Letter From the National Science Foundation 9 o Mixed Vapor Growth of Organic Non-Linear Optical d) Private Sector Commercialization. The interest of the private sector is exemplified by investment in development and actual product sales. Following are five examples of SBIR awards which have been completed. "Completion" in this context means that the projects have gone through Phases I, II, and III. O SBIR 81-14274 "Distributed Data Base Management on Local The first known research on DBM on local networks was conducted under this project and resulted in the highly successful INGRES Star software. Sales now exceed $105 million and private investment from Sutter Hill, Berkeley International, Morgan Stanley, T. Rowe Price, Citicorp, Bankers Trust and Bank of New South Wales totals $18 million. The company attributes one-third of the investment and sales to the NSF research. The consultant from the University of California, Berkeley, said that SBIR was the principal reason for the company's success, thanks to the breakthrough made possible by NSF research support. Employment at the time of the proposal in 1981 was 6; today it is 475. University collaboration has been with University of California at Berkeley, Carnegie-Mellon and MIT. SBIR 80-096001 "Theoretical Modeling of an Innovative Unidirectional Surface Acoustic Wave (SAW) Transducer." 19811984 RF Monolithics, Inc., Dallas, TX. The research represented a new concept in the design of lowloss frequency filters by four engineers who spun off from Texas Instruments. The project explored four new ideas; all were successful. Twelve product lines of receivers, oscillators (IFF and radar), SAW devices, resonators, transmitters, microtransmitters, filters, notch elements resulted directly and indirectly from the research and are now being sold. Venture capital investment came to $13.1 million in three rounds of financing from 12 firms. Sales have totalled $16.3 million. University collaboration has been with the Universities of Maine and Central Florida. Employment has increased from 5 to 85. SBIR 79-17180 "Growth of Ruby Crystals by the Heat Exchanger The research formed the base for a new class of laser materials and for another NSF SBIR award for titanium-doped alumina crystals. This significant advance resulted in the first tunable solid-state laser to be commercialized in the Letter From the National Science Foundation 10 600 to 1200 nm wavelength range. This Laser rods were introduced as a product in 1987 and a large company is now developing a tunable solid-state laser system based upon the rods. should develop into a significant military and commercial market. Customers include Lockheed, Hughes, McDonnellDouglas, Northrup and Wright-Patterson AFB. University collaboration is with MIT and State University of New York, Stonybrook. Employment has increased from 10 to 24. SBIR 82-60166 "Long-Life Catalysts for Immobilized This SBIR funded by NSF and later by NIH resulted in the invention of micro-porous beads to optimally grow mammalian cells before Phase II was completed and what may be the leading continuous process for large scale production of engineered proteins. Investment of $17 million was obtained from Eli Lilly, Combustion Engineering, Genentic and 10 venture capital firms. Cumulative sales now exceed $7 million. University collaboration is with Dartmouth, Rutgers, MIT, Rochester and Virginia. Employment increased from 12 to 80. SBIR 81-13807 "Compton Backscatter Computed Tomography," 19821985, Advanced Research and Applications Corporation, Sunnyvale, CA. The NSF research support led to a major Wright-Patterson contract in Phase III for non-destructive evaluation (NDE) equipment totaling $12.5 million, $6.5 million in R&D, and a team venture with Bechtel Corporation for NDE building inspection quality control. University collaboration has been with Stanford and University of California at Berkeley. Employment has increased from 35 to 65. SBIR 77-19777 "Coupled Transport Membranes for Metal This research and other SBIR awards that followed in the membrane area built up a research base that led to $15 million in investment or joint ventures from Bethlehem Steel, W.R. Grace, Pfizer and ENI (Italy). Products resulting from SBIR on the market through joint venture firms include a gas separation element and an insect control formulation. The company believes it is a national leader in membrane technology. University collaboration is with Oregon State, Minnesota and Michigan. Employment has increased from 10 to 105 including the spinoff companies. Conclusion. Quantitative input and output measures in the form of proposal pressure, proposal quality, and private sector Letter From the National Science Foundation 11 participation have been presented. These support the contention that the SBIR program has been successful in stimulating innovation. Among the small business firms responding to the solicitation innovation has grown in the ten years of the program's existence and the quality of the research proposals has increased markedly. Probably the most persuasive indicator of success is the