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7 Knowledge Effects One of the congressionally mandated objectives for the SBIR program is to increase scientific and technical knowledge. The program does this through stimulating new research, building partnerships, and creating networks for the exchange of information. Patents, copyrights, trademarks, and scientific publica- tions reflect, to varying extents, the growth in scientific and technical knowledge developed as a result of SBIR awards. 7.1 Publications and Intellectual Property Publications and formal intellectual property protection (i.e., as opposed to trade secrets) are the most easily measured of project outcomes related to technological innovation. NRC Phase II Survey respondents indicated that 123 patents related to the award had been applied for and 91 granted. Respondents had also applied for 21 copyrights and 31 trademarks, and were granted 20 and 27, respectively. Forty-three percent of DoE projects generated at least one patent application; the largest number of patents granted for an individual project was 13. Two firms were the top patent winners, with 13 each. Peer-reviewed publications are another important indicator that the research funded by SBIR is both high quality and is reaching the scientific and technical community. Respondents indicated that 218 scholarly works were submitted for publication, or approximately 1.5 articles per Phase II project. These submis- sions generated 200 publications, or 1.4 published articles per Phase II project, with almost exactly half of all projects generating at least one submission, and the largest number of an individual firm being 12. This evidence suggests that 85

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86 Sbir AT THE DEPARTMENT OF ENERGY DoE Phase II research leads to outcomes of a sufficiently high standard to merit scholarly publication and granting of intellectual property protection. Finally, the respondents to the NRC Phase I Survey were asked to provide the number of patents, copyrights, trademarks, and/or scientific publications for the technology developed as a result of the subject Phase I project (Table 7-1). As seen from Table 7-1, the percentages for DoE are similar to those for all agencies combined. 7.2 Stimulating New Research Responses among DoE participants to the NRC Phase II Survey strongly suggest that most Phase II projects would not be implemented without SBIR funding (see Figure 7-1). TABLE 7-1  Patents, Copyrights, Trademarks, and Scientific Publications Derived from the Phase I Project DoE Successful Percentages for DoE Applications as Applications as All Agencies Percent of Responses Percent of Responses Combined Patents 25 19 23 / 18 Copyrights  1  1  4 / 3 Trademarks  3  3  4 / 3 Scientific Publications 45 38 38 / 35 SOURCE: NRC Phase I Survey. 90 80 70 Percent Responding 60 50 Probable 40 Definite 30 20 10 0 Yes Uncertain No FIGURE 7-1  Would project have been undertaken without an SBIR award? SOURCE: NRC Phase II Survey. 7-1

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KNOWLEDGE EFFECTS 87 Thirty-eight percent of respondents reported that the project funded by the Phase II award definitely would not have been undertaken in the absence of the SBIR funding, and another 44 percent indicated that it probably would not have been undertaken. This matches data from the NRC Phase I Survey noted earlier—that about four-fifths of projects would not have been undertaken without the Phase II funding. Another 13 percent of respondents were uncertain. Only 4 percent of respondents likely would have undertaken the project without the Phase II award, and only one firm indicated that it definitely would have pursued its project. These data are further supported by case study analysis. Without exception, all of the case study companies indicated that SBIR was vital to the development of their technology. Most said that the technology would not have been created if there had been no SBIR program. 7.3 Building Partnerships and Enhancing Networks The SBIR program also facilitates technological innovation through the cre- ation of new research and commercialization partnerships and by strengthening networks of small businesses and innovators. Some of the firms interviewed for this study—for example, Creare—reported that pre-proposal networking involv- ing small and large companies increases the likelihood of commercial sales. One company (NanoScience) found that the application process itself could become a networking vehicle for the purpose of identifying downstream partners; as the company gathered information for completing its proposal, it contacted a wide variety of industry representatives. The active engagement of an agency program manager can also support this type of networking; in one instance, a Navy technical topic manager introduced an awardee to over 300 people and helped set up 100 presentations (Creare). Figure 7-2 shows the type and status of relationships with other organiza- tions, as reported through the NRC Phase II Survey. Three quarters of respondents reported either a formalized relationship with other companies and investors, or an attempt to establish such relationships, as a result of the technology developed during the subject Phase II project. Fifteen percent had finalized plans for licensing agreements with respect U.S. companies and investors, and another 15 percent were in negotiations. Other finalized agreements also were reported: market and distribution (9 percent), customer alliances (8 percent), R&D agreements (8 percent), manufacturing (6 percent), and sale of technology rights (5 percent). In these categories, similar numbers were reported to be in ongoing negotiations, as well. NRC Phase II Survey responses further indicate that relationships are forged not only with domestic partners but also with foreign companies or investors. Approximately 14 percent of respondents were involved in licensing agreements with foreign partners (5 percent finalized, another 9 percent in negotiations),

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88 Sbir AT THE DEPARTMENT OF ENERGY 50 45 40 Foreign investor/Ongoing Percent Responding negotiation 35 Foreign investor/Finalized 30 agreement 25 Domestic investor/Ongoing 20 negotiation 15 Domestic investor/Finalized agreement 10 5 0 Licensing Agreement(s) Sale of Company Partial Sale of Company Sale of Technology Rights Company Merger Joint Venture Agreement Marketing/Distribution Agreement(s) Manufacturing Agreement(s) R&D Agreement(s) Customer Alliance(s) Other Activity FIGURE 7-2  Company activities with other companies and investors. SOURCE: NRC Phase II Survey. 7-2 12 percent were involved in marketing or distribution agreements, 9 percent in customer alliances, and 8 percent in R&D agreements. 7.4 SBIR and the universities One of the key features of SBIR programs is that they support alignments between the private sector, the agencies, and universities. This is true at DoE, as collaboration with academic research groups is common among DoE SBIR companies. About a quarter of NRC Phase II Survey respondents reported the involve- ment of faculty or adjunct faculty in their project, 20 percent the involvement of graduate students, 16 percent the use of university or college facilities, and 18 percent use of a university or college as a subcontractor on the project. Five percent of respondents said that the Phase II project was originally developed at that institution by one of the recipients. Three percent reported the PI was an adjunct faculty member.

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KNOWLEDGE EFFECTS 89 However, only one respondent reported that the technology used in the p ­ roject was licensed from the university. More generally, the NRC Firm Survey, which did not differentiate between agencies, indicated that two-thirds of responding firms have one or more firm founders who were university staff, and that 36 percent of founders were most recently employed at a college or university.