small business research

How to Do Market Research for Small Business: 8 Affordable Market Research Techniques

Small business market research is a tough game.

If you Google “how to do market research,” you’ll come across a long list of tactics that are hard to use on a small business budget.

• Market research surveys
• Questionnaires
• Focus groups
• Competitive intelligence
• SWOT analysis
• Structured interviews.

The list goes on.

If you dig even  further into market research techniques, you could quickly find yourself reading about the difference between qualitative and quantitative research, or even statistical sampling methods.

All of these market research techniques have their place. But when you’re wondering how to do market research for small business , you aren’t thinking about complicated statistical models or big budgets.

Market research firms sometimes run massive surveys and international focus groups. You might not have a way to reach 100,000 people with a survey, or the resources to set up multiple focus groups. Your market research process might not be able to include a ton of technology or statistics.

But there are still small business market research tools that work. Conducting market research for a new business or a small business can require some creativity.

With the right tactics, you can do affordable or even free market research that gets you the insights you need for your business.

How can market research benefit a small business owner?

Right now you’re probably wondering: why do you need market research?

Small businesses already have a lot of day-to-day operations to deal with.

It’s hard to make time to do market research for small businesses—especially if you also need to learn how to do market research in the first place.

But if you don’t periodically check in with your audience, you could be leaving business and revenue on the table without ever knowing.

There are many benefits of market research for small business, but the top ones include:

• Helping you create more compelling marketing materials
• Identifying more targeted niches interested in your company
• Suggesting ideas for new products or services based on pain points
• Minimizing the risk of bad positioning that costs you leads without you knowing
• Giving you early updates on industry trends before they become widespread. For a comprehensive overview of these trends, you can check out Incfile’s guide to small business trends

Simply put, effective market research helps you get inside your customers’ heads. How cool is that?

When you need to conduct market research on a tight budget, it can be tricky to find the techniques and market research tools that give the best value for the time and cost investment.

Here’s 8 of our favorite affordable market research techniques.

• Book reviews
• Facebook groups
• Competitors
• Behavior and analytics
• Ask your audience

1. Quora: How to use Quora for market research

Quora is a social media platform based on questions and answers. On Quora, users can submit questions on any topic they like, as well as answer questions related to their expertise.

Getting started with Quora is easy: the platform guides you through the process and immediately prompts you to select your areas of interest.

Setting up your Quora profile will let you get notified when questions are tagged with the topics you select. That makes it easy to see what burning questions your audience is asking.

And because Quora orders its answers based on voting, you can also see which solutions they think are the most valuable.

For that reason, Quora market research can be a great method of collecting information on customer pain points. In market research for small businesses, free public questions from your audience is hard to beat.

If it fits into your marketing plan, you can also consider putting some effort into answering Quora questions. Repurposing your blog posts as part of a Quora marketing strategy can increase their reach and visibility.

2. Reddit: How to use Reddit for market research

Reddit bills itself as “the front page of the internet,” and for good reason—Alexa ranks Reddit as the eighth most trafficked website in the world and the fifth most trafficked in the United States.

Reddit contains a wide variety of communities, linked content, original content, and memes. But among cat videos and adorable GIFs, there are some surprisingly insightful conversations—discussions that are a gold mine for small business market research.

Reddit is organized into “subreddits,” which are communities focused on specific topics. Finding subreddits based on your industry is a good way to mine for pain points—and discover your audience’s candid thoughts.

Anonymity means that Redditors are often willing to share things they wouldn’t normally talk about in person. Reading discussion threads or even asking questions yourself can help you get insights from specific niches.

For example, if you run a fitness business and need to know how to do market research, you’ll find that there are quite a few opportunities to conduct customer research on Reddit.

Subreddits like these will show up:

• /r/bodybuilding
• /r/bodyweightfitness

Each of them serves different communities, and people often share their successes and struggles.

Reddit can also help track down a very narrow segment of a larger population. A subreddit like /r/griptraining is the very definition of niche—but if you run a rock climbing or powerlifting gym it could have valuable insights from your target audience.

Navigating Reddit can be a little tricky for new users. But once you figure it out, it’s a powerful tool to do market research for small business.

3. Book reviews: How to use Amazon book reviews for market research

This market research technique is a little bit unusual—but it’s all the more powerful because of how few people think of it.

When you need to conduct market research on a tight budget, you need to get creative. Book reviews offer a wealth of information, sometimes incredibly detailed and specific, that few people are taking advantage of.

Amazon reviews are public, and you probably have some idea of the most important or popular books in your field. Even if you don’t, Amazon charts are also freely available—it’s easy to find out what people are reading.

Once you’ve tracked down some popular books, take a look at the reviews. Amazon lets you easily sort reviews by how positive they are and how helpful they are, so you can dive in at whatever point you like.

Joana Wiebe of Copyhackers is a huge review mining advocate to get to know your audience – and rightfully so. You can hear exactly what people’s problems and wishes are in their exact language.

Positive reviews will be helpful because they can help you understand what people are benefiting from.

Negative or lukewarm reviews can be even more helpful because there’s a chance they call out needs or burning pains that the book didn’t answer—which may represent unmet needs your business can take advantage of.

4. Surveys: How to use a survey for market research

When most people think of using a survey to do market research for small business, they think of a massive effort that goes out to thousands and thousands of customers.

No, you probably don’t have thousands and thousands of customers who will respond to a survey. And there are some types of survey research that really do require those kinds of numbers.

But others don’t. And those are the kind you can focus on as you learn how to do market research for your small business.

Setting up surveys that get sent to customers after a sale can help you get a sense of how satisfied they are and what needs to lead them to make a purchase.

Similarly, you can set up surveys that go out to people that didn’t make a purchase. What prevented them from buying? What might have caused them to make a different decision?

Even if you only ask those two survey questions, the answers can help you make adjustments for the next time around.

BONUS – this type of small business market research is easy to automate.

Setting up automations that trigger based on a purchase or lack of purchase is easy to do with marketing automation software. Set up survey questions once, then focus on other parts of your small business while the results come in.

5. Facebook groups: How to use Facebook for market research

Facebook has risen as one of the major community-building platforms for small business. Type your industry into Facebook search and you’re bound to find a variety of related groups.

Some Facebook groups will be run by other business owners, others are simply people interested in the same topics. Regardless, reading through the conversations and questions asked in Facebook groups can be a valuable source of market research.

When you’re using Facebook for market research, you have a few options.

Simply reading through existing conversations is a great way to get started.

Even though names on Facebook aren’t private, people are often more willing to share their goals or frustrations within a relatively private group.

Once you’ve observed for a while and understood a group’s tone and social norms, you can start to join the conversation. Becoming a member of a group and engaging in discussions can be a great way to ask questions and go beyond surface-level insights.

You can’t do this on another business’s page, and you have to be careful about coming off spammy, but Facebook groups can also help you get participants for a market research survey.

As you get more comfortable with how to do market research on Facebook, sharing a link to a survey can help you gather quantitative market research data.

As a free platform with over two billion monthly active users , Facebook can be a powerful way to do market research for small business.

6. Competitors: How to use competitor analysis for market research

Chances are you’re not the only business in your niche. How are the most popular websites in your industry trying to appeal to your audience?

How can you tell which content is the most popular or successful? Use a tool like Buzzsumo to find the most shared content on a particular topic.

A tool like SEMrush can tell you which content ranks the highest in search engines. Both are good ways to identify potentially high-value topics.

Beyond content, look at the other marketing materials your competitors put out.

• What kind of messaging are they using on their website?
• How are they creating cross-sell and upsell opportunities?
• What does their team look like—who’s actually doing their marketing?

As you grow your business, this kind of information becomes more useful.

There’s no guarantee that your competitors are doing everything the best way—but seeing how they are managing their business can spark ideas to improve your own.

Here’s how you do this kind of research:

• Collect all of the info your competitors make publicly available
• Comb through their website and about page, download flyers and brochures, and check out the events they attend.
• Make absolutely sure you get on their email list , so you can see what kind of messages they like to send.

