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Employment growth from the Small Business Innovation Research program

Author

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  • Albert Link

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  • John Scott

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Abstract

This paper investigates employment growth in small firms funded by the U.S. Small Business Innovation Research (SBIR) program. Using data collected by the National Research Council for each of five federal agencies, our analysis shows that on average over two-fifths of all projects retained 0 employees after completion and over one-third retained only 1 or 2 employees. Thus, on average, the direct impact of SBIR funded projects on employment is small, especially when compared to the mean number of employees in the firms. However, there are substantial cross-project differences in the number of retained employees that are explained by differences in the firms and their SBIR projects. We find across funding agencies that projects with intellectual property—patents, copyrights, trademarks, or publications—retained more employees after completion of the project. Also, we find that the public funding of research by the SBIR program is more likely to stimulate employment when the government created a market for the products, processes, or services developed by the research projects.
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Suggested Citation

  • Albert Link & John Scott, 2012. "Employment growth from the Small Business Innovation Research program," Small Business Economics, Springer, vol. 39(2), pages 265-287, September.
  • Handle: RePEc:kap:sbusec:v:39:y:2012:i:2:p:265-287
    DOI: 10.1007/s11187-010-9303-6
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    File URL: http://hdl.handle.net/10.1007/s11187-010-9303-6
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    References listed on IDEAS

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    1. Albert N. Link & John T. Scott, 2013. "Governments as entrepreneur: Evaluating the commercialization success of SBIR projects," Chapters,in: Public Support of Innovation in Entrepreneurial Firms, chapter 2, pages 25-38 Edward Elgar Publishing.
    2. Albert N. Link & John T. Scott, 2013. "Private Investor Participation and Commercialization Rates for Government-sponsored Research and Development: Would a Prediction Market Improve the Performance of the SBIR Programme?," Chapters,in: Public Support of Innovation in Entrepreneurial Firms, chapter 11, pages 157-174 Edward Elgar Publishing.
    3. Carlsson, Bo, 1992. "The Rise of Small Business: Causes and Consequences," Working Paper Series 357, Research Institute of Industrial Economics.
    4. David B. Audretsch & Albert N. Link & John T. Scott, 2013. "Public/private technology partnerships: evaluating SBIR-supported research," Chapters,in: Public Support of Innovation in Entrepreneurial Firms, chapter 5, pages 91-104 Edward Elgar Publishing.
    5. Davis, Steven J & Haltiwanger, John & Schuh, Scott, 1996. "Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts," Small Business Economics, Springer, vol. 8(4), pages 297-315, August.
    6. Gregory Tassey, 2007. "Tax incentives for innovation: time to restructure the R&E tax credit," The Journal of Technology Transfer, Springer, vol. 32(6), pages 605-615, December.
    7. Robert Atkinson, 2007. "Expanding the R&E tax credit to drive innovation, competitiveness and prosperity," The Journal of Technology Transfer, Springer, vol. 32(6), pages 617-628, December.
    8. Josh Lerner, 2010. "The future of public efforts to boost entrepreneurship and venture capital," Small Business Economics, Springer, vol. 35(3), pages 255-264, October.
    9. Lerner, Josh, 1999. "The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program," The Journal of Business, University of Chicago Press, vol. 72(3), pages 285-318, July.
    10. Ashley J. Stevens, 2004. "The Enactment of Bayh--Dole," The Journal of Technology Transfer, Springer, vol. 29(1), pages 93-99, January.
    11. David Audretsch & Roy Thurik, 2004. "A Model of the Entrepreneurial Economy," Papers on Entrepreneurship, Growth and Public Policy 2004-12, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Albert N. Link & John T. Scott, 2013. "Public R&D subsidies, outside private support, and employment growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(6), pages 537-550, September.
    2. Link, Albert N. & Scott, John T., 2013. "Bending the Arc of Innovation: Public Support of R&D in Small, Entrepreneurial Firms," UNCG Economics Working Papers 13-8, University of North Carolina at Greensboro, Department of Economics.
    3. Hall, Michael & Link, Albert, 2015. "Technology-Based Growth Policies: The Case of North Carolina’s Green Business Fund," UNCG Economics Working Papers 15-1, University of North Carolina at Greensboro, Department of Economics.
    4. repec:kap:jtecht:v:42:y:2017:i:5:d:10.1007_s10961-016-9476-5 is not listed on IDEAS
    5. Falck, Oliver & Wiederhold, Simon, 2013. "Nachfrageorientierte Innovationspolitik," Studien zum deutschen Innovationssystem 12-2013, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    6. Anna Kochenkova & Rosa Grimaldi & Federico Munari, 2016. "Public policy measures in support of knowledge transfer activities: a review of academic literature," The Journal of Technology Transfer, Springer, vol. 41(3), pages 407-429, June.
    7. Haga Elimam, 2017. "The Role of Small Businesses (Small Scale Economic Projects) in Alleviating the Acuity of Unemployment," International Business Research, Canadian Center of Science and Education, vol. 10(3), pages 120-132, March.
    8. Oliver Falck & Simon Wiederhold, 2013. "Nachfrageorientierte Innovationspolitik: Bestandsaufnahme und ökonomische Bewertung," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 51, March.
    9. Scott, John T. & Scott, Troy J., 2016. "The entrepreneur's idea and outside finance: Theory and evidence about entrepreneurial roles," European Economic Review, Elsevier, vol. 86(C), pages 118-130.
    10. Schneck, Stefan & May-Strobl, Eva, 2014. "The economic contribution of start-up firms in Germany," Working Papers 02/14, Institut für Mittelstandsforschung (IfM) Bonn.
    11. Felipe Rojas & Elena Huergo, 2016. "Characteristics of entrepreneurs and public support for NTBFs," Small Business Economics, Springer, vol. 47(2), pages 363-382, August.
    12. repec:kap:revind:v:52:y:2018:i:4:d:10.1007_s11151-018-9615-2 is not listed on IDEAS
    13. Link, Albert & Scott, John, 2017. "Toward an Assessment of the U.S. Small Business Innovation Research (SBIR) Program at the National Institutes of Health," UNCG Economics Working Papers 17-6, University of North Carolina at Greensboro, Department of Economics.
    14. Helge Dauchert & Dietmar Harhoff & Patrick Llerena & Wolfgang Crasemann & Carla Dekker & Oliver Falck & Simon Wiederhold & Ludger Wößmann, 2013. "Innovationen auf Bestellung? Was von einer stärkeren Nachfrageorientierung in der Innovationspolitik zu halten ist," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(05), pages 03-19, March.

    More about this item

    Keywords

    Small business research; Employment growth; Entrepreneurship; Intellectual property; L53; J48; O38; L26;

    JEL classification:

    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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