Last week, I wrote Part 1 of this post that provided a little background on the SBIR/STTR program. This federal government legislation is in the process of being revised and, hopefully, readopted. It basically assures that ~2% of all federal government research and development funding that goes to private enterprise, is spent with small businesses. Funding amounts for first time recipients, known as Phase I grants, are contemplated to be increased from $100,000 to $150,000. In my opinion, this is an appropriate change and ought to be part of additional changes that improve the odds of developing commercializable technology.
Senate Bill 493 originally prescribed many constructive changes to how the SBIR program is run. As of debate 2 weeks ago, the Senate was “loving the bill to death” by offering over 70 amendments. These amendments included highly “relevant” issues such as:
- Paul Amendment No. 199, to cut $200 billion in spending for fiscal year 2011
- Hutchison Amendment No. 197, to delay the implementation of the health reform law in the United States until there is final resolution in pending lawsuits
- Sanders Amendment No. 207, to establish a point of order against any efforts to reduce benefits paid to Social Security recipients, raise the retirement age, or create private retirement accounts under title II of the Social Security Act
- Pryor Amendment No. 229, to establish the Patriot Express Loan Program under which the Small Business Administration may make loans to members of the military community wanting to start or expand small business concerns
- McConnell Amendment No. 183, to prohibit the Administrator of the Environmental Protection Agency from promulgating any regulation concerning, taking action relating to, or taking into consideration the emission of a greenhouse gas to address climate change
- Johanns Amendment No. 161, [1099 repeal] to amend the Internal Revenue Code of 1986 to repeal the expansion of information reporting requirements to payments made to corporations, payments for property and other gross proceeds, and rental property expense payments.
Clearly, our Senate understands the value of SBIR-funded innovation for our country when they offer valuable amendments like these! In truth, there are a couple of ideas that WOULD make the SBIR and STTR programs more helpful for our country:
TechonomicMan Amendment 1: Require each SBIR application to describe a business plan structured around the proposed innovation to be developed. Currently, each SBIR application does require commercialization to be discussed. However, it is an afterthought and is a minor portion of what the proposer submits. Fundamental research should be handled elsewhere in the federal panoply of funding. The SBIR should provide funding to BUSINESS-oriented research and development.
TechonomicMan Amendment 2: Include commercialization experts on the review panels. My organization is focused on providing funding to business oriented proposals and we assign equal weight to business and technology reviews. The SBIR program would be more effective if reviews were also provided by business-experienced reviewers who could provide more educated reviews of the business plans of proposers. Ph.D.’s who’ve had some business experience are not as good as M.B.A’s who’ve had some technology development experience when evaluating business opportunites.
TechonomicMan Amendment 3: Assign additional ombudsmen (hell, all you’d have to do is engage private sector interest) in official roles for commercializing technologies developed with SBIR funding. The Bayh-Dole Act required colleges to try to commercialize technologies developed with federal funding on college campuses. This same effort should be undertaken with small businesses. Certify a host of profit-motivated entities to pore over and obtain rights to commercializable technologies and let them go to it. Remunerate them for success. Obligate them to connect with organizations like Ben Franklin Technology Partners (like Boeing does now).
TechonomicMan Amendment 4: Provide an extra $50,000 to the top scoring 20% of proposal scorers each year, based on their commercialization plans. It would cost an extra $5-10 million to provide some additional funding for patenting, corporation organizing, market research and other planning. All steps which, for the best opportunities, would provide significant additional value for the investment already made.
I know these ideas may not be as relevant to SBIR funding as reducing Social Security benefits would be under the Sanders Amendment (that was sarcasm), but I believe we would convert more research into jobs in this country.
What do you think?