter of the companies receiving grants are receiving them for the first-time.[3]

History[edit]

The program was established with the passing of the Small Business Innovation Development Act in 1982 to award federal research grants to small businesses. According to Rep. Sam Graves, (R-MO) the Chairman of the House Small Business Committee of the 112th Congress, the program originally had three main objectives

  • to spur technological innovation in the small business sector
  • to meet the research and development needs of the federal government
  • to commercialize federally funded investments. [4]

A fourth objective - to enhance the participation of women and socially or economically disadvantaged persons in technological innovation- was added at the time of the 2000 reauthorization.[5]

The program must be periodically reauthorized by the United States Congress, but reauthorization is generally included in each new budget. The program was re-authorized through FY2017 by the 2012 Defense Authorization Act (P.L.112-81).[6]

Research contracts/grants[edit]

The SBIR program agencies award monetary contracts and/or grants in phases I and II of a three-phase program:[7]

  • Phase I, the startup phase, makes awards of "up to $150,000 for approximately 6 months support [for] exploration of the technical merit or feasibility of an idea or technology."
  • Phase II awards grants of "up to $1 million, for as many as 2 years," in order to facilitate expansion of Phase I results. Research and development work is performed and the developer evaluates the potential for commercialization. Up to 2014 Phase II grants were awarded exclusively to Phase I award winners but in 2014 the DOD, NIH and Education are allowed to make "direct to Phase II" awards; NIH and DARPA (part of DOD) had active solicitations for this in the Summer of 2014.
  • Phase III is intended to be the time when innovation moves from the laboratory into the marketplace. No additional SBIR set-aside funds may be awarded for Phase III. "The small business must find funding in the private sector or other non-SBIR federal agency funding."

Each Federal agency with an extramural budget for R&D in excess of $100,000,000 must participate in the SBIR Program and reserve the following minimum percentages of their "extramural" R&D budgets for awards to small business concerns:

  • 2.5% of such budget in each of fiscal years 1997 through 2011;
  • 2.6% of such budget in fiscal year 2012;
  • 2.7% of such budget in fiscal year 2013;
  • 2.8% of such budget in fiscal year 2014;
  • 2.9% of such budget in fiscal year 2015;
  • 3.0% of such budget in fiscal year 2016; and
  • 3.2% of such budget in fiscal year 2017 and each fiscal year after.

A Federal agency may exceed these minimum percentages.[8]

In 2010, the SBIR program across 11 federal agencies provided over $2 Billion in grants and contracts to small U.S. businesses for research in innovation leading to commercialization. The company owns the intellectual property and all commercialization rights. Companies such as Symantec, Qualcomm, Da Vinci Surgical System, Jawbone, Lift Labs, Natel Energy and iRobot received critically important early-stage funding from this program.

Related programs[edit]

A similar program, the Small Business Technology Transfer Program (STTR), uses a similar approach to the SBIR program to expand public/private sector partnerships between small businesses and nonprofit U.S. research institutions. The main difference between the SBIR and STTR programs is that the STTR program requires the company to have a partnering research institution which must be awarded a minimum of 30% of the total grant funds.[9] As of 2014 federal agencies with external R&D budgets over $1 billion were required to fund STTR programs using an annual set-aside of 0.40%.[6]

The Small Business Technology Council, a member council of the National Small Business Association, hands out the Tibbetts Award annually "to small firms, projects, organizations and individuals judged to exemplify the very best in SBIR achievement."[10]

Federal and State (FAST) is a program of State-based business mentoring and assistance to aid small businesses in the preparation of SBIR proposals and management of the contracts.[1] It is more active in some states than others.

Initiatives[edit]

Rep. Mazie K. Hirono (D-HI) has proposed the `SBIR Enhancement Act of 2011' as HR 447 of the 112th Congress, which increases the funding for SBIR by increasing the funding tax from the original 2.5% up to 5%, raises the Phase 1 amount to $200,000 and provides for economic adjustments every five years.[11]

Participating agencies[edit]

As of September 2010, SBIR programs are in place at the following agencies:

References[edit]

  1. ^ a b "Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs at the NIDCR". Nidcr.nih.gov. 2011-03-25. Retrieved 2011-06-02. 
  2. ^ REAUTHORIZING SBIR: THE CRITICAL IMPORTANCE OF SBIR AND SMALL HIGH TECH FIRMS IN STIMULATING AND STRENGTHENING THE U.S. ECONOMY ROLAND TIBBETTS, Annex 3 in THE ROLE OF THE SBIR AND STTR PROGRAMS IN STIMULATING INNOVATION AT SMALL HIGH-TECH BUSINESSES HEARING BEFORE THE SUBCOMMITTEE ON TECHNOLOGY AND INNOVATION COMMITTEE ON SCIENCE AND TECHNOLOGY HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION APRIL 23, 2009 Serial No. 111–20, http://www.gpo.gov/fdsys/pkg/CHRG-111hhrg48735/pdf/CHRG-111hhrg48735.pdf
  3. ^ "Small Business Innovation Research". U.S. Department of Defense. 
  4. ^ Graves, Sam SBIR Reauthorization Opens Opportunities For Small Business http://www.cnbc.com/id/45697983/Opinion_SBIR_Reauthorization_Opens_Opportunities_For_Small_Business
  5. ^ SBIR Reauthorization Act 2000 (H.R. 5667 - Section 108)
  6. ^ a b "Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs". National institutes of Health. Retrieved 3 May 2014. 
  7. ^ a b c d e f g h i j k l Description of the Small Business Innovation Research Program (SBIR), U.S. Small Business Administration website, accessed 2010-09-16.
  8. ^ "Small Business Innovation Research (SBIR) Program Policy Directive". 24 February 2014. 
  9. ^ Garland, Eva (2014). Winning SBIR/STTR Grants: A Ten Week Plan for Preparing Your NIH Phase I Application. p. iv. ISBN 1494784440. 
  10. ^ [1][dead link]
  11. ^ http://thomas.loc.gov/cgi-bin/query/z?c112:H.R.447:
  12. ^ NIST SBIR Program page, accessed 02/15/2012
  13. ^ Garland, Eva (2014). Winning SBIR/STTR Grants: A Ten Week Plan for Preparing Your NIH Phase I Application. p. iv. ISBN 1494784440. "The National Institutes of Health (NIH) is the second largest SBIR/STTR granting agency." 

See also[edit]

External links[edit]