Public gains from entrepreneurial research: Inferences about the economic value of public support of the Small Business Innovation Research program

This article presents a systematic analysis of the net economic benefits associated with the Small Business Innovation Research (SBIR) program. We offer a derivation of producer and consumer surplus to estimate economic benefits. Fundamental to the implementation of these models is a specific value of the elasticity of demand, but in its absence we estimate what its value would be when the benefit-to-cost ratio associated with public support of the SBIR program equals unity. We infer from these calculations, and from general knowledge about the ability of SBIR-funded firms to exploit their monopoly position, that the SBIR program likely generates positive net economic benefits to society.