The Employment Benefits from Small Business Innovation Research: Is the U.S. Making the Most of the Opportunity?
The Small Business Innovation Research (SBIR) program was created with the passage of the Small Business Innovation Development Act of 1982, which mandated that all government agencies with external research programs of greater than $100 million set aside a percentage of their external research budget to support small firms’ innovative activities. The SBIR program was designed to stimulate technological innovation in the hopes of generating employment growth. This study looks at employment issues associated with innovation, in particular the employment impact of SBIR funding on small firms. The author addresses whether public-sector support for R&D in small firms increases their demand for technical workers, and if so, if this increase in demand is temporary or permanent. The study also examines whether the extent of SBIR funding has been successful in stimulating R&D in small firms. This research represents the first broad-based project-level empirical analysis of the role of public funding on innovation in small firms.