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An Assessment of the SBIR Program
Multiple Sources of Bias in Survey Response
Large innovation surveys involve multiple sources of bias that can skew the results in both directions. Some common survey biases are noted below.a
Successful and more recently funded firms are more likely to respond. Research by Link and Scott demonstrates that the probability of obtaining research project information by survey decreases for less recently funded projects and it increased the greater the award amount.b Nearly 40 percent of respondents in the NRC Phase II Survey began Phase I efforts after 1998, partly because the number of Phase I awards increased, starting in the mid-1990s, and partly because winners from more distant years are harder to reach. They are harder to reach as time goes on because small businesses regularly cease operations, are acquired, merge, or lose staff with knowledge of SBIR awards.
Success is self reported. Self-reporting can be a source of bias, although the dimensions and direction of that bias are not necessarily clear. In any case, policy analysis has a long history of relying on self-reported performance measures to represent market-based performance measures. Participants in such retrospectively analyses are believed to be able to consider a broader set of allocation options, thus making the evaluation more realistic than data based on third party observation.c In short, company founders and/or principal investigators are in many cases simply the best source of information available.
Survey sampled projects at firms with multiple awards. Projects from firms with multiple awards were underrepresented in the sample, because they could not be expected to complete a questionnaire for each of dozens or even hundreds of awards.
Failed firms are difficult to contact. Survey experts point to an “asymmetry” in their ability to include failed firms for follow-up surveys in cases where the firms no longer exist.d It is worth noting that one cannot necessarily infer that the SBIR project failed; what is known is only that the firm no longer exists.
Not all successful projects are captured. For similar reasons, the NRC Phase II Survey could not include ongoing results from successful projects in firms that merged or were acquired before and/or after commercialization of the project’s technology. The survey also did not capture projects of firms that did not respond to the NRC invitation to participate in the assessment.
Some firms may not want to fully acknowledge SBIR contribution to projectsuccess. Some firms may be unwilling to acknowledge that they received important benefits from participating in public programs for a variety of reasons. For example, some may understandably attribute success exclusively to their own efforts.
Commercialization lag. While the NRC Phase II Survey broke new ground in data collection, the amount of sales made—and indeed the number of projects that generate sales—are inevitably undercounted in a snapshot survey taken at a single point in time. Based on successive data sets collected from NIH SBIR award recipients, it is estimated that total sales from all responding projects will likely be on the order of 50 percent greater than can be captured in a single survey.e This underscores the importance of follow-on research based on the now-established survey methodology.