The SBBC – advocating for America’s Innovators
The Small Biotechnology Business Coalition (SBBC, www.smallbiotech.org) advocates for more than
2000 independently owned biotech and medical device firms - and the countless other businesses from
equipment manufacturers to patent attorneys that service, and rely on, the success of our industry and the hundreds of thousands of jobs we create & sustain nationwide.
SBBC Innovators & entrepreneurs are the drivers of America’s scientific & technological leadership and knowledge-industry job creation in every state and nearly every District. That success has been
driven in large part by the Small Business Innovative Research (SBIR) Program. For 28 years, the SBIR
program has been a dynamic, cost-effective, PROVEN success – help preserve a program that WORKS!
Congress Should Support Job Creation by Increasing the NIH SBIR Allocation
...and oppose job destruction through a Taxpayer-funded bailout for Wall Street Venture
Capital that will drain 45% of NIH SBIR without creating any new jobs!
1. SBIR was created to provide seed capital to those technologies that are so innovative – or have such a
long development cycle – that they are simply not within the reach of private capital markets.
2. SBIR has driven America’s technology and innovation leadership for over a quarter century, creating
entire new industries, new treatments to disease, and hundreds of thousands of jobs.
3. Increasing the NIH SBIR allocation by 1% in each of the next 3 years will put Federal R&D dollars to
work where they’ve PROVEN to be most effective – in small business.
4. Stop the Taxpayer-funded bailout of Wall Street Venture Capital firms! SBIR has successfully provided
funding to launch those innovations that do not have access to private capital – leading more than half
to market! Allowing majority VC-owned companies – that obviously have access to capital – to drain
funds from SBIR will only subsidize existing, late-stage VC investment & create windfall bonuses to VCs.
Small Businesses account for a mere 4.3% of all R&D spending across the ENTIRE federal government – and
only 2.8% through NIH SBIR/STTR. Universities, by contrast, receive $28-32%, and a staggering 97% at NIH.
What is the return on the governments’ investment in small business innovation?
 A 50% rate of commercialization across NIH SBIR funded projects.1
 1/3 of all science & engineering jobs are in small businesses.2
 2/3 of all new science & engineering jobs in the past 15 years came from small business3
 38% of all patents filed (12 times as many as universities)4
 $421,975 average federal dollars per patent5 (less than 3% of each University patent)6
 25% of key innovations in the past decade as measured by the R & D 100 awards!7
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Testimony of Dr. Sally Rockey, Director, NIH Extramural Research, before the House Science, Space and Technology Committee, Technology and
Innovation Subcommittee, on March 31, 2011.
Where Do Innovations Come From? Transformations in the U.S. National Innovation System, 1970-2006, published by THE INFORMATION
TECHNOLOGY & INNOVATION FOUNDATION, Washington, DC July 2008.
AUTM, Op Cit, 2009.
A New View of Government, University, and Industry Partnerships, This paper was submitted by Jere Glover, Chief Counsel of the Office of
Advocacy, at the Senate Committee on Small Business Roundtable Discussion on the SBIR program on August 4, 1999.
Data from www.inknowvation.com, 2011. From program inception in 1982 to date total funding is $31.8 billion; total patents issued is 75,265.
Press releases for the Association of University Technology Managers (AUTM) U.S. Licensing Activity Survey Summary: FY-2007 to 2009, average
annual funding is $51.4 billion; average number of patents issued is 3440 = $14.94 MM/per patent.
SBIR is a PROVEN success – let’s build on that investment!
For every $1 that NIH awards through SBIR to lean-operating, job-creating small businesses, it spends $10 + on
university overhead. This broken funding model drives money to Universities to support repetitive basic
research, expensive new lab buildings, and paying faculty higher salaries to underwrite publication and directly
prevents small biotech companies from advancing disease cures in a timely manner.
NIH could nearly double its SBIR allocation with a mere 1% reduction in university overhead - without cutting a
single dollar from basic research. The sole focus of a small business is bringing products to market, which
creates jobs. In fact, small business created more than 2/3 of all new knowledge industry jobs in the past 15
years. For universities, it’s “publish or perish.” For small businesses, it’s “produce products or perish.”
Increasing the NIH SBIR Serves our National Priority of Job Creation
Small businesses, in addition to being the backbone to economic growth and recovery, have long been the
source of some of our greatest innovations. An important 2008 report titled “Where Do Innovations Come
From?” found that since the 1970s there has been a dramatic shift in R&D 100 winners from large
corporations acting independently to small companies operating in collaboration with, and with support from,
government agencies.
In 2008, a study determined that nearly one-quarter of inventions that receive the prestigious R&D 100
awards are developed by SBIR funded small businesses. Past winners of the prestigious R&D 100 Awards
include the flashcube (1965), the automated teller machine (1973), the liquid crystal display (1980), the
Nicoderm antismoking patch (1992), the anticancer drug Taxol (1993), lab on a chip (1996), and HDTV (1998).
SBIR funding is a critically important aspect of the future of technological innovation, entrepreneurship and
leadership for the U.S. A 2007 National Academies of Science study on the SBIR program concluded that SBIR
"addresses [federal] agency missions," "supports small business," "pushes the scientific frontier," "enhances
human capital" and "helps create new ideas and bring them to market."
Small biotech firms pass rigorous peer review to earn SBIR grants to develop new products and processes
that improve quality of life, quality of care and actively fight disease - not rehash basic research or making
minor expansions of established profitable lines. That is why the balance of SBIR allocation at 20 percent
Venture Capital and 80 percent private funding is so important. The federal support of small biotechnology
businesses has been proven to foster innovation, and the reliability of those programs is crucial.
At a time when job creation is our number one national priority, your support of a proven, carefully balanced
program that will create innovation and sustainable knowledge industry jobs in small businesses is critical.
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Where Do Innovations Come From? Transformations in the U.S. National Innovation System, 1970-2006..