The Small Business Innovation Research (SBIR) program was created in 1982 by the Small Business
Innovation Development Act. The program is designed to stimulate technology innovation by small businesses,
provide technical and scientific solutions to challenging problems, and encourage the marketing of the resulting
new technologies in the private sector. Federal agencies with more than $100 million in extramural research and
development (R&D) are required to allocate 2.5 percent of their research budgets to small businesses. Such funds
from all federal agencies amounted to approximately $1.1 billion in fiscal year 1998. The U.S. Department of
Defense (DOD) has the largest single SBIR program ($540 million), approximately 40 percent of which comes
through Air Force channels