Aiming to surpass China's innovation? Empower Small Business Innovation Research (SBIR) program managers to cultivate the next Anduril-like success stories.

In the dynamic landscape of defense technology, small businesses play a crucial role in driving innovation. However, these businesses often face significant hurdles in transitioning from promising ideas to real-world military capabilities.

Over the past decade, 40% of small business suppliers within the Defense Industrial Base (DIB) have been shed, highlighting the challenges they encounter. One of the main obstacles is not red tape, but the underfunding of government personnel responsible for promoting defense technology innovation.

Recently, two legislations, the SPEED Act and the INNOVATE Act, have been introduced to reduce red tape for emerging defense technology. The INNOVATE Act, proposed by Senators Joni Ernst (Iowa) and Thom Tillis (North Carolina), aims to reform the Small Business Innovation Research (SBIR) program to improve commercialization and accountability.

The SBIR program, known for growing defense tech unicorns like Anduril and Shield AI, currently allows only 3% of its budget to be spent on administration, while traditional acquisition programs spend 15% on management and support. To maximize the potential of these reforms, Congress should consider raising the cap on SBIR administrative funds.

These funds can be used to coach small businesses, connect them with end-users, and guide them towards commercialization and operational use. Each dollar of targeted SBIR support attracts roughly six dollars of private investment, making it a cost-effective strategy for fostering innovation.

The success of the SBIR program is due to program managers staying engaged, users testing, and private investors seeing a signal worth backing. However, without the right support, promising SBIR projects often fail in the ruthless marketplace.

To ensure the funds are spent on meaningful outcomes, Congress could require that a significant percentage (70%) of the SBIR administrative budget be used for documented services that help companies transition their technology to the warfighter or commercial markets.

Policymakers often think the solution is to fund more startups, but velocity, not volume, is key to winning innovation races. The real problem isn't too few awards, it's lack of support for the startups and small businesses already funded.

The Navy's SBIR program demonstrates the effectiveness of hands-on support in converting promising Phase I ideas into fielded technology at a rate that is currently not standard. Higher Phase III transition rates can result in more defense capabilities reaching the field instead of being orphaned.

The cost of the proposed fix to make reform count is negligible. Lawmakers should aim to provide a level playing field for startups to compete with Defense primes and their capture managers. The strategic upside of the proposed fix is decisive.

Brian Miller, senior vice president at BMNT and a former professional staff member for the Senate Select Committee on Intelligence, emphasizes the importance of support for startups and small businesses in the defense sector. Without it, promising projects often fail in the "Valley of Death" between a great idea and a real-world military capability.

Both the SPEED Act and the INNOVATE Act are considered significant steps forward in promoting innovation within the defense sector. As policymakers consider these acts, it's crucial to remember that velocity, not volume, is the key to fostering a thriving defense technology ecosystem.

Aiming to surpass China's innovation? Empower Small Business Innovation Research (SBIR) program managers to cultivate the next Anduril-like success stories.