Des Moines Register
06-11-07
Federal grants give a lift to small Iowa businesses
Government to offer more than $2.2 billion this year to research and develop
products
By PATT JOHNSON
REGISTER BUSINESS WRITER
Steve Shivvers' chance at making a difference in the world did not come without
perseverance.
After nine years of research, design trial and errors and relentless pursuit of
funding for his work, the Corydon businessman was able to create an energyefficient grain-drying system through his family company, Shivvers
Manufacturing. His invention, which he hopes to introduce commercially next
year, was funded in part with federal grants. "Without government grants, we
never could have done this project," Shivvers said.
Shivvers is one of dozens of Iowa entrepreneurs who have tapped into federal
agencies in recent years for grants to fund research and develop products at
manufacturing companies.
The federal government will offer more than $2.2 billion this year through the
Small Business Innovation Research (SBIR) and Small Business Technology
Transfer (STTR) programs to U.S. businesses. The programs target innovative
technology projects at manufacturing companies with 500 or fewer workers.
Andrew Peek said his company was able to use a $100,000 grant from the
National Institutes of Health to fund research on ribonucleic acid, or RNA, which
is used in gene therapy. Peek, director of bioinformatics at Integrated DNA
Technologies Inc. in Coralville, said the grant funded four researchers who
worked on the project for four months.
Integrated DNA Technologies, which produces and ships tiny strands of synthetic
DNA to labs around the world, identified three federal agencies that offered SBIR
and STTR grants for which the company might qualify. It applied to the National
Institutes of Health in 2006 because it had the largest pot of money, giving the
company a greater chance of winning a grant, Peek said.
Peek said the laborious grant-writing process took more than a month to
complete because of all the information that was required.
The company plans to submit a second proposal for additional NIH grants next
year to further its work on RNA.
Iowa companies received $4.7 million in SBIR grants this year, up from $3.5
million in 2006, said Kris Johansen, director of the Office of Intellectual
Property and Technology Transfer at the Iowa State University Research
Foundation in Ames. Johansen's office helps companies write and review grant
applications and assists in hooking up firms with university experts.
Massachusetts and California, which receive "hundreds of millions of dollars
each year" in SBIR and STTR grants, rank among the top states obtaining the
federal funds, Johansen said. Iowa is ranked 45th, "but we're moving up," she
said.
"There is enormous potential for Iowa companies," she said. Lack of awareness
and support for submitting grant proposals are reasons why more companies
don't take advantage of the programs, she said.
The programs were created to stimulate technology innovation and increase
private sector commercialization of those innovations, she said.
In Phase I funding, companies must submit and follow very detailed and precise
guidelines, including margin width and document length. Companies are eligible
for up to $100,000 for a six-month project or $150,000 for a 12-month project.
Under Phase II funding, companies can receive up to $750,000 for research and
development of a product over two years.
After that, companies are expected to bring their products to the marketplace.
Shivvers has applied for 10 grants and received four, totaling $415,000, from the
Department of Energy and the U.S. Department of Agriculture to fund
development of his energy-efficient grain dryers.
He has applied for a $350,000 Phase II grant to further develop his product.
"I will be ecstatic if I get it and one sad boy if I don't," said Shivvers, who is vice
president and chief engineer for the company started by his father. It took about
800 man-hours to prepare the latest application.
The improved grain dryer will save 75 percent of the energy normally expended
in traditional grain drying methods. Shivvers Manufacturing has built grain dryers
and other agriculture equipment for more than 35 years. It also manufactures
zero-turn radius mowers.
The grants can enable companies "to bring out products that would have great
benefits to society," Shivvers said.
Eric Henderson, chief executive of BioForce Nanosciences in Ames, a
biotechnology firm that makes the Nano eNabler, a molecular printer that enables
mapping - or testing - of minuscule amounts of molecules on silicon chips, said
his company has been able to develop several products with assistance from
SBIR grants.
"The key is persistence," he said.
Federal agencies offering the SBIR and STTR grants have different deadlines,
submission and review processes, topic areas and funding levels.
Henderson said reading the solicitations from agencies carefully and following
instructions to the letter help improve a company's chances of being seriously
considered for a grant.
Johansen said the payoffs, once awarded a grant, are substantial.
The other benefits of receiving an SBIR or STTR grant include:
- No payback because the programs provide grants, not loans.
- Brings recognition, credibility and visibility to companies.
- Can act as a leveraging tool to attract other sources of financing.
Johansen warned that companies should not rely solely on federal grants for
developing new products. They should continue to pursue other funding avenues
in addition to the grants.
Reporter Patt Johnson can be reached at (515) 284-8367 or
pjohnson@dmreg.com