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SBIR to Be Victim of Recovery Myopia?

The proposed American Recovery and Reinvestment Act, released last week by the House Appropriations Committee, would dramatically increase federal funding for research in several agencies required to participate in the Small Business Innovation Research (SBIR) Program. The National Science Foundation alone, for example, would receive an additional $3 billion – equal to 50 percent of its FY08 appropriations. The Department of Energy would get a $2 billion research injection; the National Institutes of Health, a cool $1.5 billion for R&D. The SBIR program requires the research agencies to award 2.5 percent of their extramural R&D funds to small businesses. So it would seem small tech firms fighting for funds in the highly competitive SBIR arena could see a windfall in the coming months as a result of a Recovery Act.

That is, if the 25-year-old SBIR program itself is extended past its current expiration in March 2009.

The SBIR program was to sunset Sept. 30 last year as Congress had yet to pass a Reauthorization Act that both chambers could accept and former President Bush would not veto. The program received a reprieve until March 6 by way of the Continuing Resolution that is currently keeping the federal government in business.

With the economy continuing to nosedive and less than six weeks remaining until expiration of one of the most successful federal tools for supporting technology commercialization and innovation, some analysts expected SBIR would be an easy target for immediate attention by its authorizing committees in the House or Senate. Perhaps, for no other reason than to keep the direct capital injections of nearly $2 billion flowing into the nation’s small tech firms at the same time other capital sources are running dry.

Instead, no action is readily visible, or being discussed through traditional SBIR news sources, such as Rick Shindell’s SBIR Insider or the Small Business Technology Council.

The Senate Committee on Small Business and Entrepreneurship appears yet to have opened its doors in 2009 under the new leadership of Sen. Mary Landrieu (D-LA). The committee’s website, for example, has only one update since December. Separately, on Jan. 8, Sen. Russ Feingold (D-WI), a member of the committee, introduced S. 177 to extend SBIR and its companion STTR program until 2022 and increase the SBIR set -aside to 10 percent by 2012. That bill was read twice and referred to the committee, which has yet to hold its first hearing.

The House Committee on Small Business, still led by Congresswoman Nydia Velazquez (D-NY), held a hearing on Jan. 14 with the promising title, ""The State of the Small Business Economy and Identifying Policies to Promote an Economic Recovery." The focus and witness list – dominated by representatives of electrical, general and roofing contractor associations and chambers of commerce – only touched lightly on innovation. No SBIR-related legislation has been introduced in the House yet for the 111th Congress.

SBIR Reauthorization during the 110th Congress was contentious and dragged out because of proposed changes to the program. The time remaining in the program’s current authorization does not permit a debate of similar length in the new Congress without another extension.

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Copyright State Science & Technology Institute 2009. Redistribution to all others interested in tech-based economic development is strongly encouraged. Please cite the State Science & Technology Institute whenever portions are reproduced or redirected.

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