It’s worth taking competitor research with a grain of salt. Again, there’s no guarantee that competitors have done the level of customer research you’re looking for. Still, looking at competitor messaging is a useful way to infer the features and benefits that matter to your audience.

Competitor research isn’t a substitute for contacting your audience directly, but it can be a good starting point to figure out what kind of content is popular in your niche.

7. Behavior and analytics: How to use data for market research

It’s one thing to know what customers say they want. In any industry, professionals know that customers don’t always know how to solve their problems. Sometimes there’s a better question to ask for market research.

What do they actually do?

Tracking behavior on your website or engagement with your emails and messages is a great way to see which of your marketing efforts are most popular—and can help you adjust your marketing in the future.

Google Analytics is one powerful tool that can show you exactly how people engage with your website.

What content topics are the most popular? Make more content on those topics. Which pages have the best conversion rates? Direct more traffic to those pages. Your content marketing is also a source of information about your audience.

Combining website tracking with marketing automation can take things to the next level.

Marketing automation software can track email opens, link clicks, behavior on websites, replies/forwarding—and use those insights to automatically follow up with customers on what they care about most.

Of all the affordable small business market research techniques on this list, data is the most actionable. Analytics allow you to go from insight to action almost instantly—and sometimes automatically.

8. Ask your audience: How to use interviews for market research

Even though people don’t always say quite what they mean, there’s no substitute for direct, one-on-one conversations with your audience.

A market research interview allows free conversation that leads to deeper insights than survey or written answers. If you can get people to open up, you’ll be rewarded with detailed information about their pain points, struggles, and successes.

The style of the interview is less important than getting interviews done. You can do phone interviews, in-person interviews, even email interviews—and still get actionable insights.

The lessons you learn from talking to even 10 customers can change your business strategy, marketing, or client service. The ability to speak to customers using their own language is like a marketing superpower.

Customer interviews are the way to do it.

Entire businesses can be built on what your customers tell you. When you listen to your audience, you get to the heart of what they care about—and no amount of online market research or survey data can tell you that as precisely as they can.

Conclusion: Use market research to get inside your customers’ heads

If your business grows, you’ll eventually want to consider the focus group, survey, statistical analysis, and market trends approach to market research.

Those methods can reveal insights that are hard to find using more affordable market research techniques.

If you need to understand market saturation, or build a picture of how your pricing compares to the competition, you’ll eventually need to use some of the more traditional forms of market research.

But there’s value to doing market research before you have the budget for standard methods. Getting in touch with your customers’ needs can give you a huge edge as a small business.

Not a lot of people do market research for small business like this. Most prefer to wait until they can hire someone to do it for them (or just ignore it entirely). That’s where you can get a head start on others, as well as using features like Google Ads , company branding , and small business software .

Because of that, these types of affordable market research techniques are a huge competitive advantage—one that lets you get inside the heads of your customers and offer them exactly what they want to buy.

Thanks to Canva Presentations for creating a slide deck of this article:  How to Do Market Research for Small Business

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Small Business Statistics Of 2024

Updated: Jan 31, 2024, 10:00am

Table of Contents

Small business employment statistics, small business job creation, small business salaries & wages, small business ownership statistics, online & e-commerce business statistics, small business costs, small business survival statistics, conclusion: what do these statistics mean for small businesses, methodology.

While giants in technology and multinational corporations often capture the public’s attention, it’s small businesses that form the crux of the American economy. As we step into 2024, these businesses continue to evolve, reflecting not only their enduring role in job creation but also their significant contributions to innovation, economic dynamism and the country’s overall prosperity. The latest small business statistics for 2024 do more than just present a snapshot of the current state of affairs; they offer a window into the emerging trends and future directions.

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1. Almost all businesses across the U.S. are small businesses

While large corporations often grab headlines, it’s small businesses that form the bedrock of the American economy. Recent data from the U.S. Small Business Administration reveals a remarkable figure: 33.3 million businesses [1] in the United States qualify as small businesses, making up 99.9% of all U.S. businesses. This number not only reflects the dominance of small enterprises in the business sector but also shows their significant role in generating employment and contributing to economic stability, a trend that remains relevant in 2024.

2. Nearly half of all U.S. employees are employed by a small business

The impact of small businesses on the U.S. job market is more significant than often perceived. Although a majority of small businesses, over 80%, operate without any staff, these entities still employ a total of 61.6 million people. This figure represents 45.9% of the entire U.S. workforce [1] , a remarkable statistic especially when considering that fewer than 20% of small businesses have any employees. This data not only shows the importance of small enterprises in job creation but also their role in sustaining the economy. It’s clear that the growth of small businesses is integral to the nation’s employment health and overall economic success.

3. Over eight out of 10 small businesses have no employees

Reflecting a significant trend in the U.S. small business sector, data reveals that a vast majority, over 80%, of small businesses are solo ventures. Out of the 33.3 million small businesses in the country, 27.1 million are managed solely by their owners and do not employ any additional personnel [1] . This statistic sheds light on the significant number of individual entrepreneurs in the U.S. It demonstrates the independence and self-reliance characteristic of many small businesses, illustrating their unique role and contribution to the U.S. economy, even without a workforce.

4. Just 16% of small businesses have one to 19 employees

While the majority of small businesses in the U.S. operate without any employees, there is still a significant segment that does employ staff. Specifically, 16% of small businesses fall into the category of having between one and 19 employees. This equates to over 5.4 million businesses. On the larger end of the small business spectrum, only 647,921 businesses have a workforce size ranging from 20 to 499 employees [1] . These figures give insight into the distribution of employee numbers within small businesses, showing a majority leaning towards minimal or no staff, with a smaller yet notable proportion employing a larger number of workers.

5. Small businesses have added over 12.9 million jobs in the last 25 years

Despite the average small business being operated by a solo founder, these enterprises have been a significant source of job creation in the U.S. In the past 25 years, small businesses have been responsible for generating nearly 13 million net new jobs [1] . This accounts for approximately two-thirds of all new jobs added to the economy during this period. This trend emphasizes the enduring role of small businesses in bolstering employment, even as business continues to evolve. As we look toward the future, the continued contribution of small businesses to job creation remains a vital aspect of economic growth and resilience.

6. The leisure and hospitality industry has the highest average of jobs added per month over the last year

In the wake of the pandemic’s impact, the job market has shown remarkable resilience, especially in certain sectors. While the professional and business services industries have been significant contributors to job growth, adding over 1 million new jobs in the last 12 months, it’s the leisure and hospitality industry that stands out for its recovery pace. This sector has demonstrated the highest average monthly job growth, adding an average of 52,000 jobs per month over the last year [2] . This surge in job creation reflects not only a rebound from the severe impacts of the pandemic but also the sector’s critical role in the broader economic recovery. Overall, the labor market has seen an increase of 5.8 million jobs since last year, surpassing its February 2020 level by 240,000 jobs, signaling a strong recovery trajectory.

7. The industry with the most job openings is the professional and business services industry

The professional and business services industry now leads in job openings [2] , a shift from the previous trend where education and health services were more in demand. This change signals a strong need for skilled workers in areas such as management, administration and consulting. Job seekers exploring opportunities in this field may find promising prospects for stable employment. For businesses operating in these sectors, the surge in job openings presents challenges in attracting and maintaining a skilled workforce, reflecting the dynamic nature of job markets and the evolving needs of industries.

8. The industry with the highest projected job growth is home health and personal care

While the professional and business services industry currently leads in job openings, the home health and personal care sector is projected to experience the most significant job growth. An estimated increase of 22%, translating to over 804,000 new jobs [2] , is expected in the next decade. This surge in demand can be attributed to factors such as an aging population, which necessitates more in-home healthcare services. The trend towards personalized and patient-centric care models also plays a role, as does the increasing preference for in-home care over institutional settings.

While the professional and business services industry currently has the highest number of job openings, the home health and personal care industry is expected to see the highest growth. Over the next decade, it is estimated to see an increase at the astronomical rate of 22% and add a over 804,000 jobs. [2] This reveals projected growth within the home health and personal care industries, which is slated to increase in demand given the fact that the aging population is growing disproportionately larger than the younger generations.

