Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program

The SBIR/STTR program provides funds for early-stage research and development at small U.S. businesses. Proposing entities are encouraged to take advantage of research expertise and facilities that may be available to them at colleges, universities, national laboratories and from other research providers. The PI must have the primary employment at a small business (primary employment is defined as 51% employed by the small business for the duration of the award).

Successful PIs will conduct Research and Development(R&D) on projects that:

  • Provide evidence of a commercially viable product, process, device, or system, and/or
  • Meet an important social or economic need.

Projects should have the following:

  • High potential commercial payback, and
  • A high degree of technical risk.

Mission of the program:

To promote technological innovation and economic growth through the investment of Federal research funds in small U.S. businesses.

Goals of the program:

  • Stimulate technological innovation by small U.S. businesses
  • Strengthen the role of small businesses in meeting Federal research and development needs
  • Increase private-sector commercialization of innovations derived from Federal research and development funding
  • Foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged persons

History of the program:

The SBIR program started as a pilot program at NSF in the late 1970’s. Since then, three legislative acts have been passed to govern its existence and execution. Currently, the SBIR program is operating on a continuing resolution.

SBIR/STTR program description:

Small Business Innovation Research (SBIR)

  • A set-aside program for small business to engage in Federal R&D – with a potential for commercialization
  • 2.5% of the extramural research budget for all agencies with a budget greater than $100M per year is dedicated to funding SBIR projects.

Small Business Technology Transfer (STTR)

  • A set-aside program to facilitate cooperative R&D between small business concerns and U.S. research institutions – with the potential for commercialization.
  • 0.3% of the extramural research budget for all agencies with a budget greater than $1B per year is dedicated to funding STTR projects.

Participating Agencies:

Program Basic Structure:

Phase I:

  • Feasibility study, proof-of-concept
  • $150k Max for 6 months

Phase II

  • Full research and development effort
  • $1M Max for 12 months

Phase III

  • Commercialization Stage
  • Seek External Funding [No Use of SBIR funds]
    • Non-SBIR federal funding, or
    • Private sources

Every agency has its own deadlines. It also has a different review mechanism. Indirect costs plus fringe are limited to 150% of direct salaries and wages. This limitation may entail mandatory cost sharing by the organization. In such cases, it constitutes an exception to some agencies’ guidelines like the NSF’s policy which prohibit cost share

For more information on the program, please visit the official SBIR website: http://www.sbir.gov/.

Sources:

  • National Science Foundation (NSF) website
  • Department of Commerce National Institute of Standards and Technology (NIST)
  • SBIR website