Rep. Doris Matsui, D-Sacramento, successfully amended the SBIR/STTR Reauthorization Act (H.R. 5819) to help entrepreneurs implement their ideas and shepherd them through production and commercialization. The amendment will encouragebusiness incubators—entities that provide startup companies with resources and services to grow their businesses—to partner with Small Business Innovation Research (SBIR) award recipients.

“When you hear the word ‘incubator,’ an image is called to mind of a safe environment that allows growth to happen. Business incubators are entities that do just that: they provide our innovators and entrepreneurs a stable environment in which to move their ideas from concept to
reality,” said Rep. Matsui.

In Sacramento, incubators such as CleanStart and the McClellan Technology Incubator have already had a demonstrably positive effect on the maturation of the business climate in Sacramento. Business incubators provide startup companies with technical and management assistance, access to equipment, shared offic space, networking opportunities with other local businesses and venture capital groups, and a host of other services. Put simply, these incubators undertake the task of shepherding entrepreneurial companies from the initial idea stage to
product implementation and, eventually, commercialization.

The companies which receive SBIR grants, are by definition, small, innovative and with brandnew research. These are just the type of companies best situated to take advantage of the tools an incubator can provide. This amendment will support and strengthen the objectives of the SBIR program.

"This action by Rep. Matsui is a direct outcome of discussions on Capitol Hill during the recent Metro Chamber Cap-to-Cap trip," said J.D. Stack, CEO of Sacramento Area Regional Technology Alliance. "SARTA participated in these discussions as a member of the Clean/Green Technology Team."

The team asked for federal funding support of business incubation programs focused on growing clean technology firms.

"I was surprised and delighted by the quick action taken by Congresswoman Matsui," Stack said.

Congresswoman Matsui's amendment on this bill is a big step for growing Sacramento's technology-based economy, Stack added. "This legislation will provide opportunities for crucial funding and business development assistance for innovative companies in our region's burgeoning clean technology and medical technology sectors. Her leadership on this important federal research and development program is most timely and valuable for local economic development efforts."

There are over 1,100 incubators in the United States, and the vast majority of these are non-profit organizations, such as the McClellan Technology Incubator. According to the National Business Incubation Association, incubators in North America assisted more than 27,000 startup companies that generated more than $17 billion in 2005 alone.

Section 404 of H.R. 5819 requires Federal agencies to encourage partnerships between small companies that receive SBIR awards and prime contractors, venture capital companies, and larger businesses. The intent of these partnerships is to help SBIR awardees get their products to the commercial phase faster. However, Section 404 did not require these partnerships to include business incubators, even though these incubators are uniquely positioned—in fact, designed—to help small companies make the transition from concept to commercial product.

The Matsui amendment requires that business incubators are included in these provisions. “Cultivating our workforce, which is largely comprised of small businesses, will help ensure that America remains competitive in the evolving global market. By providing resources to
innovative new businesses, we are taking action now to grow the cutting-edge workforce of tomorrow,” said Rep. Matsui.

“The bill we passed today reinvests in research and development in the sectors that will compose the workforce of tomorrow, including clean energy and technology. Taking steps now to help grow our small businesses will cultivate a better America for the future,” said Rep. Matsui.