9. The leisure and hospitality industry is still recovering from Covid-19

The Leisure and Hospitality industry, which experienced significant job losses due to the Covid-19 pandemic, is on a path to recovery. While the industry faced a shortfall of 633,000 jobs since February 2020 [2] , recent trends show positive momentum. In 2023, the industry has been adding an average of 41,000 jobs per month. This is a decrease from the 2022 average of 88,000 jobs per month, yet it represents continued progress. Despite these gains, employment in leisure and hospitality remains 223,000 jobs below its pre-pandemic level as of February 2020. The industry’s recovery, spurred by resumed travel and increased demand for leisure activities, is still unfolding as it works to regain its pre-pandemic strength.

10. Nevada and D.C. have the highest unemployment rates in the nation

Recent data places Nevada at the forefront in terms of unemployment rates in the United States, with a rate of 5.4% [2] . Following closely is the District of Columbia, recording a 5% unemployment rate [2] . These figures suggest particular economic challenges or labor market conditions unique to these regions. Nevada, known for its tourism-centric economy, particularly in areas such as Las Vegas, may reflect the lingering impacts of the pandemic on the hospitality and entertainment sectors. Similarly, D.C.’s rate could be influenced by its distinct urban and political dynamics.

Conversely, Maryland showcases the nation’s lowest unemployment rate at just 1.7% [2] . This could be attributed to the state’s diverse economy, which includes sectors such as bioscience, manufacturing and cybersecurity, coupled with its proximity to the federal government’s numerous agencies providing a stable employment base. Maryland’s low unemployment rate indicates strong job market health and potentially effective economic policies at play.

According to the most recent data, Nevada has the highest unemployment rate in the country at 5.4%. Right behind it is the District of Columbia at 5% [2] . Meanwhile, on the other end of the spectrum, Marylandhas the lowest unemployment rate at just 1.7% [2] .

11. New Jersey had the largest increase in unemployment over the last year

Over the last year, New Jersey has seen the most substantial rise in unemployment rates, with an uptick of 1.3% [2] . This change points to specific economic shifts or challenges within the state. On a different note, Maryland experienced the most significant reduction in unemployment, with a decrease of 1.5% [2] . This could be linked to its varied economic strengths, contributing to a more stable job market.

12. The number of U.S. jobs will increase by 87,000 in 2024

In 2024, the U.S. job market is projected to witness an increase, though modest, in the number of jobs. Specifically, employment across the United States is anticipated to grow by 87,000. To put this in perspective, considering the 9.6 million jobs lost due to the Covid-19 pandemic between May 2020 and September 2022 [2] , this increase represents a small step towards recovery. It’s a noticeable shift from the 2.72 million jobs added in 2023 [3] , indicating a slower pace of job market recovery in 2024. This suggests that while there is progress in regaining the jobs lost during the pandemic, the journey towards a full recovery is gradual and ongoing.

Over the next year, the number of jobs in the U.S. is expected to increase by 87,000. Granted, this is following immense job loss due to the pandemic. According to data from the Bureau of Labor Statistics, [2] 9.6 million jobs were lost in the U.S. due to covid between May 2020 and September 2022. In other words, the projected job growth for 2023 remains just a fraction of what was lost during the pandemic. This indicates that while the nation is in recovery, it still has a long way to go.

13. By 2032, the number of U.S. jobs is projected to increase by 4.7 million

By 2032, the U.S. job market is expected to see an increase in employment, with a projected addition of 4.7 million jobs [2] . This expansion will bring total employment to an estimated 169.1 million. However, this growth, with an annual rate of just 0.03%, marks a significant slowdown compared to the previous decade's annual growth rate of 1.2% from 2012 to 2022 [2] . This slower pace of growth indicates a lengthy recovery period from the job losses incurred during the Covid-19 pandemic. Despite the increase in total jobs, by 2032, the U.S. will still be recovering from the pandemic's impact, as the growth falls short of fully compensating for the 9.6 million jobs lost during that period.

14. The fastest-growing industries are healthcare and social assistance

Not only do the healthcare and social assistance industries have the highest survival rate across all industries, but it also boasts the fastest growing industry. [2] . This growth is driven by increasing demand for health services due to an aging population and a broader recognition of the importance of mental health and social support services. Advances in medical technology and healthcare delivery, including the rise of telehealth and personalized medicine, further fuel this expansion. Additionally, the sector's resilience to economic fluctuations and its capacity to innovate in response to societal health challenges contribute to its rapid growth. With an ever-growing focus on health and well-being in society, these industries are expected to continue their upward trajectory, meeting essential needs and creating numerous job opportunities.

15. The industry that will add the most jobs is individual and family services

The individual and family services industry has the highest projected growth as it is estimated to add over one million jobs between 2019 and 2029. [2] The industry that is slated to have the second highest job growth in the nation is computer systems and design which is projected to add over 574,000 jobs in the next 10 years.

The individual and family services industry, with its projection to add over 1 million jobs between 2019 and 2029 [2] , reflects a growing societal emphasis on social welfare and mental health services. This surge in job creation is likely driven by increased public awareness and acceptance of mental health issues, alongside a growing aging population requiring more in-home and community-based services. The expansion of this industry signifies a shift towards prioritizing individual and family well-being in policy and practice.

In parallel, the computer systems and design industry, projected to add over 574,000 jobs in the next decade [2] , mirrors the ongoing digital transformation across all sectors. The increasing reliance on technology in everyday life and business operations has spurred demand for professionals skilled in these areas. This trend highlights the critical role of technology and digital innovation in driving economic growth and job creation in the modern economy.

16. The average salary of a small business owner is just 16% above the annual mean wage in the U.S.

Business owners and entrepreneurs may make up some of the wealthiest people in the world; however, the average small business owner salary is just 16% above the national average mean wage of $59,428 [5] at $69,119 [6] . Of course, the salary of the average business owner varies greatly. On the low end, small business owners earn an average salary of $32,000 and earn as much as $147,000 on the average high end, according to pay rate data from Payscale.

17. Hourly earnings have increased more than 4% over the last year

Over the past year, there has been a 4.6% increase in hourly earnings, which is notably higher than the current annual inflation rate of 3.2% [2] . This disparity indicates that the average wage growth has not only kept pace with but exceeded the rate of inflation. This trend suggests that, on average, employees have experienced an increase in real purchasing power, an encouraging sign amidst broader economic challenges. However, it's important to consider that these figures are averages and may not reflect the experiences of all workers, especially in industries where wage growth has been uneven. The context of these increases amidst global economic shifts and post-pandemic recovery efforts highlights the complex interplay between wages, inflation and overall economic health.

Over the year, hourly earnings have increased by 4.6%. Meanwhile, the annual inflation rate in the U.S. over the past 12 months is 3.2%, meaning that the increase in annual earnings was proportionate to the rising inflation rate.

18. Millennials own just 13% of small businesses in the U.S.

Despite that the Millennial generation is considered to be highly entrepreneurial, Millennials own just 13% of small businesses. Meanwhile, the vast majority of small businesses are owned by Boomers and Gen X, illustrating “the generation gap” [7] in business ownership. Granted, the average age to start a business is reportedly 35 years old, so the younger generation may simply need a bit more time for the reality to catch up to their desire to own a business.

19. More small businesses are owned by males than females

While males still own a majority of small businesses, the increasing percentage of female-owned businesses, currently at 43.4% [1] , shows a positive shift towards greater gender equality in entrepreneurship. This change reflects broader societal movements towards inclusivity and the breaking down of traditional barriers in the business world. The rise in female entrepreneurship is supported by a growing number of resources and networks dedicated to supporting women in business.

Similarly, the ownership of small businesses by racial minorities and veterans, although comparatively lower, is a significant aspect of the diverse entrepreneurial ventures in the U.S. The 20.4% of small businesses owned by racial minorities and the 14.5% owned by Hispanics highlight the contributions of diverse cultural perspectives to the economy [1] . Veteran-owned businesses, at 6.1% [1] , also play a unique role, often drawing on the skills and experiences gained during military service to drive business success.

