AN ASSESSMENT OF THE SBIR PROGRAM
Charles W. Wessner, Editor
THE NATIONAL ACADEMIES PRESS
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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the Councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
This study was supported by Contract/Grant No. DASW01-02-C-0039 between the National Academy of Sciences and the U.S. Department of Defense, NASW-03003 between the National Academy of Sciences and the National Aeronautics and Space Administration, DE-AC02-02ER12259 between the National Academy of Sciences and the U.S. Department of Energy, NSFDMI-0221736 between the National Academy of Sciences and the National Science Foundation, and N01-OD-4-2139 (Task Order #99) between the National Academy of Sciences and the U.S. Department of Health and Human Services. The content of this publication does not necessarily reflect the views or policies of the Department of Health and Human Services, nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. Government. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project.
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Committee for Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program
Chair Jacques S. Gansler (NAE) Roger C. Lipitz Chair in Public Policy and Private Enterprise and Director of the Center for Public Policy and Private Enterprise
School of Public Policy University of Maryland
David B. Audretsch Distinguished Professor and Ameritech Chair of Economic Development Director,
Institute for Development Strategies Indiana University
Gene Banucci Executive Chairman
ATMI, Inc.
Jon Baron Executive Director
Coalition for Evidence-Based Policy
Michael Borrus Founding General Partner
X/Seed Capital
Gail Cassell (IOM) Vice President,
Scientific Affairs and
Distinguished Lilly Research Scholar for Infectious Diseases
Eli Lilly and Company
Elizabeth Downing CEO
3D Technology Laboratories
M. Christina Gabriel Director,
Innovation Economy The Heinz Endowments
Trevor O. Jones (NAE) Founder and Chairman
Electrosonics Medical, Inc.
Charles E. Kolb President
Aerodyne Research, Inc.
Henry Linsert, Jr. CEO
Columbia Biosciences Corporation
W. Clark McFadden Partner
Dewey & LeBoeuf, LLP
Duncan T. Moore (NAE) Kingslake Professor of Optical Engineering
University of Rochester
Kent Murphy President and CEO
Luna Innovations
Linda F. Powers Managing Director
Toucan Capital Corporation
Tyrone Taylor President
Capitol Advisors on Technology, LLC
Charles Trimble (NAE) CEO, retired
Trimble Navigation
Patrick Windham President
Windham Consulting
PROJECT STAFF
Charles W. Wessner Study Director
McAlister T. Clabaugh Program Associate
David E. Dierksheide Program Officer
Sujai J. Shivakumar Senior Program Officer
Adam H. Gertz Program Associate
Jeffrey C. McCullough Program Associate
RESEARCH TEAM
Zoltan Acs
University of Baltimore
Alan Anderson Consultant
Philip A. Auerswald
George Mason University
Robert-Allen Baker
Vital Strategies, LLC
Robert Berger
Robert Berger Consulting, LLC
Grant Black
University of Indiana South Bend
Peter Cahill
BRTRC, Inc.
