Examination of recent venture capital behavior reveals considerable turbulence, especially over the past decade, when total investments rose from less than $10 billion in 1995 to more than $100 billion in 2000. By 2004 investments had returned to about $20 billion. During that 2000-2004 period, while the United States experienced a five-fold decrease in available venture funding, SBIR and its sister program, the Advanced Technology Program (ATP), were in place to help address this missing step.
The day’s conference focused on Phase III SBIR activities representing product commercialization, particularly in support of the missions of the Defense Department and NASA. Specifically, the conference would:
hear the views of small businesses, prime contractors, SBIR program officers, and government customers,
discuss features of the program that have worked during transitions from one SBIR phase to the next, and
identify and review features that need improvement.
He noted that the conference represented the first time the principal participants in the SBIR program—program managers, representatives of leading prime contractors, and leaders of small companies that had been successful as well as those that have faced challenges—would come together to exchange views and experiences on this topic. He expressed the hope that these views and experiences could help identify some “best practices” and/or new initiatives for the program.
The difficult challenge for the NRC committee assessing SBIR, he said, was to evaluate the program as a whole. Given SBIR’s unique role, a key question in analyzing the SBIR program is, “Compared to what?” Answers to this question depend heavily on understanding the context in which SBIR operates. He concluded by emphasizing the need for policymakers to appreciate the challenges of technology transition in particular and the risks and complexity of early-stage finance in general.
Fortunately, he observed, the National Academies had assembled a distinguished committee with an exceptional chairman to take up this task. He then introduced Dr. Gansler of the University of Maryland, who is the chair of the NRC Committee evaluating SBIR.