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SBIR at NASA (2016)

Chapter: 6 Participation of Women and Minorities

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Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
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6

Participation of Women and Minorities

One of the four primary Congressional objectives for the Small Business Innovation Research (SBIR) program is “to foster and encourage participation by minority and disadvantaged persons in technological innovation.”1 The 1992 reauthorization reaffirmed that the purpose of the SBIR program is “to improve the Federal Government’s dissemination of information concerning the Small Business Innovation Research Program, particularly with regard to program participation by woman-owned small business concerns and by socially and economically disadvantaged small business concerns.”2 Within the SBIR program, disadvantaged persons are defined as those who are either women or are members of a disadvantaged group as identified by the Small Business Administration (SBA).3 Although participation can encompass more than ownership, available agency data did not support detailed analysis of participation of disadvantaged persons beyond company ownership. The Academies’4 2011 Survey of National Aeronautics and Space Administration (NASA) SBIR awardees enabled for the first time a disaggregation of participants by minority status as well as information on participation of women and minorities as principal investigators in addition to company owners. In the committee’s related report on the Small Business Technology Transfer Program, it recommends that the SBA change its definitions to address congressional intent with regard to minorities (see Box 6-1).

This chapter reviews the participation by women and minorities in the NASA SBIR program, using agency data and the 2011 Survey of NASA SBIR award recipients. It finds that current efforts have not been sufficient to meet the

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1 P.L. 97–219, § 2, July 22, 1982, 96 Stat. 217.

2 P.L. 102-564, October 28, 1992, 106 STAT 4249.

3 For the SBA definition of disadvantaged persons, see https://www.sba.gov/category/navigationstructure/eligibility-requirements. Accessed August 4, 2015.

4 Effective July 1, 2015, the institution is called the National Academies of Sciences, Engineering, and Medicine. References in this report to the National Research Council or NRC are used in an historic context identifying programs prior to July 1.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

Congressional objective. The committee recognizes that small businesses often introduce the radical ideas that can transform industries and markets, and that mobilizing all skilled individuals, regardless of race/ethnicity or gender, strengthens the economy and the nation. To this end, the committee convened a

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

workshop to draw attention to participation of women, minorities, and both older and younger scientists, engineers, and entrepreneurs in the SBIR program and to identify mechanisms for improving their participation rates.5 The workshop also drew attention to the fact that improving the participation of women and minorities in the SBIR program is a part of a broader national challenge of promoting the effective participation of women and minorities in science, technology, engineering, and mathematics (STEM) (see Box 6-2).

Participants in the workshop examined broad demographic trends in the science and engineering workforce and statistical measures from the SBIR program for women and minorities, and searched for pragmatic solutions to boost SBIR awards to women and minorities. The workshop highlighted the fact that women comprise 51 percent of the U.S. population and 27 per cent of

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5 National Academies of Sciences, Engineering, and Medicine, Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop, Washington, DC: The National Academies Press, 2015, p.5.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

STEM graduates, but woman-owned companies have received only about 6 percent of SBIR awards. Hispanics, African Americans, Asian Americans, and Native Americans together comprise 36 percent of the U.S. population and 26 percent of STEM graduates, but less than 10 percent of all SBIR awards.

DEFINING THE ISSUE

NASA and other federal agencies use definitions provided by the SBA. However, for the purposes of this analysis—and for determining whether agencies are meeting the congressionally mandated objective—neither the SBA’s definition nor related metrics is adequate. In implementing the statute, the SBA has transformed “minority and disadvantaged persons” into “socially and economically disadvantaged small businesses (SDBs), and […] women-owned small businesses (WOSBs).”6 Although this formulation has been traditional among SBIR stakeholders, it has several unintended consequences:

  • It focuses attention entirely on company ownership, rather than the “participation” described in the statute. There are many different ways to participate in the SBIR program, and only one of them is ownership.
  • It replaces “minority and disadvantaged persons” with “socially and economically disadvantaged small businesses,” which aligns the program not with the minority needs apparently at the forefront of Congressional objectives but instead with SBA definitions of socially and economically disadvantaged and with businesses rather than persons.

As a result, all participation other than via ownership is disregarded by agencies—including NASA. For example, no data appear to be maintained by any SBIR-awarding agency on female and minority principal investigators. And as we shall see, SBA definitions of “socially and economically disadvantaged” have the effect of largely obscuring agency performance in addressing the Congressional objective.

To analyze the role of women and minorities in NASA’s SBIR program, the committee relied primarily on agency data, survey data, and a workshop convened by this committee on the issue of diversity, taking each in turn. The analysis begins with examination of what agency data tells us about the participation of women and minorities.

AGENCY DATA ON WOMEN AND MINORITIES

The data cited below on the participation of woman- and minority-owned firms have been provided by NASA directly. These data are summarized below and discussed in more detail in the chapter annex.

