Congressional panel urges permanent reauthorization of SBIR and STTR programs amid IP concerns

The U.S. House Committee on Small Business convened on February 27, 2025, to discuss the critical role of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs in fostering American innovation. The meeting highlighted the need for reauthorization of these programs, emphasizing their importance in supporting small businesses and enhancing national security.

A significant concern raised during the meeting was the threat posed by the Chinese Communist Party (CCP) in acquiring sensitive intellectual property (IP) from U.S. small businesses funded by SBIR. Witnesses discussed various methods employed by China, including leveraging venture capital investments and utilizing third-party firms to obscure their involvement. This issue underscores the need for vigilance in protecting American innovations from foreign exploitation.

The committee members unanimously agreed on the necessity of making the SBIR and STTR programs permanent. Witnesses argued that the current stop-and-start nature of funding leads to delays that can jeopardize small businesses, which often lack the cash flow to survive prolonged interruptions. The consensus was clear: a stable funding environment is essential for the success of these programs.

Additionally, the meeting addressed the relatively small share of federal research and development funding allocated to SBIR and STTR. Witnesses urged Congress to consider increasing agency allocations to these programs, noting that other countries, particularly in Europe, are investing significantly more in similar initiatives. This disparity could hinder the U.S.'s competitive edge in critical technologies.

The discussion also touched on the challenges small businesses face in transitioning from research to commercialization. Witnesses suggested improving communication between federal agencies and small businesses to better align innovations with government needs. Enhanced exposure to end-users, such as military personnel, was also recommended to ensure that technologies developed meet real-world requirements.

Finally, the committee recognized the need for increased funding for the Small Business Administration (SBA) to effectively manage the growing SBIR program. With the program now accounting for nearly $5 billion in the federal budget, the SBA's administrative resources have not kept pace, leading to inefficiencies that could impact the success of small businesses.

In conclusion, the meeting underscored the vital role of SBIR and STTR programs in driving innovation and national security. The committee's commitment to reauthorization and potential expansion of these programs reflects a proactive approach to safeguarding American technological advancements and supporting the small businesses that contribute to them.