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The Senate Committee on Appropriations this morning advanced a funding bill that includes $25 million for Regional Innovation Strategies — $4 million more than the current funding round. Commerce, Justice and Science Subcommittee Chairman Jerry Moran (R-KS) spoke to the importance of funding scientific innovation in a statement, and the bill strongly supports many science-related activities. The bill would provide level funding of $140 million for MEP; increase NSF to $8.1 billion (nearly $100 million less than the House bill), with more for research, STEM education and EPSCoR; and, NASA would see a nearly $600 million increase, including $179 million more for science and $10 million more for education.

The U.S. Small Business Administration and Department of Treasury have released strategic plans through FY 2022. Similar to the new Department of Commerce plan, these documents do not mention programs and offices that the administration has marked for elimination, creating a lack of clear strategic direction for millions of dollars in entrepreneurship and innovation funding that Congress continues to appropriate and direct. Specific areas of concern at these agencies are the SBA’s Regional Innovation Clusters and Growth Accelerator programs and the Community Development Financial Institutions Fund.

With final passage and signage pending at the time of publication, the federal budget for FY 2018 provides relatively strong support for innovation economies. The Regional Innovation Strategies program is funded at $21 million, MEP at $140 million and the National Science Foundation at $7.8 billion, increases for all organizations. Other notable innovation programs receiving at least level funding are SBA’s cluster and accelerator programs, DOE’s ARPA-E, NASA science and the National Institutes of Health. Numerous stakeholders weighed in with Congress to preserve these priorities over the administration’s FY 2018 request — and FY 2019 faces the same challenges.
 

The U.S. Small Business Administration (SBA) has announced the 20 recipients of the fourth Growth Accelerator Fund competition. The winners, which represent a broad set of industries and a diversified range of demographic groups, will each receive a cash prize of $50,000 to address gaps in regional entrepreneurial ecosystems as part of the award. Awardees will be required to submit quarterly reports for a year, and must report or provide their metrics, including jobs created, funds raised, startups launched and corporate sponsors obtained. 

The Small Business Administration (SBA) announced that is withdrawing a December 28, 2016, final rule concerning Small Business Investment Company (SBIC) investments in passive businesses – a small entity that does not engage in regular and continuous business activity. Set to take effect on August 18, the final rule would have placed several restrictions on the eligibility of passive companies to receive SBIC investments. The new decision will maintain the current SBA rule that allows passive companies to remain eligible for SBIC investments. The SBIC, however, must receive SBA written approval before making the investment.

The U.S. Small Business Administration has granted 16 organizations up to $125,000 each and five organizations up to $200,000 in FY 2017 as part of the Federal and State Technology (FAST) Partnership Program. FAST funds help organizations provide outreach and technical assistance to technology-based businesses, with a particular emphasis on broadening participation among underrepresented groups. The organizations – which include state and local economic development entities, small business development centers, and universities – will use the awards to support R&D commercialization and small business innovation through the SBIR and STTR programs. SSTI members receiving FAST Awards include: Oregon BEST, the Ben Franklin Technology Partnership, Launch Tennessee, the University of North Dakota Center for Innovation, the Iowa Innovation Corporation, and the University of Wyoming. 

The House Appropriations Committee began releasing FY 2018 “markup” budget bills this week, and the proposals would cut billions in non-defense spending. EDA would lose $100 million* in funding, SBA’s entrepreneurial development programs would lose $34 million, NIST’s Manufacturing Extension Partnership would lose $30 million, and Energy’s ARPA-E would be eliminated, among other cuts. As SSTI noted for both the administration’s proposed FY 2017 and FY 2018 budgets, congressional statements rejecting the president’s total budget package did not necessarily make innovation safe.

The SBIR program has been a legislated requirement of the Department of Defense, an agency responsible for roughly 40 percent of all federal extramural R&D spending, for more than three decades. One might expect that over that amount of time, the Department of Defense would have developed a system to become compliant with SBIR’s fundamental provision that a minimum threshold of innovation research spending be directed toward small businesses.  Yet, a new report from the Government Accountability Office concludes DOD couldn’t say if it was meeting the threshold because, DoD did not submit the required obligations data. The report states “DOD officials told [the GAO] that obtaining obligations data would require requesting information from more than 10 individual program offices that, in turn, would have to request the information from various DOD comptrollers, which would be a major effort.” [Emphasis added.]

Congress has passed a budget for FY 2017 that largely continues support for federal innovation programs and R&D investments. Among the highlights are $17 million for Regional Innovation Strategies (a $2 million increase over FY 2016), level funding of $130 million for the Hollings Manufacturing Extension Partnership and $5 million for SBA’s clusters program. In reviewing dozens of line items, offices that had received significant cuts in the White House’s skinny budget appear to receive some of the largest funding increases (such as the Appalachian Regional Commission, Community Development Block Grant and ARPA-E). However, with the exception of multi-billion dollar increases for Department of Defense R&D, many increases are rather small in terms of overall dollars. This is, at least in part, a reflection of non-defense spending caps rising by only $40 million for FY 2017, limiting the availability of new funds. In this context, science and innovation gains are particularly impressive, with a five percent overall increase for federal R&D that particularly benefits NASA and NIH.

The U.S. Small Business Administration has announced dates for this year’s SBIR Road Tour, a national outreach effort to highlight funding opportunities through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Combined, these two programs invest more than $2.5 billion annually as a way to spur innovation. At each of the road tour’s 16 stops, innovators, entrepreneurs, researchers, and small technology firms will have the opportunity to meet directly with SBIR and STTR program managers at the state and federal levels to discuss the program. The tour begins in May 2017 and will continue through October.