Government Funding for Research and Innovation in Small Businesses.

When it comes to government investment in research and development different countries have different implementations of their incentives to research and development. In the USA, a competitive structure of grants empowers businesses by direct cash infusions. In Canada a system of tax refunds/credits are non competitive incentives to invest in R&D for small businesses.

On the one hand, the US system encourages new ventures who do not have a track record or established business to invest in completely new innovations. Although this is not always the case, the competitive system limits funding based on a specific budget per year.

In Canada, the system is more about innovation within existing business which is perhaps a lower risk approach since businesses have already overcome the hurdles of establishing a business model. The Canadian model also does not limit the amount of money available to small businesses as the criteria are non-competitive and focus on set criteria for funding.

Small Business Innovation Research Program (SBIR) – USA

The SBIR is a US funding program aimed at promoting research and development in the “Small Business” sector. Aimed at encouraging innovation in high risk sectors, the SBIR makes funds available for companies looking to invest in new research campaigns.

SBIR targets the entrepreneurial sector because that is where most innovation and innovators thrive. However, the risk and expense of conducting serious R&D efforts are often beyond the means of many small businesses. By reserving a specific percentage of federal R&D funds for small business, SBIR protects the small business and enables it to compete on the same level as larger businesses. SBIR funds the critical startup and development stages and it encourages the commercialization of the technology, product, or service, which, in turn, stimulates the U.S. economy.

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Small Business Technology Transfer Program (STTR) – USA

STTR is an important new small business program that expands funding opportunities in the federal innovation research and development arena. Central to the program is expansion of the public/private sector partnership to include the joint venture opportunities for small business and the nation’s premier nonprofit research institutions. STTR’s most important role is to foster the innovation necessary to meet the nation’s scientific and technological challenges in the 21st century.

STTR is a highly competitive program that reserves a specific percentage of federal R&D funding for award to small business and nonprofit research institution partners. Small business has long been where innovation and innovators thrive. But the risk and expense of conducting serious R&D efforts can be beyond the means of many small businesses.

Conversely, nonprofit research laboratories are instrumental in developing high-tech innovations. But frequently, innovation is confined to the theoretical, not the practical. STTR combines the strengths of both entities by introducing entrepreneurial skills to high-tech research efforts. The technologies and products are transferred from the laboratory to the marketplace. The small business profits from the commercialization, which, in turn, stimulates the U.S. economy.

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Scientific Research and Experimental Development (SR&ED) – Canada

The SR&ED Program is an incentive program designed to encourage R&D in Canada. The Canada Customs and Revenue Agency (CCRA) administers the program.

Each year, the CCRA receives over 11,000 claims from companies participating in the program. Of these, about 75% are small companies whose claims for R&D expenditures generally range from $20,000 to $2,000,000. Qualifying companies get money back as an income tax refund, an investment tax credit, or a combination of refund and credit.

“E.QU.I.P. International is a young company that has grown very rapidly since its beginnings in Chicoutimi, Quebec in 1988.The development costs at E.QU.I.P. have been substantial and there is no doubt that the support that the company has received from the SR&ED Program has been of tremendous assistance in achieving the status currently enjoyed.”

David Aston,Technical Director,
E.QU.I.P. International Inc.

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Technology Investment for Information Worker based businesses

Information workers see major gains in productivity by using the collaboration systems included in Small Business Server 2003. The collaboration technologies and mobility features allow users the flexibility to form virtual teams and create synergies that traditional technologies did not offer.

Sharepoint Services allow sharing of project data, documents, meeting information, research results, and more through internal websites helping to centralize information while protecting access through advanced security.

Remote Access with Remote Web Workplace, a technology that allow a user to securely log on to his/her workstation from anywhere in the world, allow unprecedented flexibility to continue working from remote locations during seminars, conferences and other business related activities.

Independent researcher have noted Small Business Server 2003 greatly reduces overhead IT costs while empowering Information Workers resulting in extremely fast Returns on Investment. Any company looking improve their bottom line should consider investing in technology that reduces costs and improves operational efficiencies.

Jeff Loucks
Available Technology

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