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The Small Government Office That's Funding the Next Big Idea

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By Cailyn Kreitz, Farah Imtiaz and Soh-Yun Park September 11, 2015

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The authors are former innovation specialists at the Small Business Administration.

Imagine being diagnosed with a condition that eliminated your ability to walk. Traditionally, you would face daunting choices from a limited, outdated market: use a wheelchair and a myriad of cumbersome assistive devices -- or paying almost $70,000 for a bulky, robotic exoskeleton.

But what if the market offered another option that was lighter, cheaper and more flexible?

Otherlab Orthotics is turning this hypothetical into a reality. Using Small Business Innovation Research funding from the Defense Department and the National Science Foundation, the company is constructing a lightweight exoskeleton made entirely from fabric and compliant materials without any rigid metal parts, providing a greater degree of mobility.

This lightweight exoskeleton would provide people with disabilities (including people over 60 with mobility limitations, veterans with disabilities, and others with physical disabilities) another option of assistive technology that enhances mobility. These exoskeletons can also be produced at a much more reasonable cost than traditional metal exoskeletons, opening up new and high-volume markets.

Otherlab Orthotics is just one of numerous SBIR-funded companies that have developed cutting-edge technologies. Tech startups like Otherlab Orthotics do not necessarily create dazzling products and conveniences with commercial potential overnight. Without sufficient funding for research and development, an idea would remain just that -- a hypothetical.

This is where SBIR comes in. SBIR programs provide the early-stage funding and infrastructures for these startups to actually launch their ideas into tangible products and technologies.

Now, some argue about the role of government funding and high-risk, high-reward technology development. What does government know about innovation or high-end research and technology commercialization? More so, what government funding has resulted in real innovative companies to come about?

Surprisingly a lot more innovative research and commercially viable technology has resulted from the SBIR/STTR programs than one might realize. For instance, the following companies can thank the SBIR/STTR program for initial seed funding: Qualcomm (mobile and microprocessor technologies), Symantec (anti-virus software), Intuitive Surgical (DaVinci robot surgical device), GeoMagic (3-D printing), Biogen-Idec (life-saving drugs), Ultra Scan (biometric technology), just to name a few.

SBIR funding covers a spectrum of development, from early-stage research and development to product-development research preluding commercialization. This type of funding can be especially crucial for high-risk ventures. Most venture capitalists aim to maximize short-term success, and therefore, profit. Risky ventures aren’t an option. As a result, many small businesses with high-risk innovations and technologies, which may not provide returns for several quarters, face difficulty when pursuing venture capital funding.

For example, Teachley, a company aiming to transform modern education by replacing traditional testing with interactive games, is an Education Department awardee still in its early stages of research that sought SBIR to validate the need for the technology for mainstream educational needs in a very stodgy area in need of new solutions.

Another example is Ecovative Design, a materials science small business currently commercializing its environmentally friendly plastics made from mycelium and agricultural waste via its first two contracts with Steelcase and Dell. Without SBIR funding, Ecovative would not have been able to find a comparable 100 percent biodegradable replacement to petrol-based Styrofoam, and have its innovative designs realized as well contribute significantly to a more sustainably friendly environment.   

Now, how does one get the opportunity to learn more and/or participate in this unique seed-funding program?

For starters, one can check out the recently relaunched SBIR website at www.sbir.gov and www.sbirroadtour.com, which provide a bevy of information regarding the who, what, why, how and when. High-tech entrepreneurs can also attend an SBIR/STTR-related event like the National SBIR/STTR conferences or one of the SBIR Road Tour pit stops.

These meetings provide the unique opportunity for small businesses to engage in meaningful discussions with the 11 participating agencies program managers in an informal and personal setting, and designed to convene important stakeholders in the innovation ecosystem from industry, academia, government, etc.

There are also plans to host an SBIR Awareness Day during National Entrepreneurship Month in November 2015, as well a SBIR/STTR Innovation Summit at the Defense Innovation Technology Acceleration Challenges in Austin, Texas (Dec. 1-3, 2015) aka a good spot to find amazing BBQ while on the hunt for some high-tech seed funding.  

The SBIR/STTR program not only allows current awardees the breathing room to perfect their prototypes to reach long-term commercialization success, but also encourages potential awardees to pursue novel products with the knowledge of an available safety net.

In this way, SBIR enables technical risk to become an opportunity for greater success -- while creating jobs, maintaining America’s leadership in science and innovation, and creating a larger return on investment for the country and even the world. We hope you are intrigued to consider participating in America’s Seed Fund.

Acknowledgements: Betty Royster, Lindsay D’Ambrosio, Ed Metz, Jen Rocha, John Williams, Javier Saade and G. Nagesh Rao for content and input.

(Image via Pixelbliss/ Shutterstock.com)

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