Taxpayer Funded Innovation Under Review
By Owen von Zagorski
Improving Our Small Business Programs
In a letter published February 26th, 2025, to Secretary Pete B. Hegseth of the U.S. Department of Defense, several SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) concerns were raised.
According to the House Committee on Small Business, the Committee on Science, Space, and Technology, and the Select Committee on the Chinese Communist Party (collectively, “the Committees”) it has become more apparent that taxpayer funded innovation is being used to benefit the greatest adversary of the United States. The reason for the letter is to crackdown on Chinese groups targeting innovations derived from U.S. businesses, particularly those businesses categorized as “small” entities.
For example, Chinese venture capital firms, research partnerships, and talent recruitment programs solicit expertise and pursue intellectual property extricated from U.S. high tech start-ups industry enterprises where ideas are born. It is feared that sensitive information is being extracted by China to undermine national security.
A 2021 D.O.D. report shows that China has exploited our programs to acquire U.S. technology. The report states that Chinese talent programs have recruited key U.S. firm employees allowing them to connect their Chinese Communist Party (CCP)-linked entities to taxpayer-funded research.
“As a participant in the SBIR and STTR programs, we would like to work with the Department of Defense to identify vulnerabilities and strengthen safeguards to ensure that these programs put America first by supporting American small businesses, advancing U.S. innovation, and protecting national security.”
The clear message of the letter is that groundbreaking tech developed by U.S. small businesses must remain in the U.S. Authorization for SBIR and STTR programs that expires on September 30th, 2025, when the Committees of jurisdiction are set to discuss legislative and policy changes.
Information requested by “the Committees” can be found in the attached letter.