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6 SBA SBIR/STTR Policy Directive, February 24, 2014, p. 3.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

Phase I Applications, Awards, and Success Rates

Phase I: Woman-owned Small Businesses (WOSBs)

Phase I applications from woman-owned small businesses (WOSBs) declined fairly steadily across the study period, fiscal year (FY) 2005-2014.7 In FY2014 there were 179 applications from WOSBs, down from a peak of 286 in FY2005. However, there was no decline in WOSB applications as a percentage of all applications because the decline in WOSB applications matches the overall broad decline in Phase I SBIR applications to NASA.

“Success rates” measure the percentage of applications that result in awards. At NASA, Phase I success rates for WOSB have been consistently lower than for non-WOSB firms. During the study period, success rates for WOSB applications fluctuated substantially, with a peak at 22 percent in FY2008 and a low of 11 percent in FY2011 (see Figure 6-1), but in every one of the 9 years of data provided, WOSB success rates were lower than those for all

images
FIGURE 6-1 NASA Phase I SBIR success rates for WOSB and non-WOSB applications, FY2005-2014.
SOURCE: NASA applications and awards database.

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7 NASA utilizes the definition of woman-owned provided by the SBA in its policy guidance for the SBIR/Small Business Technology Transfer (STTR) program. http://www.sbir.gov/sites/default/files/sbir_pd_with_1-8-14_amendments_2-24-14.pdf. Accessed March 17, 2015.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

applicants. Overall, the WOSB success rate was 16.8 percent, while the non-WOSB success rate was 25.5 percent. As a result of the lower success rates, the WOSB share of Phase I awards declined over the study period, from about 12 percent of awards in the early part of the period to less than 9 percent in FY2014.

Phase I: Minority-owned Small Businesses (MOSB)

Phase I applications from minority-owned small businesses (MOSBs) declined fairly steadily during the study period, from a peak of nearly 350 in FY2005 to 132 in FY2014.8 This decline was somewhat steeper than the overall decline in applications to NASA during the study period.

Success rates for MOSB application were lower than those for non-MOSB applications for every year during the study period—by more than one-half in 2 years (including FY2014). Across the study period, the average success rate was 25.5 percent for non-MOSBs and 14.5 percent for MOSBs. The average MOSB success rate was also lower than the average WOSB success rate for the same time period (14.5 compared with 16.8).

Reflecting a sharper than average decline in applications together with lower success rates, the MOSB share of Phase I SBIR awards declined across the study period, from a peak of almost 14 percent in FY2007 to a new low of

images
FIGURE 6-2 NASA Phase I SBIR success rates for MOSB and non-MOSB applications, FY2005-2014.
SOURCE: NASA applications and awards database.

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8 NASA utilizes the SBA definition as the basis for this tabulation.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

7.8 percent in FY2014. These results include within the MOSB category awards to companies that are majority owned by Asian-Americans as well as those owned by groups more traditionally included in minority groups, such as African-Americans, Native Americans, and Hispanic-Americans. While the existing data reveal the dual problems of lower application rates and lower success rates, they do not provide the details of cause and effect needed to design solutions.

Summary: NASA data on Phase I Awards to Minority- and Woman-owned Small Businesses

For Phase I, there is strong evidence that MOSBs are not improving their access to the SBIR program; to the contrary, during the study period, for almost every relevant metric, access appeared to decline:

  • The share of Phase I applications from MOSBs declined from about 15 percent to less than 12 percent of the total.
  • For every year, MOSB success rates were lower than non-MOSB success rates. In FY2014 the gap was more than 10 percentage points.
  • Declining applications and flat or declining success rates inevitably led to declining numbers of awards to MOSB.
  • The percentage share of SBIR awards to MOSBs fell steadily beginning in FY2008, a function of both declining applications and relatively low success rates. At study end, MOSBs accounted for about 8 percent of NASA Phase I SBIR awards.

WOSBs had somewhat more success than MOSBs in Phase I, and overall there was a small upward trend in the share of awards to WOSBs:

  • Applications from WOSB, although declining over the period, broadly reflected the patterns for applications as a whole. There was no substantial change in the percentage of applications received from WOSBs.
  • Overall, success rates were lower for WOSBs than for non-WOSBs, although the average gap was considerably less than that for MOSBs. In 1 year (FY2011) WOSB applications enjoyed a slightly higher success rate than did all other applicants. Most recently, in FY2014 the gap in success rates between WOSB and all others widened, with WOSB success rates about 25 percentage points lower than that for all others.

