Each year, the Small Business Innovation and Research (SBIR) program from the U.S. Small Business Administration (SBA) helps small businesses research new technologies and develop new products by providing federal funds. Through this program, federal agencies with annual R&D budgets exceeding $100 million are required to set aside 2.5 percent of their research dollars for small businesses. Eleven federal agencies are required to participate in the SBIR program, including the Department of Defense, the Department of Homeland Security and the Department of Health and Human Services.
    
The SBIR program was established by the “Small Business Development Innovation Act of 1982” to increase employment and promote technological innovation. Following three reauthorizations by Congress, it was slated to expire in September 2008 but was extended by a pair of continuing resolutions through July of this year.
    
In order for a company to qualify for competitive SBIR grants, it must have fewer than 500 employees and be at least 51 percent owned and operated by one or more individuals who are U.S. citizens. In 2001, the SBA changed the definition of “individuals” to exclude venture capital-backed owners. Some SBIR advocates argue that this rule prevents many small businesses from having access to SBIR funding.
     
In addition to the SBIR program, the Small Business Technology Transfer (SBTT) program from the SBA also provides grant opportunities to promote technological growth among small businesses. The SBTT program makes awards available to small businesses that work with researchers at universities and other research institutions. Together, these programs have issued $2 billion in small business grants. 
     
“At the very earliest stages of development, other sources of financing, such as SBIR grants, have been instrumental in advancing research and development,” Jim Greenwood, president and CEO of the Biotechnology Industry Organization, said at a recent House Science and Technology Subcommittee for Technology and Innovation hearing.
     
This year, Sen. Mary Landrieu, D-La., introduced the “SBIR/SBTT Reauthorization Act of 2009” (S. 1233), reauthorizing both programs through FY2023. In the House of Representatives, meanwhile, Rep. Jason Altmire, D-Penn., introduced the “Enhancing Small Business Research and Innovation Act” (H.R. 2965) to reauthorize the SBIR and SBTT programs through FY2017. Altmire’s bill also modifies the SBIR program by, once again, making venture capital-backed small businesses eligible for funding. The legislation passed the House on July 8, and a version that used the language from Landrieu’s bill passed the Senate on July 13. The House and Senate now must negotiate a compromise bill.
     
Through the distribution of federal grant dollars, the SBIR and SBTT programs will continue to encourage technological innovation and help small businesses grow. The Security Industry Association (SIA) supports the efforts of the SBA and the goals of both
programs.