For those of you that didn’t see last week’s newsletter, here is the lead story.

In March, Patrick Sweeney joined two dozen small business executives at the White House to watch President Obama sign a job stimulation bill for small businesses.

As he stood in the Rose Garden, Sweeney, the CEO of ODIN technologies in Ashburn, Va., thought about how nice it would be if more government funding was directed toward RFID and other technologies with game-changing potential for industry. Government-backed research grants could provide a much-needed additional push for RFID technology.

But as the European Union and other countries continue to heavily fund RFID research and pilot programs, U.S.-based RFID providers are mostly on their own. Sure, there are isolated government backed initiatives through NIST and the Department of Defense, but that funding doesn’t come close to matching the support technology providers receive overseas.

“It’s very disappointing,” says Kathleen Carroll, director of government relations at HID Global. “It’s interesting to me that Europe is ahead of us not only in looking at policy issues on RFID, but also in the implementation of RFID and in looking at different ways to deploy it.”

Most recently, the EU announced a plan to fund research to measure the return on investment for RFID when it comes to small and medium size businesses in Europe. That’s exactly the kind of initiative that would further drive RFID usage in the U.S. Earlier this year, Korea gave RFID a shot in the arm when it announced that more than 50 percent of pharmaceuticals in that country will need to carry RFID tags by 2015.

The EU project began in May and will run for two years, conducting tests at eight locations in six countries across multiple industries. The project’s goal is to allow SME’s to fully understand and leverage the potential benefits of RFID.

Dubbed the “RFID-ROI-SME” project, the goal is to boost the adoption of RFID technology by wide SME communities, while at the same time creating business opportunities for innovative RFID solution providers in the EU. Benefits will then be disseminated to wider SME communities in the form of case studies, best practices and blueprints.

In addition, the EU sponsored the recently-concluded two-year BRIDGE project, designed to address ways to resolve the barriers to the implementation of RFID and EPCglobal technologies. Those kinds of initiatives in the U.S. could help a host of small enterprises that believe RFID is out of reach do to pricing and scaling concerns.

“I don’t think we’ll ever see anything where the government funds technology research within private companies,” says Sweeney, whose company has numerous contracts with the DOD. “It’s a very different model between the U.S. and Europe. The whole purpose of the EU research is to figure how these solutions can scale and change the way small businesses work. The U.S. would never attempt to something that bold.”

In fairness, there are some examples of government working with the industry. When UMass-Lowell broke ground on its $70 million Emerging Technologies and Innovation Center this month, it did so with a stash of grant money, albeit from the state of Massachusetts, not the federal government. The Center’s primary focus will be on RFID technology.

And the Commerce Department has been fairly active working with the EU on RFID pilots, including the Lighthouse Project. Last year, SecureRF Corp. was awarded a Phase II Small Business Innovation Research (SBIR) grant from the National Science Foundation to develop a secure RFID tag for the pharma supply chain. SecureRF received $500,000. Other SBIR grants have been awarded to RFID firms in the past.

But while European firms rely on federal money, most of the research centered in the U.S. originates in the DOD and at universities like MIT and the University of Arkansas, which both have thriving RFID labs. In fact, the number of universities with RFID programs is growing rapidly. Rutgers University recently launched an RFID center in a partnership with Tagsource.

“It absolutely has to happen at the university level,” says Michael Ohanian, the former president of Intermec Technologies who is still active as an industry consultant. “But we need collaboration with industry. If these universities don’t get some funding, they can’t do anything.” Ohanian points to the RFID Solutions Center in Dayton , Ohio, a collaboration with several universities that received federal and state funding, as well as private money from Alien Technology. “That’s the kind of collaboration and funding that you need,” he says.

In addition to university-sponsored research, the federal government will continue to fund projects through the DOD, which also partners with universities. UMass- Lowell recently received $4 million to advance nanomanufacturing research and development, mostly for applications that will protect soldiers from biological and chemical substances during warfare.

“There will continue to be a combination between academia and the DOD,” says Sweeney. “Historically, most of the big technology breakthroughs in the U.S. have come out of the DOD or NIST, the Internet and GPS being prime examples. That’s because those developments end up being breakthrough technologies that dramatically change the battle field, as opposed to something that will help a small business to run more efficiently.”

That’s something the U.S. government might want to examine further if it is to maintain its foothold as a leader in innovation, technology and business.