measurable financial participation from the private sector in the products and processes coming from SBIR research. Goal 2: SBIR RESPONDS TO NEEDED R&D "...to use small business to meet Federal research and development needs..." When it established SBIR, Congress formally stated that technological innovation creates jobs, increases productivity, competition, economic growth, and is valuable in reducing inflation and improving the balance of payments. Further, while most federally funded R&D is conducted by large business, universities, and Government laboratories, small business is the principal source of innovations. Finally, Congress determined that small businesses are among the most cost-effective performers of R&D and are particularly capable of transforming R&D into new products. Three Major Studies. In making these findings, Congress had access to studies and reports which had provided the earlier impetus for the small business set-aside under the NSF SBI program, as well as the NSF's experience with this program. Three of these studies are especially relevant: 1) A Commerce Department report on innovation published in 19675 showed that small high technology firms were responsible for a disproportionately large share of new technology when compared with their three percent share of Federal research and development support. The report set the stage for what has become the SBIR program, first at the National Science Foundation, and in 1982 at all of the major research funding agencies in the government. As to how well the SBIR program has succeeded in stimulating this innovation and how well the small high tech firms have succeeded in providing innovation which meets Our national needs, it is 4 PL 97-219, Sec. 2 (a). 5 Holloman, J.H., Technological Innovation, Its Environment and Management, U.S. Department of Commerce, Washington D.C. 1967 Letter From the National Science Foundation 12 necessary to compare projected technological trends and requirements with the projects which have been awarded. 2) The National Academy of Sciences in 1981 prepared the Five Year Outlook on Science and Technology, and 3) the Office of Science and Technology Policy prepared the Annual Science and Technology Report to the Congress' in 1983. Research Priorities. Based on review of these major reports, and other data, the perceived research priorities could be summarized under the following general categories: o electronic materials and devices o lasers and electro-optical devices o biological systems, neurobiology o robotics and computers o fluids, turbulence o surface science o air and water pollution Industry Studies. Similar but not identical results emerged from analyses of various industrial indicators such as compound annual growth rates by industry, and the distribution of industrial research expenditures. The resulting industrial R&D priorities are: o electronic materials and devices o scientific instruments o electrical equipment and computers o chemicals and chemical processes o aerospace systems o mechanical systems and machinery While there is not complete agreement between the governmental forecasters and the distribution of industrial research resources, it became apparent that both perceive electronic materials and computers to be of long term importance. NSF SBIR Priorities. The foundation made its SBIR awards under a series of research topics representative of the disciplinary research thrusts. These topics have been reviewed and are summarized under the following, more generic categories. These categories make it possible to assess how well SBIR research 6 Five Year Outlook on Science and Technology-1981, National Research Council, National Academy of Sciences, Washington, D.C. 1981. 7 Annual Science and Technology Report to the Congress, Office of Science and Technology Policy, Washington, D.C., Oct. 1983. Letter From the National Science Foundation 13 matched larger Federally published objectives and priorities: o Electro-optic materials O Manufacturing Processes o Industrial/Chemical Processes o Instruments/Sensors o Biosciences/Genetics o Computers/Robotics o Surface Science o Communications o OtherR The Foundation's solicitation topics during the past decade have coincided largely with the larger national scientific and engineering research activities. This approach permits an assessment of these activities over the span of the program with comparisons to the cited forecasts. Distribution of Awards. Table 2 is a categorization of Phase I awards for the years from 1977 through 1987, in accordance with the preceding listing: Table 2: NSF SBIR PHASE I AWARDS BY CATEGORY 1977-1987 This ten-year summary of the Foundation's Phase I SBIR activities indicates that the bulk of the research has been concerned with electronic materials, industrial chemical processes, instrumentation, biosciences, and manufacturing technology. When compared with the 1981 forecasts and the industrial indicators, 8 "Other" has been used by NSF in many research programs; it leaves open the door for new ideas, especially those not readily classifiable by discipline or topic. |