A Senate bill that would add roughly $1 billion to a longstanding research set-aside program for US small businesses has drawn opposition from a coalition of nearly 100 organizations who mainly represent the academic research community.
In a 23 June letter, the groups urged senators to oppose a bill to reauthorize the Small Business Innovation Research program that was approved 18 June by the Committee on Small Business and Entrepreneurship. The Senate measure (S.1233) would raise the amount that the 11 largest federal R&D-funding agencies must withhold from their external research budgets, from a current 2.5% to 3.5%, to support R&D proposals from small businesses. At its current rate, SBIR pays for about $2 billion of R&D grants to hundreds of businesses employing 500 or fewer workers.
“We recognize the benefits of the participation of small businesses in scientific research,” the groups’ letter stated. “However, a mandatory increase in the SBIR allocation across agencies will necessarily result in funding cuts for the peer-reviewed research conducted by other organizations.”
On Wednesday, the House Committee on Science and Technology approved its version of the SBIR reauthorization bill, which would not alter the current SBIR allocation. Assuming passage in both chambers, the bills would need to be reconciled by a House-Senate conference committee. Without reauthorization, the SBIR program is set to expire on July 31.
The two bills also differ on the eligibility of SBIR awards to small businesses that are majority-owned by venture capital firms. The Senate measure would allow the National Institute of Health’s SBIR to award up to 18% of its grants to such majority-owned businesses, while other SBIR agencies could award no more than 8% of their totals. The House bill would allow SBIR awards to small businesses that are majority-owned, provided that no single VC firm owns more than half of the business.
SBIR grants are of two types: Phase I awards of up to $100,000 support a 6-month study of the technical merit and feasibility of an idea or technology. In Phase II, awards of up to $750,000 are available over a period of up to two years to support R&D work and evaluations of commercial potential. A Phase I award is a prerequisite for a Phase II grant. There is no limit on the number of Phase II awards, and serial awardees are not uncommon.
A second, much smaller program known as Small Business Technology Transfer (STTR) offers similar-sized, two-phase grants to small firms funded through a 0.3% set-aside on the external research budgets of the five largest research-funding federal agencies. STTR is meant to encourage the transfer of technologies to small businesses from federal laboratories, universities and nonprofit research insititutions. Both House and Senate bills would retain the current STTR allocation.
David Kramer
These changes are more likely to enhance peer-review, and encourage more innovation, by enfranchising the thousands of innovative, creative, and dedicated researchers who have suffered as adjunct faculty or been forced to abandon their hopes of serving society through academic affiliations.
The only thing threatened by the proposed change is uncontested access to federal taxpayers' dollars by academic institutions and established research labs. The changes merely open up the possibility for a very slight and graduated increase (from 2.5% to 3.5% over ten years!) in the availabilty of funding for meritorious competition of ideas by unaffiliated researchers. Not a penny of it is earmarked. In fact, the requirements under SBIR are more stringent than otherwise, since in addition to technical and scientific merit, researchers must prove commercial viability.
What do these organizations have to fear by open and fair competition of ideas? It is not affiliations or credentials that establishes validity, but strength of the underlying science. See my blog post "a href="http://researchentrepreneur.blogspot.com/2009/06/academia-innovation.html"Academia ≠ Innovation" for further discussion of these issues. I welcome your comments.
This bill DOES NOT threaten peer-reviewed research. It is peer-reviewed and is then followed by the National academies to monitor the sucess and conversion to a product to benefit society. Also the companies getting these funds typically work with academia as partners. Without SBIR and STTR there are not enough jobs to hire the graduates of the technical program. In addition, the research institutions use the technologies from the SBIR in future research programs.