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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
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1

Introduction

The United States’ ability to break frontiers in science and technology, creating new products, services, and entire industries along the way, is an important driver of its economic growth. The technology revolution has propelled U.S. productivity,1 as industries across the board have absorbed advances in information, materials, biological, and other sciences to create whole new markets—from social media and mobile communications to alternative energy and personalized medicine—all transforming the possibilities of human life. In a globalized economy, where other countries are quickly ascending the economic value chain and competition in knowledge-intensive industries becomes more acute, America’s aptitude for innovation is all the more prized as a bedrock comparative advantage.

Multiple ingredients fuel the United States’ innovation machine. They include university education that fosters critical thinking, government-funded research, public-private sector collaboration, deep capital markets, established rule of law, cultural acceptance of risk-taking, and a comparably hospitable climate for new business formation. A system that endeavors to cultivate the best ideas and talent, whether from small startups or individuals of varied backgrounds, the United States draws strength from the ability to tap all sources of innovation across the economy. Small, rather than large, businesses, often introduce the radical ideas that can transform industries and markets,2 as the global successes of one-time startups Apple and Google demonstrate today. Similarly, mobilizing all skilled individuals, regardless of race/ethnicity or gender, strengthens the economy and the nation.

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1Dale W. Jorgenson, et al., Productivity: Information Technology and the American Growth Resurgence, Cambridge, MA: MIT Press, 2005.

2On the Road to an Entrepreneurial Economy: A Research and Policy Guide, Version 2.0, Kansas City, MO: Ewing Marion Kauffman Foundation, July 2007, p. 4.

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×

THE ROLE OF THE SBIR AND STTR PROGRAMS

When Congress established the Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR) program, it recognized the contribution of small businesses to U.S. innovation. Congress created the SBIR program in the 1982 Small Business Innovation Development Act to foster technological innovation by encouraging small businesses to meet the nation’s research and development (R&D) needs. In 1992, Congress established the STTR program to stimulate technological innovation by facilitating the transfer of federal research to small businesses for commercialization.

The SBIR program provided $26.9 billion to small businesses through fiscal year (FY) 2009 to support the development of their technologies.3 In 2011, Congress reauthorized the SBIR and the STTR programs for another 6 years. Federal agencies with extramural R&D budgets over $100 million continue to allocate a percentage of that budget annually for the two programs.4 Under the reauthorization, agency allocations for the SBIR program will rise annually from 2.6 percent in FY 2012 to reach 3.2 percent in FY 2017. Agency allocations for the STTR program will rise from 0.35 percent to 0.45 percent over this same period. A pilot program now enables agencies to use 3 percent of their SBIR funds to improve the SBIR or STTR programs’ administration, which can include allocating funds for new outreach activities.5

As mandated by Congress, the SBIR program continues to carry out four goals: To stimulate technological innovation; use small business to meet federal R&D needs; foster and encourage participation in innovation and entrepreneurship by minority and disadvantaged persons; and increase private-sector commercialization of innovations derived from federal R&D funding.6 The STTR’s goals are to stimulate technological innovation; foster technology transfer through cooperative R&D between small businesses and research institutions; and increase private-sector commercialization of innovations derived from federal R&D.7

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3U.S. Small Business Administration, SBIR, http://www.sbir.gov/about/about-sbir. Accessed March 6, 2013.

4Today, 11 agencies participate in the program, including the Department of Agriculture, Department of Commerce, Department of Defense, Department of Education, Department of Energy, Department of Health and Human Services, Department of Homeland Security, Department of Transportation, Environmental Protection Agency, National Aeronautics and Space Administration, and the National Science Foundation.

5SBIR/STTR Reauthorization Act of 2011 (U.S. Congress, Public Law 112-81).

6These congressional objectives are found in the Small Business Innovation Development Act (Public Law 97-219). In reauthorizing the program in 1992 (Public Law 102-564), Congress expanded the purposes to emphasize the program’s goal of increasing private sector commercialization development through federal research and development and to improve the federal government’s dissemination of information concerning small business innovation, particularly with regard to woman-owned business concerns and by socially and economically disadvantaged small business concerns.

7U.S. Small Business Administration, STTR/SBIR, http://www.sbir.gov/about/about-sttr. Accessed March 20, 2013.