Though the gap is narrowing, females only own 43.4% of small businesses. Racial minorities own 20.4% of small businesses—of which Hispanics own 14.5%. Veterans are one of the least represented groups, owning just 6.1% of small businesses in the U.S. [1]

20. Nearly one out of three businesses still don’t have a website

In an increasingly digital age where websites are becoming easier—and more affordable—than ever to build and maintain thanks to code-free web builders and immense online resources, still, only 71% of businesses have a website [8] . Of the nearly one-third favoring website-free, 20% say they use social media in lieu of creating a website. That doesn’t mean that is a widely advisable move, however, as millions look to Google to discover businesses for anything from deciding where to grab dinner to buying an automobile.

21. Over 25% of business is conducted online

Still not sure if a business website is really quite necessary? As of 2023, there were 2.64 billion e-commerce shoppers [3] . This equated to over a quarter of all business being conducted online [9] . As the pandemic limited the movement of people, more consumers resorted to the web to shop. And not just for things such as clothes and shoes, but groceries, alcohol, prescription medications, counseling and more.

22. Over three-quarters of shoppers visit a business’s website before its physical location

Just because a business operates in-person doesn’t mean brick-and-mortars don’t need a website. In fact, 76% [10] of online shoppers reportedly check a business’s website before visiting their physical store or location. As surprising as this may initially be, the reality is that the web has become consumers’ first stop. And this is good news for brick-and-mortar businesses because it means that you don’t have to depend solely on foot traffic or word of mouth to get customers or clients through your doors.

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23. Labor remains the number one cost for businesses at 70% of spending

For most businesses, the biggest cost is labor. It makes up 70% of a business’s spending [11] , taking up a large piece of the pie. For this reason, it’s not surprising then that one of the first areas a business looks to save money on is labor costs, whether that’s through layoffs, outsourcing to more affordable staff overseas or employing software that helps reduce the number of hands on deck a business needs to operate.

24. Inventory is the second biggest cost for small businesses

On average, the next biggest cost behind labor for businesses is inventory, which makes up an average of 25% to 35% of a business’s budget [12] . Though inventory should equate to revenue down the line, it does represent a large upfront cost for small businesses that may be on a tight budget. For this reason, the popularity of dropshipping continues to grow, as do smaller minimum quantity orders to help reduce the upfront investment and the space required for storage—never mind the chances of damage or inventory spoiling.

25. Marketing accounts for just 9% of a business’s revenue on average

It’s common to hear of astronomical advertising budgets and campaign spending, and yet advertising makes up just 1% of the average business’s revenue [13] . One of the most popular advertising channels, with 83% [3] of businesses using it, is now social media. This is likely due to the value of a pay-per-click-based ad platform where advertisers only pay when users interact with their ad, the ease of use across said platforms and the sheer accessibility they offer to businesses of all sizes and budgets.

26. Small Business Spending Adjustments in Response to 3% Inflation Rise

As the economic environment continues to evolve, small businesses face the challenge of adapting to inflationary pressures. According to the CPI inflation calculator [2] , $1 in November 2022 is equivalent to $1.03 in November 2023, indicating a noticeable rise in costs over the year. This increase affects various aspects of running a business, from payroll and material costs to utilities and property taxes.

In response to these growing expenses, many small businesses have been reevaluating and adjusting their spending strategies. While specific data from 2022 showed that over half of small businesses cut costs, the trend likely persists as businesses seek innovative ways to maintain financial stability. This includes adopting remote work models to reduce office expenses, seeking more cost-effective manufacturing or supply options and leveraging technology such as artificial intelligence to boost productivity and reduce operational downtime. These measures reflect not just a reaction to the immediate challenges of inflation but also a strategic shift towards greater operational efficiency and resilience in a fluctuating economic climate.

27. Over 180,000 more small businesses opened than closed in the last year

From March 2021 to March 2022, approximately 1.4 million new small businesses opened, according to data from the U.S. Small Business Administration (SBA) [1] . That is 447,519 more small businesses that opened within this timeframe than closed. This increase shows positive growth towards business ownership, and the shift towards entrepreneurship following the pandemic and tremendous job loss.

28. One in five businesses fail within the first year

Chances are you’re familiar with the statistic that half of all businesses fail. However, this only paints a partial picture. To get the complete picture, it should be noted that 20% of businesses fail in the first year, 30% in the second year and 50% by year five [15] . This illustrates how pivotal the first five years of business are for new ventures.

29. Businesses are most likely to fail from running out of capital

A significant factor in the failure of new businesses is financial challenges. Data shows that 38% of businesses fail due to exhausting their cash reserves or the inability to secure additional capital. This points to the essential role of financial management in the survival and growth of startups and young companies.

In comparison, 42% of businesses that close within the first five years do so because of inadequate market demand [16] . However, the issue of capital is not merely about having funds; it's about managing these resources effectively to reach and engage the target market. For entrepreneurs, this means balancing the act of capturing market demand with maintaining robust financial health to ensure long-term business sustainability.

30. Lack of market need is the second most common reason small businesses fail

Following closely behind financial challenges, the second most common reason for small business failure is insufficient market demand, accounting for a significant portion of closures. While 38% of small businesses struggle due to running out of capital [16] , the lack of market need presents an equally pressing challenge. For a small business to be successful, it's imperative not only to have adequate capital to sustain operations in the early stages but also to ensure there is a consistent and growing demand for its products or services.

31. The construction industry has the highest failure rate

When examining failure rates by industry, the construction sector stands out with the highest rate of business failures, at 25% in the first year [17] . This high failure rate in construction may stem from various factors inherent to the industry, such as the complexity of projects, fluctuating material costs and the need for skilled labor. Additionally, the industry's sensitivity to economic cycles and changes in real estate demand can add to the challenges faced by new businesses. These dynamics illustrate the unique pressures within the construction sector, requiring businesses to navigate a range of operational and financial challenges from the outset.

32. The industries with the highest survival rate are healthcare and social assistance

Contrasting with other sectors, businesses in the healthcare and social assistance industries show remarkable resilience, boasting the highest survival rates [17] . This durability can be attributed to factors such as consistent demand for health and social services, regardless of economic fluctuations. The essential nature of services provided, ranging from medical care to social work, ensures a steady need, contributing to the longevity of businesses in this sector. Additionally, advancements in medical technology and an increasing focus on health and well-being across populations further support the growth and sustainability of these industries. The healthcare and social assistance sector's ability to adapt to changing demographics and health needs plays a significant role in its stability and enduring success.

On the other end of the spectrum, the healthcare and social assistance industries have the highest survival rates. [17]

Small businesses can glean a lot of insight by looking at business statistics. Not only does data help provide intel on the general business climate—the one in which all businesses operate within, but statistics can also be leveraged to enable businesses to better plan for the future based on the direction in which the data is pointing to. Of course, while every business will potentially interpret and apply the data differently, this is exactly what can help give one small business a leg up on those that do not.

To compile our list of the top small business statistics of 2024, we went directly to the information powerhouses, such as the Bureau of Labor Statistics and the United States Small Business Administration (SBA) to acquire and analyze available data. We considered the source quality, relevance and timeliness of the data to present, compare, contrast and overlay data to create more useful insights for small businesses.

Visit our hub to view more statistics pages .

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Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Additionally, she is a Columnist at Inc. Magazine.

The Ultimate Guide to Market Research for Small Businesses

• by Alice Ananian
• June 26, 2024

Starting a business is an exciting venture but also a challenging one. One of the most crucial steps in this journey is conducting thorough market research. Understanding your market is key to making informed decisions, developing effective strategies, and ultimately achieving success. In this ultimate guide, we’ll explore why market research is essential, how to do it, the tools you’ll need, and how prelaunch activities can offer valuable insights.

Why You Need to Conduct Market Research

Imagine launching a product or service into a black box. You have no idea who your ideal customer is, what their needs are, or even if there’s a market for what you’re offering. Yikes! This is where market research comes in.

Think of market research as your business’s roadmap to success. By gathering data and insights about your target audience and the competitive landscape, you can make informed decisions about everything from product development to marketing strategies. Here are some key reasons why market research is essential:

Know Your Customer: Understanding your target audience’s demographics, needs, preferences, and buying behaviors allows you to tailor your offerings directly to them.

