• Of the 420 projects reporting some sales, just under 1 percent reported sales greater than $50 million, another 9.2 percent of projects reporting some commercialization, indicated sales between $5 million and $50 million.4

  • In addition, 17.6 percent of respondents reported sales by licensees of their technology, with three reporting licensee sales of greater than $50 million.5,6

  • For projects that have received sales, survey responses indicate that 87.6 percent of first sales occurred within 4 years of the Phase II award date.7 Interviews and cases, however, support the view that the bulk of sales will be realized in the longer run—that is, beyond the date of first sale.

  • These figures, while positive, necessarily reflect the concentration and skewed outcomes often associated with early-stage funding and the special challenge of the procurement process. The figures also understate, perhaps substantially, the amount of commercialization ultimately to be generated from the funded projects. It is important to recognize that these data constitute only a snapshot of sales and licensing revenues, as of May 2005. Projects completed in more recent years will continue to generate revenues well into the future. Consequently, the data aggregated for the May 2005 snapshot necessarily under-reports the eventual return from the SBIR Phase II awards that were made during the latter part of the study period (1992–2002).8


See Figure 4-2 (NRC Phase II Survey, Question 4).


This type of “skew”—in which a majority of projects fail or are minimally successfully while a small proportion generates large revenues—is typical of early-stage finance and has been noted in previous Academy research. See National Research Council, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative, Charles W. Wessner, ed., Washington, DC: National Academy Press, 2000. See also Joshua Lerner, “Public Venture Capital: Rationales and Evaluation,” in National Research Council, The Small Business Innovation Research Program: Challenges and Opportunities, Charles W. Wessner, ed., Washington, DC: National Academy Press, 1999.


NRC Phase II Survey, Question 4.




The total eventual return from these awards is estimated to be approximately 50 percent higher than the data captured at the time of the survey. (For an explanation of the methodology underlying this analysis, see Chapter 4.) This suggests that the actual sales and licensing revenues that will in the end be generated by projects funded during the study period, on average, are approximately $2.2 million, and about $5.6 million for each project that did report some sales or licensing revenues. For DoD as a whole, the SBIR Program Manger Michael Caccuitto, reports that the amount of commercialization generated from SBIR projects now leads the total amount spent on SBIR, with about a 4-year lag from the year of Phase II award. See National Research Council, SBIR and the Phase III Challenge of Commercialization, Charles W. Wessner, ed., Washington, DC: The National Academies Press, 2007. This corresponds with the findings of the 1992 GAO report’s assessment of commercialization, which found that not enough time had elapsed since the program’s inception for projects to mature. See U.S.

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