Dirk Czarnitzki
University of Leuven
Julie Ann Elston
Oregon State University
Irwin Feller
American Association for the Advancement of Science
David H. Finifter
The College of William and Mary
Michael Fogarty
University of Portland
Robin Gaster
North Atlantic Research
Albert N. Link
University of North Carolina
Rosalie Ruegg
TIA Consulting
Donald Siegel
University of California at Riverside
Paula E. Stephan
Georgia State University
Andrew Toole
Rutgers University
Nicholas Vonortas
George Washington University
POLICY AND GLOBAL AFFAIRS
Ad hoc Oversight Board for Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program
Robert M. White (NAE), Chair University Professor Emeritus
Electrical and Computer Engineering Carnegie Mellon University
Anita K. Jones (NAE) Lawrence R. Quarles Professor of Engineering and Applied Science
School of Engineering and Applied Science University of Virginia
Mark B. Myers Senior Vice President, retired
Xerox Corporation
Reports in the Series
Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program
An Assessment of the Small Business Innovation Research Program— Project Methodology
Washington, DC: The National Academies Press, 2004
SBIR: Program Diversity and Assessment Challenges
Washington, DC: The National Academies Press, 2004
SBIR and the Phase III Challenge of Commercialization
Washington, DC: The National Academies Press, 2007
An Assessment of the SBIR Program at the National Science Foundation
Washington, DC: The National Academies Press, 2008*
An Assessment of the SBIR Program at the Department of Energy
Washington, DC: The National Academies Press, 2008*
An Assessment of the SBIR Program at the National Institutes of Health
Washington, DC: The National Academies Press, 2009*
An Assessment of the SBIR Program at the Department of Defense
Washington, DC: The National Academies Press, 2009*
An Assessment of the SBIR Program at the National Aeronautics and Space Administration
Washington, DC: The National Academies Press, 2009*
Preface
Today’s knowledge economy is driven in large part by the nation’s capacity to innovate. One of the defining features of the U.S. economy is a high level of entrepreneurial activity. Entrepreneurs in the United States see opportunities and are willing and able to take on risk to bring new welfare-enhancing, wealth-generating technologies to the market. Yet, while innovation in areas such as genomics, bioinformatics, and nanotechnology present new opportunities, converting these ideas into innovations for the market involves substantial challenges.1 The American capacity for innovation can be strengthened by addressing the challenges faced by entrepreneurs. Public-private partnerships are one means to help entrepreneurs bring new ideas to market.2
The Small Business Innovation Research (SBIR) program is one of the largest examples of U.S. public-private partnerships. Founded in 1982, the SBIR program was designed to encourage small business to develop new processes and products and to provide quality research in support of the many missions of the U.S. government. By including qualified small businesses in the nation’s R&D (research and development) effort, SBIR grants are intended to stimulate innovative new technologies to help agencies meet the specific research and development needs of the nation in many areas, including health, the environment, and national defense.
As the SBIR program approached its twentieth year of operation, the U.S. Congress asked the National Research Council to conduct a “comprehensive study of how the SBIR program has stimulated technological innovation and used small businesses to meet federal research and development needs” and to make recommendations on still further improvements to the program.3 To guide this study, the National Research Council (NRC) drew together an expert committee that included eminent economists, small businessmen and women, and venture capitalists. The membership of this committee is listed in the front matter of this volume. Given the extent of ‘green-field research’ required for this study, the Committee in turn drew on a distinguished team of researchers to, among other tasks, administer surveys and case studies, and develop statistical information about the program. The membership of this research team is also listed in the front matter of this volume.
This report is one of a series published by the National Academies in response to the Congressional request. The series includes reports on the Small Business Innovation Research Program at the Department of Defense, the Department of Energy, the National Aeronautics and Space Administration, the National Institutes of Health, and the National Science Foundation—the five agencies responsible for 96 percent of the program’s operations. It includes, as well, an Overview Report that provides assessment of the program’s operations across the federal government. Other reports in the series include a summary of the 2002 conference that launched the study, and a summary of the 2005 conference on SBIR and the Phase III Challenge of Commercialization that focused on the Department of Defense and NASA.
PROJECT ANTECEDENTS
The current assessment of the SBIR program follows directly from an earlier analysis of public-private partnerships by the National Research Council’s Board on Science, Technology, and Economic Policy (STEP). Under the direction of Gordon Moore, Chairman Emeritus of Intel, the NRC Committee on Government-Industry Partnerships prepared eleven volumes reviewing—the drivers of cooperation among industry, universities, and government; operational assessments of current programs; emerging needs at the intersection of biotechnology and information technology; the current experience of foreign government partnerships and opportunities for international cooperation; and the changing roles of government laboratories, universities, and other research organizations in the national innovation system.4
This analysis of public-private partnerships included two published studies
of the SBIR program. Drawing from expert knowledge at a 1998 workshop held at the National Academy of Sciences, the first report, The Small Business Innovation Research Program: Challenges and Opportunities, examined the origins of the program and identified some operational challenges critical to the program’s future effectiveness.5 The report also highlighted the relative paucity of research on this program.
