While most of the conversation here on Rock Talk, particularly in the comments, is about research at academic institutions and non-profit organizations, NIH also funds researchers at small businesses. The Small Business Innovation Research (SBIR) program was established by Congress in 1982 — all Federal agencies with extramural research and development (R&D) budgets that exceed $100 million are required to allocate a percentage of their R&D budget to the program. In 1992 Congress established another program to support small businesses and commercialization of federally funded research. This program, the Small Business Technology Transfer (STTR) program, requires small businesses to formally partner with research institutions on their proposed research project. Federal agencies with extramural R&D budgets over $1 billion participate in the STTR program to support small businesses and to bridge the gap between federally funded research and the commercialization of the innovative technologies that grow out of basic science.

In late 2011, Congress reauthorized both SBIR and STTR programs through fiscal year (FY) 2017, and all SBIR/STTR agencies are currently discussing the details of implementing this legislation.

Here at NIH, we have always prioritized outreach about our SBIR/STTR programs to all states. My staff and I were curious how well NIH SBIR/STTR funding is distributed, and we wanted to share with you what we found when we looked state-by-state at SBIR/STTR award dollars across the United States from FY2007 to FY2011. The results are presented as a heat map in figure 1, below. Since highly populated states are likely to receive more funding, we normalized by population, and the map shows award dollars per person by state.

As you can see, while some states stand out as having more SBIR/STTR funding per person and form hubs of small biotech enterprises, SBIR/STTR funding is more or less evenly distributed across the country. California and Massachusetts are known as large biotech hubs, but Massachusetts in particular is especially prominent in the map, due to its relatively small population in comparison to California (approximately 6.6 million versus 37.7 million, according to 2011 US Census estimates).

Even correcting for population, we have a congressional mandate to increase funding in states receiving less R&D funding for small businesses, and we will continue our outreach efforts – not just increasing the quantity, but improving the quality of applications received by our SBIR/STTR program.

Whether it’s research by entrepreneurs or academics, NIH values the contributions of all of the research community – it’s good to see we’re supporting research in every state, but we will continue to work even harder to promote scientific research all across the nation.

In a November blog post, I mentioned the myriad of activities that are impacting our Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, one of which was the congressional effort to reauthorize these programs. Well, Congress voted on the reauthorization, and it was signed into law last December 31. I’ve been waiting until the Small Business Administration (SBA) released their interim guidance so I could give you the details of how the reauthorization will impact NIH small business grants. 

The SBA guidance can be found in this blog  by Sean Greene, Associate Administrator for Investment and Special Advisor for Innovation at the SBA. It discusses the timeline Congress gave the SBA for revising the existing regulations and policy directives. They are targeting the end of 2012.

Based on the guidance, the only thing that will change for NIH’s small business programs in fiscal year 2012 is the amount of funding. NIH will raise the set asides to 2.6% for SBIR and to 0.35% for STTR. They were 2.5% and 0.3%, respectively. 

For all the other provisions in the reauthorization, however, NIH must wait until SBA amends the regulations and updates the policy directive. We will continue to work within the existing regulations until that time. This means business as usual for now. 

Remember that our small business programs are among the biggest in the federal government and are dynamic, important components of the NIH portfolio. Make sure to check out the NIH Data Book on RePORT to see the updated fiscal year 2011 data on the programs or see the NIH SBIR/STTR website. Just to throw a few figures your way, the number of applications continues to rise after falling dramatically in the mid 2000s. This makes the program even more competitive, so the combined success rates for all phases was around 14% for fiscal year 2011. We made 902 awards and are currently supporting 1,100 businesses. And as our commercialization rate is high , the impact on the economy and moving important technologies and products to market continues to be the hallmark of these programs.