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Employment Growth from Public Support of Innovation in Small Firms

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  • Link, Albert N.

    (University of North Carolina at Greensboro, Department of Economics)

  • Scott, John T.

    (Dartmouth College)

Abstract

We investigate the impacts of the U.S. publicly-funded Small Business Innovation Research (SBIR) program’s funding on the overall employment growth of SBIR-award recipient firms. This paper is motivated by the U.S. Congress’ continued emphasis of employment growth during its deliberations on the reauthorization of the SBIR program. We set forth a model of employment growth; the model offers a framework through which we can compare the firm’s actual level of employment after receipt of an SBIR award and completion of the research project to the level of employment predicted by the firm’s characteristics prior to the award. Using data collected by the National Research Council within the National Academies, we estimate our model, and we conclude that, on average, the overall employment effects associated with the SBIR program are large absolutely and relative to dollars of funding, but these effects are, in general, not statistically significant.

Suggested Citation

  • Link, Albert N. & Scott, John T., 2011. "Employment Growth from Public Support of Innovation in Small Firms," UNCG Economics Working Papers 11-17, University of North Carolina at Greensboro, Department of Economics.
  • Handle: RePEc:ris:uncgec:2011_017
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    More about this item

    Keywords

    Employment growth; Entrepreneurship; Innovation; Technology; Small business;
    All these keywords.

    JEL classification:

    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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