National Academies Call for Permanent SBIR/STTR Renewal: What Small Innovators Need to Know

Hook

The possibility that America’s most important innovation seed funds could go silent is back on the table. On the heels of a pivotal National Academies of Sciences, Engineering, and Medicine report, stakeholders are sounding the alarm: The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs face expiration in late 2025. The report’s strong endorsement places a spotlight on the urgent need for Congressional reauthorization to avoid significant disruption to federal innovation grants that fuel nearly every corner of the startup and small business research landscape.

Across 11 key federal agencies, these programs have driven everything from defense tech to medical breakthroughs. If Congress doesn’t act, small companies and researchers could see a vital source of non-dilutive R&D funding dry up just as 2026 appropriations bring new priorities and competition.

Context

SBIR and STTR are often dubbed “America’s Seed Fund,” and for good reason: they deliver billions annually in early-stage R&D awards to innovative small businesses, providing critically needed runway to commercialize ideas and foster public-private collaboration. Since their inception, the programs have funded over $60 billion in research, with NIH alone backing nearly $1.3 billion in SBIR/STTR awards in FY2023.

The recent National Academies report, which you can read summarized here, concludes that SBIR/STTR programs significantly outperform other innovation mechanisms in producing government and market successes—particularly through Department of Defense efforts, which are the world’s largest ecosystem for dual-use small business innovation.

Why the sense of urgency? Despite a $47.2B base and $1.5B for the new ARPA-H initiative in the FY26 NIH budget, the SBIR and STTR programs themselves expire unless Congress reauthorizes them. And as federal funding dynamics shift—with policy uncertainty, realignments like the new NIH technical/business grants, and agency consolidations such as DoD board integrations—even a temporary lapse could mean months (or longer) without new awards.

Impact

For Small Businesses

Small businesses—particularly those working in defense, health, energy, and advanced manufacturing—rely on SBIR/STTR as a non-dilutive funding lifeline. The programs are especially critical for women- and minority-owned companies, many of whom tap SBIR/STTR as their first external capital. The permanent renewal urged by the National Academies would help ensure a reliable pipeline, preventing harmful funding gaps and signal continuity to private investors and partners.

For Academic Researchers and Research Consortiums

With programs like STTR requiring university partnerships, many researchers depend on these grants for translational research and pilot commercialization. Uncertainty about program continuation could stall collaborations and hiring or force a shift to less mission-driven funding sources.

For Policy Stakeholders and National Security

SBIR/STTR underpin national initiatives in biotechnology, quantum, and so-called “critical and emerging technologies.” The expiration risks come amid heightened concern about foreign influence in U.S. research, new disclosure requirements, and ongoing Congressional reviews of the federal innovation pipeline. The National Academies’ endorsement is now a reference point for lawmakers working on NASA, NIH, and DoD reauthorizations.

Action

What should you do right now if you’re a grant seeker or advocate?

1. Track your SBIR/STTR pipeline: Ensure applications are aligned with current solicitations—don’t wait until late 2025 to start submissions for planned projects.
2. Engage in advocacy: Reach out to your trade associations, university government relations offices, and Congressional representatives. Share case studies and data showing your program’s local impact.
3. Monitor agency updates: Especially from NIH, DoD, and DOE—their SBIR/STTR pages will post updates on any policy, eligibility, or timing changes.
4. Prepare alternative plans: If dependent on SBIR/STTR, develop contingency funding strategies in case of even a short-term program lapse.
5. Leverage new opportunities: NIH for example recently offered up to $50K in Technical and Business Assistance (TABA) to Phase II awardees. Review open supplements and related pilot programs.

Outlook

All eyes are now on Congress to act before the SBIR/STTR programs sunset in late 2025. Expect hearings and increased advocacy from academic and business stakeholders in the coming months. With bipartisan support strong so far, a permanent extension seems likely—but not guaranteed, as federal appropriations debates often drag on or yield only short-term solutions. Tracking this story closely could help your organization stay ahead of the curve.

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