Ecosystems & Entrepreneurship

Congress Extends Small Business Innovation Program for Three Years. Now What?

10.04.22 | 7 min read | Text byRyan Buscaglia&Matt Hourihan

The collective sigh of relief you heard last week came from small businesses and university innovators across the country who had been holding their breath for passage of the2022年的SBIR和STTR扩展法.The bill,which was finally adopted by Congress on Thursday and signed into law by President Biden on Friday, ensures continuity for a 40-year-old R&D grant program thatinvests在4,000家小型企业中,每年约有40亿美元在所有科学,技术和医学领域从事创新研究。该计划在9月底一直面临终止,由于对非竞争力和外国影响的风险的担忧,其延期延长了。上周的延期法案(国会都在截止日期截止日期之后)包括解决这些问题的关键规定,并将该计划重新授权了三年,直到2025年9月30日。

What is SBIR / STTR?

小企业创新研究(SBIR)和Small Business Technology Transfer (STTR) programs fund American small businesses engaging in dual-use research and development (R&D). Often referred to as “America’s Seed Fund,” their goals are to stimulate innovations that can address federal agencies’ missions and be commercialized in the private sector. They also seek to promote the participation of women and socially or economically disadvantaged persons in entrepreneurship. The program is a source of non-dilutive funding for small businesses, meaning they do not give up equity in exchange for SBIR funds.

SBIR has its roots in 1970s-era concerns that the United States was losing its technological and scientific edge in the global economy — concerns that are all too familiar today. Piloted at the National Sciences Foundation (NSF) and formally established in 1982, the program now includes 11 federal agencies. The five largest of those agencies (Department of Defense, Department of Energy, Department of Health and Human Services, NASA, and NSF) also fund STTR awards which require participation of a nonprofit research institution.

每个代理商都决定要资助哪些研究主题,并分为两个顺序的阶段颁发资金。例如,国防部callsfor topics that meet warfighter mission needs, while the National Institutes of Health (NIH) funds research related to novel cancer treatments, Alzheimer’s drugs, andmore. The program’s success stories include household names like Qualcomm, Symantec, iRobot, and 23andme.

More broadly, the economic impact of both programs is massive. One frequently cited Department of Defense study claims that the two programsgenerated在1995年至2018年之间,公众的投资回报为22-1,国家经济影响总计3470亿美元,创造了150万个就业机会。

Key Hold Ups to Extension

In light of the looming authorization lapse, Congress discussed an extension of SBIR for months, butnegotiations founderedover a few key issues. One of these was disagreement over what to do about the minority of firms that receive an outsized share of awards, which some pejoratively refer to as “SBIR mills.” Most firms that participate in SBIR receive only one or two awards in their lifetime. But the award distribution has a major skew: for instance, arecent analysisfinds that just 10 firms, accounting for 0.7% of all SBIR recipient firms, have received 6.5% of all SBIR awards since 2000.

Some arguethat this skew is evidence of large, well-entrenched companies gaming a system intended to drive innovation from smaller businesses and new entrants. On the other hand, there issome evidence为了建议这些公司的确以科学出版物,发明,后续资金和商业化的形式带来价值,并且还可以作为继续成为创始人的才华横溢的科学家和工程师的场所金博宝更改账户。

The other major issue is that of foreign influence. Amidgeneral Congressional concerns over foreign involvementin the U.S. scientific enterprise, an oft-cited 2021 report from the Defense Department据称发现令人不安的迹象of Chinese state involvement in SBIR funding recipients. These findings prompted cautious backlash on the part of lawmakers.

Summary of Major Bill Sections

While Congress kept it until the final hours, the2022年的SBIR和STTR扩展法was ultimately approved by overwhelming majorities. The core of the act is a three-year extension of the overall program and several SBIR pilot programs through September 2025. The reauthorization also includes several new provisions to address past criticism and points of concern. Let’s unpack these below.

