The Small Business Research and Development Enhancement Act of 1992 reauthorized the SBIR Program and established the STTR Program, closely modeled on the SBIR Program. This increase will effectively double the funding for the program to nearly $1 billion in fiscal year 1997. In general, we believe the quality of the winning SBIR and STTR proposals is favorable. In addition, agencies deemed many more SBIR proposals worthy of award than they were able to fund. Accordingly, we made several recommendations to the Administrator of SBA, who has taken steps to implement them. The relative roles of the research institution and the small business as the source of the technology bear directly on the need for the STTR Program. Second, if the program is effective in moving ideas from research institutions to small businesses, then the next logical question concerns whether their collaboration is effective in moving them to the marketplace. Third, because one important difference between the two programs is that STTR makes a small business/research institution collaboration mandatory, the question arises whether the SBIR Program could accomplish the objective of transferring technology from research institutions to the private sector without mandatory collaboration. In addition, the agencies have taken steps to address other concerns such as duplicate funding of SBIR projects and potential conflicts of interest in the STTR Program.
Why GAO Did This Study

GAO discussed the Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Pilot Program.

What GAO Found

GAO noted that: (1) the quality of winning SBIR and STTR proposals appears to be good, but it is too early to assess the programs' actual results; (2) the increase in available SBIR funding did not appear to affect the program, since the competition for SBIR funding was high and the agencies' ratios of awards to proposals remained essentially constant; (3) despite the increased funding, many SBIR proposals that were deemed worthy did not receive funding; (4) the Small Business Administration is taking steps to implement recommendations to reduce duplicate funding of similar research; (5) the five agencies responsible for STTR programs are taking steps to prevent entities that submit proposals from evaluating their own and other proposals; (6) there is no consensus on the need for and effect of the STTR program on agency research and development and it will take years before its effectiveness in transferring technology from research institutions to the marketplace can be assessed; and (7) assessments of STTR programs must determine whether innovative ideas are originating with the research institutions more than the small businesses, their collaboration is effective in moving technology to the marketplace, and the SBIR program could accomplish the technology transfers without mandatory collaboration.