How does agency workforce diversity influence Federal R&D funding of minority and women technology entrepreneurs? An analysis of the SBIR and STTR programs, 2001–2011

Abstract

US Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide Federal research and development (R&D) grants to technology ventures. We explore how grantor demographic diversity explains why demographically diverse grantees experience different odds for successfully transitioning from initial to follow-on R&D grants. We empirically analyze 52,126 Phase I SBIR/STTR awards granted by 11 Federal agencies (2001–2011). We find a positive association between agency workforce diversity and Phase II funding for Phase I grantees, but minority and women technology entrepreneurs are less likely to receive this funding than their non-minority and male counterparts. Agencies valuing workforce ethnic diversity or leveraging gender homophily positively influence the likelihood of women technology entrepreneurs obtaining Phase II funding. We discuss evidence-based implications for policy and practice.

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Fig. 1

Notes

  1. 1.

    https://www.sbir.gov/about-tibbetts-awards

  2. 2.

    https://www.sbir.gov/success-story/qualcomm-inducted-sbir-hall-fame

  3. 3.

    http://www.acq.osd.mil/osbp/sbir/about/index.shtml

  4. 4.

    https://www.sbir.gov/sites/default/files/sbir_pd_with_1-8-14_amendments_2-24-14.pdf

  5. 5.

    http://www.acq.osd.mil/osbp/sbir/sb/resources/deskreference/04_fast.shtml

  6. 6.

    http://www.dawnbreaker.com/defense/navy-tap.php

  7. 7.

    http://sbir.gov/about/about-sbir

  8. 8.

    SBA SBIR Policy Directive February 24, 2014

  9. 9.

    https://www.sbir.gov/about/about-sttr#sttr-mission

  10. 10.

    https://www.sbir.gov/about/about-sttr#sttr-mission

  11. 11.

    https://www.edi.nih.gov/data/demographics

  12. 12.

    See https://www.sbir.gov/sbirsearch/firm/all for the Award Listing and Company Listing databases. The Annual Reports database is available at https://www.sbir.gov/awards/annual-reports.

  13. 13.

    See https://www.opm.gov/policy-data-oversight/diversity-and-inclusion/federal-workforce-at-a-glance/ for the OPM database.

  14. 14.

    For 2001–2009, the OPM’s diversity categories were Black, Hispanic, Asian/Pacific Islander, and Native American. For 2010–2011, the OPM redefined these categories to Black, Hispanic, Asian, American Indian/Alaskan, and Native Hawaiian/Pacific Islander. This re-categorization does not affect our measure, since either set of categories captures the respective percentages of minority or non-White employees in the Federal Agency.

  15. 15.

    https://www.sba.gov/content/minority-owned-businesses

  16. 16.

    https://www.sba.gov/content/women-owned-small-business-program

  17. 17.

    http://www.kauffman.org/microsites/kauffman-index

  18. 18.

    http://clustermapping.us, Institute for Strategy and Competitiveness, Harvard Business School

  19. 19.

    See http://fmwww.bc.edu/RePEc/bocode/c/complogit.html for function description.

  20. 20.

    A member of our co-author team was an invited participant in a special NASA event held at the team member’s university. With advanced planning and NASA’s permission, our team member scheduled and met individually with appropriate representatives from 8 Research Centers and 2 Mission Directorates.

  21. 21.

    The one notable exception in NASA’s demographic diversity is that it does have a sizable Hispanic workforce compared to other large Federal agencies and the overall U.S. government. Most of NASA’s major facilities are located in Florida, Texas, and California, which are states with large Hispanic populations relative to the rest of the U.S. NASA employees attributed the apparent success in recruiting Hispanic employees to the agency’s ability to build long-term relationships with universities located near NASA centers.

  22. 22.

    This is also supported by the results of the 2012 Federal Employee Viewpoint Survey. For more details, see: https://intern.nasa.gov/content/news/press-releases/BPTW13_CaseStudiesReport.pdf

  23. 23.

    https://www.nasa.gov/about/highlights/bolden_bio.html

  24. 24.

    http://www.nasa.gov/press-release/nasa-awards-research-grants-for-minority-serving-institutions

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Acknowledgements

We would like to express our sincere appreciation and gratitude to Tim Bates, Bill Bradford, Rob Seamans, Alicia Robb, Maryann Feldman, Michael Verchot, and two anonymous reviewers for their helpful insights and valuable feedback on earlier versions of this paper. We also thank NASA and our fellow participants in two Kauffman Minority Entrepreneurship Conferences held in San Francisco and Anaheim in 2016. This research is funded in part by the Ewing Marion Kauffman Foundation and the Rutgers Center for Urban Entrepreneurship & Economic Development. The contents of this publication are solely the responsibility of the authors.

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Correspondence to Amol M. Joshi.

Appendices

Appendix A.

Table 5 Summary and comparison of SBIR and STTR programs

Appendix B.

Table 6 Summary of data sources and data collection procedures

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Joshi, A.M., Inouye, T.M. & Robinson, J.A. How does agency workforce diversity influence Federal R&D funding of minority and women technology entrepreneurs? An analysis of the SBIR and STTR programs, 2001–2011. Small Bus Econ 50, 499–519 (2018). https://doi.org/10.1007/s11187-017-9882-6

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Keywords

  • Entrepreneurship
  • Economics of minorities
  • Economics of gender
  • Technological innovation
  • R&D

JEL classifications

  • L26
  • J15
  • J16
  • O32
  • O38