The Advanced Technology Program Assessing Outcomes (2001) / Chapter Skim
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Leveraging Research and Development: The Impact of the Advanced Technology Program
Leveraging Research and Development: The Impact of the Advanced Technology Program
Pages 189-210
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From page 189... ...
Furthermore, the ATP award has prestige value for the winning firms; the halo effect from the award increases the success of these firms in attracting additional funding from other sources. Our conclusion is that the ATP is leveraging activities that have a strong potential for broad-based economic benefit.
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From page 190... ...
Support for basic research at universities is widely accepted and the links to technical progress are well established. A common question regarding the public funding of research conducted by private firms is if the public interest, specifically the goals of technical advance and economic growth, is being promoted and how.
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From page 191... ...
In the United States, the Advanced Technology Program provides an example of a government R&D program that attempts to encourage broadly applicable technical advance. Since 1990, the ATP has provided selective cost-shanng awards for early stage industry-defined research projects with broad-based economic potentials Rationale for Public-Private R&D Partnering The program mission of the ATP thus depends upon its success in selecting projects with attributes that indicate a high potential to generate substantial econom~c benefits.
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From page 192... ...
~ Only when scientific and technical advances become known and are incorporated into new products and processes can ATP expect to see any economic benefits realized from the funded project. 9 Studies of the strategies that managers use to learn about other organization's products, technologies, and business practices emphasize the importance of both formal linkages between firms and the informal network ties among engineers, scientists, and managers employed in different organizations (e.g.: Y
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From page 193... ...
When information about a company' s R&D activity comes from a credible source, such as a government agency with a reputation for scientific integrity as well as programmatic expectations of economic significance, the investment decisions of other organizations may be favorably affected. In light of a large number of potential investment opportunities, the announcement of the ATP award may provide information that certifies an awardee's R&D activities from ii Previous research suggests that the ways in which government provides funding to the private sector is important.
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From page 194... ...
:285-318, suggests that the Small Business Innovation Research (SBIR) program award provides a certification function that informs private investors of a notable opportunity.
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From page 195... ...
Independent technical experts and specialists in the business planning evaluate every proposal. The selection process involves an assessment of the project's contribution to technical advance, its economic potential, and the need for public funding.
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From page 196... ...
We completed interviews for 122 non-winners, for a 50 percent response rate (122/~297-491~. This yields an overall effective response rate of 61 percent.
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From page 197... ...
PATHWAYS TO INNOVATION: VALUATING THE POTENTIAL FOR BROAD-BASED TECHNICAL ADVANCES AND ECONOMIC GROWTH A project may have greater economic potential if the firm embarks on a new technical problem or forms a new R&D collaboration. Although R&D collaborations are widely recognized as an important strategy for learning about technical advance,2i establishing new collaborative relationships is especially difficult and costly for firms.22 Table 2 shows the percent of projects proposed to ATP in 1998 that involved two or more organizations as research partners, and the percent of new partnerships and new technical areas proposed by ATP award winners compared to non-winners.
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From page 198... ...
1 = almost always or sometimes; 0 = rarely or never 1 = no; 0 = yes 1 = no; 0 = yes expect that most firms will have a tendency to secrecy.23 Firms that answered yes to two of the three questions were considered to exhibit a willingness to share research results. The potential for contributing to scientific and technical advance may be enhanced by a firm's linkages to universities and other institutions.
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From page 199... ...
ATP Awards Risky Projects with the Potential for Broad-based Economic Benefits We find that the ATP awarded those companies who proposed projects involving the formation of new partnerships and new areas of research for the firm. When compared to unsuccessful applicants, the firms that were awarded by ATP were more likely to have extensive linkages to other businesses and to profess a greater willingness to share information about their research findings with other firms.
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From page 200... ...
12. In the two years prior to your ATP application, for your R&D or technology development activities, has your company received funds from a university program?
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From page 201... ...
, was this person previously employed at another company? Other Business Ties: In the two years prior to your ATP application have you used assistance from a private venture capital firm 8.
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From page 202... ...
In addition, the cost of preparing a proposal ranged from $2,000 to $300,000 with a median of $15,000 per firm and we might expect that a professionally presented proposal might affect award status. Our regression results do not find any support that experience with the ATP matters nor do we show that proposal preparation cost is related to winning, independent of other attributes of the project.
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From page 203... ...
When compared to the evaluation of their business plans, the defunct firms were rated as having stronger, on average, technical plans. This suggests that they were relatively weaker on the business front.
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From page 204... ...
In light of the unique features of the program, we assess the potential influence of an ATP award on the subsequent behavior of the investment community to arise from the information the award signifies about both the technical and economic potential of the project and firm. For an ATP award to influence the subsequent decision of other sources of research funding implies that the announcement of the award itself provides valuable and credible information to the investment community.
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From page 205... ...
also considered the review and selection process to be fair. These responses suggest that ATP has a reputation for fairness that is widely recognized.
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From page 206... ...
We may expect the ATP awards to confer a halo effect to winning firms and projects, boosting the chances of a firm's success in attracting additional funding for its R&D activities. To test for this effect, we considered the group of applicants that pursued other funding sources in the year following the ATP application.
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From page 207... ...
We are interested in determining the influence of the ATP award as a pure signal to the investment community, and our statistical analyses confirm our hypothesis. After we have controlled for these other factors, we still find a significant halo effect from an ATP award.29 Award winners who seek additional funding from non-ATP sources were more successful than non-winners and received a larger amount of funding.
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From page 208... ...
Among firms that seek additional funding, we find that ATP award winners are more successful than non-winners. The halo effect from the ATP award is independent of the ratings of the quality of the project, and the firm's prior success in winning funds from these sources.
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From page 209... ...
1999. "The Government as Venture Capitalist: The Long Run Impact of the SBIR Program." Journal of Business 72(3)
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From page 210... ...
2000. The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative.
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