In my continuing efforts to share economic development programs that work, I give you the Small Business Innovation Research (SBIR) program. SBIR is a national initiative that requires Federal research and development agencies, such as the Pentagon or National Institutes of Health, to devote at least 2% of R&D spending to support mission-critical research by small businesses.
A comprehensive new study from researchers at the University of North Carolina-Greensboro Economics Department confirms what many of us have known for some time: SBIR works and it works extremely well! The researchers reviewed years of research, by themselves and others, on how SBIR funds have been deployed since the program first began in 1982. They find that SBIR funds are a critical lifeline for small technology firms. The funds are clearly used to support high risk research that would not have occurred otherwise–a critical impact as public funds should be deployed only in cases where private support is not available. These R&D dollars bring new technologies to support public needs and also engage firms, often run by technologists or minority entrepreneurs, who may not have otherwise had easy access to R&D investments. Finally, SBIR funds appear to help these firms create new jobs and to grow faster than firms without SBIR dollars. SBIR is a good investment for Federal agencies, for small business, and for the taxpayer.