Phase II Applications, Awards, and Success Rates

Participation of WOSBs and MOSBs in Phase II was largely, but not entirely driven, by their limited and lower participation in Phase I, compared to

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

non-WOSBs and non-MOSBs. For instance, the Phase II success rates for WOSBs were lower than those for non-WOSBs in every year of the study period except for FY2005 (see Figure 6-3). Overall, the WOSB success rate was 4 percentage points lower than the non-WOSB success rate. And as a result of these factors, the WOSB share of Phase II awards declined to below 8 percent in FY2011 and FY2012.

Falling applications and lower success rates resulted in a decline in the number of MOSB Phase II awards, and in their share of all awards. The largest number of Phase II awards to MOSBs in FY2010, FY2011, and FY2012 was six awards, and MOSBs’ share of all awards fell to a low of 5 percent in FY2012, the most recent year for which data were available.

Summary: Phase II Awards to Minority- and Woman-Owned Small Firms

Phase II participation is highly dependent on the number of firms winning NASA Phase I awards, because only Phase I winners could apply for Phase II until 2012. Beyond this overarching effect, other findings are important to note:

  • Unlike Phase I, Phase II success rates showed no consistent pattern.
  • The number of MOSB Phase II awards declined sharply during the study period, especially toward the end. After peaking at 18 in FY2009, awards dropped to 4 by FY2014.
images
FIGURE 6-3 NASA Phase II SBIR success rates for WOSB and non-WOSB applications, FY2005-2012.
SOURCE: NASA applications and awards database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
  • Overall the MOSB share of Phase II awards fell by more than half, from 13 percent in FY 2006 to 6 percent in FY2014.
  • The trend in the number of Phase II applications from WOSBs tracked closely with that for all applicants.
  • NASA awarded 8 or 9 Phase II awards to WOSBs in each of the 3 most recent years reported.
  • Although the WOSB share of Phase II awards grew from FY2005 to FY2010, peaking at greater than 14 percent, it declined sharply since FY2010. In FY2014, WOSBs accounted for less than 9 percent of all Phase II awards.
  • WOSB results are somewhat skewed by the presence of two especially successful WOSB companies. Two firms (Intelligent Automation and Paragon Space Development) accounted for more than one-quarter of all Phase II awards to WOSBs. There are no comparable MOSB companies.

Overall, these data overall suggest that NASA has not been effective in increasing applications from WOSBs and MOSBs. At a minimum, NASA should seek an explanation for these observed differences and search for appropriate remedies.

The data collected and provided by NASA do not address other forms of participation of women and minorities in the program—notably as PIs. In addition, the data are not disaggregated by minority status, which has the effect of camouflaging particularly serious problems around participation of Black-, Native American-, and Hispanic-owned firms. These issues are addressed via data drawn from the 2011 Survey.

SURVEYING MINORITY GROUPS

The 2011 Survey addressed the participation of women and minorities in the NASA SBIR program. It is the first to the committee’s knowledge to probe beneath the SBA definition of “socially and economically disadvantaged groups” (SEDGs).9 That is, previous SBIR surveys by the Academies and other organizations such as the Government Accountability Office (GAO)10—as well as agency data collection—have all simply sought to determine whether the company is majority-owned by members of a SED group (as defined by the SBA). The results below should be examined with some caution because the numbers of responses are too small to draw definitive conclusions. At the same time, these are the only available data on the demographics of PIs and on the

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9 Different agencies use different terminologies, which also change over time. Both “minority-owned” and “socially or economically disadvantaged” are widely used.

10Government Accountability Office, Small Business Innovation Research Shows Success but Can Be Strengthened, RCED-92-37, March 30, 1992.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

participation of firms owned by Blacks, Hispanics, and Native Americans, and, as such, are of keen interest.

Minority Principal Investigators

Like the 2005 Survey, the 2011 Survey asked whether the PI for the surveyed project was a minority. Fourteen percent of Phase I11 and 11 percent of Phase II respondents indicated this was the case for their project (see Table 6-1).

The 2011 Survey also asked respondents to provide details about the PI’s ethnic background. Detailed categories were drawn from SBA definitions, with the addition of a category for “other” to ensure that all respondents who wish to claim SED status had an appropriate category. Answers to this detailed question revealed that more than three-quarters of the SED PIs were Asian-Pacific or Asian-Indian. No Phase II respondent indicated that the PI was African-American. Eighteen percent of Phase I PIs and 5 percent of Phase II PIs were Hispanic. Although the raw numbers are very small, the absence of Black PIs in Phase II and the sharp decline in Hispanic PIs across phases are causes for concern (see Table 6-2).

These data can be placed in the further context of the 2011 Survey population as a whole. Overall, of the 298 Phase I and Phase II respondents, over 1 percent reported that the project PI was Hispanic, and less than 1 percent reported that the project PI was Black. One percent reported that the Phase II PI was Native American (see Table 6-3).