Identify Opportunities: Market research can reveal gaps in the market or unmet customer needs. This can spark innovative ideas for new products or services.

Stay Competitive: Knowing your competition’s strengths and weaknesses helps you differentiate your brand and develop a winning strategy.

Reduce Risk: Market research can help you identify potential challenges before you invest heavily in product development or marketing campaigns.

Measure Success: By tracking market trends and customer feedback, you can gauge the effectiveness of your strategies and make adjustments as needed.

In short, market research is an investment that can pay off significantly. It equips you with the knowledge and insights you need to navigate the ever-changing marketplace and achieve sustainable growth.

How to Do Market Research for a Small Business

So, you’re convinced of the importance of market research, but where do you begin? This step-by-step guide will equip you with the tools to conduct effective market research on a budget:

Step 1: Define Your Research Goals

Before diving in, identify what you want to achieve. Are you trying to understand customer needs for a new product? Maybe you want to analyze the effectiveness of your current marketing strategy. Having clear goals keeps your research focused and helps you choose the most relevant methods.

Step 2: Leverage Secondary Research (Free or Low-Cost)

Secondary research involves utilizing existing data collected by others. This is a fantastic way to gain a broad understanding of your market landscape without breaking the bank. Here are some resources:

Government Websites: The U.S. Small Business Administration provides a wealth of free market research tools and industry reports.

Industry Associations: Many industry associations publish reports and data on market trends, demographics, and competitor analysis. Consider the list below as a starting point and adjust it based on your particular niche:

American Marketing Association (AMA)

• Focus: Marketing trends, consumer behavior, and advertising effectiveness.
• Publications: Journal of Marketing , Marketing News

National Retail Federation (NRF)

• Focus: Retail industry trends, consumer behavior, and sales data.
• Publications: NRF Retail Sales Report , Consumer View

International Data Corporation (IDC)

• Focus: Technology market trends, IT spending, and competitive analysis.
• Publications: Worldwide Quarterly PC Tracker , IT Market Reports

Consumer Technology Association (CTA)

• Focus: Consumer electronics and technology trends.
• Publications: Consumer Technology Ownership and Market Potential Study

National Association of Realtors (NAR)

• Focus: Real estate market trends, housing statistics, and buyer/seller demographics.
• Publications: Existing Home Sales , NAR Profile of Home Buyers and Sellers .

Biotechnology Innovation Organization (BIO)

• Focus: Biotechnology industry trends, research and development, and market data.
• Publications: BIO Industry Analysis Reports , Emerging Therapeutic Company Investment Report .

Gartner, Inc.

• Focus: Technology market trends, IT spending, and strategic insights.
• Publications: Gartner Magic Quadrant

World Travel & Tour i sm Council (WTTC)

• Focus: Global travel and tourism trends, economic impact, and market analysis.
• Publications: WTTC Economic Impact Reports , Travel & Tourism Competitiveness Report .

Food Marketing Institute (FMI)

• Focus: Food retail industry trends, consumer shopping behavior, and sales data.
• Publications: The Food Retailing Industry Speaks , U.S. Grocery Shopper Trends .

Association for Computing Machinery (ACM)

• Focus: Computing and IT industry trends, research developments, and technological advancements.
• Publications: Communications of the ACM, ACM Transactions on Computer Systems

International Council of Shopping Centers (ICSC)

Focus: Shopping center industry trends, retail real estate, and consumer behavior.

Publications: ICSC Research Reports , Shopping Centers: America’s First and Foremost Marketplace .

Market Research Reports: Public libraries often offer access to subscription-based market research databases, allowing you to download relevant reports. Visit your local library to find out what resources they have.

Step 3: Conduct Primary Research to Gather Specific Insights

Secondary research provides a foundation, but primary research allows you to delve deeper into your target audience’s thoughts and behaviors. Here are some cost-effective methods to consider:

Online Surveys: Free survey tools like Google Forms or SurveyMonkey allow you to gather feedback from a large pool of potential customers. Keep your surveys concise and easy to complete to ensure a high response rate.

Social Media Listening: Tools like Brandwatch or Hootsuite allow you to track conversations about your industry or brand on social media platforms. This can reveal valuable insights into customer sentiment and preferences. Also consider using this AI Market Research tool that gathers information on competitor products from Amazon, analyzes their feedback, and gives you a summary with all the juicy details that will help you create a product your customers will love.

Focus Groups: Gather a small group of potential customers for a moderated discussion about your product, service, or industry. This allows for in-depth exploration of their thoughts and experiences. For more information on conducting focus groups, click here .

Pro tip: Gathering primary resources is easier said than done, so we recommend on using tools that pool the resources for you. For example, when it comes to online surveys Prelaunch is a concept validation platform that lets you develop a landing page to test the waters for a product your considering on selling.

Here, you’ll see how people react, what comments they have, if there is adequate market demand, and even how much people are willing to pay. A quick embedded survey is posed both to those who showed interest in your product and – wait for it – those who were even willing to pay a special price for it before you created it.

Step 4: Analyze Your Findings and Draw Conclusions

Once you’ve collected your data, it’s time to make sense of it all. Organize your findings from both secondary and primary research. Look for patterns, trends, and recurring themes. What do these insights tell you about your target market and your competitive landscape?

Not sure you have time for all that? You’re not the only one. That’s why Prelaunch compiles all the info derived from your primary sources into a single Dashboard that clearly breaks down who your customers are and what they want.

Step 5: Take Action and Refine

Use your market research to inform your business decisions. This could involve modifying your product or service offering, developing targeted marketing campaigns, or adjusting your pricing strategy. Remember, market research is an ongoing process. As your business evolves, revisit your research and adapt your strategies based on new data and market trends.

That’s why we always say Prelaunch as soon as possible. Even if you only have quality rendered images of your product, imagine how much your prototype could improve if your customers pointed out your blind spots beforehand. Having a landing page that interested people visit and tracking what they have to say is a solid place to start from.

Market Research Tools for Small Businesses

Several tools can simplify and enhance your market research efforts. Here are some must-haves for small businesses:

Survey Tools

• SurveyMonkey : A popular and easy-to-use tool that allows you to create surveys, quizzes, and polls. It offers a free plan with limited features and paid plans with more advanced features such as branching logic and skip logic.
• Typeform : Another user-friendly survey tool that allows you to create visually appealing surveys. It offers a free plan with limited features, and paid plans with more advanced features such as logic jumps and custom branding.
• Prelaunch : The platform does not have surveys as a separate feature per say, but rather makes a few targeted question an embedded part of the process when users visit a product’s landing page.
• Google Forms : A free survey tool from Google that is easy to use and integrates seamlessly with other Google products. It is a good option for simple surveys with a limited number of questions.

Social Media Listening Tools

• Brandwatch : A powerful social listening tool that allows you to track brand mentions, analyze sentiment, and identify influencers. It offers a free trial, but paid plans are required for access to most features.
• Hootsuite : A social media management tool that also offers social listening capabilities. It allows you to track brand mentions, analyze sentiment, and schedule social media posts. It offers a free plan with limited features, and paid plans with more advanced features.
• AI Market Research Tool by Prelaunch : This tool can analyze thousands of reviews and feedback on Amazon to uncover the top customer praises and complaints.
• Sprout Social : Another social media management tool that offers social listening capabilities. It allows you to track brand mentions, analyze sentiment, and engage with customers on social media. It offers a free trial, but paid plans are required for access to most features.

Website Analytics Tools

• Google Analytics : A free website analytics tool from Google that provides insights into website traffic, user behavior, and conversions. It is a must-have tool for any small business with a website.
• Hotjar : A website heatmap and analytics tool that allows you to see how visitors are interacting with your website. It offers a free plan with limited features, and paid plans with more advanced features such as session recordings and form analytics.
• Crazy Egg : Another website heatmap and analytics tool that allows you to see how visitors are interacting with your website. It offers a free trial, but paid plans are required for access to most features.
• Ahrefs : A powerful SEO tool that allows you to track keywords, analyze backlinks, and conduct competitor analysis. It offers a free trial, but paid plans are required for access to most features.
• SEMrush : Another powerful SEO tool that offers similar features to Ahrefs. It offers a free trial, but paid plans are required for access to most features.
• Moz : An SEO tool that offers a variety of features, including keyword research, backlink analysis, and on-page optimization tools. It offers a free plan with limited features, and paid plans with more advanced features.

