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By Mark H. Clevey, MPA, Manager of Consumer Education and Renewable Energy Programs, Michigan Economic Development Corporation, Michigan Energy Office
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More than most, Michigan has benefited historically from the fact that 40-60 percent of all economic growth is from technological innovation. Indeed, many economists are increasingly coming to appreciate an emerging field of study called “Innovation Economics” which poses that innovation — not capital accumulation — drives economic growth.

Today, West Michigan is using its innovation and manufacturing prowess to spur economic growth, in part, by capitalizing on the rapidly growing but highly competitive energy efficiency (EE) and renewable energy (RE) energy global marketplace.

While labor continues to be a significant factor in EE/RE product sales, more and more, accelerating technological innovation is viewed as the primary way to drive down the installed cost per watt and attain market leadership. The need for accelerated innovation is spurring new models for collaborative research and development that can truncate the invention process.

For example, in the 1970s, the lion’s share of R&D, 100 Award-winning U.S. innovations came from corporations acting on their own behalf (with Michigan leading the nation in corporate R&D investments). Over the past two decades, however, most of these award-winning innovations have started to come from inter-organizational partnerships involving business (large, medium and small) and government (including federal labs and universities).

In the U.S., currently, roughly two-thirds of award-winning U.S. innovations now involve some kind of inter-organizational collaboration and roughly 75 percent of U.S. patents come from federally funded research.

As the primary generators of most innovations and related prosperity, small businesses play a vitally important role in the innovation landscape. Many successful small businesses — such as A123 Systems (formerly T/J Technologies, Ann Arbor) — have successfully used multi-millions in federal research grants to effectively leverage innovation-related collaborations with universities and third-party commercial partners. Using this model, in just under 14 years, T/J went from a startup to a joint venture with A123 Systems and, along the way, used federal R&D grants to develop advanced battery technology that is currently being used by General Motors in its electric vehicle program.

The National Science Foundation (NSF) Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) program is one of the leading programs in the nation for funding commercially viable R&D projects. The NSF SBIR/STTR program provides individual R&D grants to small businesses (like T/J Technologies) in the range of $100,000 (Phase I) to $1,000,000 (Phase II).

Based on the success of companies like T/J Technologies, NSF has found that the most successful SBIR/STTR projects have the following characteristics:

• Close collaboration with a market leader
• Strong focus on a narrow technology and market
• Strong patent position
• Long term dedicated technologists
• Key company officer is long-term project champion
• Commercialization of sound science is used as a smart business strategy
• Grant proposals with strong collaborations and financial backing from industry leaders receive more credit in the review process

NSF, along with the U.S. Departments of Agriculture, Defense and Energy regularly provide EE/RE-related SBIR/STTR grants to small businesses interested in developing innovations that effectively lower the installed cost of energy efficient products, solar photovoltaic and both on and off-shore wind energy systems in areas such as: electronics/information technology (e.g., software, services, systems, applications, components and devices); green chemistry (e.g., biobased materials, lubricants, fuels, etc.); advanced materials (e.g., electronic and magnetic materials, structural materials, coatings and surface modification, materials for sustainability) and advanced manufacturing (e.g., manufacturing processes, machines and equipment, modeling and simulation, etc.).

The Muskegon-based Michigan Alternative and Renewable Energy Center (MAREC) of Grand Valley State University is currently teaming with the MEDC’s Michigan Energy Office to encourage increased inter-organizational EE/RE collaborations in West Michigan led by small business entrepreneurs.

To that end, the following type of West Michigan organizations could potentially benefit from SBIR/STTR collaborations:

• Senior technical staff from OEMs, total system, sub-system, component and raw material suppliers and/or startups, with 500 employees or less (“small business”), seeking research and develop funding for proprietary EE/RE-related innovations, products and processes that have high commercial potential.
• Large & medium-sized businesses and/or third-party investors seeking to collaborate with the small SBIR/STTR businesses to commercialize their successful R&D results.
• University/institute faculty and staff seeking consulting opportunities with the small businesses on their SBIR/STTR grants.
• Community and economic developers interested in fostering innovative entrepreneurship as an economic reinvention strategy.
• Business support service providers (i.e., patent and legal, accounting, marketing and business development specialists) with demonstrated expertise in areas such as technology transfer, government data rights, federal acquisition regulations, export, cutting-edge venture formation and growth and strategic alliances.

The MEDC has a number of programs — including the Michigan Energy Office — to assist in the formation and growth of EE/RE-related ventures in Michigan (see www.MichiganAdvantage.org).

For more information on Commercially Viable SBIR/STTR and related R&D grants for EE/RE-related innovations, please contact: Mark H. Clevey, MPA, Manager, Consumer Education & Renewable Energy Programs, MEDC, Michigan Energy Office, Office: 517-241-6280, email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

For SBIR/STTR training and technical assistance, business incubation and business development services and resources in West Michigan through MAREC (www.gvsu.edu/marec), please contact Kim Walton, GVSU MAREC (616) 331 6907.

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