According to the EPA, small business employs more than half of all <?xml:namespace prefix="st1"?>U.S. workers and is responsible for the majority of new eco-friendly technologies developed in the country. That may explain why the EPA has become a quasi venture capitalist firm in recent years providing funding to the best eco-friendly innovations emerging from small businesses. As reported in a recent GreenBiz article, the EPA will award $1.75 million to 25 small business on the forefront of eco-friendly technologies.

According to George Gray, EPA assistant administrator for the Office of Research and Development; “There are huge new opportunities for profits in the booming green technology business sector.”

The Small Business Innovation Research program is designed to support the development of nanotechnology, pollution prevention, biodiesels, solid and hazardous waste, air pollution control and homeland security, in particular.

One previous winner, Edenspace Systems, produced a plant that could remove arsenic from the soil and was used by the Army to clean parts of Spring Valley, Washington D.C. This year’s winners will receive an initial $70,000 to produce a proof of their concept and then they may apply for a second phase to begin commercializing the product. The EPA is accepting submissions for next year’s contest until May 21 of 2009.