These are just a few of the many market research tools available for small businesses. The best tool for you will depend on your specific needs and budget. Be sure to research different tools and compare features before making a decision.

Conducting market research is a vital step for small businesses and entrepreneurs. It provides the data and insights needed to make informed decisions, understand your target audience, identify opportunities, and gain a competitive advantage. By following the steps outlined in this guide and utilizing the recommended tools, you can conduct effective market research and set your business up for success.

Remember, market research is an ongoing process. Continuously gather and analyze data to stay ahead of trends and adapt to changing market conditions. And don’t forget to leverage prelaunch activities to refine your product and marketing strategies.

1. What is market research?

Market research is the process of gathering information about your target market, competitors, and the overall industry landscape. This information can be used to make informed business decisions about everything from product development and pricing to marketing strategies and sales tactics.

2. Why is market research important?

Market research is crucial for small businesses because it helps you:

• Understand your customers: Identify their needs, preferences, and buying behaviors.
• Identify opportunities: Discover gaps in the market or unmet customer needs that your business can address.
• Stay competitive: Analyze your competition’s strengths and weaknesses to differentiate your brand and develop a winning strategy.
• Reduce risk: Make informed decisions to avoid costly mistakes in product development or marketing campaigns.
• Measure success: Track market trends and customer feedback to gauge the effectiveness of your strategies and make adjustments as needed.

3. How much does market research cost for a small business?

Market research can be conducted on a budget. Here’s a breakdown of costs:

• Free or Low-Cost Options: Utilize free government resources, industry reports, and online survey tools like Google Forms.
• Moderate Cost: Consider social listening tools with free trials or student research partnerships with universities. Another option is to use tools that combine things like social listening and primary research in one like Prelaunch.
• Higher Cost: Invest in professional market research agencies for in-depth studies, but this might not be necessary for every small business.

Remember, effective market research doesn’t have to be expensive. By being resourceful and focusing on your specific needs, you can gain valuable insights to propel your small business forward.

4. What are some common market research methods for small businesses?

Secondary Research: Leverage existing data from government websites, industry associations, and market research reports.

Surveys & Online Polls: Gather feedback from a large pool of potential customers through free survey tools.

Social Media Listening: Track brand mentions and analyze customer sentiment on social media platforms.

Focus Groups: Conduct moderated discussions with a small group of potential customers to gain in-depth insights.

Website Analytics: Utilize tools like Google Analytics to understand website traffic, user behavior, and conversions.

Alice Ananian

Alice has over 8 years experience as a strong communicator and creative thinker. She enjoys helping companies refine their branding, deepen their values, and reach their intended audiences through language.

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Comprehensive Guide to Market Research Types and Methods

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Market Segmentation Analysis in 2024: The Ultimate Guide

21 Best Market Research Resources for Small Businesses

Noah Parsons

8 min. read

Updated May 10, 2024

When you’re starting your business , you need to have a deep understanding of your customers. In fact, knowing your customers inside and out is probably the most important key to success.

Your customers are the people who desperately need your product or service. You need to know who they are, why they want your solution, what they like and dislike, and even what they had for breakfast. Knowing all of this will help you find more customers and build a better product that your customers will clamor to buy and tell their friends and colleagues about.

This is where market research comes in.

• What is market research?

Market research is the process of gaining information about your target market —a fancy way of saying “getting to know your customers.” Ideally, you find specific information about your target market and the key factors that influence their buying decisions. This is a key step in your larger market analysis.

As you get started, you’ll need to determine what type of market research is going to work best for you. Make that decision based on the value of the insights you think you’ll gain, versus the time and effort you need to invest to find the information.

Market research is often confused with an elaborate process conducted by fancy consultants that takes a tremendous amount of time and money. That’s certainly not true. You can, and should, do most of your own market research, and it doesn’t even have to be that hard.

After I explain the different types of market research, I’ll share all the resources you can use to do your own.

• Types of market research explained

1. Primary market research

Primary market research is research that you conduct yourself, rather than information that you find that’s already published. You gather this information by talking directly with your potential customers. This can either be exploratory research, where you ask open-ended questions, or specific research, where you try to obtain quantifiable results.

Here are a few methods you can use to conduct primary research.

Conduct focus groups

A focus group requires you to gather a small group of people together for a discussion with an assigned leader.

Survey your customers

Distribute these both to existing customers and potential customers. Sending out a survey using tools like SurveyMonkey is a great way to collect this type of information from current or potential customers of your business. You can even run tiny surveys right on your website with services like Qualaroo . Make sure to ask specific questions—but try not to lead people toward the answer you want to hear. Be as objective as you can.

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Assess your competition

Look at your competition’s solutions, technologies, and what niche they occupy. This can help you better understand their position in the market and how you can compete. Complete a competitive matrix or SWOT Analysis to streamline your competitive analysis.

Hold one-on-one interviews

Find potential customers and talk with them about their problems and your solutions to those problems. Ideally, conduct these in-depth interviews in your customer’s workplace, or wherever they will be when they might consider shopping for your solution. You can also just ask to conduct these interviews remotely. 

2. Secondary market research

Market research may also come from secondary sources. This is information others have already acquired and published about customers in your industry.

Access to this secondary market research data may be yours for the asking, and cost you only an email, letter, or phone call. Much of it is entirely free and easily available online. Here are a few ways to gather secondary market research.

Trade associations

Trade associations are organizations that serve specific industries. There’s almost certainly one for your industry. Once you find it, contact them and ask them for information about their industry and markets in the industry.

Government information

The U.S. government has a treasure trove of information to wade through. The data is all free but may take a little bit of time to find.

Third-party research sites

For reasonable fees, there are market research companies that will sell you pre-written industry reports that provide information on industries and their target markets.

• Best market research resources

There’s so much information out there that it can be difficult to know where to start with your market research. Here are our favorite resources for doing market research.

U.S. government resources

If your business is operating within or expanding to the United States, these are the top sites you should use for your research.

• U.S. Census : This is a great starting point for data about the U.S. population. You can drill into the data and find out nearly anything you want to know about different locations and demographics.
• Census Business Builder : Beyond population data, you can look at how much people in your industry spend.
• Bureau of Labor Statistics : A fantastic site for information on specific industries, like hiring and expense trends as well as industry sizes. If your target market is other businesses, this is a good place to look for data.
• Consumer Expenditure Survey : If you want to know what people spend their money on, this is your go-to source.
• CensusViewer : While it’s not a U.S. government resource, this free tool leverages US Census data and other data sources to give you access to data in an easy-to-use format that you can explore both visually on a map or in data reports for cities, counties, and entire states.
• Economic Indicators : Offers free economic, demographic, and financial information.
• Pew Research Center:   A nonpartisan fact tank that was founded with the mission of informing the public about the issues, attitudes, and trends shaping the world. They conduct public opinion polling, demographic research, content analysis, and other data-driven social science research.

Industry summaries

If you’re looking for information about specific industries, these are some of the best options to look into.

• SBDCNet Business Snapshots : You’ll find a great collection of industry profiles that describe how industries are growing and changing, who their customers are, and what typical startup costs are. You should also check out their list of market research resources, sorted by industry .
• Hoovers Industry Research : While not a free resource, the industry summary data provided here can be helpful if you need in-depth industry reports.
• IBISWorld: Regularly updated industry reports, that provide insight regarding the current status, market outlook, and competitive landscape of a given industry. It is a subscription service, but you can download free reports to test it out.

Business location market research tools

Interested in learning more about the demographics and customer base in a given geographic location? Check out these resources.

• ZoomProspector : This tool can help you find the ideal location for your business, or find new locations similar to where you already are for expansion and growth.
• MyBestSegments : This tool from Nielsen is a great resource for finding out what demographic and psychographic groups live in a given zip code or where the highest concentration of a given segment lives. While the most detailed data is not free, you can get a lot of great insights from the free version.
• SizeUp: This is a useful mapping tool to help determine where your target customers are. It’s very useful to help you determine the ideal location for your business.

