The Veteran Who Invented the SBIR Program
We are 15 days away from the expiration of the SBIR program, requiring Congress to decide when (and whether) to reauthorize and fund it as they have done every 3 to 5 (and one time 8) years for the past four decades. Though we have every confidence that the program will be reauthorized, we wanted to spend these next two weeks sharing fun facts and success stories about the program that most are not aware of to highlight its importance and celebrate its impact on American innovation and our technological impact on the world.
What better way to start off this series than with its origin story and the visionary veteran who dreamed it up.
A Nation in Need of New Ideas
In the late 1970s, the United States was anxious about its innovative edge. The economy was mired in stagflation – stagnant growth coupled with high inflation – and global competitors were catching up(**). Policymakers and business leaders worried that America’s technological leadership was eroding. Amid this climate of uncertainty, Washington sought ways to spark inventiveness and economic renewal. One glaring problem stood out: while small businesses were widely seen as hotbeds of innovation, they were largely shut out of federal research funding(**). Most government R&D dollars flowed to big corporations, universities, and federal labs, leaving the entrepreneurs and tinkerers in garages and startups with little support(**). The nation’s innovation pipeline had a serious leak, and a little-known federal employee was about to plug it.
A WWII Veteran with a Vision
Roland Trefethen Tibbetts did not fit the stereotype of a revolutionary. A soft-spoken World War II veteran, he had already fought for his country as a U.S. Army Air Corps lieutenant. After the war, he experienced firsthand how a government program could change a life: the G.I. Bill paid for his education, allowing him to earn an undergraduate degree at Boston University and an MBA at Harvard(**). That opportunity transformed Tibbetts from a returning soldier into a business-savvy professional, instilling in him a belief that smart government investment could unlock individual potential.
Tibbetts spent two decades in the private sector, eventually serving as a vice president at small high-tech firms(**). This experience taught him how innovative small companies often struggled to obtain resources – especially from the government. In 1972, Tibbetts brought his real-world perspective to Washington, joining the National Science Foundation (NSF) as a senior program officer. He was placed in a new NSF directorate called Research Applied to National Needs, which aimed to fund research with practical benefits. At NSF, Tibbetts quickly earned a reputation as a taskmaster with sharp instincts for spotting game-changing ideas. More importantly, he recognized a structural flaw in how federal R&D was allocated. Small businesses – the very entities willing to pursue risky, out-of-the-box innovations – faced “fierce opposition” when competing for government grants against large institutions(**). In agency after agency, bigger players won virtually all the funding, while small firms were left to fend for themselves.
Tibbetts was convinced that this imbalance was stifling America’s innovative potential. He believed that individual entrepreneurs and small startups were “the primary source of category-creating inventions and technical breakthroughs”, even more so than corporate or academic labs. According to Tibbetts’s analysis, large corporations were often reluctant to pursue radical new ideas – they “will not risk breaking from a so-far successful business model or product lines,” as he later explained. University laboratories and government research centers, for all their strengths in basic science, were not in the business of commercial development. Small businesses, by contrast, live or die by innovation. These scrappy firms exist precisely to chase high-risk, high-reward technological breakthroughs and bring them to market. Yet despite their ingenuity, small companies in the 1970s received under 5% of federal R&D dollars, compared to more than half for large companies and roughly a third for universities. Tibbetts saw a classic market failure: the organizations most capable of disruptive innovation were the least likely to get funding under the status quo.
Diagnosing a Broken Innovation Pipeline
By the mid-1970s, concern over U.S. competitiveness had reached Congress. Lawmakers across party lines began acknowledging that something was wrong in the nation’s approach to innovation. In hearings and studies, they noted that “small business is the principal source of significant innovations in the Nation” even as “the vast majority of federally funded research and development is conducted by large businesses, universities, and Government laboratories.” This contradiction – an innovative small-business sector starved of public R&D support – suggested that America’s innovation ecosystem was out of balance. Senator Edward Kennedy of Massachusetts emerged as a key champion of small business research. Throughout the 1970s he pressed the NSF to open its doors to more small-firm proposals, introducing legislation to earmark a portion of agency research budgets for entrepreneurial ventures. Outside of Congress, a husband-and-wife team, Arthur and Judith Obermayer, also lobbied tirelessly for change. Arthur Obermayer, himself a small business founder, had testified as early as 1970 about the hurdles faced by small R&D companies in dealing with the government.
