SBIR at the
Committee on Capitalizing on Science, Technology, and Innovation:
An Assessment of the Small Business Innovation Research Program—Phase II
Board on Science, Technology, and Economic Policy
Policy and Global Affairs
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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
This study was supported by: Contract/Grant No. HQ0034-10-D-0003, DO #1, between the National Academy of Sciences and the Department of Defense. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project.
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THE NATIONAL ACADEMIES
Advisers to the Nation on Science, Engineering, and Medicine
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The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. C. D. Mote, Jr., are chair and vice chair, respectively, of the National Research Council.
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Committee on Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program—Phase II
Jacques S. Gansler (NAE), Chair Roger C. Lipitz Chair in Public Policy and Private Enterprise Director of the Center for Public Policy and Private Enterprise School of Public Policy University of Maryland
Ameritech Chair of Economic Development
Director of the Institute for Development Strategies
Executive Chairman, ret.
Thomas J. Bond
Grant and Proposal Director
Association for Manufacturing Technology
Founding General Partner
X/Seed Capital Management
J. Michael Brick
Vice President and Co-Director of Survey Methods
Gail H. Cassell (IOM)
Department of Global Health and Social Medicine
Harvard Medical School
M. Christina Gabriel
University Energy Partnership
Charles E. Kolb (NAE)
and Chief Executive Officer
Aerodyne Research, Inc.
Professor of Statistics
Department of Statistics
Director, Survey Research Center
Oregon State University
Henry Linsert, Jr.
Chairman and CEO
Columbia Biosciences Corporation
W. Clark McFadden II
Orrick, Herrington & Sutcliffe, LLP
Duncan T. Moore (NAE)
Vice Provost for Entrepreneurship
Rudolf and Hilda Kingslake Professor of Optical Engineering
The Institute of Optics
University of Rochester
Toucan Capital Corporation (Member: 6/26/2009-10/13/2011)
Dean and Professor
School of Business
University at Albany, SUNY
Jeffrey E. Sohl
Professor and Director of the Center for Venture Research
Peter T. Paul College of Business and Economics
University of New Hampshire
Tyrone C. Taylor
Capitol Advisors on Technology, LLC
John P. Walsh
Professor of Public Policy
School of Public Policy
Georgia Institute of Technology
Patrick H. Windham
Sujai J. Shivakumar
Study Director (4/1/2014-Current)
McAlister T. Clabaugh
David E. Dierksheide
Karolina E. Konarzewska
Charles W. Wessner
Study Director (6/26/2009-3/31/2014)
For the National Research Council (NRC), this project was overseen by the Board on Science, Technology, and Economic Policy (STEP), a standing board of the NRC established by the National Academies of Sciences and Engineering and the Institute of Medicine in 1991. The mandate of the Board on Science, Technology, and Economic Policy is to advise federal, state, and local governments and inform the public about economic and related public policies to promote the creation, diffusion, and application of new scientific and technical knowledge to enhance the productivity and competitiveness of the U.S. economy and foster economic prosperity for all Americans. The STEP Board and its committees marshal research and the expertise of scholars, industrial managers, investors, and former public officials in a wide range of policy areas that affect the speed and direction of scientific and technological change and their contributions to the growth of the U.S. and global economies. Results are communicated through reports, conferences, workshops, briefings, and electronic media subject to the procedures of the National Academies to ensure their authoritativeness, independence, and objectivity. The members of the STEP Board* and the NRC staff are listed below:
Paul L. Joskow, Chair
Alfred P. Sloan Foundation
Ernst R. Berndt
Professor of Applied Economics
Alfred P. Sloan School of Management
Massachusetts Institute of Technology
Former U.S. Senator, New Mexico
Ellen R. Dulberger
Dulberger Enterprises, LLC
Alan M. Garber (IOM)
Ralph E. Gomory (NAS/NAE)
Stern School of Business
New York University
John L. Hennessy (NAS/NAE)
William H. Janeway
Warburg Pincus, LLC
Richard K. Lester
Japan Steel Industry Professor and Department Head
Department of Nuclear Science and Engineering
Massachusetts Institute of Technology
*As of September 2014.
David T. Morgenthaler
Luis M. Proenza
University of Akron
Kathryn L. Shaw
Ernest C. Arbuckle Professor of Economics
Graduate School of Business
Laura D’Andrea Tyson
S.K. and Angela Chan Professor of Global Management
Haas School of Business
University of California, Berkeley
Harold R. Varian
Patent Properties, Inc.
Stephen A. Merrill
Director (through March 2014)
Paul T. Beaton
McAlister T. Clabaugh
Aqila A. Coulthurst
Sujai J. Shivakumar
Senior Program Officer
David E. Dierksheide
Karolina E. Konarzewska
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 take on risk to bring new welfare-enhancing, wealth-generating technologies to the market. Yet, although discoveries in areas such as genomics, bioinformatics, and nanotechnology present new opportunities, converting these discoveries into innovations for the market involves substantial challenges.1 The American capacity for innovation can be strengthened by addressing the challenges faced by entrepreneurs. Public-private partnerships are one means to help entrepreneurs bring new ideas to market.
