The Impact of NASA's Small Business Innovation Research Program on Invention and Innovation

We empirically determine the impact of the NASA Small Business innovation Research (SBIR) Program on invention and innovation. The NASA SBIR program selects a portfolio of technology proposals, submitted by small businesses to an annual solicitation. Funding may be awarded in two tranches, a 6-month phase I award and a subsequent, 2-year phase II award. Over the last decade, the total annual awarded funding was about $100-140M with Phase I awards growing from $100-125K and phase II awards from $500-750K. Typically, about 15-20% of submitted Phase I proposals are awarded and only these awards are eligible to submit a phase II proposal. The success rate at phase II is about 40%. We looked at NASA SBIR data between 1999 and 2006 to determine the impact of receiving a phase II award on invention and innovation by using patent activity as a proxy. Data from all NASA Mission Directorates and over a range of years were considered and combined into a statistically significant collection. We examined the phase II proposed technologies and the subsequent patent history of the submitting companies in the five years after the award cycle. We find that phase II awarded companies had a significantly greater number of awarded and cited patents, over this time frame, than companies not awarded an SBIR phase II. Specifically, we find an overall increase in awarded patents of 39% for SBIR awarded companies versus non-awarded companies. This difference is statistically significant at the 95% confidence level. We also examined subsets for these data to quantify the effects of company size and previous patent awards on these trends.