Report.2 One issue however should be briefly discussed here too—the question of comparators.

Assessment is usually done by comparison—comparing programs and activities, in this case. Three kinds of comparison seem possible: with other NIH programs, with SBIR programs at other agencies, and with early stage technology development funding in the private sector, such as venture capital activities.

Yet none of these comparisons is valid.

Other award programs at NIH have fundamentally different objectives, such as promoting basic research (e.g., RO1 awards), developing medical capacity (awards for medical centers), or training. No other NIH award programs have as a primary goal the commercial exploitation of research. This fundamental difference in objectives must be taken into account in evaluating the SBIR program at NIH.

SBIR programs at other agencies are organized very differently and—at DoD and NASA at least—have quite different objectives.

NIH SBIR might be compared with venture capital activities, but these are typically focused closer to market, and include much larger investment (an average investment round of $7 million in 2005 as against less than $1 million for SBIR). VC investments are also focused on companies, not projects, further invalidating comparisons.3

Finally, while the question of commercialization is the most readily subject to measurement—through accessible data on sales and licensing revenues and other metrics—Congress has not prioritized among the four mandated objectives and each is equally important to NIH.


How well has the NIH SBIR program fostered commercialization of funded research? The following sections examine a variety of relevant indicators.

Proposed Commercialization Indicators and Benchmarks

Three sets of indicators are used to evaluate the extent to which SBIR grantees have commercialized their funded research:

  1. Sales and licensing revenues (“sales” hereafter unless otherwise noted). Revenues flowing into the company from the commercial marketplace


National Research Council, An Assessment of the Small Business Innovation Research Program: Project Methodology, Washington, DC: The National Academies Press, 2004.


See National Venture Capital Association, Money Tree Report, November, 2006. The mean venture capital deal size for the first three quarters of 2006 was $8.03 million. This trend has been accelerated by the growth of larger venture firms. See P. Gompers and J. Lerner, The Venture Capital Cycle, Cambridge: The MIT Press, 1999, Ch. 1.

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