SSTI Digest

As the end of the fiscal year approaches, Congress is again at a critical juncture in reauthorizing the SBIR and STTR programs. With only two hearings (one each in the House and Senate Small Business Committees) held so far this year on the topic, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, introduced H.R.5100 on September 3 to extend the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, set to expire on September 30, 2025, for one year, “as is.” The bill passed out of committee on September 10. 

This is known as a “clean” extension, meaning it includes no policy changes, preserves continuity for small businesses, avoids a funding gap, and gives Congress more time to work towards long-term reauthorization. There is said to be Senate interest to move a more complete reauthorization before the end of this fiscal year.

As attention-grabbing as AI might be for the media and large investors (see previous SSTI analysis of AI investment), economic growth through innovation in life sciences and biotechnology is a priority for many state and regional TBED initiatives.  The venture capital market recognizes that as well.  In fact, Pitchbook estimates the broad biotechnology sector (comprising life science, pharma, health care, devices, etc.) captured 14% of all deals so far in 2025, making it the second largest investment group after info tech this year to date.  

Subsequently, SSTI wonders in this article: what does the health and composition of the biotech equity investment market tell TBED practitioners for any needed tweaks or changes to life science-driven regional innovation strategy?

Understanding the composition of local economies requires looking beyond broad statewide or national trends. County-level data reveals the unique mix, or lack thereof, of industries and businesses in each area. Policy makers, by identifying which sectors drive employment and business activity within a locality, can influence the impact and design of regional innovation strategies to reflect local realities and potential.  

The U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) allows examination of county-level employment and establishment counts across all private sectors at the 2-digit NAICS level. In this article, SSTI uses annualized private sector data for all provided 2-digit NAICS sectors at the county level for 2015 and 2024.  

Conventional TBED wisdom for decades has been that small businesses generate more innovation in the United States. All big tech companies started as scrappy little companies in their respective eras of IT’s rapid growth. But there remains a long-running debate about whether large firms with financial resources and R&D capacity have an innovation advantage over smaller but more agile firms. Understanding the arguments for each side is important for policymakers and business leaders as they seek ways to support small and medium-sized enterprises and leverage the innovative capacity of larger corporations. In their paper, Firm Size and Innovative Performance: A Meta-Analysis Across 25 Years of Evidence, Federico Bachmann and Rodrigo Ezequiel Kataishi provide a comprehensive meta-analysis that synthesizes 25 years of research to clarify this relationship.