In perhaps the most difficult budget season of the last 25 years, where the President’s budget has proposed eliminating funding for scores of programs, both the House and Senate subcommittees with budget oversight for the Economic Development Administration (EDA) have proposed continuation funding of $50 million for FY2026 for the popular Build 2 Scale (B2S) program—referred to as the Regional Innovation Program Grants in budget language. B2S is one of three key funding priorities for SSTI’s Innovation Advocacy Council (IAC). Under IAC’s coordination, dozens of organizations weighed in with their members of Congress to explain the importance of the program and asked them to support it. This direct communication has taken the program from authorization but no funding to $50 million per year. While a relatively small amount of money, B2S is the largest federal pool of competitive funding to support individual, regionally designed innovation initiatives across the country.

House and Senate subcommittees with oversight for Commerce, State and Justice appropriations differ on funding recommendations for the EDA Regional Technology and Innovation Hubs program, commonly referred to as Tech Hubs. While any funding in a tight budget environment is good, the $50 million in the House version of the CJS bill or the Senate subcommittee’s $60 million is far short of Congress’s original vision for the Tech Hubs, authorized at $10 billion over ten years. Congress provided EDA $500 million in FY2025 for new Tech Hubs.

The Financial Services and General Government (FSGG) subcommittee of House Appropriations has turned against the Federal and State Technology (FAST) Partnership in its budget recommendations for the Small Business Administration, zeroing out the only program that provides funds to help states level the competitive field of applicants for the SBIR/STTR program. While the FAST funds were decreased from the $9 million enacted in FY2024, the SBDC line item received a $10 million increase in the FSGG appropriations proposal. The corresponding Senate subcommittee has not taken any action yet regarding FAST. SSTI’s Innovation Advocacy Council (IAC) is working to protect the funding in the Senate bill and in the final conference bill. Broadening the distribution of SBIR awards nationally is a priority within SBIR reauthorization bills under consideration in both chambers of Congress.

The nearly status quo nature of the FY 2026 budget of $9.0 billion for the National Science Foundation advanced by the Senate Appropriations Committee stands in striking contrast to the Administration’s $3.9 billion request. House appropriations, meanwhile, appropriated $7.0 billion for NSF, a reduction of $2.06 billion or 23% from the FY 2025 enacted level. The fate of the popular Regional Innovation Engines program, as well as NSF’s entire R&D funding portfolio, remains in play for a future conference bill.

The U.S. Small Business Administration adopted new rules in 2023 that made it easier for venture capital funds to leverage federal resources under the Small Business Investment Company (SBIC) program, thereby increasing the capital they have available for early-stage investments. (See SSTI’s previous reporting on these changes here.) As noted in the article, the most significant change in this direction is the creation of an accrual funding mechanism. As venture funding moves to larger and later-stage deals and TBED initiatives face the prospect of funding challenges, awareness of innovation capital resources such as the SBIC program  is an increasingly important TBED strategy. 

The U.S. Small Business Administration announced a new funding opportunity through the Regional Innovation Cluster (RIC) Program. The program is designed to enable new RICs to assist small businesses in matching innovative technologies to industry needs, with the aim of reshoring critical industrial and manufacturing capabilities, securing domestic supply chains, and spurring job creation.

SBA is interested in competitive offers from organizations with relevant partnerships and small business expertise in critical industries, including: 

After the tremendous learning and community-building experience at SSTI’s conference last December at the beautiful Sheraton at Wild Horse Pass in Arizona, many people are looking forward to our next gathering. We are too, but have decided to postpone the event until next year with dates to be determined.

As most readers likely know, staging conferences of the size and complexity of SSTI’s last one takes months of planning. A critical first step is securing the appropriate site. Given the continued uncertainty in the federal economic development and R&D funding landscape that many likely conference participants are navigating, we were not comfortable committing SSTI to an expensive hotel contract for a 2025 event.