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Chapter 4. R&D: National Trends and International Comparisons

Federal Technology Transfer and Other Innovation-Related Programs

This section reviews data on two types of federal programs that support public-private collaboration for technology transfer and innovation.[29] (For academic patents and related knowledge diffusion indicators, see chapter 5; for international business licensing fees and royalties, see chapter 6.) The first type includes federal programs for technology transfer from R&D funded and performed by agencies and laboratories. The second type supports new or small U.S. companies in R&D or technology deployment with R&D funds or technical assistance.

In the late 1970s, concerns about the strength of U.S. industries and their ability to be competitive in the global economy intensified. Issues included the question of whether inventions from federally funded academic research were adequately exploited for the benefit of the national economy and the need to create or strengthen public-private R&D partnerships. Since the 1980s, several U.S. policies have facilitated cross-sector R&D collaboration and technology transfer. One major policy thrust was to enhance formal mechanisms for transferring knowledge arising from federally funded and performed R&D (Crow and Bozeman 1998; NRC 2003). Other policies addressed federally funded academic R&D, the transition of early-stage technologies into the marketplace, and R&D and innovation by small or minority-owned businesses. For an overview of these initiatives, see sidebar, "Major Federal Legislation Related to Technology Transfer and Commercializing R&D."

Federal Technology Transfer

Federal technology transfer refers to the various processes through which inventions and other intellectual assets arising from federal laboratory R&D are conveyed to outside parties for further development and commercial applications. Technology transfer may also involve linking R&D capabilities and the resources of federal laboratories with outside public or private organizations for mutual benefit (FLC 2006).

In response to the Stevenson-Wydler Act of 1980 (as amended) federal agencies with laboratory operations have active efforts to engage in technology transfer as defined above, identify and manage intellectual assets created by their R&D, and participate in collaborative R&D relationships with nonfederal parties (including private businesses, universities, nonprofit organizations) consistent with agency mission goals. Federal labs have also been required to have technology transfer offices (termed an Office of Research and Technology Applications or ORTA) to assist in identifying transfer opportunities and establishing appropriate arrangements for relationships with nonfederal parties (see sidebar "Federal Technology Transfer: Activities and Metrics").

Six agencies continue to account for most of the annual total of federal technology transfer activities: DOD, HHS, DOE, NASA, USDA, and DOC. Statistics for these six agencies in FYs 2004 and 2009, spanning the main activity areas of invention disclosures and patenting, intellectual property licensing, and collaborative relationships for R&D, appear in table 4-18.[30] (Similar statistics for a larger set of agencies, going back over time to FY 2001, appear in appendix table 4-38.)

As is apparent in the distribution of the statistics across the activity types in table 4-18, most agencies engage in all of the transfer activity types to some degree, but there are differences in the emphases. Some agencies are more intensive in patenting and licensing activities (such as HHS, DOE, and NASA); some place greater emphasis on transfer through collaborative R&D relationships (such as USDA and DOC). Some agencies have unique transfer authorities which can confer practical advantages. NASA, for example, can establish collaborative R&D relationships through special authorities it has under the Space Act of 1958; USDA has a number of special options for establishing R&D collaborations other than through CRADAs; DOE's contractor-operated national labs, with their nonfederal staffs, are not constrained by the normal federal limitation on copyright by federal employees and are able to use copyright to protect and transfer computer software. In general, the mix of technology transfer activities pursued by each agency reflects a broad range of considerations such as agency mission priorities, technologies principally targeted for development, intellectual property protection tools and policies, and the types of external parties through which transfer and collaboration are chiefly pursued.

Small Business Innovation-Related Programs

This section focuses on several small business programs. The Small Business Innovation Research (SBIR) program was established by the Small Business Innovation Development Act of 1982[31] to stimulate technological innovation by increasing the participation of small companies in Federal R&D projects, increase private sector commercialization of innovation derived from federal R&D, and foster participation by minority and disadvantaged persons in technological innovation. The Small Business Technology Transfer (STTR) program was created in 1992 to stimulate cooperative R&D and federal technology transfer.[32] SBIR and STTR are both administered by the Small Business Administration (SBA). The last portion of this section covers the Technology Innovation Program (TIP), created by the America COMPETES Act of 2007 and administered by NIST.

