For years, Puerto Rico has had a long-standing reputation for being a mecca for manufacturing and production for major companies who flock to this Caribbean island in search of talented workers and tax benefits.
However, considering all of the activity that goes on in that sense, the island is falling significantly behind when it comes to research and development. The reasons are varied, but one common denominator — funding — may have the most to do with the lag.
“R&D isn’t easy and it doesn’t happen overnight, especially for smaller companies on the island,” said Yvette T. Collazo, district director for the SBA in Puerto Rico. “However, we have to start somewhere.”
That somewhere may be through the agency’s Small Business Innovation Research program, which the SBA has said is underutilized by Puerto Rico small businesses looking to innovate.
The SBIR is a competitive program that encourages small businesses to engage in R&D activity that has the potential for commercialization.
Through a competitive awards-based program, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization. Each year, about a dozen federal agencies with R&D budgets that exceed $100 million are required to allocate 2.5 percent of it to SBIR programs.
“This program was created to make sure there was participation from small businesses in R&D; to stimulate innovation not just from bigger companies who are going to do that anyway, but small businesses that are interested out there,” Collazo said.
She explained that participating companies compete for more than $1 million in seed funding — in the form of grants — to get their R&D off the ground. The SBIR program is structured in three phases: 1) the process of establishing the technical merit, feasibility, and commercial potential of the proposed R&D efforts, with awards ranging in the neighborhood of $150,000 to cover costs for six months; 2) continue the R&D efforts started in the first phase, with available awards of up to $1 million to cover total costs for two years; and 3) to see that small businesses move forward with their commercialization objectives. There is no funding available for this phase.
“The intent is to make sure that there is that stimulus for innovation, so that people know that it’s a significant amount of money available. This is grant money that is free,” she said.
In recent years, Puerto Rico has fallen short in applying for this type of funding, with the last major funding round taking place in March 2010. However, in July, Mayagüez start-up Cutting Edge Superconductors landed a $150,000 SBIR grant to start developing a technology in the field of superconductivity that could reduce the cost of magnetic resonance imaging studies by 40 percent. The first phase of research under the SBIR will run between July and December
In May, the Puerto Rico Science, Research and Technology Trust — an SBA partner — approved financing to another 18 research and development projects, proving the point that there is local interest in doing the work.
“But there’s opportunity for more, because there are so many people in universities that could easily partner with small businesses and do the work,” Collazo said.
To get the word out, the SBA has signed strategic partnerships with several local universities to provide orientation to staff and students.
The agency is also in talks with nonprofits and local government agencies — including the Northeastern Technological Initiative, known as INTENE, and the Puerto Rico Science, Research and Technology Trust — to shape similar collaboration agreements to continue spreading the word about available opportunities, she said.