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Small-Biz Billions Hit the Road

Light Reading
News Analysis
Light Reading
8/27/2004

Reps from several government agencies are going on an eight-day, six-state tour, hunting for new technology in areas including high-speed networking, storage networking, and data security. The agencies are promoting Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), two programs that together offer more than $2 billion annually to small U.S. technology companies and research institutions.

The agencies -- which include the all branches of the military, as well as the Department of Transportation and the Environmental Protection Agency -- are looking for U.S. companies with no more than 500 employees that have R&D projects that could benefit the federal government and have strong commercial potential.

The $2 billion kitty is awarded in smallish chunks, in three phases. Phase I awards up to $100,000 to test the feasibility of a concept. Phase II supports funding up to $750,000 to develop a Phase I project into a working model. And Phase III pushes companies to seek additional funding from venture capitalists and other sources so the companies can transfer the new technology into the public sector.

One company that received funding in the past couple of years is Rockville, Md.-based Acadia Optronics, which made headlines earlier this year when it helped the Commerce Department’s National Institute of Standards and Technology (NIST) build "the fastest known cryptographic system based on transmission of single photons" -- a potentially huge advance in data encryption.

Acadia also received a Phase II award this year for its optical front-end for 10-Gbit/s network interface cards. The project is described on a U.S. Dept. of Energy Website as an attempt to make high-speed optical communications links inexpensive enough for end users on a network. [Ed. note: 10 Gbit/s to the desktop? I can barely keep my 3 Mbit/s cable modem busy!]

Physical Optics Corp., of Torrance, Calif., also received Phase II funding last year for building a fiber optic backplane to speed up supercomputers. The interconnection system, if commercialized, could make supercomputers used in weather forecasting and data center applications much more productive.

Phase I winners from this year include Sunnyvale, Calif.'s Pentum Group Inc., which is working on SAMTP (Sonet Application Memory Transport), an attempt to develop a new data transfer protocol that will provide low cost, higher speed, and networking between computers connected through existing long-distance fiber optic links. The protocol, if commercialized, could lead to "improved quality of video conferencing, technology collaborations, scientific and engineering simulations, computer gaming, and more efficient use of the telecommunications infrastructure," according to the Dept. of Energy.

The SBIR/STTR bus tour will be pulling into Louisville, Ky., on Sept. 9; Memphis on Sept. 10; St. Louis on Sept. 13; Chicago on Sept. 14; Indianapolis on Sept. 15; and Detroit on Sept. 16.

— Phil Harvey, News Editor, Light Reading

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OptoScot
OptoScot
12/5/2012 | 1:19:47 AM
re: Small-Biz Billions Hit the Road
The UK Govt set up a version of SBIR last year. It's been a complete washout because the civil servants in the research councils won't play ball. Reading this article should inspire you to beat a path to your local MP - in fact, forward them this URL.
jim_smith
jim_smith
12/5/2012 | 1:19:46 AM
re: Small-Biz Billions Hit the Road
I sure hope some good stuff comes out of this SBIR nonsense, but the two data points I've seen are scams.

I don't want to name names, but there is very little accountability in these schemes!

Most of the hard work is done during proposal writing. Once you get money, you use it to write the next proposal! What a scam!

Think about it - if the idea was really that good, why wouldn't a VC fund it?

The government is already pumping billions of research dollars into universities and national labs.

Do we really need to spend money on these losers?!
wildcat
wildcat
12/5/2012 | 1:19:40 AM
re: Small-Biz Billions Hit the Road
Couldn't agree more. I can see how the program is supposed to work, provide some initial government funding to prove a concept, which if successful should lead to commercial funding and further development. Unfortunately, many of these companies become trapped in the cycle of writing dozens of proposals a year, landing a few of them, and using the money to write more proposals. Probably they did not start out with this business plan at the start, but became addicted to the low risk strategy that SBIR/STTR affords them. What is needed are strict limits on the total number of awards that a specific company or PI can win. After hitting this limit, they should be banned from any further participation.
Balet
Balet
12/5/2012 | 1:19:24 AM
re: Small-Biz Billions Hit the Road
Physical Optics as an example lives off the SBIR and other governmental funds.
All they do is to write proposals, get funds, write reports, write proposals, etc. etc.
Each department's director should bring certain ammount of $$ to keep his job.
One wealthy family, which owns POC, benefits from a bunch of writers and smart governmental officials.
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