1. Effective oversight relies on appropriate funding.45 An evidence-based program requires high quality data and systematic assessment. Sufficient resources are not currently available for these functions.

  2. Increased funding is needed to provide effective oversight, including site visits, program review, systematic third-party assessments, and other necessary management activities.

  3. To achieve the goal of providing modest amounts of additional funding for management and evaluation, there are three options that might be considered:

    1. Additional funds might be allocated internally, within the existing budgets of NIH, as the Navy has done at DoD.

    2. Funds might be drawn from the existing set-aside for the program to carry out these activities.

    3. The set-aside for the program, currently at 2.5 percent of external research budgets, might be marginally increased, with the goal of providing management resources necessary to maximize the program’s return to the nation.46

The key point is that additional resources for program management and evaluation are necessary to optimize the nation’s return on the substantial annual investment in the SBIR program.

45

According to recent OECD analysis, the International Benchmark for program evaluation of large SME and Entrepreneurship Programs is between 3 percent (for small programs) and 1 percent for large-scale programs. See Organisation for Economic Co-operation and Development, “Evaluation of SME Policies and Programs: Draft OECD Handbook,” OECD Handbook CFE/SME(2006)17, Paris: Organisation for Economic Co-operation and Development, 2006.

46

Each of these options has its advantages and disadvantages. For the most part, the Departments, Institutes, and Agencies responsible for the SBIR program have not proved willing or able to make additional management funds available. Without direction from Congress, they are unlikely to do so. With regard to drawing funds from the program for evaluation and management, current legislation does not permit this and would have to be modified, therefore the Congress has clearly intended program funds to be for awards only. The third option, involving a modest increase to the program, would also require legislative action and would perhaps be more easily achievable in the event of an overall increase in the program. In any case, the Committee envisages an increase of the “set-aside” of perhaps 0.03 percent to 0.05 percent on the order of $35 million to $40 million per year or, roughly, double what the Navy currently makes available to manage and augment its program. In the latter case (0.05 percent), this would bring the program “set-aside” to 2.55 percent, providing modest resources to assess and manage a program that is approaching an annual spend of some $2 billion. Whatever modality adopted by the Congress, without additional resources the Committee’s call for improved management, data collection, experimentation, and evaluation may prove moot.



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