An Assessment of the SBIR Program at the Department of Energy (2008) / Chapter Skim
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1 Introduction
1 Introduction
Pages 11-24
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From page 11... ...
This evidence gained new credibility with empirical analysis by Zoltan Acs and David Audretsch of the U.S. Small Business Innovation Database, which confirmed the increased importance of small firms in generating technological innovations and their growing contribution to the U.S.
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During this phase, companies do not receive further SBIR awards. Instead, grant recipients should be obtaining additional funds from a procurement program at the agency that made the award, from private investors, These are the 1982 Small Business Development Act, and the subsequent multiyear reauthorizations of the SBIR program in 1992 and 2000.
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From page 13... ...
102-564) , which reauthorized the SBIR program until September 30, 2000, doubled the set-aside rate to 2.5 percent. This increase in the percentage of R&D funds allocated to the program was accompanied by a stronger emphasis on encouraging the commercialization of SBIR-funded See Reid Cramer, "Patterns of Firm Participation in the Small Business Innovation Research Program in Southwestern and Mountain States," in National Research Council, The Small Business Innovation Research Program, An Assessment of the Department of Defense Fast Track Initiative, Charles W
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From page 14... ...
In the first phase, at the request of the agencies, a formal report on research methodology was to be developed by the NRC. Once developed, this methodology was then reviewed and approved by an independent National Academies panel of experts.11 Information about the program was also gathered through interviews with SBIR program administrators and during four major conferences where SBIR officials were invited to describe program operations, challenges, and accomplishments.12 These conferences highlighted the important differences in See Robert Archibald and David Finifter, "Evaluation of the Department of Defense Small Business Innovation Research Program and the Fast Track Initiative: A Balanced Approach," in National Research Council, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative, op.
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The second phase of the NRC study implemented the approved research methodology. The Committee deployed multiple survey instruments and its researchers conducted case studies of a wide profile of SBIR firms.
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In some cases, for example, SBIR recipients receive a Phase I award from one agency and a Phase II award from another. In other cases, multiple SBIR awards may have been used to help a particular technology become sufficiently mature to reach the market.
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This can occur when a procuring agency changes its mission objectives and hence its procurement priorities. NASA's new Mars Mission is one example of a mission shift that may result in the cancellation of programs involving SBIR awards to make room for 15Duncan Moore, "Turning Failure into Success," in National Research Council, SBIR: Program Diversity and Assessment Challenges, op.
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As a point of comparison, Gail Cassell, Vice President for Scientific Affairs at Eli Lilly, has noted that only one in ten innovative products in the biotechnology industry will turn out to be a commercial success.17 Similarly, venture capital funds often achieve considerable commercial success on only two or three out of twenty or more investments.18 In setting metrics for SBIR projects, therefore, it is important to have a realistic expectation of the success rate for competitive awards to small firms investing 16For a description of the challenges small businesses face in defense procurement, the subject of a June 14, 2005, NRC conference and one element of the congressionally requested assessment of SBIR, see National Research Council, SBIR and the Phase III Challenge of Commercialization, op.
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From page 19... ...
? 1.6.1 Surveys of DoE SBIR Award-recipient Companies Original data gathered by the research team in support of the NRC study of DoE SBIR program included a survey of DoE Phase II award-recipient firms; a survey DoE Phase I award-recipient firms that did not also receive a Phase II award; a survey of DoE technical staff involved in the SBIR program; numerous interviews with DoE personnel directly involved in administering the SBIR program; the assessment and analysis of data provided by DoE's SBIR staff; and ten company case studies.
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From page 20... ...
Nearly 40 percent of respondents began Phase I efforts after 1998, partly because the number of Phase I awards increased, starting in the late 1990s, and partly because winners from more distant years are harder to reach, as small businesses regularly cease operations, staff with knowledge of SBIR awards leave, and institutional knowledge erodes. For DoE, the sample size of Phase II projects targeted was 439.
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From page 21... ...
From a list of 34 candidate firms, 10 were selected, including firms from a variety of locations, across a range of founding dates, having received different numbers of SBIR awards received, and representing different technological domains. The case study interviews focused on learning how the companies use the SBIR program: the extent to which SBIR is important to their company's survival and growth, whether and how they intend to commercialize SBIR technology, whether and how the receipt of multiple awards influence their ability to commercialize, what challenges they have faced in the commercialization process, in what way they see the SBIR program serving the needs of technology entrepreneurs and how they believe the program can be improved.
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From page 22... ...
R esearch by Link and Scott demonstrate 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.
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From page 23... ...
These sources of bias provide a context for understanding the response rates to the NRC Phase I and Phase II Surveys conducted for this study. For the NRC Phase II Survey, of the 335 DoE firms that could be contacted out of a sample size of 439, 157 responded, representing a 47 percent response rate.
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From page 24... ...
Chapter 4 examines actions taken by the Department of Energy to encourage commercialization efforts by SBIR awardees; how commercialization outcomes are measured; and what the various measures described indicate with respect to the commercialization of SBIR-supported technologies. Chapter 5 focuses on the manner in which the program supports the mission of the Department of Energy "to advance the national, economic, and energy security of the United States; to promote scientific and technological innovation in support of that mission; and to ensure the environmental cleanup of the national nuclear weapons complex." The section highlights the tension that exists between commercialization and agency mission objectives of the program.
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