Minority Company Ownership

Turning from the ethnicity of PIs to the ethnicity of company owners, approximately 10 percent of Phase I respondents and 7 percent of Phase II respondents indicated that the company was majority-owned by minority individuals at the time of the award.12

TABLE 6-1 Minority PIs in NASA SBIR Projects, Reported by 2011 Survey Respondents, as Percentage of Total Respondents, by Phase

Minority PI Percentage of Phase I Respondents Percentage of Phase II Respondents

Yes

14

11

No

86

89

Total 100 100

N=Number of Respondents

119

177

SOURCE: 2011 Survey, Question 14B.

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11 Phase I data were originally collected as a part of an effort to add statistical analysis to the assessment. This effort was later shelved, but the data were retained. It should be noted that the Phase I respondents in this case all came from companies that did not receive a Phase II award in FY1998-2007 from NASA, the National Science Foundation (NSF), or the Department of Defense (DoD).

12 2011 Survey, Question 19B.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

TABLE 6-2 NASA SBIR: Composition of Minority PIs by Ethnicity, Reported by 2011 Survey Respondents, as a Percentage of Respondents Reporting a Minority PI, by Phase

Ethnicity of Minority PI Percentage of Phase I Respondents Reporting a Minority PI Percentage of Phase II Respondents Reporting a Minority PI

Asian-Indian

41

37

Asian-Pacific

29

47

Hispanic

18

5

Black

12

0

Native American

0

5

Other

0

5

100

100

N= Number of Respondents Reporting a Minority PI

17

19

SOURCE: 2011 Survey, Question 14C.

TABLE 6-3 NASA SBIR Composition of Minority PIs by Ethnicity Reported by 2011 Survey Respondents, as Percentage of All Respondents, by Phase

Ethnicity of Minority PI Percentage of Phase I Respondents Percentage of Phase II Respondents

Asian-Indian

6

4

Asian-Pacific

4

5

Hispanic

3

1

Black

2

0

Native American

0

1

Other

0

1

14 11

N= Number of Respondents

119

179

SOURCE: 2011 Survey, Question 14C.

Probing more deeply into the ethnic distribution of minority company ownership allows for identification of further issues. Overall, this distribution is quite similar to that for minority PIs, in that responses from 75 percent of both Phase I and Phase II respondents reported majority owners of Asian-Indian and Asian-Pacific ethnicity.13 Again, the percentages should be viewed with some caution, because the numbers involved are very small indeed: the 2011 Survey reported two Phase I awards and one Phase II award to Black-owned companies, and one Phase I award to a Hispanic-owned firm, out of 298 awards surveyed. Nonetheless, the fact remains that even among this very small sample, three-quarters of firms identifying as minority-owned are Asian-owned.

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13 2011 Survey, Question 19C.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

Female Principal Investigators

Women have traditionally been viewed as socially and economically disadvantaged in the context of the SBIR program, and therefore expanding opportunities for women has been one of the congressionally mandated goals of the SBIR program since its inception. In most cases, analysts have focused on the participation of woman-owned firms. However, being a PI is thought by some to be a stepping stone toward company ownership, so the 2011 Survey captures the extent to which SBIR awarded projects had female PIs.

Respondents reported that about 11 percent of Phase I projects and 5 percent of Phase II projects had a female PI (see Table 6-4). The data show that overall there are relatively few female PIs in the NASA SBIR program. Furthermore, female PIs were less likely to receive a Phase II award than a Phase I award, at levels that were less than half. Although the raw numbers are small, these results warrant further analysis and possibly agency action.

Woman-owned Businesses

The 2011 Survey also addressed the extent to which SBIR awards are made to WOSBs. These data are provided in Table 6-5 and indicate that, although the percentage of WOSBs in the sample was not large, it was overall somewhat higher than the percentage of female PIs for Phase II projects. NASA provided data that show somewhat higher shares for WOSBs than does the 2011 Survey for the study period. Surprisingly, the NASA data show higher shares for WOSBs in Phase II than in Phase I.

NASA OUTREACH ACTIVITIES TOWARD WOMEN AND MINORITIES

Box 6-3 provides an excerpt from the 2013 NASA annual report to the SBA on efforts to enhance the participation of women and minorities in the SBIR program. This text shows that NASA’s SBIR Program Office has passed primary responsibility for outreach to women and minorities to its Office of Small Business Programs (OSBP). OSBP staff undertake the outreach, and OSBP staff at the Field Centers are responsible for implementation. However, this outreach is not focused on the small target audience of potential SBIR applicants: it includes all other small businesses.

In 2013, the NASA SBIR program participated in several workshops, two of which were led by other organizations and were not SBIR-focused. There is no evidence that any concrete actions emerged from any of these activities.

