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The following HTML text is provided to enhance online readability. Many aspects of typography translate only awkwardly to HTML. Please use the page image as the authoritative form to ensure accuracy. Other potential non-economic benefits
Trends in agency funding for small businessFor this study, “small business funding” will be defined as synonymous with SBIR. A definition of “small” is needed. The SBIR definition (fewer than 500 employees) is quite broad.43 Dividing firm participants into size subcategories may be advantageous. We plan a breakdown of small firms by size, taking into account existing SBA classifications and based on natural divisions as emerge from the data. The agencies have considerable discretion in defining which agency expenditures and disbursements they consider to be R&D, and thus subject to the percentage requirements of the SBIR set aside. Small firms also receive R&D funding directly from the agencies outside the SBIR program, and receive subcontracts for R&D from primes or other subcontractors, whose original funding source was federal R&D. Since in some cases the prime or intermediate contractor may also be a small business, there is an opportunity for double counting as well as for undercounting. It is important to keep in mind that the congressional intent was to increase the amount of federal R&D funding ultimately reaching small businesses. Small businesses, in many cases, cannot take on more R&D funding, as they do not have the expert staff, or the culture to do R&D. Thus, there might conceivably be a sort of saturation effect. The issue of absorptive capacity also occurs in the case of fast moving high tech firms, which may not willing to risk the overhead and delay involved in seeking federal funds at all. In the present study, saturation effects can be examined in part by investigating the relationship between the growth of grant-program funding and the growth of grant-program applications. Insights into the impacts of expansions in grant funding on small-business response capacity and on research quality may be gained by analyzing ATP’s experience between 1993 and 1994, based on changes in reviewer technical scores and small business application rates as the program was expanded dramatically between 1993 and 1994. Best practices and procedures in operating SBIR programsIssues related to administrative process, both within agencies and across agencies, will be defined over the course of the first phase of the NRC study. Areas to be addressed may include:
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