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×

The SBIR program disburses Phase I awards (grants or contracts) to establish the technical merit and commercial potential of awardees’ projects and Phase II awards, based on Phase I results, to support a continuation of awardees’ R&D.8 Phase III companies do not receive SBIR funds but obtain funding from the private sector and/or federal agencies to pursue commercialization for use by the U.S. government.9 The STTR program follows a similar Phase I to III pathway.10

NATIONAL RESEARCH COUNCIL STUDY OF THE SBIR AND STTR PROGRAMS

At the request of Congress, the Board on Science, Technology, and Economic Policy is reviewing the SBIR and STTR programs at the Department of Defense (DoD), National Institutes of Health (NIH), National Aeronautics and Space Administration (NASA), Department of Energy (DoE), and National Science Foundation (NSF). This assessment is the second round of study carried out by the NRC in response to a congressional mandate.11 The first-round study, carried out by a separate NRC committee, focused exclusively on the SBIR program and resulted in a series of reports from 2004 to 2009. The statement of task for the overall study, to which the current workshop summary contributes partially, appears in Box 1-1.

WORKSHOP ON DIVERSITY IN THE SBIR/STTR PROGRAMS

On February 7, 2013, the committee convened a workshop titled “Innovation, Diversity, and Success in the SBIR/STTR Programs” to examine the participation of women, minorities, and other underrepresented groups in the SBIR/STTR programs and identify ways to increase that participation. The workshop examined both 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. The statement of task for the workshop appears in Box 1-2.

THE WORKSHOP SUMMARY REPORT

Although some time has passed since this workshop was convened, program participation by women and minorities remains a concern, and releasing a full

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8U.S. Small Business Administration, SBIR, http://www.sbir.gov/about/about-sbir. Accessed March 20, 2013.

9Ibid.

10U.S. Small Business Administration, STTR/SBIR, http://www.sbir.gov/about/about-sttr. Accessed March 20, 2013.

11H.R. 5667, Sec. 108, enacted in Public Law 106-554, as amended by H.R. 1540, Sec. 5137, enacted in Public Law 112-81.

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×

BOX 1-1
Project Statement of Task

In accordance with H.R. 5667, Sec. 108, enacted in Public Law 106-554, as amended by H.R. 1540, Sec. 5137, enacted in Public Law 112-81, the National Research Council is to review the Small Business Innovation Research and Small Business Technology Transfer (SBIR/STTR) programs at the Department of Defense, the National Institutes of Health, the National Aeronautics and Space Administration, the Department of Energy, and the National Science Foundation. Building on the outcomes from the Phase I study, this second study is to examine both topics of general policy interest that emerged during the first-phase study and topics of specific interest to individual agencies.

Drawing on the methodology developed in the previous study, an ad hoc committee will issue a revised survey, revisit case studies, and develop additional cases, thereby providing a second snapshot to measure the program’s progress against its legislative goals. The committee will prepare one consensus report on the SBIR program at each of the 5 agencies, providing a second review of the operation of the program, analyzing new topics, and identifying accomplishments, emerging challenges, and possible policy solutions. The committee will prepare a consensus report focused on the STTR Program at all five agencies. The agency reports will include agency-specific and program-wide findings on the SBIR and STTR programs to submit to the contracting agencies and the Congress.

Although each agency report will be tailored to the needs of that agency, all reports will, where appropriate:

  1. Review institutional initiatives and structural elements contributing to programmatic success, including gap funding mechanisms such as applying Phase II-plus awards more broadly to address agency needs and operations and streamlining the application process.
  2. Explore methods to encourage the participation of minorities and women in SBIR and STTR.
  3. Identify best practice in university-industry partnering and synergies with the two programs.
  4. Document the role of complementary state and federal programs. 5. Assess the efficacy of post-award commercialization programs.

In addition, the committee will convene symposia to gather information on specific topics related to the SBIR/STTR programs overall or specific agency requests with some workshops resulting in individually-authored workshop summaries.

summary of the workshop can make an important contribution to the policy dialogue by capturing participants’ suggestions for addressing the participation of women and minorities in the SBIR and STTR programs. Because the SBIR program has a legislative mandate to foster and encourage participation in innovation

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×

BOX 1-2
Innovation, Diversity, and Success in the SBIR/STTR Programs: Summary of a Workshop Statement of Task

As part of the Academies’ study of the Small Business Innovation Research program, this event will focus on participation of women, minorities, and both older and younger scientists, engineers, and entrepreneurs in the SBIR/STTR programs, with the goal of reviewing current efforts to expand the pool of SBIR/ STTR-funded researchers and to identify mechanisms for improving participation rates. An individually authored workshop summary will be published based on the workshop.

and entrepreneurship by minority and disadvantaged persons, as noted above, most of the workshop discussion centered on that program.

