businesses and the nature of the measures needed to address these obstacles. (See Findings D and E.)
Increasing Private Sector Commercialization of Innovation Derived from Federal Research and Development. The program enables small businesses to contribute to the commercialization of the nation’s R&D investments, both through private commercial sales, as well as through government acquisition, thereby enhancing American health, welfare, and security through the introduction of new products and processes. (See Finding B.)
SBIR Is Meeting Federal R&D Needs. SBIR plays an important role in introducing innovative, science-based solutions that address the diverse mission needs of the federal agencies.
The program has the potential to make systematic investments in high-potential, high-risk technologies that can meet specific mission needs and/or offer the potential of significant commercial development. Balancing the potential gains from high risk, but potentially high payoff, against technologies with more promising immediate commercial benefits, represents a challenge for management and appropriate evaluation.
Improving SBIR. As structured, the management of SBIR exhibits considerable flexibility, allowing program experimentation needed to address varied agency missions and technologies. This flexibility is commendable and has enabled the program to contribute to multiple agency missions. At the same time, more regular assessment is required, both internal and external, to inform agency management of program outcomes and to improve performance through analysis of program outcomes and regular adoption of agency “best practices.” (See Section II on Recommendations.)
Commercialization Despite High Risk. Small technology companies use SBIR awards to advance projects, develop firm-specific capabilities, and ultimately create and market new commercial products and services.
Given the very early stage of SBIR investments, and the high degree of technical risk often involved (reflected in risk assessment scores developed during agency selection procedures), the fact that a high proportion of projects reach the market place in some form is significant, even impressive.
Although the data vary by agency, responses to the NRC Phase II Survey indicate that just under half of the projects do reach the marketplace.2
See Figure 4-1. In addition, the response to the survey may reflect a degree of self-selection bias,