Survey tools

If you plan on conducting primary research, here are some of the surveying tools you should look into.

• SurveyMonkey : Should you need to poll a group for business purposes, SurveyMonkey is free and reliable. Simply build the survey and send it out to your audience.
• Google Consumer Surveys : You don’t need to have a contact list to send out a survey on this site. With Google Surveys, you can target users from around the web and get instant feedback on your business idea.
• TypeForm : Whether you need a simple form or a survey, TypeForm does it beautifully. It’s especially good on mobile.
• Qualaroo : If you run a website and want to get quick feedback from the people that are already showing up there, Qualaroo is a great tool for this purpose.

Trade and industry associations

Many industries are blessed with an active trade association that serves as a vital source of industry-specific information. Such associations regularly publish directories for their members, and the better ones publish statistical information that tracks industry sales, profits, ratios, economic trends, and other valuable data.

• Wikipedia’s list of U.S. trade groups : This is a fairly comprehensive list to kickstart your research.  
• Directory of Associations : Another long list of associations. You should be able to find an association for your industry here.

Market trends

• Google Trends : Use Google Trends to discover what people are searching on and how search volume on important topics is changing over time.
• Statista : If you’re looking for statistics and trends, Statista is a great place to get started. You’ll find data on virtually everything here.
• Leverage market research to inform your business decisions

Doing market research is a powerful way to reduce the risk for your small business or startup. The more you know about your customers and your industry, the less likely you are to waste money on marketing and advertising campaigns that don’t reach the right people.

You probably already have a gut feeling about who your customers are and what their needs and pain points are. But taking the time to validate (or invalidate) your assumptions can make a big difference to your company’s bottom line and long-term viability. 

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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How to Do Market Research for Small Businesses

Market research is the process of organizing information about your target audience. It’s the single most important thing you can do to attract and delight customers, launch high-value products, and maintain a competitive edge. But, when you’re a small business owner, you’re juggling so many responsibilities that market research gets put on the backburner. Big businesses spend months and huge budgets to understand their customers, but small business owners have to be thriftier to understand their customers without access to big-budget resources. In this guide, we break down exactly how you can conduct market research to grow your small business with minimal investments in time and budget.

Define your buyer personas

A buyer persona is a fictional, descriptive profile used to target people most likely to become loyal customers. Buyer personas tell you who your customers are, their interests, behaviors, and spending patterns. Understanding your customers as humans and not just a set of data helps you to create content and messaging tailored to their specific needs. For example, if you own a dog food company, your buyer persona might highlight someone named “Eric.” Eric is 36 years old and works as a field engineer in Indianapolis. He wants to keep his dog healthy, but his job is stressful and time-consuming, so he doesn’t have a lot of time to take his dog on walks. Eric needs to buy dog food he can trust to be made with whole foods, tastes good to his pet, and is affordable for his income level.

Even though the person in your buyer persona isn’t real, you want to treat them as a model customer. Give them a name, and add details about their life like age, location, interests, and buying behaviors. If it’s helpful, you can also find a stock photo of a person who embodies your ideal customer as a handy visual. Be sure to include common pain points faced by your persona, so you can determine any niche markets your product can fill. Aim to keep your buyer personas limited to no more than five. Having more than one type of buyer persona is perfectly fine, but it's important you’re realistic about who you're able to effectively reach when developing a marketing campaign.

Analyze your competition

Competitor analysis is an exercise in unpacking who your top competitors are and what makes them successful (or not successful) in engaging with your potential customers. Understanding the ways other businesses are successful will help you make informed decisions and identify ways you can outperform the competition. Conducting a competitor analysis involves a little bit of research. Get started by identifying both local and online businesses that compete with your own. Comb through their website and other marketing channels to examine their customer-facing experience, taking a close look at:

• Website performance: Do the pages load quickly? Is it easy to navigate?
• Social media platforms: How do they engage with their followers?
• Pricing structure: How much do they charge for products and services? Are their prices appropriate for the audience?
• Reviews: How do their customers feel about them? Keep in mind businesses with higher reviews are your stronger competitors.

Gather information about your competitors with our Competitor Analysis Google Sheets template , using it to pinpoint trends and see comparisons between businesses.  

Ask your most loyal customers what they love about your business

One valuable way to learn what’s working, or not working, among your most valuable customers is to go straight to the source: the people who are already buying from you. These are the people who embody your ideal customer base. We’re willing to bet these customers also look a lot like one of your buyer personas. Luckily, with the advent of social media and digital technology, it’s easy and cost-effective to talk with customers directly.

Ask for customer feedback with surveys

Businesses that collect feedback make more informed decisions because they’re able to address the biggest issues that impact their customers. A recent SurveyMonkey study found 83% of small businesses that self-identify as “successful” measure customer satisfaction. Use a survey software like SurveyMonkey to follow up with customers after they make a purchase. Keep your surveys short and simple — between 5 and 10 multiple choice or short answer questions. Always follow up with negative respondents to offer a solution.

Read customer reviews

Online reviews are powerful ways to build customer trust. Data from ReviewTrackers shows that 94% of consumers will decide to not engage with a brand after reading a negative review, making a convincing argument to stay on top of your positive and negative reviews. Check online reviews once or twice a week to stay in control of your online reputation. Respond to positive reviews to thank happy customers for supporting your business, and respond to negative reviews to resolve issues if possible. Always offer an apology for a bad experience regardless of whether the problem is solvable. Four websites control about 88% of all online reviews : Google, Yelp, TripAdvisor, and Facebook. If you have a Google for Business account , you can reply to reviewers, but keep in mind your response will be public.

Use social media to talk with your audience directly

Social media marketing lets businesses connect directly with their audience. It’s a free way to build a brand, generate sales, and drive tons of traffic to a website using engaging content. Instagram makes it easy to connect with your audience with interactive features designed for Stories like stickers, question prompts, and quizzes. Use these features to talk to your followers, asking them to weigh in on your products and services. For example, if you’re a skincare company and you want to pick up a new vendor, use a Question sticker to ask your followers what their favorite product is. Your followers can introduce you to new brands you may not have considered before.

Goldune is a new sustainability company that sells products to environmentally conscious consumers. Even though Goldune has only been around for about one year, they’ve grown a strong community-based following thanks to their crowd-sourced approach to social media . Goldune has become a master at leveraging Instagram Stories to learn from their followers about the products they carry and brands they should work with.

Calculate your Net Promoter Score (NPS)

Your Net Promoter Score, or NPS , is a metric you use to gauge the overall quality of your customer experience and understand how customers feel about your business. You can calculate NPS by gathering feedback from your existing customers about their likelihood to recommend your products. It’s a common practice for businesses to survey their customers via email after making a purchase. For example, say you recently purchased a pair of eyeglasses online from Warby Parker. In the confirmation email for that purchase, they ask you, “On a scale of 0–10, how likely are you to recommend Warby Parker to a friend?” Your numerical response helps Warby Parker calculate their NPS, giving them a snapshot of your customer experience.

To calculate your NPS, create an email survey for your customers to send out after each purchase. Once you’ve collected responses, tally the answers into the following categories:

• Detractors: Those with a score between 0 - 6
• Passives: Those with a score between 7 - 8
• Promoters: Those with a score of 9 -10

Next, subtract the percentage of the detractors from the percentage of the promoters (passives aren’t used for NPS). The answer is your NPS. Total % Promoters  – Total % Detractors = Net Promoter Score (NPS) For example, if you have 20% of respondents who are detractors and 60% who are promoters, your NPS would be: 60 - 20 = 40 Your NPS can range between -100 and 100. In an ideal world, you want your NPS to be as close to 100 as possible. Remember, NPS is simply an indicator of your overall customer experience. So, a high score means your customers are generally pleased with your products and services — and the opposite goes for a low score. Improve your NPS by reaching out to passives and detractors to ask them about their experience and how you can do better.

