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Innovation, Diversity, and the SBIR/STTR Programs: Summary of a Workshop (2015)

Chapter: 3 Opening Remarks: Defining the Issue

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Suggested Citation:"3 Opening Remarks: Defining the Issue." 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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3

Opening Remarks: Defining the Issue

The workshop’s opening presentations welcomed the participants, framed the purpose of the event, and provided statistical background on the participation of women and minorities, drawing specifically on data on the Small Business Innovation Research (SBIR) program. The chair of the committee, Dr. Jacques Gansler, set the objective of gathering speaker recommendations for enhancing access to the SBIR and Small Business Technology Transfer (STTR) programs by woman- and minority-owned businesses. He noted that the workshop would explore lessons from success stories as well as demographic challenges.

A keynote address by Winslow Sargeant of the Small Business Administration (SBA) Office of Advocacy principally focused on statistics showing that women and minorities are underrepresented in STEM degree attainment, business ownership, and receiving SBIR awards. Dr. Sargeant recommended strengthening outreach efforts, including tapping into existing networks with ties to the woman and minority communities, and he highlighted National Science Foundation (NSF) programs designed to encourage ties between SBIR awardees and underserved schools.1

The content of the discussion and issues and recommendations raised by speakers is summarized below.

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1See presentation by Grace Wang, National Science Foundation, in chapter 6 of this volume.

Suggested Citation:"3 Opening Remarks: Defining the Issue." 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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Charles Wessner
National Research Council

Charles Wessner, then of the Academies, welcomed participants to the workshop. He invited them to a constructive and forward-looking discussion on realistic approaches to encourage participation by women and minorities in the SBIR and STTR programs.

Dr. Wessner noted that the Academies is currently conducting its second-round assessment of the SBIR program. This examination will follow up on surveys capturing changes in program perceptions, practices, and outcomes to assess the efficacy of post-award commercialization programs, encourage university-industry partnering and synergies, streamline the application and award processes, and examine complementary state and federal programs. At the request of Congress, the board is now also reviewing the STTR program as part of the project.

Jacques Gansler
University of Maryland

Jacques Gansler of the University of Maryland, chair of the committee studying the SBIR and STTR programs, introduced the day’s proceedings as following in the spirit of innovation. Applying the “idea of continuous product and process improvement” to the SBIR program, he set as the workshop objective the gathering of recommendations for enhancing access to the SBIR program by woman- and minority-owned businesses, one of the program’s four congressional mandates. Dr. Gansler said that the workshop would explore SBIR and STTR success stories and lessons as well as and also demographic challenges, including ways to encourage baby boomers and younger entrepreneurs to participate. The day’s discussions would form part of an ongoing study of how to solve the challenge of broadening access, he said.

Noting that many countries have tried to emulate the U.S. SBIR program, Dr. Gansler said the challenge now is to maintain focus on the program’s long-term objectives amidst current budgetary pressures that may tempt policymakers into “giving up the future for the present.” Indeed, a key finding from the first round of the committee’s assessment was the SBIR program’s success in supporting the growth of woman- and minority-owned businesses.2 The commitee has been collecting data to monitor such outcomes. To improve their ability to reach minorities and women, federal agencies must identify and find ways to overcome obstacles.

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2National Research Council, An Assessment of the SBIR Program, Charles W. Wessner, editor, Washington, DC: The National Academies Press, 2008, p. 54.

Suggested Citation:"3 Opening Remarks: Defining the Issue." 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.
×

Winslow Sargeant
Small Business Administration

In his keynote address, Winslow Sargeant of the SBA Office of Advocacy discussed the congressionally mandated objectives of the SBIR program, founded in 1981 as a pilot program by the SBA. In 1982, when the Small Business Innovation Development Act expanded the SBIR program into a government-wide program, Congress set four goals: (1) stimulate technological innovation, (2) meet federal research and development needs, (3) foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged persons, and (4) increase private-sector commercialization of innovations derived from federal R&D funding.

Dr. Sargeant cited the following statistics, which reveal a shortfall in SBIR awards to women and minorities compared with their representation among U.S. businesses and science, technology, engineering, and mathematics (STEM) graduates:

  • Women make up 51 percent of the total U.S. population and 27 percent of STEM graduates. Twenty-nine percent of businesses are woman-owned, and 6 percent of SBIR awardees are woman-owned.
  • Hispanics comprise 17 percent of the population and 5 percent of STEM graduates. Eight percent of businesses are Hispanic-owned.
  • African Americans comprise 13 percent of the population and 4 percent of STEM graduates. Seven percent of businesses are African American-owned.
  • Asian Americans comprise 5 percent of the population and 17 percent of STEM graduates. Six percent of businesses are Asian American-owned.
  • Native Americans comprise 1.2 percent of the population and 0.3 percent of STEM graduates. One percent of businesses are Native American-owned.
  • Less than 16 percent of SBIR awards go to woman- and minority-owned businesses. Woman-owned businesses comprise 6 percent of SBIR awardees, and businesses owned by all other minorities, which are not disaggregated by ethnicity, comprise less than 10 percent of SBIR awardees.

