An Assessment of the SBIR Program at the National Institutes of Health (2009) / Chapter Skim
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Pages 19-41
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From page 19... ...
. As with investments by angel investors or venture capitalists, SBIR awards result in highly concentrated sales, 5 with a few awards accounting for a very large share of the overall sales generated by the program.
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At least 50 of the 200 most frequent winners of NIH SBIR awards have received venture funding, and those investments totaled more than $1.5 billion (1992-2005)
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Company Creation: just over 25 percent of companies indicated that they were founded entirely or partly because of an SBIR award;14 2. The Project Initiation Decision: more than 50 percent of SBIR funded projects reportedly would not have taken place without SBIR funding; 3.
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4 2 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 FIGURE 2-1 Share of Phase II awards to women- and minority-owned firms, 1992-2006. Note: Following discussions with the NRC staff, the NIH made an effort to recalculate the data for women and minority owners' participation in the SBIR program.
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F NIH SBIR Awards are Open to New Entrants 1.
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Reflecting this synergy, initial NRC review indicates about 25 percent of the top 200 NIH Phase II award winners (1992-2005) have acquired some venture funding in addition to the SBIR awards.22 2.
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Some of the most successful NIH SBIR award winning firms – such as Martek have, according to senior management, been successful only because they were able to attract substantial amounts of venture funding as well as SBIR awards.27 Access the SBA's 2002 SBIR Policy Directive, Section 3(y)
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ii. For firms seeking to capitalize on the progress made with SBIR awards, venture funding may be the only plausible source of funding at the levels required to take a product into the commercial marketplace.
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Knowledge Transfer from Universities: The NRC survey also suggests that SBIR awards are supporting the transfer of knowledge, firm creation, and partnerships between universities and the private sector: i. in more than 80 percent of responding companies with projects at NIH, at least one founder was previously an academic;34 ii.
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While these effects are not directly measurable, discussion during interviews and case studies suggest they exist.36 I The NIH SBIR Program has not benefited from regular evaluation.
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4. Limited Benchmarking for Success: The SBIR Program Coordinator's office appears to have few formal operational benchmarks for program success, other than compliance – i.e., the full annual disbursement of award funding.
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Meaningful commercialization is occurring and the awards made under the program are making valuable additions to biomedical knowledge and developing products to apply that knowledge to the nation's health. With the programmatic changes recommended here, the NIH SBIR program should be even more effective in achieving its legislative goals.
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Annual SBIR Program Report: The NIH SBIR Program Coordinator should be tasked with preparing a much expanded annual SBIR Program Report for submission to a new Advisory Board (see E below)
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After all, experience as a Principal Investigator or Co-Investigator on a successful SBIR program may well give a woman or minority scientist or engineer the personal confidence and standing with agency program officers that encourage them to apply for SBIR awards and found their own firms.
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While the NIH SBIR program has registered substantial commercial success, awardees and agency staff have suggested that there is room for UNEDITED PROOFS
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The agency should consider adopting pilot programs that could improve the quality and fairness of commercial reviews.40 Possible options include: i. Hiring professional commercialization consultants and attaching them to specific study sections.
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2. Program Changes Need Follow up Assessment: Some of the most significant changes to the SBIR program at NIH – notably changes in award size – have apparently occurred without any evaluation or a clearly articulated rationale.
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Discussions with NIH SBIR program managers. 6/13/06 44 45 Phase I awards may have particular importance in meeting non-commercial objectives of the program, for example helping academics to transition technologies out of the lab into startup companies.
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iii. The set-aside for the program, currently at 2.5 percent of external research budgets, might be marginally increased, with the goal of providing management resources necessary to maximize the program's return to the nation.47 The key point is that additional resources for program management and evaluation are necessary to optimize the nation's return on the substantial annual investment in the SBIR program.
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From page 41... ...
This also means that there may be some areas where NRC analysis is incomplete or not possible. Finally, NIH has been working since 2005 to correct some problems in the NIH data related to the distribution of awards to women- and minority-owned businesses that were originally identified by the NRC study.1 While about 95% of all NIH SBIR awards are grants, a small number of SBIR contracts are awarded each year.
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