NRC An Assessment of SBIR Program - National Defense Industrial ...

An Assessment of the Small Business Innovation Research Program
http://www.nap.edu/catalog/11989.html
PREPUBLICATION COPY
This report provides an overview of the NRC assessment. It is a complement to a set of five
separate reports that describe and assess the SBIR programs at the Departments of Defense
and Energy, the National Institutes of Health, the National Aeronautics and Space
Administration, and the National Science Foundation.
The purpose of this introduction is to set out the broader context of the SBIR program.
Section 1.1 provides an overview of the program’s history and legislative reauthorizations. It
also contrasts the common structure of the SBIR program with the diverse ways it is
administered across the federal government. Section 1.2 describes the important role played
by SBIR in the nation’s innovation system, explaining that SBIR has no public or private
sector substitute. Section 1.3 then lists the advantages and limitations of the SBIR concept,
including benefits and challenges faced by entrepreneurs and agency officials. Section 1.4
summarizes some of the main challenges of the NRC study and opportunities for improving
SBIR. Finally, Section 1.5 looks at the changing perception of SBIR in the United States and
the growing recognition of the SBIR concept around the world as an example of global best
practice in innovation policy. The increasing adoption of SBIR-type programs in
competitive Asian and European economies underlines the need, here at home, to improve
upon and take advantage of this unique American innovation partnership program.
1.1 PROGRAM HISTORY AND STRUCTURE
In the 1980s, the country’s slow pace in commercializing new technologies—compared with
the global manufacturing and marketing success of Japanese firms in autos, steel, and
semiconductors—led to serious concern in the United States about the nation’s ability to
compete economically. U.S. industrial competitiveness in the 1980s was frequently cast in
terms of American industry’s failure “to translate its research prowess into commercial
advantage.” 6 The pessimism of some was reinforced by evidence of slowing growth at
corporate research laboratories that had been leaders of American innovation in the postwar
period and the apparent success of the cooperative model exemplified by some Japanese
kieretsu. 7
Yet, a growing body of evidence, starting in the late 1970s and accelerating in the 1980s,
began to indicate that small businesses were assuming an increasingly important role in both
innovation and job creation. David Birch, a pioneer in entrepreneurship and small business
6 David C. Mowery, “America’s Industrial Resurgence (?): An Overview,” in David C. Mowery, ed., U.S. Industry
in 2000: Studies in Competitive Performance. Washington, D.C.: National Academy Press, 1999, p. 1. Mowery
examines eleven economic sectors, contrasting the improved performance of many industries in the late 1990s
with the apparent decline that was subject to much scrutiny in the 1980s. Among the studies highlighting poor
economic performance in the 1980s are Dertouzos, et. al., Made in America: The MIT Commission on Industrial
Productivity, Cambridge, MA: The MIT Press, 1989 and Eckstein, et. al., DRI Report on U.S. Manufacturing
Industries, New York: McGraw Hill, 1984.
7 Richard Rosenbloom and William Spencer, Engines of Innovation: U.S. Industrial Research at the End of an Era.
Boston: Harvard Business Press, 1996.
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