The NASA SBIR program office does not track outreach to woman- and minority-owned firms in any systematic way and did not provide any data connecting outreach to applicants.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

TABLE 6-4 NASA SBIR: Female PIs in NASA SBIR Projects, Reported by 2011 Survey Respondents, as Percentage of All Respondents, by Phase

Female PI Percentage of Phase I Respondents Percentage of Phase II Respondents

Yes

11

5

No

89

95

100

100

N=Number of Respondents

119

177

SOURCE: 2011 Survey, Question 14A.

TABLE 6-5 NASA SBIR: Woman-owned Small Businesses Reported by Respondents, as a Percentage of All Respondents, by Phase

WOSB at Time of Award Percentage of Phase I Respondents Percentage of Phase II Respondents

Yes

7

9

No

93

91

100

100

N=Number of Respondents

118

177

SOURCE: 2011 Survey, Question 19A.

PERSPECTIVES ON IMPROVING DIVERSITY

To further examine the participation of women, minorities, and other underrepresented groups in the SBIR/STTR programs and to identify ways to increase that participation, the committee convened a workshop on February 7, 2013, titled “Innovation, Diversity, and Success in the SBIR/STTR Programs.”14 The workshop examined broad demographic trends in the science and engineering workforce and the need for more female and minority representation within that workforce, as well as pragmatic solutions to boost SBIR awards to women and minorities.

Personal experiences shared at the Academies’ workshop illustrated how diversity can advance innovation; the blending of multiple viewpoints often casts a new lens on old problems, leading to innovative solutions. Eric Adolphe of CenterScope Technologies, who is a 17-time SBIR awardee, credited the diversity of his team for his first SBIR award. He described the experience of writing code overnight for a National Aeronautics and Space Administration (NASA) Phase II award. By thinking outside the box, his team not only won the contract but also garnered the NASA SBIR of the Year Award. “We were able to solve complex problems because we all thought differently,” he said.

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14 For a review of these perspectives, see National Academies of Sciences, Engineering, and Medicine, Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop, Washington, DC: The National Academies Press, 2015. This section draws from the text of this report.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

Although greater participation of women and minorities in U.S. science and engineering can help ensure a stable pipeline of talent to weather U.S. demographic and global economic shifts, workshop speakers noted how the addition of women and minorities enriches America’s science and technology innovation in a more qualitative manner. For example, Peggy Wallace of Golden Seeds noted that research shows companies with women on their boards are more profitable than other companies.15

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15 See presentation by Peggy Wallace in Chapter 4 of National Academies of Sciences, Engineering, and Medicine, Innovation, Diversity, and Success in the SBIR/STTR Programs. It is recognized that

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

Individual workshop participants made a number of suggestions for addressing the participation of women and minorities in the SBIR and STTR programs. These suggestions spanned a wide range but broadly fell within three categories—expanding the pool of applicants, eliminating barriers in grant applications and selection, and providing greater education and support for entrepreneurship training and commercialization efforts. Participants also saw the need to align and leverage resources and programs at the state level that aim at providing access and support to woman- and minority-owned businesses; and to team with other federal and state/local programs which are addressing this issue.

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an observation differs from a statement of causality, with the latter generally requiring control groups to establish proof. For example, it may be that companies are more profitable because they have women on their boards, or that more profitable companies are more likely to emphasize diversity and appoint women to their boards.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

SUMMARY

Data from both NASA and the 2011 Survey show that access for women and minorities to the SBIR/STTR program is not expanding. Not only are the shares of awards to woman- and minority-owned businesses continuing to decline, recently reaching historic lows in some cases, but also the same is true of opportunities for female and minority PIs.

Delving further into the details of minority participation, the 2011 Survey results also established that the percentages of Black- and Hispanic-owned firms and Black and Hispanic PIs are small and vanishing.

Finally, there is no evidence that NASA has undertaken any significant or effective initiatives to address this Congressional objective for the SBIR program. There are no documented outreach programs of any size or duration.

ANNEX 6-A
APPLICATIONS AND AWARDS FOR THE NASA SBIR PROGRAM, FY2005-2014

Phase I SBIR Award Demographics

Woman-owned Small Businesses

Phase I Applications and Success Rates

The number of applications received from WOSBs declined steadily over the study period (see Figure 6-4), reflecting the overall decline in all applications to NASA.

The success rates for WOSB applications fluctuated substantially, reaching a peak at 22 percent in FY2008 and a low at 11 percent in FY2011 (see Figure 6-5). However in every 1 of the 9 years of data provided by NASA, WOSB success rates were lower than those for all applications. Overall, the average success rate for WOSB applications was 17 percent, while average success rate for non-WOSB applications was 26 percent.

