Technology emerging from SBIR/STTR programs has contributed to the development of unmanned aerial vehicles. "An unmanned aerial system hovers in the sky above the Eglin Air Force Base, Fla., Oct. 26, 2023." Credit: Samuel King Jr., Air Force.
By Bianca Licitra
A new report reaffirms the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs as critical to science, technology, and security in the United States and urges Congress to reinstate them after allowing them to expire last year.
Despite broad bipartisan support for them, the programs lapsed as FY25 ended last September and Congress did not include them in temporary funding that reopened the government after last fall’s shutdown. Without reauthorization, small businesses, universities, and entire state innovation ecosystems would lose a key pathway for collaboration and bringing new inventions to market.
Known as “America’s Seed Fund,” the SBIR/STTR programs provide equity-free funding to technology-focused entrepreneurs across the nation who need help converting scientific discoveries into commercial products. Eleven federal agencies currently participate in the programs, which are administered by the Small Business Administration. The Department of Defense has the largest budget for the programs and is the focus of the new report, issued by the National Academies of Sciences, Engineering, and Medicine (NASEM). Since the inception of the programs, the report noted, “DOD has made awards to more than 13,400 unique firms.”
The report found that DOD’s SBIR/STTR programs have been a continued success for both DOD and the awardees. The programs help connect DOD with “small businesses with distinct capabilities” from across the nation “to support the Department’s mission and broaden the defense industrial base,” it noted.
The report described SBIR/STTR programs as “the world’s largest initiatives dedicated to small business innovation in defense technology.” Small firms that are selected to receive the awards are able to navigate the defense innovation ecosystem successfully and usually go on to grow and attract additional non-SBIR/STTR funding from DOD. The report found that “SBIR/STTR provides an important on-ramp to DOD research, bringing innovative, early-stage companies to defense agencies.”
The report also noted that DOD SBIR/STTR-funded firms “do better on traditional innovation metrics,” including acquiring patents and attracting venture capital funding, than other small firms that contract with the government for research and development but do not receive the same SBIR/STTR funding.
Because of the programs’ overwhelming success, NASEM recommended that Congress extend them permanently.
AAU also strongly supports reauthorizing the SBIR/STTR programs because of the significant role they play in fostering innovation; supporting small businesses and entrepreneurs; and ensuring that federally funded research discoveries make it into real-world products, services, and solutions that benefit all Americans.
The programs are particularly helpful in the commercialization of federally funded university research. While universities do not directly receive SBIR/STTR funding, they frequently license patents to small business awardees and work with them to help bring research discoveries to market. They also provide small businesses with the expertise of faculty and graduate students and access to world-class labs and infrastructure.
AAU urges the Senate to pass H.R. 5100, which passed the House successfully in September. As the association noted in a recent letter, H.R. 5100 “provides a critical one-year extension, ensuring continuity for researchers, entrepreneurs, and small businesses that rely on these programs to advance research discoveries and U.S. competitiveness.”
Bianca Licitra is editorial and communications assistant at AAU.