6
Woman- and Minority-Owned Businesses

Support for women and minorities in federal R&D is a core objective of the SBIR program.

6.1
WOMAN-OWNED BUSINESSES

Figure 6-1 shows the share of all Phase I awards made to woman-owned businesses 1992-2005. Woman-owned businesses accounted for 7.7 percent of all DoE Phase I awards during this period. During 1992-2003, woman-owned businesses, accounted for 10.5 percent of Phase I applications.

The average size of Phase I awards to woman-owned businesses was similar to that for all recipients combined, near the nominal maximum funding limit. This indicates that woman-owned businesses did not receive differential treatment with respect to the average amount of award.

Figure 6-2 shows the percentage of Phase II awards received by woman-owned businesses in 1992-2005.

The percentage of Phase II awards received annually by woman-owned businesses remained fairly constant during this period, with minor variation from year to year. Woman-owned businesses accounted for 7.8 percent of Phase II applications in 1995-2003 and 6.4 percent of actual Phase II awards 1992-2005. Although, the average value of a Phase II award for woman-owned businesses declined from 1996 to 2000, it has since rebounded upward. The average value of awards to woman-owned businesses was comparable to those for all awardees; indeed, for approximately six years, the average value of a Phase II award was higher for woman-owned businesses than for all awardees combined.



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6 Woman- and Minority-Owned Businesses Support for women and minorities in federal R&D is a core objective of the SBIR program. 6.1 WOMAN-OWNED BuSINESSES Figure 6-1 shows the share of all Phase I awards made to woman-owned businesses 1992-2005. Woman-owned businesses accounted for 7.7 percent of all DoE Phase I awards during this period. During 1992-2003, woman-owned businesses, accounted for 10.5 percent of Phase I applications. The average size of Phase I awards to woman-owned businesses was similar to that for all recipients combined, near the nominal maximum funding limit. This indicates that woman-owned businesses did not receive differential treatment with respect to the average amount of award. Figure 6-2 shows the percentage of Phase II awards received by woman- owned businesses in 1992-2005. The percentage of Phase II awards received annually by woman-owned busi- nesses remained fairly constant during this period, with minor variation from year to year. Woman-owned businesses accounted for 7.8 percent of Phase II applications in 1995-2003 and 6.4 percent of actual Phase II awards 1992-2005. Although, the average value of a Phase II award for woman-owned businesses declined from 1996 to 2000, it has since rebounded upward. The average value of awards to woman-owned businesses was comparable to those for all awardees; indeed, for approximately six years, the average value of a Phase II award was higher for woman-owned businesses than for all awardees combined. 0

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 WOMAN- AND MINORITY-OWNED BUSINESSES 14 12 10 8 Percent 6 4 2 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 19 19 19 19 19 19 19 19 20 20 20 20 20 20 FIGuRE 6-1 Phase I awards to woman-owned businesses as a percentage of all DoE Phase I awards. SOURCE: U.S. Small Business Administration, Tech-Net Database. 14 12 Number of Phase II Awards 6-1 10 8 6 4 2 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 19 19 19 19 19 19 19 19 20 20 20 20 20 20 FIGuRE 6-2 Phase II awards received by woman-owned businesses in 1992-2005 as a percentage of all DoE Phase II awards. SOURCE: U.S. Small Business Administration, Tech-Net Database. 6.2 MINORITY-OWNED BuSINESSES Figure 6-3 shows that minority-owned businesses on the whole won a sig- nificantly larger share of DoE Phase I awards than woman-owned businesses. From 1992-2005, they won an average of 13.2 percent of awards, compared to 6-2 7.7 percent for woman-owned businesses. The average value of Phase I awards