The remainder of Chapter 1 distills workshop presentations and additional background materials on the current participation of women and minorities in SBIR/STTR programs and the value of a diverse workforce in general. Chapter 2 provides selected suggestions from workshop participants of ways to increase this participation. Chapters 3-8 summarize the individual workshop presentations and discussions. The workshop agenda, listing the speakers and their presentations, is found in Appendix A, and a full list of participants is found in Appendix B. Appendix C includes data on woman and minority participation excerpted from the committee’s report on the SBIR program at the Department of Defense,12 and Appendix D includes a reference bibliography.

THE NATIONAL NEED FOR A DIVERSE SCIENCE AND ENGINEERING WORKFORCE

A leading theme during the workshop was the importance of woman and minority participation in U.S. science and technology, and overall, the need to continue to fill the U.S. pipeline with well-trained scientists and engineers.13 U.S. science and engineering workforce needs are projected to grow faster than those of any other sector, according to the U.S. Bureau of Labor Statistics.14

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12National Research Council, SBIR at the Department of Defense, Washington, DC: The National Academies Press, 2014.

13See also National Academy of Sciences, National Academy of Engineering, Institute of Medicine, Rising Above the Gathering Storm—Energizing and Employing America for a Brighter Economic Future, Washington, DC: The National Academies Press, 2007, p. 213.

14National Research Council, Expanding Underrepresented Minority Participation: America’s Science and Technology Talent at the Crossroads, Washington, DC: The National Academies Press, 2011, p. 36.

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×

The United States lags other nations in attracting its own citizens to enter science and engineering, ranking 20th out of 24 countries in the percentage of 24-year-olds who have earned a first degree in the natural sciences or engineering in 2000.15 Recent data from the Census Bureau show that the challenge could become more acute, as minority groups, such as Hispanics and African Americans, who have been historically underrepresented in U.S. science and engineering, become a more dominant proportion of the U.S. population. Minorities, including Hispanics, African Americans, and Asian Americans, are the most rapidly growing segments of the population. Altogether, minorities are expected to comprise a majority of the U.S. population by 2043.16

Today, women and minorities are notably underweighted in the nation’s science and engineering workforce. According to Grace Wang, director of the NSF’s Industrial Innovation and Partnerships Division at the time of the workshop, 65 percent of the total U.S. population in 2008 consisted of women, Hispanics, African Americans, Native Americans, and people with disabilities, yet these groups constituted only 33 percent of science and engineering occupations, according to 2006 NSF data.17

The 2011 publication by the National Research Council, Expanding Underrepresented Minority Participation: America’s Science and Technology Talent at a Crossroads, notes that underrepresented minorities, defined as Hispanics, African Americans, Native Americans/Alaska Natives, comprise a small percentage at each step of the science, technology, engineering, and mathematics (STEM) education process.18 The percentages of African Americans and Hispanics interested in STEM undergraduate majors are similar to those of white and Asian Americans, but their completion rates are much lower.19 At the graduate school level for science and engineering, underrepresented minorities receive only 14.6 percent of master’s degrees and 5.4 percent of doctoral degrees.20 Data from the National Science Board indicate that women earn roughly half of S&E degrees at the bachelor’s, master’s, and PhD levels, but they earn “fewer than one-third of the doctorates awarded in physical sciences, mathematics and computer sciences, and engineering” and less than one-quarter of engineering master’s degrees.21

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15Ibid, p. 35.

16U.S. Census Bureau, U.S. Census Bureau Projections Show a Slower Growing, Older, More Diverse Nation a Half Century from Now, https://www.census.gov/newsroom/releases/archives/population/cb12-243.html. Accessed February 23, 2015.

17See presentation by Grace Wang, National Science Foundation, in Chapter 6 of this volume.

18National Research Council, Expanding Underrepresented Minority Participation: America’s Science and Technology Talent at the Crossroads, Washington, DC: The National Academies Press, 2011, pp. 37-38.

19Ibid, pp. 38-39.

20Ibid, p. 38. Here, underrepresented minorities are also defined as African Americans, Hispanics, and Native Americans/Alaska Natives.

21National Science Board, Science and Engineering Indicators 2014, Arlington, VA: National Science Foundation, 2014, pp. 2-26, 2-29, 2-32, and appendix table 2-29.

