#31 & #32

270 Energy:Eliminate Small Business Innovation Research and Small Business Technology Transfer Programs

Savings in Millions of Dollars
  • 2016
    2746
  • 2017
    2756
  • 2018
    2762
  • 2019
    2793
  • 2020
    2859
  • 2021
    2922
  • 2022
    2985
  • 2023
    3066
  • 2024
    3126
  • 2025
    3183
  • 2016-2020
    13916
  • 2016-2025
    29198

Sources

Estimated 2009 spending of $2.5 billion on the two programs provided by the Small Business Administration (SBA), “The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program,” undated. The SBA’s estimated 2009 spending figures were updated for inflation through 2014 according to the CPI (as reported by the Bureau of Labor Statistics). The 2014 estimated level was then increased at the same rate as discretionary spending for 2016–2025, according to the CBO’s most recent August 2014 baseline spending projections.

×

Technical Notes on Scoring

CBO Baseline

Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.

Savings “Totals”

While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.

First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.

Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs.  Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.

×

Heritage Recommendation:

Eliminate Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. This proposal saves $2.7 billion in 2016, and $29.2 billion over 10 years.

Rationale:

Turn small businesses into big businesses, eliminate SBIR & STTR.

The Office of Science includes SBIR and STTR programs with the original intent to “increase private sector commercialization of innovations derived from Federal R&D, thereby increasing competition, productivity, and economic growth.”1

A recent overview of the SBIR and STTR programs stresses that the goal of the programs today is to place more emphasis on commercialization, “[a]ccepting greater risk in support of agency missions.” Using taxpayer dollars to offset higher risk is no way to promote economic development. It ensures that the public pays for the failures, as they have with failed government energy investments, while the private sector reaps the benefits of any successes. Congress should eliminate all SBIR and STTR funding in the DOE budget.

Endnotes

  1. DARPA, “Small Business Innovation Research Program,”  (accessed December 11, 2014). 

Turn small businesses into big businesses, eliminate SBIR & STTR.

Contributing Expert

Nicolas (Nick) Loris, an economist, focuses on energy, environmental and regulatory issues as the Herbert and Joyce Morgan fellow at The Heritage Foundation.

See publications by Nicolas Loris

Nicolas (Nick) LorisHerbert and Joyce Morgan Fellow

Heritage Experts

Jack Spencer oversees Heritage Foundation research on a wide range of domestic economic issues as director of the Roe Institute for Economic Policy Studies. Those topics include federal spending, taxes, energy and environment, regulation and retirement savings.

See publications by Jack Spencer

Jack SpencerVice President for the Institute for Economic Freedom and Opportunity

Katie Tubb is a Research Associate and Coordinator in the Thomas A. Roe Institute for Economic Policy Studies

See publications by Katie Tubb

Katie TubbResearch Associate and Coordinator

Additional Reading