Inside the NSF, Tibbetts became the point man for this idea. He sketched out a bold concept for a new grant program exclusively for small businesses – a protected channel where startups could compete only against each other, not against Boeing or Harvard or Los Alamos. Crucially, Tibbetts insisted the program should value commercialization as much as pure science. He envisioned a process to take a raw high-risk idea from proof of concept to prototype to market-ready product, using phased funding that would weed out the duds and propel the winners. This three-phase structure, which Tibbetts first detailed in the mid-1970s, aimed to “push [firms] to realize their commercial potential” – a radical departure from the publish-or-perish culture dominating most research grants.
Tibbetts’s push for “commercializable” research ruffled feathers in the academic-oriented NSF. Many traditional scientists bristled at the notion that grant money should produce products, jobs, or profits; in their view, NSF’s role was to support basic science, not business ventures. Tibbetts, by contrast, argued that federally funded research should more directly benefit the economy and society. He fought internal resistance with a calm but steadfast demeanor. Colleagues recalled that even amid controversy, he “never lost the gentle and dignified approach” that defined him. By 1976, Tibbetts had won enough support inside NSF to launch a small experimental program. The following year, 1977, the NSF Small Business Innovation Research pilot quietly made its debut.
The 1977 Experiment That Paid Off
When the NSF’s pilot began, few could have predicted its remarkable outcomes. The program’s budget was tiny – only enough to fund 63 awards in the inaugural round (42 small Phase I feasibility studies and 21 larger Phase II follow-on grants). But Tibbetts had carefully selected proposals with big potential. He was betting that even a modest infusion of capital and validation could help small firms achieve breakthroughs that others had overlooked.
He bet right. Incredibly, one of those first NSF-funded companies went on to discover the gene responsible for cystic fibrosis, a milestone in medical science. That small biotech firm’s work also contributed to completing the map of the human genome – long before the official Human Genome Project was finished. Another NSF-backed startup in 1977 was a little software venture working on natural-language processing. With Tibbetts’s support, it grew and eventually became Symantec, the cybersecurity and software giant known for Norton Antivirus. A third high-risk awardee from the pilot (originally named Relation Technology, Inc.) later transformed into Ingres Corporation, a pioneering database company.
These success stories were not mere flukes – they were proof of concept that small businesses, given a chance, could deliver outsized innovations. As Arthur Obermayer told Congress in 1978, the NSF’s experiment was “potentially… the most significant government program of this century in the field of science and technology.” Enthusiasm for Tibbetts’s pilot began to spread. Jere Glover, a House Small Business Committee staffer at the time, enlisted Tibbetts to compile evidence on how much high-tech innovation actually sprang from small companies. Tibbetts responded with a trove of data – over 600 pages of studies – demonstrating that startups could innovate as well as, if not better than, the established players. That research helped shatter lingering myths and caught lawmakers’ attention. It even laid groundwork for the Bayh-Dole Act of 1980, which for the first time allowed small businesses (and universities) to own the patents arising from federal research. The stage was set for a bigger leap.
