SBA seeks regional clusters; nonprofits welcome to apply

The Small Business Administration recently released a new solicitation for the Regional Innovation Clusters initiative. Unlike what SBA has done in recent years, and returning to the program’s roots, all nonprofit organizations are eligible to apply alongside for-profit firms. In a change from prior solicitations, proposals must include whether the work will support an emerging or mature cluster. The timeline is relatively tight: submissions are due July 26.

In recent years, SBA has only allowed for-profit firms to compete for the awards, despite universities and regional nonprofits having successfully managed cluster organizations since the initiative first launched. This solicitation marks a return to allowing nonprofit and for-profit entities to compete. Restoring the program eligibility has been a priority for the SSTI Innovation Advocacy Council, which also had advocated for growing the program from just $5 million in FY 2020.

Last year, SBA moved the program internally to  run under the Office of Investment and Innovation (OII). The clusters initiative is run by the same team that manages the Growth Accelerators competition and is part of the same office as the Small Business Innovation Research policy and the Small Business Investment Company program. The clusters initiative’s new management is likely a key factor in SBA’s decision to restore nonprofit eligibility.

While the solicitation does not specify the amount of funding available, the amount is likely $5-6 million. The notice is competing with SBA’s FY 2023 appropriation (many SBA programs have two years to spend their funds), which was $10 million. However, this funding also covers an evaluation award and option years on existing awards.

The solicitation also does not specify how much is available per award. A review of usaspending.gov indicates that awards typically range from about $250,000 to $500,000 per year for one base year and up to four additional option years.

SBA has added a requirement that proposals specify whether they will be evaluated as an emerging or mature cluster. Emerging clusters serve an existing cluster that needs to scale to reach more businesses and to build project management and membership engagement. Mature clusters have long-standing experience and will use the awards to increase their program effectiveness and reach while also contributing effective practices to the overall clusters initiative.

The solicitation does not otherwise specify the differences between emerging and mature clusters for the services to be provided nor the price that may be sought. One might suppose that SBA anticipates emerging clusters to have a promising approach but less of a track record and to be seeking a more modest scope, while mature clusters will be expected to have a stronger history and more ambitious workplan. However, this is not stated explicitly.

SBA has scheduled a webinar for July 9 at 3p.m. ET, and registration is now available. The agency is also accepting questions for public responses until July 11.

SBA’s Regional Innovation Clusters initiative contracts with organizations that support a small business technology cluster. Common funded activities include business training, counseling and mentoring, technology transfer and commercialization assistance, and export and sales readiness coaching. The measures used to evaluate the work can vary by region and technology, but sales increases, technology development, and employment growth are some metrics covered in past program evaluations.