Subcommittee Discusses SBIR and STTR Programs

Press Release From: House Committee on Science, Space, and Technology Democrats
Posted: Thursday, June 16, 2016

Today, the House Committee on Science, Space, and Technology’s Subcommittee on Research and Technology held a hearing to review the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, the role the programs play in the mission of federal science agencies, and to examine the process for moving federally funded research and development results to the private sector and into the marketplace.

The SBIR Program was first authorized in 1982 as a way to encourage and facilitate small business participation in the federal research mission. In 1992, the STTR Program was authorized to support transfer of federally funded research developed at universities into market-ready technologies. While the Small Business Administration (SBA) administers the SBIR/STTR programs, the programs are funded from set-asides in extramural R&D accounts at each agency participating in the programs. Each agency with an extramural R&D budget over $100 million is required to have an SBIR program, and for FY 2017 these agencies must allocate 3.2% of their budget for SBIR grants and contracts. Each agency with an extramural R&D budget of $1 billion or more is required to have an STTR program, and for FY 2017 they must allocate 0.45% of their extramural budget to STTR.

Ranking Member of the Subcommittee, Congressman Daniel Lipinski (D-IL) said in his opening statement, “In the U.S., where small businesses create 55 percent of all jobs, the success of the small business enterprise is key to economic growth. …For almost 40 years, the SBIR program has been funding small business innovation across all sectors of our economy. There are many prominent success stories from SBIR grants.

“Unlike any other program that I’m aware of, SBIR and STTR are funded using a percentage of participating agencies' extramural research and development budgets. That percentage has increased by 30 percent since 2011, even as the larger budgets have remained flat. While the SBIR program has great value, we must look at it in the context of overall agency budgets and missions. Increasing the set-aside for SBIR and STTR as much as has been proposed by some could come at the expense of support for other critical research programs. Perhaps my biggest concern is harm done to the pipeline of STEM talent and innovators by increasingly lower research funding levels…We must also look hard at assessments of the SBIR program and consider ways to make it more efficient and help the program better achieve its goals.”

All of the witnesses agreed that the annual set-aside percentages for agency SBIR/STTR programs should be maintained at FY 2017 levels and that any increases would further squeeze funding for high quality basic research. They also agreed that future growth in the programs should come from an increase in overall extramural R&D budget increases at the agencies. There was also extensive discussion about “Phase 0” concepts in the SBIR program, NIH Proof of Concept Pilot Program, utilizing a small portion of the funds from the STTR set-aside, to give grants to researchers at a pre-SBIR stage.

Ms. Garton said, “As the federal investment in research and development conducted at universities is constrained, it’s important to acknowledge that funding basic science and engineering has to be a priority because that’s what fills the pipeline of discoveries that feed the innovation ecosystem. If I have one thing to offer for your consideration, it would be to focus on the overall fiscal budgets for the research funding agencies and ensure robust investment in basic and applied research to support the highest quality peer reviewed research.”

Ranking Member Eddie Bernice Johnson (D-TX) addressed the struggle agencies have faced in fostering participation by socially and economically disadvantaged persons, “According to the National Academies, agencies are doing well in all of the main goals of the SBIR and STTR Programs except for participation in innovation by economically and socially disadvantaged groups. I have spent my entire political career working on increasing female and minority participation in STEM. I’m sad to say that we are not doing much better today than when I started. SBIR cannot solve disparities created earlier in the pipeline. However, we know that women and minorities receive less encouragement and support to become entrepreneurs.” She asked the witnesses how agencies can help address this disparity.

Congressman Lipinski also highlighted the work being done through the I-Corps Program. He said, “This hearing is a good opportunity to talk about other ways to improve the commercialization of federally funded research, including the very successful Innovation Corps Program started at NSF in 2011 and now expanding to other agencies, as well as the NIH’s Proof of Concept Pilot Program. I-Corps is essentially an entrepreneurial education program. The I-Corps Node program provides this education and other support for innovators at our research universities, creating a true interconnected, national innovation network…In the five years since the I-Corps program has been running, it has clearly demonstrated its value in improving tech transfer and commercialization, and we are beginning to see that it makes the SBIR program more efficient as well…I think the time has come to talk about having some kind of I-Corps program at every agency with an SBIR program, as the two truly go hand in hand.”


· Dr. Pramod Khargonekar, Assistant Director, Directorate for Engineering, National Science Foundation
· Dr. Michael Lauer, Director, Division of Cardiovascular Sciences at the National Heart, Lung, and Blood Institute, National Institutes of Health
· Dr. Patricia M. Dehmer, Deputy Director for Science Programs Office of Science, Department of Energy
· Ms. Jilda Diehl Garton, Vice President for Research and General Manager, Georgia Tech Research Corporation, Georgia Institute of Technology

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