Phase I Awards

The number of awards to WOSBs grew fairly steadily from FY2005 until FY2010, albeit from a low base. However, in FY2011 the number of awards to WOSBs declined sharply and did not fully recover (see Figure 6-6).

WOSBs received a declining share of all NASA Phase I SBIR awards during the study period. Although they averaged about 12 percent overall, this percentage is buoyed by larger shares in FY2009 and FY2012 (see Figure 6-7). The last year of the study period is also the year with the lowest WOSB share of awards, at less than 9 percent.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
images
FIGURE 6-4 NASA SBIR Phase I proposals from all applicants and from WOSBs, FY2005-2014.
SOURCE: NASA awards and applications database.
images
FIGURE 6-5 NASA SBIR Phase I success rates from WOSBs and from all applicants, FY2005-2014.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
images
FIGURE 6-6 NASA Phase I SBIR awards to WOSBs, FY2005-2014.
SOURCE: NASA awards and applications database.
images
FIGURE 6-7 WOSB share of all NASA SBIR Phase I awards, FY2005-2014.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
Top Winners Among WOSBs

When reviewing these results, it is important to note that the very large roles played by three WOSBs (Physical Optics, Intelligent Automation, and CFD Research) in the program tend to skew the data. All three were wholly or in part founded by their female owners, who continue to play a major role at each, so they meet the SBA standard for WOSBs. Combined, they accounted for about 22 percent of all Phase I awards to WOSBs during the study period. Table 6-6 lists the top 20 WOSB NASA SBIR Phase I awardees from FY2005 to FY2014. Together the top 20 accounted for slightly more than half of all Phase I awards to WOSB during the study period. A closer look at contributing factors to the success of these WOSBs might be instructive.

Minority-owned Small Businesses

Phase I Applications

The number of Phase I applications from MOSBs declined steadily from a peak of more than 360 in FY2005 to 144 in FY2014 (see Figure 6-8). This decline mirrors, but is somewhat steeper than, the overall decline in applications to NASA during the study period. Overall, the number of MOSB applications declined by more than one-half during the study period.

images
FIGURE 6-8 NASA SBIR Phase I proposals from MOSBs and all applicants, FY2005-2014.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

TABLE 6-6 Top Winners Among WOSBs, NASA SBIR Phase I awards, FY2005-2014

Company Name Number of NASA SBIR Phase I Awards

Intelligent Automation, Inc.

32

CFD Research Corporation

23

Physical Optics Corporation

20

Ridgetop Group, Inc.

14

Paragon Space Development Corporation

11

Microcosm, Inc.

11

Cybernet Systems Corporation

10

InnoSense, LLC

8

Signal Processing, Inc.

7

Florida Turbine Technologies, Inc.

7

Composite Technology Development, Inc.

7

The Innovation Laboratory, Inc.

7

Spectral Energies, LLC

6

M4 Engineering, Inc.

6

Michigan Engineering Services, LLC

5

ElectroChem, Inc.

5

Sukra Helitek, Inc.

4

Jabiru Software and Services

4

Nano EnerTex

4

Touchstone Research Laboratory, Ltd.

4

Total 195

All WOSB awards

342

All Awards

2,862

Top 20 WOSB companies as percentage of WOSB awards

57.0

Top 20 WOSB companies as percentage of all awards

6.8

SOURCE: NASA awards and applications database.

Success rates for MOSBS were lower than those for non-MOSBs for every year of the study period. In 2 years (including FY2014), success rates for MOSBs were less than half of those for non-MOSB firms. Across the entire study period, the average success was 25.9 percent for non-MOSBs and 14.5 percent for MOSBs. NASA has provided no explanation for these results.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
Phase I Awards

Declining applications and flat or declining success rates inevitably lead to declining numbers of awards (see Figure 6-10). Combined with the growth in overall awards, the lower numbers of awards to MOSBs resulted in a declining share of awards for MOSBs. There are year-to-year fluctuations, but the overall trend is clear.

Top Winners Among MOSBs

Awards to MOSBs were less concentrated in specific companies than were those to WOSBs. Table 6-7 shows that the top 20 MOSB awardees accounted for about 42 percent of all Phase I awards to MOSBs. The top three MOSBs received a total of 57 awards, or 12 percent of all MOSB awards—a much lower percentage than for the top three WOSBs.

