Forum offers advice on innovating for government

HERNDON, Va. -- Entrepreneurs gathered here Tuesday for advice on everything from how to get a federal Small Business Innovation Research grant to how to turn an idea into a commercially viable product and get it to market.

The setting was Virginia's 12th annual SBIR conference hosted by the Center for Innovative Technology, a nonprofit that among other things helps agencies like the Defense Department find emerging technologies they may have never noticed on their own.

Center Vice President Paul McGowan said too often he sees companies that are strong in science but not commercialization, or too strong on marketing but not on science. He offered examples of programs to help technology companies get noticed.

McGowan also encouraged entrepreneurs, saying that historic military innovations like tanks and airplanes did not come from requests from the military.

Richard Martin, president of Defense Holdings Inc., had an example, citing a $6.5 million contract one of his companies received to install glow-in-the-dark exit signs in the Pentagon after the Sept. 11, 2001, terrorist attacks. Martin said he had tried to sell the technology unsuccessfully to the Navy after the attack on the U.S.S. Cole in 2000 in a Yemeni port.

One executive from a company that coaches small businesses through the process, with a focus on getting both SBIR grants and a commercial product, said to become defense contractors someday, small companies must be "viable, visible, capable and credible."

"Commercialization isn't a phase-three process," said Lea Strickland, president and CEO of F.O.C.U.S. Resources. "It starts the day you start your business."

As the conferees were meeting across the Potomac River in Virginia, lawmakers were working to close the 109th Congress, and at least one item on the innovation agenda of President Bush that they may consider is renewing the research and development tax credit.

But Strickland said a broader issue that needs to be addressed next year is how to keep small businesses' cutting-edge innovation alive to deliver their innovations to market.

In highlighting the troubles that companies face, Martin offered his own example of a 10-year product-to-market cycle on a contract to outfit Navy submarines with metal brushes and the $3 million the Navy owes a company on another product.

"The programming cycles are so long that companies can't survive," Strickland said. "Companies disappear out from under the Navy because of the funding challenge."

Small companies now try to stay afloat with venture capital or institutional investors, but if they take on too much venture capital, Strickland said they lose that small-business status -- and their grant money. Venture-capital firms have lobbied Congress to not count the funding they provide small businesses.

"Congress tries not to interfere with competition and give someone an unfair advantage so they've tabled the issue," Strickland said. But she said a compromise from the extreme positions of no capital or allowing it and not counting it is desperately needed, and soon.

"The reality is these businesses won't get to success if there isn't some [policy] that meets in the middle," Strickland said.