The focus on smaller or startup R&D-based companies in these programs is an example of the promotion of innovation-based entrepreneurship via public-private partnerships that enable not only financing but also R&D collaboration and commercialization opportunities (Gilbert et al. 2004; Link and Scott 2010).

According to the SBIR statute, federal agencies with extramural R&D obligations exceeding $100 million must set aside a fixed percentage of such obligations (2.5% since FY 1997) for projects involving small business (those with fewer than 500 employees). In FY 2009, SBIR awards totaled $1.9 billion (SBA 2010). In FY 2008, 11 federal agencies awarded a total of $1.8 billion to about 5,400 SBIR projects (appendix tables 4-39 and 4-40). DOD provides about 50% of total SBIR funds annually, followed by HHS (around 30% since 1999), consistent with their large extramural R&D budgets.

The SBIR program is structured in three phases. Phase I evaluates the scientific and technical merit and feasibility of ideas. Phase II builds on phase I findings, is subject to further scientific and technical review, and requires a commercialization plan. During phase III, the results from phase II R&D are further developed and introduced into private markets or federal procurement using private or non-SBIR federal funding.[33] Several participating R&D agencies also offer bridge funding to phase III and other commercialization support for startups (NRC 2008:208–216).[34]

Federal agencies with extramural R&D budgets exceeding $1 billion are required to set aside 0.3% of their extramural R&D budget for STTR awards. The program is also structured in three phases and involves R&D performed jointly by small businesses, universities, and nonprofit research organizations. In FY 2008, federal agencies awarded 734 STTR grants valued at $240 million (appendix tables 4-39 and 4-41).

The Technology Innovation Program was set up for "the purpose of assisting U.S. businesses and institutions of higher education or other organizations, such as national laboratories and nonprofit research institutions, to support, promote, and accelerate innovation in the United States through high-risk, high-reward research in areas of critical national need."[35] Two areas of focus in recent funding competitions were advanced manufacturing materials and advanced sensors to support monitoring and assessment of civil infrastructure, such as water pipelines, roads, bridges, and tunnels. From FY 2008 to FY 2010, TIP made 38 competitive awards involving 78 participants including small businesses and universities. Over this period, awards reached $281 million, including $136 million from TIP and $145 million in industry-cost sharing funds (appendix table 4-42).


[29] Science or research parks, another example of public-private collaboration, may facilitate knowledge diffusion, technology development and deployment, and entrepreneurship by involving universities, government laboratories, and business startups. Two recent U.S. workshops focused on science parks. A December 2007 NSF workshop was aimed at fostering a better understanding and measurement of science parks' activities, including the role of science parks in the national innovation system. Participants identified a need for systematic studies on topics such as the social benefits of public investment in science parks, ways in which the university-science park interaction engenders entrepreneurial activity, and lessons that U.S. science parks can learn from comparative studies with European and Asian parks. For material from this workshop, see A subsequent workshop sponsored by the National Academies explored international models and best practices in science parks (NRC 2009).
[30] Notably missing among these indicators are technical articles published in professional journals, conference papers, and other kinds of scientific communications. Most federal lab scientists, engineers, and managers view this traditional form of new knowledge dissemination as an essential tech transfer component. Nevertheless, few agencies and their associated federal labs regularly tabulate and report this information.
[31] P.L. 97–219. At the time of writing, SBIR was authorized until November 18, 2011 (Public Law 112–36).
[32] Small Business Technology Transfer Act of 1992 (Public Law 102-564, Title II).
[33] To obtain federal funding under this program, a small company applies for a phase I SBIR grant of up to $100,000 for up to 6 months to assess the scientific and technical feasibility of ideas with commercial potential. If the concept shows further potential, the company may receive a phase II grant of up to $750,000 over a period of up to 2 years for further development.
[34] SBA's Federal and State Technology (FAST) partnership program also provides support associated with SBIR/STTR. The Consolidated Appropriations Act of 2010 (Public Law 111-117) authorized $2 million for FAST. In October 2010, SBA granted $100,000 awards to 20 state and local economic development agencies, business development centers, and colleges and universities. The program is designed to help socially and economically disadvantaged firms compete in SBIR and STTR. The project and budget periods are for 12 months, starting September 30, 2010. See SBA Press Release No. 10-62,, accessed 4 March 2011.
[35] Public Law 110-69, Section 3012. See NSB (2010) pages 4–57 and appendix table 4-47 of that publication for information and data on the predecessor program, the Advanced Technology Program.