Growing innovative businesses (Rep. David Wu)

After 20 years, even successful programs often need a tune up. That’s just what the Small Business Innovation Research (SBIR) program got last week when the House updated it to help grow innovative small businesses and insure that American innovators can compete more easily in today’s changing global economy. SBIR will now be better equipped to help America’s entrepreneurs commercialize innovative technologies, creating new products and new American jobs.

Key changes to SBIR include increasing the size of early- and mid-stage program awards to reflect the actual costs of doing high-tech research and increasing the program’s flexibility by allowing cross-agency awards and allowing applicants to apply directly for Phase II funding.



Importantly, the bill also fixes a decision made more than five years ago by an administrative law judge who erroneously excluded businesses that are backed by venture capital from participating in SBIR. The reintroduction of venture capital-backed businesses was based in part on a recent National Academies report, which concluded that businesses backed by venture capital do not crowd other small businesses out of participating in SBIR and STTR, as critics had contended, and are likely among those best equipped to transition new technologies to the market.

SBIR is fundamentally an innovation program. Given the current economic climate and growing global competition, the House-passed SBIR bill is necessary to support cutting-edge companies that are working to cure diseases, strengthen national defense, and reduce our dependence on foreign energy sources.