Innovation procurement has no statutory teeth: SBRI is a shadow of SBIR

The US SBIR programme mandates that federal agencies with extramural R&D budgets over $100m allocate 3.2 per cent to small-business innovation contracts. The UK's SBRI, now Innovate UK Contracts for Innovation, has no mandatory target and a budget pegged at roughly 1 per cent of 2015-16 reference levels. Two decades of evaluations, from Cambridge Industrial Innovation Policy and David Connell's reviews, recommend a set-aside, and departments still face no requirement. ARIA covers frontier research push rather than procurement pull.

Procurement is the demand-side innovation lever the UK persistently leaves unpulled. SBIR seeded Qualcomm, iRobot and much of US defence technology. A statutory UK equivalent would give deep-tech startups first customers at zero net new spend, complementing ARIA and record R&D budgets.

A legislated SBIR-style set-aside of 2 to 3 per cent of extramural departmental R&D and procurement budgets in defence, health, energy and transport, run as phased challenge contracts with published uptake statistics.

// State-led: Instrument: legislation mandating 2-3% SBIR-style set-aside of departmental extramural R&D budgets.

A statutory set-aside is well-evidenced and near-costless, and SBRI already exists in weak form with moderate stakes and nothing dating the reform.