Small Business

Opinion: SBIR Reauthorization Opens Opportunities For Small Business

Rep. Sam Graves, Chairman of the House Small Business Committee

This guest column was written by Rep. Sam Graves, (R-MO) the Chairman of the House Small Business Committee.

Despite the normal gridlock that takes place between the two houses of Congress, this week the House and Senate agreed and passed legislation that will help spur economic growth and create jobs in America— without any additional taxpayer funding.

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On Wednesday, Congress passed legislation to reauthorize the Small Business Innovation and Research (SBIR) and the Small Business Technology Transfer (STTR) programs that help innovative small businesses make products that will benefit the government and the private sector.

The SBIR and the STTR programs were created in 1982 to award federal research grants to the country’s best innovators — small businesses. The objectives of the programs are threefold: to spur technological innovation in the small business sector, to meet the research and development needs of the federal government, and to commercialize federally funded investments.

The SBIR and STTR programs are two of government’s most effective programs for spurring innovative ideas among the small business research and development community, leading to the development of successful companies such as Symantec, Qualcomm, Genentech, DaVinci and iRobot.

For example, iRobot produced technology that has been used in the military and also used in home cleaning products. Founded in 1990 by Massachusetts Institute of Technology roboticists Colin Angle, Helen Greiner and their professor, Dr. Rodney Brooks, iRobot created the PacBot, a robot used by the Department of Defense in performing bomb disposal operations.  Adapting the same technology, the company created home cleaning products like the Roomba robot vacuum, the Verro pool cleaner and the Looj gutter cleaner.

Angle, Greiner and Brooks’ dream was turned into a reality not by working for a multibillion-dollar company or by big investors — but by participation in the SBIR program.

But unfortunately, improvements, and a full reauthorization, had been put on hold for nearly 4 years.  The last full SBIR reauthorization occurred in 2000 and the STTR program in 2001. Both programs expired in 2008. Since then, Congress has struggled in a debate about how to best get R&D dollars in the hands of more businesses, while keeping the program true to the twin goals of innovation and commercialization.  As a result, the program has been subject to a series of short-term extensions — the latest of which expires today, December 16th.

The House and Senate Small Business Committees and House Science Committee have been working to reauthorize this program since the beginning of the year.   As Chairman of the House Small Business Committee, I put reauthorization of this program at the top of my agenda, and I’m glad that we reached a deal to provide much-needed certainty for the small firms who want to participate in this program. This all happened after the Senate gave way to a compromise that was added to the National Defense Authorization Act, which passed both Houses of Congress and is on its way to the President’s desk to be signed into law.

Among the many benefits of this six-year agreement is that it allows for greater participation among small businesses with significant private capital support. It increases venture capital participation to 25 percent for the National Institute of Health, the Department of Energy, and the National Science Foundation, and 15 percent for the other participating federal agencies. It also raises both Phase I and Phase II award levels, which have not been increased since 1982. There are three phases in the program.

Under the agreement, the SBIR program allocation will also expand from 2.5 to 3.2 percent and the STTR allocation from .3 percent to .45 percent over the course of the reauthorization, which allows more access for small businesses to compete for research and development funds. 

In addition, our agreement focuses the program more on commercialization and job creation by instituting a pilot program that allows more businesses with highly developed projects to compete for Phase II, and by ensuring a higher standard of success for companies that receive awards.

The SBIR and STTR programs are a win-win for America — they will help small businesses across the nation create jobs, springboard ideas and spur economic growth. As our economy continues to waiver, it is legislation like this that will aid our economy and get Americans back on the job.