Federal Government Put $4.5 Billion Into SBIR/STTR in 2025

By Amara Osei

The federal government invested $4.5 billion in innovative small businesses through the SBIR and STTR programs in 2025, including more than $300 million through U.S. Department of Energy innovation and technology programs. That scale is what made a two-year National Academies assessment of the DOE programs consequential — and UConn business professor Timothy B. Folta co-chaired it.

Folta, the Thomas John and Bette Wolff Family Chair in Strategic Entrepreneurship at UConn's School of Business, led the 13-member committee with David Popp, an economics professor at Syracuse University. Congressionally mandated, the study ran approximately two years and wrapped up earlier this month. It examined how the DOE's Small Business Innovation Research and Small Business Technology Transfer programs stimulate technological innovation, support small businesses, and advance the department's research and development missions.

"One of the things that attracted me to this project was the opportunity to apply rigorous analysis to questions with important implications for national policy," Folta said. "The federal government invested $4.5 billion into innovative businesses through the SBIR/STTR programs in 2025, including over $300 million in the DOE innovation and technology programs. We were asked to assess whether and how those Department of Energy investments contribute to the objectives of the programs."

What did the committee actually do?

The National Academies of Sciences, Engineering, and Medicine convene leading experts on complex issues facing government and society, and they rank among the nation's most respected sources of independent scientific and policy advice. Committee service itself is a professional distinction; co-chairing adds responsibility for guiding the work, reconciling diverse perspectives, and producing evidence-based recommendations that can inform national policy.

The committee analyzed extensive data on program applicants and award recipients, examined innovation and commercialization outcomes, and interviewed people involved in administering and participating in the programs.

Folta's own research portfolio — entrepreneurial policy, corporate strategy, and investment decisions under uncertainty — fed directly into the evaluation of federal innovation programs.

Why does one yardstick fail here?

The DOE's missions are broad, and the committee's key early conclusion was that success has to be measured against what each office is trying to accomplish. "For some offices, commercial success and the creation of new businesses are important objectives," Folta said. "For others, developing specialized scientific instruments or technologies that DOE can use to accomplish its own mission may be equally valuable. If we evaluate all these investments using the same measures, we risk missing some of their most important contributions."

That framing drove the findings. The study found evidence that DOE investments do support technological innovation and contribute to the agency's missions in different ways. It also flagged opportunities to strengthen program effectiveness and to address the challenges small businesses face in developing and implementing new technologies.

Who heard the findings?

After completing the study, Folta and Popp briefed congressional staff, Department of Energy officials, and representatives of the U.S. Small Business Administration, which coordinates the federal SBIR/STTR programs. Those sessions gave the committee a direct channel to the officials who oversee and administer federal innovation programs. The full report is published on the National Academies' website.

"The committee brought together people with very different expertise, and that made the work particularly interesting," Folta said. "As co-chairs, David Popp and I helped the group develop a common understanding of the issues, evaluate a substantial body of evidence, and reach conclusions that could inform decisions by the Department of Energy and Congress."

Interim UConn business dean Bob Day said the project pays off in Washington and in Storrs alike. "This is a great example of the benefits that materialize when research-focused faculty distinguish themselves as thought leaders within the academic community," Day said. "Leaders like professor Folta can both use their expertise to help guide important analysis and decisions in our federal government, and then turn around and build those experiences into a richer classroom experience for our students."

For Folta, the assignment proved academic research can shape consequential decisions beyond the university. With the report now delivered to Congress, the DOE, and the SBA, its recommendations sit with the policymakers who control the next round of program funding.