From Pilot to National Program
In Washington, once an idea proves its worth, it can quickly gain momentum. The startling early returns of the NSF pilot – medical breakthroughs and billion-dollar companies born from shoestring grants – convinced many that Tibbetts’s model should be scaled up. President Ronald Reagan, elected in 1980 on a platform of reviving the U.S. economy, embraced the notion that unshackling small entrepreneurs could help spur growth. In July 1982, surrounded by lawmakers in the White House Rose Garden, Reagan signed the Small Business Innovation Development Act into law, creating a government-wide SBIR program (Small Business Innovation Research) modeled on Tibbetts’s NSF experiment. “Small business is a tonic for what ails this country,” Reagan declared at the signing ceremony, noting that the bill “recognizes the contributions of small high-technology firms to the Nation’s growth, productivity, and competitiveness.”(**)
The 1982 SBIR law codified Congress’s findings about the innovation gap and laid out clear purposes. Lawmakers explicitly affirmed that “technological innovation creates jobs, increases productivity, [and] is a valuable counterforce to inflation,” especially in tough economic times. They acknowledged that small businesses were America’s wellspring of new ideas, and that it was “particularly” these firms that excel at turning R&D results into real products. To bridge the gap, the SBIR program required agencies above a certain R&D budget threshold to set aside a percentage for small-business grants(**). Initially, this set-aside was 1.25% of agency R&D funding. In effect, SBIR mandated a carve-out in federal research funding so that innovative little companies could no longer be crowded out by the big players. The program was designed not as a handout, but as a strategic correction to an R&D marketplace that had systematically overlooked high-potential ideas. As one analysis put it, Tibbetts and his allies sought a program that would “be available only to small business and would emphasize the commercialization of research results.”
The SBIR program spread rapidly. Eleven federal agencies – from the Department of Defense to NASA to the Department of Energy – launched their own SBIR grant competitions, all following the Phase I -> Phase II -> Phase III model first pioneered at NSF. Tibbetts continued to steer the effort at NSF, serving as the SBIR program manager there for well over a decade after the national rollout. He had the satisfaction of seeing his brainchild grow from a niche pilot into what is often called “America’s Seed Fund.” And the timing proved fortuitous: the 1980s saw intense pressure to restore U.S. technological leadership, particularly as Japan and other nations challenged American industries. SBIR became a key part of the U.S. response – an ongoing pipeline to nurture homegrown innovation at the grassroots level.
Lasting Impact and Legacy
Over the decades, the SBIR program has dramatically validated Roland Tibbetts’s original conviction. What started with a few dozen NSF grants in 1977 blossomed into a powerhouse of American innovation. As of today, over $40 billion in SBIR funding has been directed to small businesses, supporting work that has led to around 70,000 U.S. patents and the creation of nearly 700 public companies(**). The program’s alumni include household names and transformative technologies. Qualcomm, now a global leader in mobile chip technology, was a fledgling startup when it received SBIR support in the 1980s. iRobot, maker of the Roomba and other robots, likewise got early SBIR grants. Dozens of new drugs, medical devices, and energy solutions have roots in SBIR-funded research. By channeling resources to risk-takers, the program has been credited with helping keep the United States at the leading edge of fields from biotech to nanotechnology. It has also been copied internationally – countries from the U.K. to South Korea have launched similar small-business research initiatives, recognizing the wisdom of Tibbetts’s approach.
For Tibbetts himself, perhaps the most fitting tribute came in how the program remembers its heroes. In 1995 the U.S. Small Business Administration established the Tibbetts Awards, named in Roland Tibbetts’s honor, to recognize outstanding SBIR-funded entrepreneurs and the individuals who support them. Tibbetts remained actively involved even after retiring from NSF in 1996, often attending SBIR conferences and mentoring young program managers. Colleagues recall that he took as much pride in a two-person startup’s success as others might in a Fortune 500 company’s achievements. His belief in the “little guy” never wavered. In October 2014, Roland Tibbetts passed away at age 90, leaving behind a legacy firmly secured in the thousands of innovations and companies born from the program he fathered.
Today, the SBIR program stands as a cornerstone of America’s innovation strategy – often described as the government’s most effective venture capital fund. It embodies the lesson Roland Tibbetts taught: big breakthroughs can start in small places, if only we nurture them. At a time when economic challenges loomed large, a veteran with a visionary idea changed the trajectory of American innovation. Tibbetts’s story is a reminder that bold solutions can come from unlikely sources – and that a single pilot program, conceived against the odds, can end up reshaping an entire nation’s future.