Following this initial report, the Department of Defense (DoD) asked the NRC to assess the Department’s Fast Track Initiative in comparison with the operation of its regular SBIR program. The resulting report, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative, was the first comprehensive, external assessment of the Department of Defense’s program. The study, which involved substantial case study and survey research, found that the SBIR program was achieving its legislated goals. It also found that DoD’s Fast Track Initiative was achieving its objective of greater commercialization and recommended that the program be continued and expanded where appropriate.6 The report also recommended that the SBIR program overall would benefit from further research and analysis, a perspective adopted by the U.S. Congress.
SBIR REAUTHORIZATION AND CONGRESSIONAL REQUEST FOR REVIEW
As a part of the 2000 reauthorization of the SBIR program, Congress called for a review of the SBIR programs of the agencies that account collectively for 96 percent of program funding. As noted, the five agencies meeting this criterion, by size of program, are the Department of Defense, the National Institutes of Health, the National Aeronautics and Space Administration, the Department of Energy, and the National Science Foundation.
Congress directed the NRC, via H.R. 5667, to evaluate the quality of SBIR research and evaluate the SBIR program’s value to the agency mission. It called for an assessment of the extent to which SBIR projects achieve some measure of commercialization, as well as an evaluation of the program’s overall economic and non-economic benefits. It also called for additional analysis as required to support specific recommendations on areas such as measuring outcomes for
agency strategy and performance, increasing federal procurement of technologies produced by small business, and overall improvements to the SBIR program.7
ACKNOWLEDGMENTS
On behalf of the National Academies, we express our appreciation and recognition for the insights, experiences, and perspectives made available by the participants of the conferences and meetings, as well as by survey respondents and case study interviewees who participated over the course of this study. We are also very much in debt to officials from the leading departments and agencies. Among the many who provided assistance to this complex study, we are especially in debt to Kesh Narayanan, Joseph Hennessey, and Ritchie Coryell of the National Science Foundation; Ivory Fisher and later Michael Caccuitto of the Department of Defense; Robert Berger and later Larry James of the Department of Energy; Carl Ray and Paul Mexcur of NASA; and Jo Anne Goodnight and Kathleen Shino of the National Institutes of Health.
The Committee’s research team deserves major recognition for their instrumental role in the preparation of this study. In particular, Dr. Robin Gaster deserves special recognition and thanks for his energy, commitment, and many insights. Without the research team’s collective efforts, amidst many other competing priorities, it would not have been possible to prepare these reports.
NATIONAL RESEARCH COUNCIL REVIEW
This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Academies’ Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the process.
We wish to thank the following individuals for their review of this report: Robert Archibald, The College of William and Mary; Richard Bendis, Innovation Philadelphia; David Bodde, Clemson University; Anthony DeMaria, DeMaria Electro-Optics Systems; George Eads, CRA International; John Foster, TRW Defense and Space Sector (Retired); Fred Gault, Statistics Canada; Bronwyn Hall, University of California, Berkeley; Thomas Pelsoci, Delta Research Company;
7 |
Chapter 3 of the Committee’s Methodology Report describes how this legislative guidance was drawn out in operational terms. See National Research Council, An Assessment of the Small Business Innovation Research Program—Project Methodology, Washington, DC: The National Academies Press, 2004, accessed at <http://www7.nationalacademies.org/sbir/SBIR_Methodology_Report.pdf>. |
Charles Phelps, University of Rochester; Michael Rodemeyer, Pew Initiative on Food and Biotechnology; Michael Squillante, Radiation Measurement Device, Inc.; Roland Tibbets, Search Corporation; and Richard Wright, National Institute of Standards and Technology (Retired).
Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Robert Frosch, Harvard University, and Robert White, Carnegie Mellon University. Appointed by the National Academies, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.
Jacques S. Gansler
Charles W. Wessner