Some SBIR Predictions for 2010

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Yogi Berra said it best: "It's tough to make predictions -- especially about the future. The future ain't what it used to be!"

What's going on in Washington sure underscores Yogi's insight. Things, they are a changing. I've been watching the SBIR reauthorization related activity in Congress and at the Agencies with bemused frustration. I've heard every argument and every rationalization of what should be done a countless number of times. I can even argue both sides on some of the issues.

One thing for sure, SBIR will be different. But how? No one knows for sure. Especially not me. But I'm going to apply another of Yogi's observations -- "You can observe a lot by just watching." -- and give a shot at some predictions for SBIR in 2010, based solely on what I've observed.

Before I do, let's do a quick check of my 2009 predictions:

1. The SBA won't raise the award caps independent of congressional action. CAME TRUE. They didn't.

2. Grants.gov will make some major changes. CAME TRUE. They introduced an Adobe-based template to replace the despised PureEdge software and improved the input submission capacity and user communications. All that didn't prevent a 3-hour melt-down during the NIH Challenge Grant submission however.

3. The SBIR landscape will become more competitive. CAME TRUE. All agencies reported increases in submissions. The budgets did not increase. So, award rates did decline for many of the Agencies.

4. Reauthorization will be further delayed. CAME TRUE. We're currently in our fifth continuing resolution.

Four for four. Not bad! Now for 2010...

Here are my fourteen predictions for how the Reauthorization will shake out:

• 1. SBIR/STTR will be reauthorized this January.
• 2. Non-individual majority owned companies will get SBIR eligibility -- with some limitations and restrictions.
• 3. The funding caps will be increased, but not by as much as the House wants.
• 4. The funding base will also be increased, very slightly and over time, but not enough to compensate for the increased caps.
• 5. Phase I will still be required, but Fast-Track will be enhanced.
• 6. Proposal evaluation cycles will be shortened.
• 7. Multiple Phase IIs (and follow-ons for further development) will be permitted.
• 8. Support for Phase III (commercialization) will be expanded for all agencies -- and all agencies will place increased emphasis on commercialization potential as a criteria for award.
• 9. Required inclusion of projects for some critical technologies will be specified.
• 10. Special award preference for some non-technology demographic interests (including veterans) will be included.
• 11. The policy and oversight authority will be a Committee co-chaired by the NIST and the White House's OSTP.
• 12. The SBA's Office of Advocacy will continue to be able to comment on SBIR issues.
• 13. Money will be authorized for SBIR administration and award database maintenance.
• 14. Reauthorization will be for between five and eight years.

I made most of these predictions back in October and haven't seen or heard anything to change my mind from what I said then.

Why do I think it'll happen in January? Everyone is tired of the continuing resolution game. President Obama has promised that small business issues will be the next top priority once Health Care is a done deal. I believe that will happen as soon as Congress reconvenes.

The OSTP/NIST policy committee likelihood was reinforced recently by a comment by Aneesh Chopra, the first-ever [are you ready for this title?] Chief Technology Officer (CTO) and Director for Technology in the White House Office of Science and Technology in an interview he gave in December: "[Pending] House and the Senate agreement, we think a modernized version of the SBIR program will more tightly integrate the work that’s been done there to meet the operational needs of the agency and could spur economic growth." Sounds to me like he's clued in and ready to effect SBIR "modernization". I don't expect the Senate and House compromise being worked on to go in a different direction. The line will be toed.

On the eligibility issue, the likelihood that the Senate will relax its stance on SBIR eligibility was enhanced by the little talked about recently concluded temporary assignment of my friend Jo Anne Goodnight (the NIH's long-time SBIR guru) to the Senate Small Business and Entrepreneurship Committee for the past six months. She's been an unwavering advocate for allowing VC controlled companies to compete for awards. I expect she persuaded some of her fellow Senate committee staffers to support a more relaxed eligibility position. C'est la vie.

Much of what's being proposed for non-innovation or non-technology related award preferences meets the politically correct litmus test, and that's all it will take to have these provisions included. Pah.

So, we shall see. SBIR will continue. It will change. The future won't be what it used to be. (Thanks Yogi.) And however it shakes out, I'll continue to be the SBIR Coach. Maybe I need to come up with some of my own Yogi-isms.
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