An Assessment of the SBIR Program at the Department of Energy (2008) / Chapter Skim
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4 Commercialization
4 Commercialization
Pages 56-71
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From page 56... ...
the program's goal of increasing private sector commercialization of technology developed through federal research and development and noted the need to "emphasize the program's goal of increasing private sector commercialization of technology developed through Federal research and development." The 1992 reauthorization also changed the order in which the program's objectives are described, moving commercialization to the top of the list. The term "commercialization" means "reaching the market," which some agency managers interpret as "first sale" -- that is, the first sale of a product in the market place, whether to public or private sector clients.
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From page 57... ...
• Markets themselves have major imperfections, or information asymmetries so high quality, even path breaking research, does not always result in commensurate commercial returns. • The lags involved in the timeline between an early stage research project and a commercial outcome mean that for a significant number of the more recent SBIR projects, commercialization is still in process, and sales -- often substantial sales -- will be made in the future.
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From page 58... ...
4.3 Sales and licensing While this NRC study uses multiple indicators to assess program outcomes, and multiple metrics for most indicators, sales and licensing revenues remain an important measure of program success. Just over half of NRC Phase II Survey respondents indicated that they had generated sales greater than $0 from their Phase II project.
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From page 59... ...
It is important to emphasize that these figures are those reported by NRC Phase II Survey respondents who were asked about particular SBIR awards. The NRC review of the DoE SBIR program identified multiple other nonsurveyed SBIR-funded projects that received significant support from the DoE SBIR program and subsequently realized sales well in excess of $100 million.
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From page 60... ...
Specifically, these SBIR-developed technologies: • Eliminated missing laser pulses observed with the older ("thyratron switch") technology, thereby stabilizing the laser power, improving dose control to the semi conductor wafer, and greatly improving chip yield; and • Increased the lifespan of the laser driver by a factor of 100 and the lifetime of the laser head by a factor of 10-20, thereby reducing the annual maintenance costs of the laser fivefold.
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From page 61... ...
For DoE respondents, the private sector dominated sales, with over three-fourths of sales coming from the domestic private sector and approximately 14 percent from export markets. DoE data indicates that 86 percent of sales were made to the private sector.
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From page 62... ...
4.3.6 Additional Development Funding Over 60 percent of the NRC Phase II Survey's DoE respondents received or invested additional developmental funding for the Phase II projects targeted in the survey. Table 4-4 shows the distribution among the various sources of Phase III development funding. The amounts shown are the averages among all DoE respondents.
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From page 63... ...
The distribution of projects by funding source was somewhat different: About 40 percent reported raising internal company funds, and approximately 20 percent generated funds from other private companies and from federal non-SBIR sources (though not DoE)
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From page 64... ...
• First, relatively few VC firms operate in the seed capital space occupied by most SBIR awards. In the aggregate during the study period less than 5 percent of venture funding went to seed stage firms in all industries.
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From page 65... ...
These changes also indicate that it might make sense for DoE to consider how it might help to attract VC funding and other sources of finance into the Phase III activities of its SBIR awardees. Some firms, such as NanoScience, would clearly welcome this. 4.4.2 Equity Investments from Large Corporations About 20 percent of responding projects identified additional development funding from other U.S.
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From page 66... ...
Fifty-eight percent of NRC Phase II Survey respondents reported no matching funds, co-investment, or other types of cost sharing for their Phase II award. Thirty-one percent provided their own cost-sharing funds, 17 percent reported at least some cost-sharing funds from other companies, 5 percent received cost-sharing funds from a federal agency, 2 percent received some costsharing funds from venture capital, and less than 1 percent received cost-sharing funds from an angel or other private investment source.
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From page 67... ...
Similarly, firms on average retained 1.5 employees as a result of the Phase II award: 52 percent reported retaining one to five employees, 43 percent reported no additional employees retained, and 3 percent reported retaining 6 to 20 employees. Respondents were also asked to compare their employment at the time of the Phase II award with current employment at the time of the survey.
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From page 68... ...
The distribution of commercialization outcomes was even more skewed than for Phase II: 5 projects accounted for 82 percent of total reported sales. 4.6.2 Follow-on Development Funding Resulting from the Phase I Projects Nineteen percent of respondents found additional developmental funding for the Phase II projects targeted in the survey.
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From page 69... ...
TABLE 4.8 Noncommercial Benefits of the Phase I Projects. Number Percent for of DoE DoE all Agencies Respondents Percent Combined Awarding agency obtained useful information 88 57 59 Firm improved its knowledge of the technology 138 89 83 One or more valuable employees were hired 52 34 27 Public benefits have or will accrue 45 29 17 This Phase I was essential to firm's founding or survival 17 11 13 No noncommercial benefits 9 6 8 SOURCE: NRC Phase I Survey.
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From page 70... ...
TABLE 4.9 Government Grants and Contracts Subsequent to the Phase I Project DoE Percent for all Percent agencies combined At least one SBIR Phase I received in this technology 26 22 At least one related Phase II -- Although the subject 14 14 project itself did not advance to Phase II Subsequent federal non-SBIR contracts or grants in this 13 12 technology SOURCE: NRC Phase I Survey. TABLE 4-10 Commercial Results from Multiple-Award Winners Average Number Number of Commercialization of Projects Projects with of Projects with Number of Phase II Number in CCR Award Years Award Years Prior SBIR per Firm*
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From page 71... ...
Third, data from the NRC Phase II Survey indicates that the largest commercial successes at DoE -- generating more than $5 million in revenues -- were all created by firms with at least 20 employees, although it is also worth noting that none came from firms with more than 300 employees.
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