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As the end of the fiscal year approaches, Congress is again at a critical juncture in reauthorizing the SBIR and STTR programs.

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.

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 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.  

To grow their local populations and STEM workforce, communities across the country are experimenting with resident/worker attraction programs, as we have previously covered. But how effective are these programs? A recent study from the W.E. Upjohn Institute for Employment Research offers new insights by analyzing Tulsa Remote’s track record from its inception in 2018 to 2023.  

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.

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 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.

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.

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.

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: 

The Opportunity Zone (OZ) program, first established in 2017 with a ten-year lifespan, has been made permanent in Public Law No: 119-21. As noted in a