Bending the Arc of Innovation: Public Support of R&D in Small, Entrepreneurial Firms

103 Pages·2013·0.83 MB·English

by  Albert N. Link

Bending the Arc of Innovation
DOI: 10.1057/9781137370884
Science, Technology, and Innovation Policy
Series Editor: Albert N. Link
Managing Editor: Charlotte Maiorana
Science, Technology, and Innovation Policy is a scholarly series for academics and policy makers.
Topics of interest include, but are not limited to, the economic foundations of science, tech-
nology, and innovation policy; the impact of science, technology, and innovation policy on
economic growth and development; science, technology, and innovation policy as a driver of
sustainability and social well-bring; and the application of methods and models for quantify-
ing the social consequences of science, technology, and innovation policy.
Titles include:
Congress’s Own Th ink Tank: Learning from the Legacy of the Offi ce of
Technology Assessment (1972–1995)
Peter D. Blair
National Research Council
Bending the Arc of Innovation: Public Support of R&D in Small, Entrepreneurial Firms
Albert N. Link
University of North Carolina at Greensboro
John T. Scott
Dartmouth College
DOI: 10.1057/9781137370884
Bending the Arc of
Innovation:
Public Support of
R&D in Small,
Entrepreneurial Firms
Albert N. Link
Professor of Economics, University of
North Carolina at Greensboro
and
John T. Scott
Professor of Economics, Dartmouth College
DOI: 10.1057/9781137370884
bending the arc of innovation
Copyright © Albert N. Link and John T. Scott, 2013.
Softcover reprint of the hardcover 1st edition 2013 978-1-137-37158-4
All rights reserved.
First published in 2013 by
PALGRAVE MACMILLAN®
in the United States—a division of St. Martin’s Press LLC,
175 Fift h Avenue, New York, NY 10010.
Where this book is distributed in the UK, Europe and the rest of the world,
this is by Palgrave Macmillan, a division of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills,
Basingstoke, Hampshire RG21 6XS.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN: 978–1–137–37088–4 PDF
ISBN: 978–1–349-47566-7
Library of Congress Cataloging-in-Publication Data is available from the
Library of Congress.
A catalogue record of the book is available from the British Library.
First edition: 2013
www.palgrave.com/pivot
doi: 10.1057/9781137370884
Contents
List of Tables vii
List of Figures ix
About the Authors x
1 Introduction 1
2 Market Failure and Public
Support of R&D 6
3 Th e Productivity Slowdown in
the United States 10
4 An Emphasis on Small,
Entrepreneurial Firms 13
5 Th e SBIR Program 16
6 Th e Economic Role of the SBIR Program 22
7 Th e National Research Council Database 27
8 Studies Conducted Using the National
Research Council Database 30
9 Toward an Evaluation of the SBIR Program 60
DOI: 10.1057/9781137370884 v
vi Contents
10 Concluding Observations about Public Support of
R&D in Small, Entrepreneurial Firms 70
Appendices 75
References 84
Index 89
DOI: 10.1057/9781137370884
List of Tables
1.1 Characterizations about ‘who the
entrepreneur is’ 3
5.1 Major legislation related to the
SBIR Program 20
7.1 Population of SBIR Phase II projects
1992–2001 28
7.2 Descriptive statistics on the National
Research Council Survey of
Phase II awards 28
8.1 Descriptive statistics about SBIR-funded
fi rms, means 32
8.2 Responses to the counterfactual question:
“In your opinion, in the absence of this SBIR
award, would your fi rm have undertaken
this project?” 34
8.3 Categories of private investments that have
a statistically signifi cant positive impact on
the probability of commercialization 37
8.4 Predicted probability of commercialization 38
8.5 Descriptive statistics on employees (empt)
and retainees (retainees), by agency 41
8.6 Percentage of SBIR projects with fi rms
retaining the stated number of employees
aft er completion of Phase II project 41
DOI: 10.1057/9781137370884 vii
viii List of Tables
8.7 Mean actual and predicted employment for Phase II
SBIR award recipients, by agency 43
8.8 Agreements with other fi rms or investors:
percentage of the random sample of Phase II projects
answering the question: “As a result of the technology
developed during this project, which of the following
describes your fi rms’ activities with other fi rms and
investors? (Select all that apply.)” 49
8.9 Descriptive statistics for the presence of agreements 52
8.10 Descriptive statistics for sales categories with and
without U.S. and foreign agreements 53
9.1 Variables for the expected social rate of
return calculations 64
9.2 Descriptive statistics used in the social rate of
return model 65
DOI: 10.1057/9781137370884
List of Figures
2.1 Spillover gap between social and
private rates of return to R&D 8
3.1 Total factor productivity
index (2005 = 100) 11
6.1 An image of the Valley of Death 23
6.2 Private risk reduction resulting from
SBIR funding 24
7.1 Percentage of the random sample funded,
by agency 29
8.1 Likelihood of a project being started
without SBIR funding 35
8.2 Mean actual and predicted employment for
Phase II SBIR award recipients, by agency 43
9.1 Gap between social and private rates of
return: average for SBIR projects 66
DOI: 10.1057/9781137370884 ix