Third, increase the involvement of prime government contractors. This could be done by creating incentives for prime contractors to “pull” SBIR technologies toward maturity, as opposed to being “pushed” ahead by a sponsoring agency. This, he said, could make a huge difference, because prime contractors (unlike most small firms) have the resources and experience to quickly bring a technology to the stage of application.
The sum of these three approaches, in his experience, could produce a significant impact on more rapid and significant commercialization and transition. A key was to develop early partnerships among the small businesses, program officers, and prime contractors in order to increase the probability of success, speed product development, reduce cost, and stimulate the defense industrial base.
He also noted additional efforts by DoD to improve SBIR outcomes—notably the Fast-Track Initiative, which provides expedited decisionmaking for SBIR awards to companies that have commitments from outside investors.12
In summary, he said, the federal government had already had a significant impact on technology development through the SBIR program. This impact could become more important in the future as the nation’s need for innovation solutions grows.
He said he had been surprised by early studies that showed how many entities were shrinking their research efforts or shifting them from basic research toward applications research and development. The federal government itself was reducing its research commitment in its 2006 budget, and other agencies were redesigning their missions to focus explicitly on development. This would have a pronounced effect on universities, which are highly dependent on the federal funding for research funding. A reduction in federal grants would increase their dependence on commercialization activities, he said, to the neglect of long-term research with high risks but high payoffs. Industry as well, he added, had reduced its research budgets in favor of an incremental and developmental focus.
These conditions, he concluded, increased the urgency to optimize the SBIR program, which is one of the few large programs available to help small, technology-based businesses survive and expand their contributions to the economy and to federal missions. The government spends about $132 billion a year on a vast range of R&D activities, only about $2 billion of which goes to the SBIR program. A careful strategy was needed if small businesses are to take full advantage of SBIR funding and to make their full contribution. The participants’ help in the current evaluation, he said, would be critical in identifying those practices that best allow the private sector to capitalize on technology-based innovations.