新要求

Foreign Risk Management:扩展名要求每个机构努力评估与SBIR资助的小型企业的外国参与风险并与之联系。在获得裁决之前,将要求业务申请人在获得裁决的威胁之前披露业务关系和财务安排,如果公司本身伪造本身,则资助了回扣。与之相关的是,该法案要求多个机构发布有关外国风险的报告。ReportsReports

实际上,尚不清楚新的财务报告要求对小型企业负担多少。一些初创公司,尤其是第一次获奖者或有外国投资者的初创公司,可能会面临适当报告此信息的挑战。其他人可能会完全劝阻SBIR征集。在小型企业获得资金并完成了计划的工作范围后,还不清楚哪种机制可用于管理外国风险。为了减轻这种情况,SBA在对公司需要披露的内容的指导中应明确。

Open Topics:The extension mandates that Defense Department components each issue at least one ‘open topic’ announcement per year. Open topics are technology-agnostic solicitations to which any small business may respond with their proposed innovation. The Air Force pioneered the open topic model at DoD in 2018, and according to a 2022GAO report,事实证明,它成功地吸引了首次获奖者(43%的获奖者是净新手),并削减了奖励时间(平均更快108-126天)。这项新要求还请求年度报告,以比较许多指标的公开主题奖。ReportsReports

Increased Minimum Performance Standards for Experienced Firms:扩展方概述了经验丰富的公司和第二阶段奖项的更高绩效标准。他们也被称为“多个获奖者。” This is an effort to cut down on SBIR ‘mills’, but whether it will achieve this end or not is questionable. The number of companies these restrictions apply to is small, and the minimum penalty for not meeting the standard is a restriction to only 20 Phase I awards ateachagency in the next year. The impact of these new restrictions is an open question that the next three years will hopefully answer. Finally, the new standards remove patents as a way to meet performance standards.

Here’s a breakdown of the new standards:

Phase Criteria Standard
Phase I-II > than 20 Phase I awards 1 Phase II award for every 4 Phase I awards (existing standard)
Phase I – II > than 50 Phase I awards during the previous 5 years 1 Phase II award for every 4 Phase I awards
II-III期[Tier 1] > 50 phase II awards during the previous 10 years $250,000 in sales revenue or investment for every Phase II award during 10 year period
Phase II -III [Tier 2] > 100 Phase II award during the previous 10 years 在10年内,每次II期奖励的销售收入或投资45万美元
Pilot programs

The reauthorization of pilot programs–and the inclusion of new efforts–provides the SBA and policymakers an opportunity to learn more from different agency efforts. They’ll get three more years worth of data to weigh whether or not to permanently weave these pilots into the fabric of the overall program. Brief overview of the pilots are included below:

Looking Forward

The bill, which was欢呼由小企业管理局,扩展了SBIR / STTR计划for three years instead of the usual five. That means the next debate over reauthorization and reform will approach quickly. In the intervening years, policymakers will get additional data and information on various aspects of the program through a series of mandated reports from GAO and agencies.

首先,必须在6个月内提出有关外国影响力和风险的报告。这将是对跨机构该计划中对抗性影响的首次全面研究。

其次,GAO需要进行年度研究,以比较未来四年的开放与常规主题。这些研究将比较几个指标的招标,包括过渡率,获奖者,技术类型等,并可能有助于阐明与政策相关的相似性和模型之间的差异。

第三,GAO被授权在颁布后的18个月内报告多个获奖者。该报告将检查商业化率,技术类型及其联邦影响,潜在的终身奖项上限以及颁布的绩效标准对公司的影响。

With luck, these collective reports will provide valuable inputs to the next round of reform – which will hopefully not have to wait until the last minute next time. For our part, we’ll be looking forward to learning more about the program through these mandated reports, and doing our own research on areas for improvements. We’re looking for diverse perspectives from practitioners, ecosystem builders, and small businesses on how the program might be improved. Unearthing opportunities for the various elements of the program to evolve will help agencies and entrepreneurs unlock their full potential.

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