The Small Business Innovation Research (SBIR) program is one of the largest examples of U.S. public-private partnerships. An underlying tenet of the program is that small businesses are a strong source of new ideas, and therefore economic growth, but that it is difficult to find financial support for these ideas in the early stages of their development. The SBIR program 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. By involving qualified small businesses in the nation’s R&D (research and development) effort, SBIR grants stimulate innovative technologies to help federal agencies meet their specific R&D needs in many areas, including health, the environment, and national defense.
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.2 Upon completion of the first round of this study, an ad hoc
1See L.M. Branscomb, K.P. Morse, M.J. Roberts, and D. Boville, Managing Technical Risk: Understanding Private Sector Decision Making on Early Stage Technology-based Projects, Gaithersburg, MD: National Institute of Standards and Technology, 2000.
2See the SBIR Reauthorization Act of 2000 (Public Law 106-554, Appendix I-H.R. 5667, Section 108).
committee prepared a series of reports from 2004 to 2009 on the Small Business Innovation Research Program at the Department of Defense, the National Institutes of Health (NIH), the National Aeronautics and Space Administration (NASA), the Department of Energy, and the National Science Foundation (NSF)—the five agencies responsible for 96 percent of the program’s operations.3
Building on the outcomes from the first round, this second round examines topics of general policy interest that emerged during the first round as well as topics of specific interest to individual agencies. The results will be published in reports of agency-specific and program-wide findings on the SBIR and Small Business Technology Transfer (STTR) programs to be submitted to the contracting agencies and Congress. In partial fulfillment of these objectives, this volume presents the committee’s second review of the SBIR program’s operations at the Department of Defense.4
The current two-phase assessment of the SBIR program follows directly from an earlier analysis of public-private partnerships by the National Research Council’s Board on Science, Technology, and Economic Policy (STEP). From 1990 to 2005, the NRC Committee on Government-Industry Partnerships prepared 11 volumes reviewing the drivers of cooperation among industry, universities, and government; operational assessments of current programs; emerging needs at the intersection of biotechnology and information technology; the current experience of foreign government partnerships and opportunities for international cooperation; and the changing roles of government laboratories, universities, and other research organizations in the national innovation system.5
This analysis of public-private partnerships includes two published studies of the SBIR program. Drawing from a 1998 workshop, the first report, The Small Business Innovation Research Program: Challenges and Opportunities, examined the origins of the program and identified operational challenges to its future effectiveness.6 The report also highlighted the relative paucity of research on the SBIR program.
3For the overview report, see National Research Council, An Assessment of the SBIR Program, C. W. Wessner, ed., Washington, DC: The National Academies Press, 2008. See also National Research Council, An Assessment of the SBIR Program at the Department of Defense, C. W. Wessner, ed., Washington DC: The National Academies Press, 2009. The committee also prepared reports of the SBIR program at the Department of Energy, NSF, NIH, and NASA.
4The formal Statement of Task is presented in Chapter 1 of this report.
5For a summary of the topics covered and main lessons learned, see National Research Council, Government-Industry Partnerships for the Development of New Technologies: Summary Report, op. cit.
6See National Research Council, The Small Business Innovation Research Program: Challenges and Opportunities, C. W. Wessner, ed., Washington, DC: National Academy Press, 1999.
After release of this initial report, the Department of Defense (DoD) asked the NRC to compare its Fast Track Initiative with its regular SBIR program. The resulting report, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative, relying on case study and survey research, found that the DoD SBIR program was achieving its legislated goals. The report also found that the Fast Track Initiative was achieving its objective of greater commercialization and recommended that it be continued and expanded where appropriate.7 The report also recommended that the SBIR program overall would benefit from further research and analysis, a recommendation subsequently adopted by Congress.
On behalf of the National Academies, the committee expresses its appreciation and recognition for the insights, experiences, and perspectives shared by the conference and meeting participants, as well as by the survey respondents and case study interviewees. The committee also thanks officials from the Department of Defense who provided assistance to this complex study. Special thanks are due to Peter Grunwald of Grunwald Associates LLC for conducting the survey along with the tabulation and initial analysis of quantitative results and to Robin Gaster of Innovation Competitions LLC and to David Dierksheide for assisting the committee in the preparation of this report. We are also grateful to Charles Wessner for directing this study in its early stages.
ACKNOWLEDGMENT OF REVIEWERS
This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Academies’ Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the process.
We wish to thank the following individuals for their review of this report: Eric Adolphe, IPSS Government Solutions, LLC; Richard Bendis, BioHealth Innovation Inc.; Michael Ettenberg, Dole Technologies; David Finifter, The College of William and Mary; Millard Firebaugh, University of Maryland; Heidi Jacobus, Cybernet Systems Corporation; Mahendra Jain, Kentucky Science and Technology Corporation; Gary King, Harvard University;
7See National Research Council, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative, C. W. Wessner, ed., Washington, DC: National Academy Press, 2000.
Richard McNamara, RRM&A, LLC; Stephanie Shipp, Virginia Tech; and Todd Watkins, Lehigh University.
Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Irwin Feller, Pennsylvania State University and Edwin Przybylowicz, Eastman Kodak Company (retired). Appointed by the National Academies, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.
|Jacques S. Gansler||Sujai J. Shivakumar|