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 SBIR AT THE DEPARTMENT OF ENERGY 20 18 16 14 12 Percent 10 8 6 4 2 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 19 19 19 19 19 19 19 19 20 20 20 20 20 20 FIGuRE 6-3 Phase I awards to minority-owned businesses as a percentage of all DoE Phase I awards. SOURCE: U.S. Small Business Administration, Tech-Net Database. received by minority-owned businesses was similar to that of other firms. In fact, in eight of the years during 1992-2003,6-3 average Phase I award for minority- the owned businesses was slightly greater than for all firms. Minority-owned businesses submitted 16.5 percent of all Phase I applications in 1992-2003 and received 13.2 percent of all Phase I awards. Again, as with woman-owned firms, this indicates that these firms were less likely than average to generate successful applications. DoE does not appear to have analyzed these data further in order to determine why this might be the case. The number of Phase I awards to minority-owned businesses jumped approx- imately 30 percent in 1997 but steadily declined from 1999-2002. It is not clear why this sharp rise and the subsequent decline occurred. Additional research might help clarify this evolution. Figure 6-4 shows the number of Phase II awards received by minority-owned businesses in 1992-2005. Minority-owned businesses accounted for 13.7 percent of Phase II applica- tions in 1992-2003 and 12.1 percent of actual Phase II awards. The average value for these awards varied, but over the entire period, the average value of the awards to minority-owned was higher than for all awardees combined. 6.3 SuCCESS RATES FOR THE DIFFERENT GROuPS For both woman-owned businesses and minority-owned businesses, and for both Phase I and Phase II awards, the success rates (percentage of grant applica-

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 WOMAN- AND MINORITY-OWNED BUSINESSES 18 16 Number of Phase II Awards 14 12 10 8 6 4 2 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 19 19 19 19 19 19 19 19 20 20 20 20 20 20 FIGuRE 6-4 Number of Phase II awards received by minority-owned businesses in 1992-2005. SOURCE: U.S. Small Business Administration, Tech-Net Database. tions that receive awards) were lower than for all other applicants. This result is summarized in Figures 6-5 and 6-6 for Phase I and Phase II, respectively. 6-4 Figure 6-5 shows the differential rates of success by ownership status for Phase I. Woman-owned businesses have had a lower rate of success compared to all other groups—by approximately 3-10 percentage points—in every year except one. For minority-owned companies, the success rate is better than for woman-owned companies, but still lags behind the “other” category (neither woman-owned nor minority-owned). During 2002-2003 the success rate of minority-owned businesses was considerably lower than that for woman-owned and all other businesses. Success rates for Phase II awards are similar to those for Phase I (Figure 6-6). During the period 1995-2003, woman- and minority-owned businesses lagged behind all other business in their relative success at winning Phase II awards. For the whole period, the average success rate for woman-owned businesses was 0.44 (±0.12 std. dev.) percent compared 0.52 (± 0.6 std. dev.) percent for all other businesses. In 1996, the success rate for woman-owned businesses dipped below 30 percent; however, this rate has improved—in the early 2000s, it converged towards the rate for all other businesses. The same cannot be said for minority- owned businesses. Although minority-owned businesses had a higher average success rate, 0.43 (0.10 std. dev.), than woman-owned businesses during this period, in most of the years, the success rate for minority-owned businesses was below the “all others” group. In particular, the success rate for minority-owned companies in 2003 fell sharply—to approximately 27 percent—when the rate for all other businesses was over 50 percent.

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 SBIR AT THE DEPARTMENT OF ENERGY 30 25 20 Percent 15 10 5 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Woman-owned Minority-owned All others FIGuRE 6-5 DoE Phase I success rates by ownership status (number of awards/number of applications). SOURCE: U.S. Small Business Administration, Tech-Net Database; Department of En- 6-5 ergy SBIR program. 70 60 50 Percent 40 30 20 10 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 Woman-owned Minority-owned All others FIGuRE 6-6 DoE Phase II success rates by ownership status (number of awards/number of applications). SOURCE: U.S. Small Business Administration, Tech-Net Database; Department of En- ergy SBIR program. 6-6