State lawmakers support small business research, development
April 19, 2019
by Anne Barth
2020 will be known forever as the Year of the Coronavirus Pandemic and the societal upheaval that followed. As scientists and researchers around the world race to produce faster testing kits and a vaccine, the invaluable role of scientific research is front and center. This is a race we must win, and soon.
The United States has an outstanding track record in innovation that is second to none, thanks in no small part to federal programs like the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program. Created in 1982, the SBIR-STTR program has produced a wealth of innovations aimed at improving health, protecting our citizens, strengthening national defense and more.
Now, more than ever, is the time to bolster research and development programs because our lives — and our economy — depend on it.
Given the deluge of information that has ensued in the wake of COVID-19, it could be easy to overlook the successes that occurred during the 2020 West Virginia legislative session that will help advance and grow the state’s research-based technology sector.
First, the Legislature took action to support increased research and development efforts of West Virginia’s small businesses.
In House Bill 4665, legislators created a steady source of funding for the WV Entrepreneurship and Innovation Investment Fund, which provides matching grants to state firms that apply for and win Federal SBIR or STTR grants.
The SBIR-STTR program is often called “America’s largest seed fund” because it provides early stage funding to encourage small businesses to engage in federal research and development to create commercially viable innovations.
The multibillion-dollar SBIR and STTR programs were developed to help small businesses engage in research and development (R&D) with a strong potential for technology commercialization. These highly competitive programs allow innovative small businesses to offset the cost of R&D while leaving them in control of their intellectual property.
Many technologies and products that we use every day started out with funding from the SBIR-STTR program, including vaccine development, a host of products and technologies to support the military, Sonicare toothbrushes and more.
While West Virginia small businesses do win SBIR-STTR awards, more firms need to participate in the program to diversify and grow the state’s economy.
TechConnect is working to increase the number of applications and awards through a program of outreach, boot camps and counseling.
Despite the limitations enforced by COVID-19, our boot camps continue online. For some small businesses, now is a good time to develop R&D proposals so that when the economy is back in gear, they’ll be ready to go.
In addition to boosting research and development efforts of small businesses, the Legislature passed House Bill 4558, creating the High-Wage Growth Business Tax Credit Act. This legislation creates an incentive to attract tech companies to West Virginia.
The Legislature took other actions to support economic growth and diversification, including providing funds to TechConnect to continue helping entrepreneurs launch new businesses.
In the last five years, TechConnect has leveraged $435,000 in state and philanthropic funding to secure $1.96 million in federal grants to support innovation and entrepreneurship in West Virginia.
These programs have served more than 200 entrepreneurs, early stage and existing businesses; launched 51 new ventures in the state; created 106 jobs and retained 170 jobs; and attracted more than $7 million in follow-on investment.
Without TechConnect serving as an aggregator to capture these grants from the U.S. Economic Development Administration, our partner organizations would not be able to offer as much assistance to entrepreneurs, which would result in fewer new startups and new jobs. And without state funding, we wouldn’t have the match required to make these programs possible.
TechConnect will use our state funding to continue our work with entrepreneurs launching new companies, thereby growing and diversifying the state’s economy.
West Virginia’s tech community is excited to see the priority state policymakers have placed on assisting small business and growing entrepreneurial activities. The Legislative Technology Caucus, established by Delegates Moore Capito and Shawn Fluharty this past session, underscore the Legislature’s desire to build on this robust sector.
The pandemic is shining a bright light on the critical need for innovation, both to battle COVID-19 and, ultimately, to rejuvenate our economy. We are appreciative of the Legislature’s and Gov. Justice’s efforts to build up our technology and R&D sectors.
Anne Barth is executive director of TechConnect West Virginia, which is a statewide economic development organization dedicated to the advancement of science, technology and the innovation economy in West Virginia.