The federal SBIR program was created to stimulate technological innovation, utilize small businesses to meet federal research and development (R&D) needs, and increase private sector commercialization derived from federal R&D. This is a highly competitive program that encourages small businesses with the potential for commercialization to engage in federal R&D.

The federal STTR program is modeled on the SBIR program with similar objectives. It also serves to encourage tech transfer through research between small business concerns and non-profit research institutions. STTR's most important and fundamental role is to bridge the gap between the performance of science and commercialization of resulting innovations.