Over 25 years ago, the Federal government created a way to ensure that innovative solutions to tough science and technology problems would be developed. And, very cleverly, they did it in way that bolsters the largest job creation sector of our economy – small business. This initiative is called the Small Business Innovation Research (SBIR) Program.
Here’s how it works: The largest Federal agencies (those that spend over $100 million annually on outside research and development), must set aside a percentage (currently 2.5%) of their R and D budget for SBIR projects. In 2008 this represented over $2 billion of available funding. These projects are reserved for our domestic for-profit small businesses that are independently owned and operated by individuals (not large entities). The agencies pose problems, usually tough ones that they need solved to help fulfill their missions. The small businesses are invited to submit proposals for solving them, describing how they’re going to do the work and spend the money (up to $850K in two phases – feasibility and prototype development).
The SBIR Program – An Economic Stimulus for Small Business