Recent Research: North Carolina’s SBIR/STTR matching program yields results

Since 2005, the One North Carolina Small Business Program has made 423 SBIR/STTR matching awards worth nearly $26 million to more than 250 businesses throughout the state. A new assessment, which updates an earlier report, provides academic rigor to a standard program review. The results indicate that even beyond survey-based attestations to the program’s value, there is a statistically-significant impact of North Carolina’s funding for the competitiveness of recipients.

The new assessment is published in the Annals of Science and Technology Policy by John W. Hardin and David J. Kaiser of the North Carolina Board of Science, Technology, and Innovation and Albert N. Link of UNC Greensboro, the editor-in-chief of the publication. The most original portion of the article is an assessment of program data using regression analysis, which provides a more rigorous evaluation of relationships between variables than can be achieved through correlation alone.

The regression analysis reveals several clear benefits of the North Carolina matching program. First, while North Carolina has been improving its rate of SBIR/STTR Phase II awards over time, the years since the program began have seen a greater increase in awards than would be expected from this natural growth alone. Second, the presence of the program is contributing to a higher success rate of Phase I to Phase II conversions.

Additional regression analyses indicate other benefits of the program. The portion of the federal funding matched by the state increases the chance that the Phase I project will receive a Phase II award and the chance of sales being realized from the project. Specifically, increasing the state’s match by 10 percent relative to the federal funding yields about a 5.7 percent increase in the chance of achieving a Phase II award and a 2.5 percent chance in seeing sales activity.

Program recipients were also surveyed on their absolute performance. Approximately half of the projects were continuing R&D and about an equal quarter each seeing commercialization activity or having discontinued work. Eighty-three percent of projects received additional private-sector funding for a total of nearly $213 million. IP production outcomes supported by the program include 97 patents and 17 copyrights already received, with more than 250 applications pending.