Phase II SBIR Award Demographics

Woman-owned Small Businesses

Phase II Applications and Success Rates

As with Phase I, the number of Phase II applications from WOSBs largely tracked the pattern of all applications, rising in response to ARRA funding but otherwise largely flat throughout the period (see Figure 6-11).

images
FIGURE 6-9 Success rates for NASA SBIR Phase I applications from MOSBs and from non-MOSBs, FY2005-2014.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
images
FIGURE 6-10 Number of NASA SBIR Phase I awards to MOSBs, FY20052014.
SOURCE: NASA awards and applications database.
images
FIGURE 6-11 NASA SBIR Phase II applications from all applicants and from WOSBs, FY2005-2014.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

TABLE 6-7 Top Winners Among MOSB, NASA SBIR Phase I Awards, FY2005-2014

Company Name Number of NASA Phase I SBIR Awards

Scientific Systems Company

24

ZONA Technology

17

SVT Associates

16

Materials Modification

15

American GNC

15

Aurora Flight Sciences

14

Optimal Synthesis

11

Tietronix Software

10

Cybernet Systems

10

Signal Processing

7

Mobitrum

7

Acellent Technologies

7

TTH Research

6

Materials Technologies

6

ElectroDynamic Proposals

6

Analytical Services (ASI)

6

Applied Material Systems Engineering (AMSENG)

6

AdValue Photonics

6

Advanced Dynamics

6

Agave BioSystems

6

Total 201

All MOSB awards

477

Top 20 percent of total

42.1

NOTE: Zona Technology reported itself as not minority owned for three additional awards. Aurora Flights Sciences reported itself as minority owned through 2008 only.

SOURCE: NASA awards and applications database.

As with Phase I and MOSB Phase II, success rates for WOSBs were lower than those for non-WOSBs in every year of the study period except for FY2005, as shown in Figure 6-12.

Phase II Awards

The number of awards made to WOSBs in any given year was small—the most being 32 in FY2009, when additional funding from the American Recovery and Reinvestment Act (ARRA) became available (see Figure 6-14). After 2009, the number of awards to WOSBs declined to 10 or fewer in each of the three most recent fiscal years for which data are available.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
images
FIGURE 6-12 NASA SBIR Phase II success rates for WOSBs and non-WOSBs, FY2005-2012.
SOURCE: NASA awards and applications database.
images
FIGURE 6-13 NASA SBIR Phase II awards to WOSBs, FY2005-2012.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

Figure 6-14 shows that overall the WOSB share of all awards declined steadily except for the year of ARRA funding. As the share of awards to WOSBs declined, so did the number of awards.

Top Winners Among WOSBs

As expected, many of the WOSBs who led Phase I also led Phase II. There were some changes in the order, largely because of differences in the Phase I to Phase II conversion rate16 (the share of Phase I awards that are transitioned to Phase II), even among the top three firms. The differences in conversion rates were substantial enough that NASA SBIR program management should analyze them further, because low conversion rates suggest that Phase I resources may not be focused on the most likely projects. Overall, the top winners accounted for 91 out of 146 (62 percent) Phase II to WOSBs during the study period.

Minority-owned Small Businesses

Phase II Applications

NASA SBIR Phase II applications data are missing for FY2013 and FY2014, so only limited conclusions can be drawn, especially about more recent

images
FIGURE 6-14 WOSB share of all NASA SBIR Phase II awards, FY2005-2012.
SOURCE: NASA awards and applications database.

__________________

16 The conversion rate is the number of Phase II awards received by a company expressed as a percentage of the number of Phase I awards received by that company.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

TABLE 6-8 Top Winners Among WOSBs, NASA SBIR Phase II awards, FY2005-2014

Company Name Number of NASA Phase I Awards Number of NASA Phase II Awards Phase I-Phase II Conversion Rate (Percent)
Intelligent Automation, Inc. 32 17 53.1
Paragon Space Development Corporation 11 9 81.8
CFD Research Corporation 23 8 34.8
Physical Optics Corporation 20 7 35.0
Microcosm, Inc. 11 6 54.5
InnoSense, LLC 8 5 62.5
Cybernet Systems Corporation 10 5 50.0
Ridgetop Group, Inc. 14 5 35.7
Composite Technology Development, Inc. 7 4 57.1
M4 Engineering, Inc. 6 3 50.0
ElectroChem, Inc. 5 3 60.0
WEVOICE, Inc. 3 3 100.0
SIFT, LLC 2 2 100.0
Sukra Helitek, Inc. 4 2 50.0
Innovative Dynamics, Inc. 2 2 100.0
Ceramic Composites, Inc. 2 2 100.0
Florida Turbine Technologies, Inc. 7 2 28.6
Nuvotronics, LLC 3 2 66.7
Masstech, Inc. 2 2 100.0
Touchstone Research Laboratory, Ltd. 4 2 50.0

NOTE: The conversion rate is the number of Phase II awards received by a company expressed as a percentage of the number of Phase I awards received by that company.

SOURCE: NASA awards and applications database.

trends. Figure 6-15 shows that MOSB and non-MOSB applications tracked quite closely until FY2011 when non-MOSB applications responded to the ARRA funding by rising sharply while MOSB applications declined sharply and remained low in FY2012.