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×

PARTICIPATION BY WOMEN AND MINORITIES IN THE SBIR AND STTR PROGRAMS

According to the U.S. Small Business Administration (SBA), SBIR awards to women and minorities fall far short of their representation in the potential applicant pool, measured against those owning businesses and those who are STEM graduates. In his workshop remarks, Winslow Sargeant of the SBA pointed out that woman- and minority-owned small businesses receive less than 16 percent of all SBIR awards. Of that, he said, 6 percent go to woman-owned firms, and less than 10 percent go to minority-owned firms. In contrast, women comprise 51 percent of the U.S. population and 27 percent of STEM graduates. Together, Hispanics, African Americans, Asian Americans, and Native Americans constitute 36 percent of the U.S. population and 26 percent of STEM graduates.22

Agency data reported at the workshop underscore the challenge. Sally Rockey of the National Institutes of Health (NIH) reported that only about 27 percent of NIH grants support female researchers, whereas 55 percent of biomedical department students and trainees are women. She also reported that only 2-3 percent of NIH grants’ principal investigators are minorities.23

Data collected as part of the committee’s study of the DoD SBIR program,24 published after the workshop was held, further illustrate the problem: the committee found participation in the DoD SBIR program among women and minorities to be “low and not increasing” and recommended several actions (see Box 1-3). Selected data excerpted from that report are included in Appendix C of the present volume.

THE VALUE OF DIVERSITY IN INNOVATION

While greater participation of women and minorities in U.S. science and engineering can help to 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 to be more profitable than other companies.25

Personal experiences shared during the National Academies’ workshop suggest that the blending of multiple viewpoints often does cast a new lens on old problems, leading to innovative solutions. Eric Adolphe of CenterScope

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22These statistics were presented by Winslow Sargeant of the Small Business Administration. The breakdown of SBIR awards by ethnic group is not available in this set of statistics. See presentation in Chapter 3 of this volume.

23See presentation by Sally Rockey, National Institutes of Health, in Chapter 5 of this volume.

24National Research Council, SBIR at the Department of Defense, Washington, DC: The National Academies Press, 2014.

25See presentation by Peggy Wallace, Golden Seeds, in Chapter 4 of this volume.

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×

BOX 1-3
Findings and Recommendations Relating to Participation of Women and Minorities: Excerpt from SBIR at the Department of Defense

Current participation of women and other under-represented groups in the SBIR program is low and not increasing.

  • During the study period,a approximately 15 percent of awards went to woman-owned small businesses (WOSB) and 7 percent to minority-owned small businesses (MOSB).
  • The NRC survey indicated that black- and Hispanic-owned small businesses are themselves a very small share of MOSB overall. Black-owned small businesses accounted for approximately 0.5 percent of all respondents; Hispanic-owned firms, about 1 percent.
  • DoD has not made sustained efforts to “foster and encourage” the participation of woman- and minority-owned small businesses.

Addressing Under-Represented Populations

  • No Quotas: DoD should not develop quotas for the inclusion of selected populations into the SBIR program. Such an approach is not necessary to meet congressional intent and is likely to reduce program effectiveness.
  • Outreach and Education: DoD should develop an outreach and education program focused on expanding participation of under-represented populations.
  • Tracking and Metrics: The DoD Office of Small Business (OSB) should improve tracking and metrics against which to benchmark the activities of components in relation to this congressional objective.

________________

SOURCE: Excerpted from pp. 2-4 of Summary chapter of National Research Council, SBIR at the Department of Defense, Washington, DC: The National Academies Press, 2014. The committee’s full findings and recommendations relating to the participation of women and minorities in the DoD SBIR program can be found on pp. 207-209 and pp. 223-225 of that report.

Technologies, who is a 17-time SBIR awardee, credited the diversity of his team for his first SBIR award.26 He described the experience of writing code overnight for a NASA Phase II award. His diverse team not only won the award but also garnered the NASA SBIR of the Year Award. “We were able to solve complex problems because we all thought differently,” he said.

__________________

26See presentation by Eric Adolphe, CenterScope Technologies, in Chapter 6 of this volume.

Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
Page 1
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
Page 2
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
Page 3
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
Page 4
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
Page 5
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
Page 6
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
Page 7
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/21738.
×
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The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide federal research and development funding to small businesses. One of the the goals of these programs is to foster and encourage participation by minority and disadvantaged persons in technological innovation. Innovation, Diversity, and Success in the SBIR/STTR Programs is the summary of a workshop convened in February 2013 that focused on the participation of women, minorities, and both older and younger scientists, engineers, and entrepreneurs in the SBIR and STTR programs, with the goal of reviewing current efforts to expand the pool of SBIR/STTR-funded researchers and of identifying mechanisms for improving participation rates. This report is a record of the presentation and discussions of the event.

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