The Visualist Blog

Innovation: Government SBIR Program Helps Grow American Small Businesses

As an entrepreneur, I am passionate about innovation. I am interested in the forces that generate innovative ideas, how those ideas make it into the marketplace, survive competition, and, hopefully, change our lives for the better. Anyone who has let me rant over a few beers will have heard my thoughts on technology-transfer from academia to the commercial arena (something I’ve lived through), the pitfalls of laissez-faire economics on this tenuous process, and my belief that government spending in this arena can serve an important public good. I know some of my more right-leaning readers may be breaking out in a rash at the mention of public-spending-for-public-good. But I encourage you to read on.

Meaningful innovation goes far beyond the innovative spark, the communication of the concept in academic journals and patents, and even beyond prototypes. It must include the commercialization of the idea (even if commercialization takes place in the form of a non-profit or a new open source movement). Small tech companies are made up of innovative individuals who are willing to take risks, maybe have a heritage of innovation (they may have founded the company based on some pretty serious innovations), and they are far more flexible in responding to market changes than their larger counterparts.  A recent report  from Intuit outlines the advantages small businesses offer to foster innovation. The report has generally cheery conclusions about the future of small business.

However, contrary to popular belief, small businesses have some serious shortcomings when it comes to successfully commercializing an innovation. Why?  Small companies are forced to focus on generating revenue quickly, demonstrating applicability, and responding to customer needs. Those that don’t do this will quickly go from small to extinct. This means that resources spent on longer time horizons, R&D forays into work that is more heavily weighted on “R” than “D”, or exploratory work on an idea that still hasn’t reached the prototype stage is dangerous to small company health.  Don’t get me wrong, great small companies are very innovative when it comes to solving problems related to their core value proposition and innovating around their existing products.

The gap between this style of innovation and looking forward to next year’s products is very difficult for most small companies.  Small tech companies often cannot afford the risk and resource levels that longer-term innovation requires. So, if we (and by we I mean our society – both our economic and social lives) value longer-term, meaningful innovation from our best small companies (and I firmly do), what can be done?  Enter the Small Business Innovation Research (SBIR) program. The government SBIR program helps support innovation and grow American small businesses.

The SBIR program was founded in 1982 and now stands as one of the largest U.S. Government public – private partnerships. The program was founded to stimulate and support research and product development in small business in a variety of areas that are of interest to the public good including medicine, energy, the environment, and national defense.  The SBIR program was originally founded at the National Science Foundation and it has since grown to five major agencies within the government. These agencies seek proposals from small business and award grants to those that are deemed to be significant game changers. I am a big fan of the model.

Mersive recently received another National Science Foundation SBIR award for $500,000, on top of significant funding we have received in the past. The selection process that companies must undergo is borrowed from a centuries-old model of peer-review, where folks from the community who are experts rank proposals in a process that hopes to utilize tax-payer dollars in the most effective manner possible. This peer-review process is typically very stringent and, even if a company is awarded funding, it is only paid out in stages, with additional proposals, reviews and scrutiny at each stage of commercialization.

In our case, we have used SBIR funding to address a significant challenge that, with the help of the NSF, is beginning to payoff in the marketplace. How does one achieve incredibly high-resolution (well beyond HD) displays, at large format, and a very low cost. If this is indeed possible, one can imagine a future where displays can become low-cost infrastructure (at last count, we have 18 million pixels in the Mersive conference room) that will change the way we work, play, and communicate. The NSF funding is helping Mersive expand from its initial focus on military simulation to more commercial, broad-based markets where our visual computing software will truly have impact.

Imagine the next-generation of scientists and engineers who were trained using a 12 million pixel display. What happens to the U.S. economy when engineers begin to use those displays to design new products or explore solutions to our current problems in energy?

I realize that our current climate encourages skepticism of public spending, and that’s a good thing. A deep analysis of the SBIR dollars that have been spent in this way show that this is a great investment in extending, and maintaining our ability to create new jobs, grow companies from small academic spin-offs into large industry powerhouses, and perhaps create entirely new economies.

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