Overall, the MOSB share of Phase II applications declined over the time period, although data for the most recent fiscal years is not available (see Figure 6-16). Success rates for MOSBs and non-MOSBs fluctuated, but MOSB success rates in every year were lower than those for non-MOSB firms (see Figure 6-17). Overall, MOSB success rates were 13 percentage points lower than those for non-MOSBs.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
images
FIGURE 6-15 NASA SBIR Phase II SBIR Applications from MOSBs and non-MOSBs, FY2005-2012.
SOURCE: NASA awards and applications database.
images
FIGURE 6-16 MOSB share of NASA SBIR Phase II Applications, FY20052012.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
images
FIGURE 6-17 NASA SBIR Phase II success rates for MOSBs and non-MOSBs, FY2005-2012.
SOURCE: NASA awards and applications database.
Phase II Awards

The data reveal very low levels of awards to MOSBs throughout the study period, with a decline that has, if anything, accelerated in more recent years (see Figure 6-18). In FY2014 NASA reported five Phase II awards to MOSBs, down from 16 in FY2005 and a peak of 19 in FY2009. These data lead directly to the steady decline in the MOSB share of all Phase II SBIR awards, from 13 percent in FY2006 to 6.8 percent in FY2012 (see Figure 6-19).

Top Winners Among MOSBs

Unlike the case for WOSBs, where the top companies are among the biggest winners among all companies, no MOSB received as many as 10 Phase II awards during the period. The top winner, ZONA Technology, received 7 (see Table 6-9). Overall, the top 20 winners received 52 Phase II awards from FY2005 to FY2012, accounting for 59 percent of all MOSB Phase II awards, and 4.8 percent of all Phase II awards.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
images
FIGURE 6-18 NASA SBIR Phase II awards to MOSBs, FY2005-2014.
SOURCE: NASA awards and applications database.
images
FIGURE 6-19 MOSB share of all NASA SBIR Phase II awards, FY2006-2012.
SOURCE: NASA awards and applications database.
Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×

TABLE 6-9 NASA Top MOSB Phase II Awardees, 2005-2014

Company Name Number of NASA SBIR Phase I Awards Number of NASA SBIR Phase II Awards Phase I-Phase II Conversion Rate (Percent)
ZONA Technology, Inc. 13 7 53.8
Cybernet Systems Corporation 10 5 50.0
AdValue Photonics, Inc. 6 4 66.7
Scientific Systems Company, Inc. 17 4 23.5
Mobitrum Corporation 5 4 80.0
Transition45 Technologies, Inc. 4 3 75.0
S&K Aerospace 5 3 60.0
ElectroChem, Inc. 5 3 60.0
Advanced Dynamics, Inc. 6 2 33.3
SVT Associates 13 2 15.4
Discovery Semiconductors, Inc. 2 2 100.0
Ashwin-Ushas Corp, Inc. 2 2 100.0
Tao of Systems Integration, Inc. 3 2 66.7
Aurora Flight Sciences Corporation 8 2 25.0
Applied Material Systems Engineering, Inc. (AMSENG) 5 2 40.0
MetaHeuristics 1 1 100.0
Xigen, LLC 1 n/a
Andrews Space, Inc. 2 1 50.0
N&R Engineering 3 1 33.3
Materials and Systems Research, Inc. 3 1 33.3

NOTE: The conversion rate is the number of Phase II awards received by a company expressed as a percentage of the number of Phase I awards received by that company.

SOURCE: NASA awards and applications database.

Suggested Citation:"6 Participation of Women and Minorities." National Academies of Sciences, Engineering, and Medicine. 2016. SBIR at NASA. Washington, DC: The National Academies Press. doi: 10.17226/21797.
×
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The Small Business Innovation Research (SBIR) program is one of the largest examples of U.S. public-private partnerships, and was established in 1982 to encourage small businesses to develop new processes and products and to provide quality research in support of the U.S. government’s many missions. The U.S. Congress tasked the National Research Council with undertaking a comprehensive study of how the SBIR program has stimulated technological innovation and used small businesses to meet federal research and development needs, and with recommending further improvements to the program. In the first round of this study, an ad hoc committee prepared a series of reports from 2004 to 2009 on the SBIR program at the five agencies responsible for 96 percent of the program’s operations -- including NASA. In a follow-up to the first round, NASA requested from the Academies an assessment focused on operational questions in order to identify further improvements to the program.

Public-private partnerships like SBIR are particularly important since 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 assume risk to bring new welfare-enhancing, wealth-generating technologies to the market. Yet, although discoveries in various fields present new opportunities, converting these discoveries into innovations for the market involves substantial challenges. The American capacity for innovation can be strengthened by addressing the challenges faced by entrepreneurs.

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