Bill Overview
Title: Encouraging Small Business Innovation Act
Description: This bill expands and otherwise revises certain requirements for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs. Specifically, it includes small business investment companies (SBICs) in such programs. SBICs are included as a type of investor whose investment must be considered for various purposes under the programs. The bill requires the Small Business Administration (SBA), when calculating the outstanding leverage of an SBIC, to exclude investments made in SBIR and STTR participants. Under current law, SBICs are subject to a limit on their outstanding leverage. Finally, the bill sets forth provisions to increase participation of states to which a low level of SBIR awards have historically been awarded.
Sponsors: Sen. Padilla, Alex [D-CA]
Target Audience
Population: Individuals associated with small and medium-sized businesses globally
Estimated Size: 60000000
- The bill impacts small businesses participating in SBIR/STTR programs, as it includes SBICs in the programs and changes investment conditions.
- SBICs subjected to changes in leverage calculations will be directly impacted.
- States with historically low levels of SBIR awards may see increased participation and thus will be affected by the bill.
- 97% of US businesses are considered small businesses, as defined by the SBA.
- There are around 400 million small and medium-sized enterprises globally.
- The bill indirectly impacts researchers and entrepreneurs working in small businesses benefiting from SBIR/STTR funding.
Reasoning
- The policy targets small businesses participating in SBIR/STTR programs by including SBICs as investors and modifying leverage rules, potentially boosting innovation and growth.
- SBIAs and states with historically low SBIR awards are targeted for increased participation, spreading benefits geographically.
- The policy indirectly impacts researchers, entrepreneurs, and employees involved in small businesses, who might experience varied effects based on their location and industry.
- Recognizing the broad spectrum of small businesses, impact levels will likely vary across sectors, with technology and science sectors experiencing more immediate positive outcomes.
Simulated Interviews
Biotech Entrepreneur (Austin, TX)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This policy seems like a positive change. Including SBICs could mean more funding opportunities for us.
- Changes to leverage rules may facilitate enhanced support from investors, which is crucial when scaling operations.
- I'm also hopeful that the bureaucracy in funding processes might lessen.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 7 | 6 |
Venture Capitalist (Boston, MA)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Including SBICs is a win-win, facilitating more investment.
- The change in leverage calculations can allow for more aggressive investments.
- I anticipate seeing more innovative projects reach market-readiness, thus improved return on investment.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Research Scientist (Jackson, MS)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- Our state hasn't been successful securing SBIR funds so far.
- I hope this policy improves our chances, enabling more R&D and hiring opportunities.
- The potential for increased state participation makes me cautiously optimistic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 4 |
Software Developer (San Francisco, CA)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- We're not really involved in SBIR, so I don't see direct impacts from this policy.
- The broader industry might benefit from increased innovation indirectly.
- I don't expect this policy will directly affect my lifestyle or job security.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
Small Business Owner (Seattle, WA)
Age: 37 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This could incentivize us to apply for SBIR funding, offering potential growth.
- I'm excited about possible investor interest due to SBIC involvement.
- The policy could help small businesses in innovative fields.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Retired Engineer (Detroit, MI)
Age: 62 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- My involvement is indirect now, but the potential innovation boost could benefit the economy.
- I'd like to see manufacturing technologies evolve with more funding support.
- I hope my consulting firm might benefit from the spread of new technologies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 4 | 4 |
State Economic Development Officer (Albuquerque, NM)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This policy aligns well with state initiatives to secure more innovation funding.
- Seeing an uptick in SBIR applications could boost our local economy significantly.
- I expect more collaborative opportunities across businesses and sectors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Small Business Advisor (Los Angeles, CA)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Including states with low SBIR awards could balance opportunities better across regions.
- Small businesses I advise could greatly benefit if they can secure funding easier.
- I anticipate more companies seeking advice on leveraging new funding avenues.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Freelance Product Designer (Boulder, CO)
Age: 29 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- I work across multiple startups, so more funding means more projects.
- The policy might facilitate more tech innovations, leading to greater employment and client opportunities.
- Having SBICs involved could mean startups raise funds more quickly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Research and Development Manager (Raleigh, NC)
Age: 33 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This could provide our firm with longevity and financial stability.
- I'm enthusiastic about the technological advances we can achieve with more funding.
- Overall, this policy seems like it could significantly boost our R&D projects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 9 | 6 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Cost Estimates
Year 1: $500000000 (Low: $400000000, High: $600000000)
Year 2: $525000000 (Low: $420000000, High: $630000000)
Year 3: $551250000 (Low: $441000000, High: $661500000)
Year 5: $608812500 (Low: $486000000, High: $730650000)
Year 10: $500000000 (Low: $400000000, High: $600000000)
Year 100: $500000000 (Low: $400000000, High: $600000000)
Key Considerations
- The need to manage program integrity and prevent fraud among participating SBICs.
- Balancing the potential for increased administrative burden against the economic benefits from expanded participation.
- Monitoring and adjusting the impact of leveraging limits and requirements to maintain a healthy investment environment.