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One NC Small Business Program – Supporting Innovation from the Mountains to the Sea

By Katrinka McCallum and Rick Webb, North Carolina Board of Science, Technology & Innovation

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The One North Carolina Small Business Programprovides grants to companies working to solve problems through developing and commercializing innovative new technologies. The technologies cover a wide range of applications, like providing therapies for rare diseases, making medical procedures safer, increasing agricultural crop yields, reducing food waste, protecting our soldiers’ lives, increasing automation efficiency, capturing wind power for energy, and much more. Innovative companies like these drive economic growth and even create new industries. And as we have discussed previously (Corvid Technologies: Digitally Engineering High-Tech Solutions and Responding to the Coronavirus), the One NC Small Business Program’s purpose is to improve the success rate of these early-stage companies and keep this talent and economic production in North Carolina.

The North Carolina Board of Science, Technology & Innovation, on which we serve, oversees this Program. And since February of this year, we’ve awarded 94 grants, totaling $4.6 million, to 83 different small businesses across the state. Another 10 grants are currently under review, and others will likely come in before this grant cycle ends. We’ve awarded two types of grants: Incentive and Matching. Both provide support to businesses that are pursuing or have won federal Phase I awards under the Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs. Federal Phase I awards are extremely competitive (less than one out of five proposals are funded) and are awarded after a rigorous merit review process to companies with the most promising ideas to perform proof-of-concept testing.

The One NC Small Business Program’s Incentive grants provide reimbursement to the small businesses for their efforts to prepare and submit Phase I SBIR or STTR proposals to the federal government, with the goal of increasing the number and quality of proposals, and to increase the geographic diversity of applicants. Meanwhile, the One NC Small Business Program’s Matching grants offer a critical bridge of funding to help cash-strapped small businesses transform creative Phase I concepts into marketable products. Overall, by supplementing the federal grant programs, the One NC Small Business Program has helped more North Carolina small businesses commercialize new technologies, create high-paying, high-skilled jobs in the state, and attract follow-on funding. And this year was one of the most geographically diverse cohorts, with companies receiving funding spread across 19 counties statewide, from Brunswick to Yadkin (see map below).

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One North Carolina Small Business program grantee operations span the state, and efforts are ongoing to find untapped potential outside the typical innovation hotspots.

The Board has made significant contributions to many small businesses, yet the demand for One NC Small Business Program funding far exceeds the $5 million currently appropriated. As a result, the Board has had to make difficult decisions regarding the size and number of awards and eligibility restrictions. These limitations mean that we have not been able to take full advantage of the Legislature’s thoughtful enhancements and expansions of the Program in the 2021 Appropriations Act (pages 335-336). Furthermore, with North Carolina’s economy becoming more and more focused on innovation, we cannot afford to fall behind in developing technological developments in our state. The chart below illustrates this, as well as the unrealized opportunity since the Program was established:

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North Carolina small businesses have won increasing amounts of SBIR/STTR Phase I funding (red), but State matching support in North Carolina has not kept pace with this growth (blue). Not only does this leave untapped potential, but North Carolina companies may choose to move operations to states that have more robust and consistent funding for similar matching programs.

Federal SBIR and STTR awards directly fund innovative startup companies to create new technologies to address our most-pressing societal needs. Before the start of this year, the One NC Small Business Program had provided over $27 million in matching grant funding to more than 275 of North Carolina’s cutting edge and transformative small businesses and helped attract over $500 million in follow-on investment; this was despite never having come close to meeting all demand for such funding. To combat this gap in fiscal year 2023, the Board is respectfully requesting an appropriation of $9 million to expand utilization of the Program and further support this effort to create a resilient, vibrant economy that improves the quality of life for all North Carolinians through advancing the deployment of science, technology, and innovation in its small businesses.

That is why we support the One NC Small Business Program and invite you to do the same. If you ask us what North Carolina can do to help ensure our state leads the way in driving technological change critical for ensuring the success of our citizens, fellow Americans, and the world population, our recommendation is this: Increase funding of the One North Carolina Small Business Program.

More Information: 

Katrinka McCallum is a member of the North Carolina Board of Science, Technology & Innovation, Board Member of Intrusion, Inc., and a Board Member of Rimini Street, Inc.

Rick Webb is a member of the North Carolina Board of Science, Technology & Innovation and a Senior Advisor at Accenture.

More Information on the One North Carolina Small Business Program is found at https://www.nccommerce.com/grants-incentives/technology-funds/one-north-carolina-small-business-program.

More information on the NC Board of Science, Technology & Innovation can be found at https://www.nccommerce.com/about-us/boards-commissions/board-science-technology-innovation.

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Thanks to Matt Kollman, North Carolina STEM Policy Fellow in the Office of Science, Technology & Innovation, for his research assistance.





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