To do better, Dr. Sargeant said, agencies should conduct greater outreach to these groups using in part the 3 percent funds for program management created in the 2011 SBIR Reauthorization Act. Dr. Sergeant recommended tapping into networks that already serve these groups, rather than creating new programs. Such networks include the Society of Women Entrepreneurs, Society of Women Engineers, Society of Hispanic Professional Engineers, IEEE USA, nerdgirls.com, Historically Black Colleges and Universities (HBCUs), Minority-Serving Institutions (MSIs), and tribal colleges.

Suggested Citation:"3 Opening Remarks: Defining the Issue." 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.
×

In addition, Dr. Sargeant highlighted NSF programs, in which SBIR awardees with Phase IA funding can receive additional funding if they partner with an underserved school and in which those that attain Phase IIA funding can receive additional funding if they work with faculty of an MSI.

DISCUSSION

Karina Edmonds of the Department of Energy suggested public education highlighting the bottom-line benefits of diversity and noted studies that show that companies with diverse boards are more profitable.

Joseph Misanin of the small business office of the Department of Defense suggested setting regional goals. Statutory goals for federal contract awards are set at 5 percent for woman- and minority-owned businesses, he noted. By that measure, the 6 percent of SBIR awards going to women indicates adequate achievement on the national level. But some regions, in contrast, may be lagging and in need of a push. John Williams, then of the U.S. Navy’s SBIR program, noted that setting effective goals depends on having better information about the potential applicant pool. Is the number of women and minorities with PhDs who own businesses small in comparison to the number of women and minorities who hold PhDs, for example? If so, then the focus should be on encouraging female and minority PhDs to form companies or companies to appoint women and minorities as principal investigators. At any rate, setting a single federal goal would be helpful, he said. Mr. Misanin suggested that federal data on participation rates of minority-owned federal contractors could be used as a benchmark to compare the number of minority-owned businesses receiving SBIR awards.

Gail Cassell of Harvard Medical School, who is a member of the NRC SBIR/ STTR committee, suggested cultivating young female faculty members to start companies. She also suggested forging partnerships between companies and SBIR investigators who want to start companies and promoting collaboration between investigators and other countries with funds to invest. For example, she said, Russia’s small grant program is searching for recipients.

Dr. Sargeant noted SBA concerns that young faculty and investigators are not receiving credit toward tenure for their SBIR awards and work.

Heidi Jacobus, founder of SBIR awardee Cybernet Systems, said that diversity in employment at woman-owned businesses is an under-recognized attribute and questioned whether the statistic that women receive 6 percent of SBIR awards is over reported, if awardees choose more than one demographic category.3

Robin Gaster of Innovations Competitions, LLC, said he is working with the National Academies to develop a list of potential applicants by state, including

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3The survey administered by the NRC committee studying the SBIR and STTR programs includes separate questions about the woman or minority status of the (1) principal investigator for the award and (2) owner at the time of award.

Suggested Citation:"3 Opening Remarks: Defining the Issue." 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.
×

an Oregon-based project to identify all woman- and minority-owned businesses in that state.

Alison Brown of NAVSYS, an SBIR company, remarked about the transition from Phase II to Phase III commercialization. She noted that once a company wins an SBIR award, it is often easier to win more awards. A company that cannot commercialize its technology has lower chances of winning subsequent awards. Helping woman- and minority-owned companies to commercialize would improve outcomes, she said.

Todd Brethauer asked whether SBIR success rates match submission rates. Because companies that have won SBIR awards have a higher chance of future success, he suggested a two-tier evaluation system, separating applicants who have submitted less than five proposals from those who have submitted more than five proposals.

Suggested Citation:"3 Opening Remarks: Defining the Issue." 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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Suggested Citation:"3 Opening Remarks: Defining the Issue." 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 15
Suggested Citation:"3 Opening Remarks: Defining the Issue." 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 16
Suggested Citation:"3 Opening Remarks: Defining the Issue." 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 17
Suggested Citation:"3 Opening Remarks: Defining the Issue." 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 18
Suggested Citation:"3 Opening Remarks: Defining the Issue." 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 19
Suggested Citation:"3 Opening Remarks: Defining the Issue." 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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