Risk and Innovation The Role and Importance of Small, High-Tech Companies in the U.S. Economy (1995) / Chapter Skim
Currently Skimming:
5. HOW GOVERNMENTS CAN NURTURE SMALL COMPANIES AND TECHNOLOGICAL INNOVATORS
5. HOW GOVERNMENTS CAN NURTURE SMALL COMPANIES AND TECHNOLOGICAL INNOVATORS
Pages 56-76
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 56... ...
; Small Business Innovation Development Act Tenth Annual Report 1993 (U.S. Small Business Administration Office of Innovation, Research, and Technology)
|
From page 57... ...
But the indirect consequences of government actions are often poorly understood by policymakers-compliance with health and safety regulations, for example, in many instances is especially difficult for small companies and start-ups. These indirect consequences of government policies on innovation, and the extreme diversity of external conditions for small technology-intensive companies, need to be carefully considered.
|
From page 58... ...
They will be affiliated with existing technical or training institutions, such as vocational institutes, technical colleges, state or university technical assistance centers, in areas not servect by MTCs and with lower concentrations of industry. The State Technology Extension Program provides support to state and local tech
|
From page 59... ...
, which is administered by the NIST, provides grants to industry consortia and startup firms involved in precommercial R&D. The program helps firms develop breakthrough technologies that will have substantial long-term economic benefit but may be considered too risky by venture capitalists.
|
From page 60... ...
The ATP supports development of laboratory prototypes and proof of technical feasibility but not commercial prototypes or proof of commercial feasibility. Award recipients are allowed to patent inventions or copyright software that is developed using ATP awards, but the government retains a nonexclusive license.
|
From page 61... ...
FEDERAL PROGRAMS THAT SUPPORT SMALL HIGH-TECH COMPANIES The Small Business Innovation Research program, administered by the Small Business Administration, was established in 1982 and requires each federal agency with an external R&D budget of at least $100 million to set aside 2 percent of these research funds for SBTR in fiscal years 1995 and 1996 and 2.5 percent thereafter. Currently 11 federal agencies participate.
|
From page 62... ...
Seven other agencies, in addition to the 11 SBIR agencies, participate in the goaling program. As part of the Small Business Research and Development Enhancement Act of 1992, the Small Business Technology Transfer Program (STTR)
|
From page 63... ...
State technology assistance programs, also referred to as technology or industrial extension programs, encompass a variety of initiatives offering assistance to small firms. Although not explicitly mandated to serve small companies, most of the firms using these services are small- or meclium-sizedL companies.
|
From page 64... ...
Although the majority of the programs serve existing manufacturing operations, they sometimes aid small start-up companies.3 Most states also have a package of assistance programs designed to nurture start-ups, particularly in high-tech industries. Such programs include small business incubators and a variety of financial assistance instruments such as low-cost loans and loan guarantees, grants, venture capital trust funcls, and pooled bond programs.
|
From page 65... ...
in 1982 RPI established a technology park, a I,200acre real estate development aimed at attracting young technology-based companies, and the technologically intensive operations of larger companies and state agencies. This park now hosts 45 establishments employing more than i,600 people.
|
From page 66... ...
While the Technology Development Council offers a range of networking and business services, the flagship service is a business advisory program that enlists experienced technical and business people as volunteers to serve as senior level management consultants (about 300 volunteers) to provide services such as legal, risk assessment, commercialization, and business planning for client companies.
|
From page 67... ...
For example, the first-order impacts of trade barriers, employment laws, government policy on interest rates, international standards, and intellectual property rights fall in similar ways on both larger and small companies, on both technologically sophisticated companies and those with little technical capability or orientation. A number of national policy matters that have been widely recognized as having significant effects on the prosperity and performance of industry generally can have especially profound influences on the viability of small high-tech businesses.
|
From page 68... ...
Research and related advanced technical education done in a largely nonproprietary setting, in an environment that is favorable for entrepreneurship, are an important national resource for high-tech start-ups. · The legal environment, especially product liability laws and, for high-tech and high-growth companies, securities fraud liability laws.
|
From page 69... ...
· Maintaining, especially in light of prospective cut-backs in research and development spending, a rich portfolio of university research as a source of potential new commercial opportunities for start-up companies. UNINTENDED EFFECTS OF GOVERNMENT POLICYMAKING A wide variety of government actions aimed at and justified by other missions public safety, environmental quality, and national defense, for example also have an enormous impact on small technology-intensive companies by affecting the cost of innovation or the risk of failure.
|
From page 70... ...
Food and Drug Administration regulation of medical devices requiring increased numbers of trials and evaluation is increasing the expected time to market for new devices as well as the cost of demonstrating these new devices. The basic rationale for these government actions, of course, is not disputed-regulation of the health and safety of medical devices is an objective of government policy.
|
From page 71... ...
There is no question that environmental legislation has created enormous demand for pollution control technologies, for example. In addition, the Environmental Protection Agency has been active in recent yearsthrough initiatives such as Superfund Innovative Technology Evaluation, called the SITE program in attempting to promote a more flexible approach to the use of new technologies and the use of problem-based methods to replace at least some of the rigid, highly prescriptive testing methods now in use.
|
From page 72... ...
The question is whether regulation will enable small companies to exploit this new competitive environment. In contrast to medical devices or environmental testing services, which are dominated by large numbers of small competitors, regulation in telecommunications has historically focused on economic regulation of a "natural" monopoly, AT&T.
|
From page 73... ...
IMPLICATIONS FOR POLICY The contribution of this study to policy debates is to ask the question, Given the contributions of small technology-oriented companies to the economy, what principles distinguish good policy and programs from bad? The central findings of this study are that small technically oriented companies assume risks that other companies-large and small will not and that such risk takers play a particularly important role in technically new and small markets.
|
From page 74... ...
In the committee's judgment, the consequences of government actions for technically oriented startups and small companies and by implication for their ability to bear technological risk and drive innovation are often poorly understoocl both by the public and bypolicymakers. State and federal actions aimed at, and justified by, other missions public safety, environmental quality, antitrust, commercial standard setting, and national defense, for example often have the most profound impact on the opportunities for small high-tech companies.
|
From page 75... ...
Finally, in the committee's judgment, many government policy mechanisms to promote economic growth some types of federal R&D funding, technical assistance programs, local incubators, university-industry collaborative ventures need to be designed and managed regionally or locally. Local and regional programs may have an advantage in that they are closer to the resources that small companies need and are potentially more able to adapt to the needs of small high-tech companies.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.