The Sbir Program 529

Funding in phase II is routinely up to $1,000,000 currently, and there are mechanisms for increasing support beyond the level.

Efforts have been made by the National Research Council (NRC) to evaluate the success of the SBIR program: that is, to what extent it is fulfilling its mandate. Several publications summarizing the findings of the NRC are available [1-5] . Using successful commercialization as an endpoint, a study conducted in the early 1990s found that 12% of companies receiving funding through the SBIR program had commercialized the technology developed with program funds within four years of the phase II award, and 23% had achieved success by six years. A higher percentage of companies at each time reported optimism with regard to future commercialization.

Efforts have been made to elucidate the variables that led to success (i.e., commercialization). Commercialization was achieved in project funding through the NIH at a much higher rate than was achieved with funding from any other source. Among other interesting findings, commercialization was more likely to be achieved with product-oriented technology than with service-oriented technology. More success was achieved when the end user of the developed technology was in the private sector rather than in the government sector. Of particular importance to the present discussion, success was higher in those companies with a focus on tangible products than in companies with a research and development focus. Finally, technology that could be protected through patents, copyrights, and so on, achieved a higher level of commercialization than did technologies that were unprotectable in these ways. Other variables that improved commercialization success were a well-developed business and marketing plan for the technology and progress (at any stage) in implementing the plan. Companies that had potential partners as a source of capital, for co-development, or as customers also did better (not surprisingly) than those that did not.

Ultimately, however, there was so much variability in the individual projects initially funded and in those that achieved a measure of success that no single criterion had great predictive value by itself. Thus, one of the messages for a company seeking first-time support through the SBIR program is that while factors that have correlated with success in the past should not be discounted, success in the future will depend on the quality of the initial idea and success at the bench (i.e., turning a good idea into a proven product that meets a market need).

A subsequent, larger evaluation occurred approximately 10 years after the initial evaluation. This programmatic review came to many of the same conclusions as the initial review. The SBIR program was determine to be a success in its major mission: funding novel research in the private sector that ultimately had an economic payoff. It also arrived at the conclusion that the quality of the applications submitted (as well as those funded) had increased substantially over time. Like other funding programs within the various participating government agencies, the amount of funds available was judged to be insufficient to support all of the projects worthy of support based on scientific merit. Summaries of these evaluations are available online at the National Research Council Web site, and many of the studies have been published as monographs.

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