Pull all your data together into a market research report

Data without analysis is totally useless to you. That’s why we recommend pulling together your findings into a document that summarizes your research and highlights action items. A market research report lets you organize your buyer personas, competitor analysis, customer feedback, and any additional findings into one simple document. We recommend following a basic outline:

• Executive Summary: Include an introduction that gives a high-level view of the report and your findings.
• Background : Explain the goals of your research and the methods you used to collect data.
• Buyer Personas: Include an introduction that explains how you came to develop your personas and why they’re relevant to your brand.
• Key findings from competitor analysis: Pinpoint trends, like similar price points for products or strong social media presence across multiple companies. You can also identify gaps in the market your business can fill.
• Key findings from customer outreach: Look for trends in customer feedback, like customers wanting a faster response time or wanting a discontinued product to come back in stock.
• Next steps and recommendations: Call out any action items that can inform your marketing strategy.

This format will help you make the most of your market research and let you create a tactical plan to reach your ideal customers.

Use market research to grow your small business

After you’ve uncovered major discoveries about your customers and what they want, apply what you’ve found to your marketing channels. You can always tweak language on your website, update branding materials, and rework content — but one of the easiest things you can do is create a simple website with Buffer’s new Start Page tool. Start Page is a great interim tool you can use while you overhaul your actual website, so you never have any downtime. If you don’t have a website yet, Start Page is a clean, easy-to-use, and customizable option to get you started.

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Small Business Hub: A Research Guide for Entrepreneurs

Market research.

• Introduction
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• Using the Library of Congress

Research the industry trends, competition, and potential consumers to find where your business idea fits in the market.

Starting points:

• Identify the industry or industries your business will be in, then find an industry report for the closest related industry. What are the current trends?
• Find a competitor. What are their strengths and weaknesses?
• Using market research, identify a target market. What need does your product or service meet?

Suggested strategies:

• If you can't pinpoint an industry, try looking up a company that is similar and see what industries it is in. 
• Looking for a niche industry? Look at broader industries in addition to searching trade publications for articles. 
• When looking for data, consider who might collect that information: Government agencies? Industry associations? Research centers?

Select Resources

• Available at the Library of Congress
• Free Online Resources
• Related Research Guides

The following materials link to fuller bibliographic information in the Library of Congress Online Catalog . Links to additional online content are provided when available.

These are freely available online sources provided by government agencies, trade publications, and organizations.

• Census Business Builder, U.S. Census The Census Business Builder (CBB) is a suite of services that provide selected demographic and economic data from the Census Bureau tailored to specific types of users in a simple to access and use format.
• Consumer Expenditure Surveys, Bureau of Labor Statistics The survey provides information on how much consumers spend on a variety of product categories, based on age, occupation, income, and other demographics.
• QuickFacts, U.S. Census Bureau This site includes data on U.S. population and demographics, housing, and businesses.

The following guides were created by the Library of Congress to give an in-depth list of resources on a specific topic. 

• Doing Company Research This guide provides ideas and strategies for researching companies, with a focus on more common sources that may be of use for those looking for information on companies that are active and for those looking for current information.
• Doing Industry Research This guide is designed as a starting point for those looking for current information on industries. In addition, some historical sources are also included.
• Doing Consumer Research Consumer research involves finding data on consumer behaviors or preferences, in order to establish a target market segment for products or services. This guide provides links to a wide variety of useful resources for your research.
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Ownr Blog  > Ownrship 101  > Business Stages  > Growing Your Business  > Levelling Up  > Market Research for Small Business: What It Is and Key Goals

Market Research for Small Business: What It Is and Key Goals

Entrepreneurs have to wear a lot of different hats and it’s easy for market research to take a back seat to the day-to-day operations of your business. But market research is one of the most important things you can do to attract and retain customers, maintain a competitive edge, and increase your business revenue over time. 

You may think of market research as being reserved for large companies, but everyone from solopreneurs to multinational corporations can benefit from data-driven insights. 

Whether you’re running a restaurant or selling your art online , market research is an important tool in business planning, effectively marketing your business and standing out against your competitors. Here’s how market research can help you achieve your business goals and earn greater revenue. 

• What is market research?

Market research is the activity of collecting information about your target market and potential customers. A critical part of any business plan , market research helps you better understand your industry and more accurately predict if your small business can be profitable.

Ownr’s free business plan generator, Blueprint , makes your competitive analysis a breeze. Our easy-to-follow module will help you identify your competitors strengths and weaknesses, and communicate your market position in a way that’s easy to understand. Your market research is included in your polished, professional business plan, along with all the other information to get you in prime position for growth.

Even if you bring previous industry experience to your small business, market research is essential to help you look past any biases or unconscious assumptions you may have. It allows you to connect your instincts with real-world data, and can help you avoid potentially costly business pitfalls. 

• When to conduct market research

Market research is an important step for new business owners. You may think you have a brilliant idea for a product or service, but it’s wise to determine if there’s a market opportunity for it before you financially invest. Conducting market research early in your business development process can also help shape many key elements of your initial business plan, such as how you intend to reach your target customers and how much to charge for your product or services. 

But market research isn’t just for new business owners––in fact, it’s an essential part of any long-term business plan. You can revisit your market research when moving into new markets, as well as when planning the launch of new products or services. Even if you’re not expanding your business, periodic market research helps your business stay competitive and relevant as your industry and consumer needs evolve over time. It will help maximize your business revenue and keep your customers coming back year after year. 

• Types of market research

Market research can be broadly categorized into main types: primary and secondary. 

Primary market research is first-hand research that you conduct about your existing customers and potential customers. Primary market research typically involves tactics like surveys, interviews, and field trials in which you release a new product or service on a small scale so you can observe how your target market responds. This type of research is particularly helpful in developing and refining your customer personas, as well as identifying gaps or issues in your current offering that, if addressed, could increase revenue for your small business. 

Secondary market research draws on research already organized and published by others, such as trend reports, market statistics, or studies released by trade associations. Market research often involves a combination of primary and secondary research, but if you’re working with limited time or a tight budget, you’ll likely rely more on secondary market research. Secondary research can be especially useful in analyzing the business models of your competitors. 

• Small business market research goals

When getting started with your market research plan, it can be helpful to outline your market research objectives. A clear sense of how market research aligns with your big-picture business goals can guide you to hone your strategy for collecting and using data about your target market. Let’s take a closer look at some of the goals you may have in mind as you begin to research market opportunities for your small business. 

1. Learning about your competition

Competitor analysis involves identifying similar businesses that are top competitors for your target customers, and then examining the strategies they employ to connect with your audience. 

If you don’t know who your competitors are, start by researching businesses that offer similar products or services to your own. Once you have a list of competitors, you can start to analyze and learn from the tactics they use to reach your potential customers. You can check out their website and social media platforms, study their marketing and advertising campaigns, look into their pricing structure, or read reviews left by their customers. 

This research can help you recognize gaps in your current business offerings or potential areas of opportunity. For example, you may notice that your competitors’ websites are more user-friendly than your own and decide to invest in an upgrade, or you may find that you need to rethink your pricing structure if your competitors offer better value. Whether you’re an established small business owner or new to the game, market research on your competitors can spark ideas for honing your business plan.

You can also learn from your competitors’ mistakes. For example, if they released a similar product or service to one you’re considering offering and it didn’t work out for them, you can save time and money by not investing in those same strategies. 

Competitor analysis can also provide insight into what sets you apart from your competitors and what you can do to make your business stand out. When you have a clear sense of what makes your business unique, you can emphasize what makes your business better than its competitors when you market to potential customers.

• 2. Understanding your current customers

Your existing customers are an invaluable resource for understanding how to reach new potential customers. Market research can provide key insights into your customer demographics, what they value about your product, what influences their buying decisions, and where they spend time online. 

To gather this data, you can request customer feedback via email surveys, ask your customers questions via your business’ social media channels, or read reviews of your product or service left by customers. Survey your customers to understand what their challenges are and what they want from your product or service. This research can help you refine your customer profile, so you can market more effectively to your audience. It can also help you strategize on how to keep your current customers happy and encourage previous customers to buy from your business again and again. 

• 3. Identifying new potential customers

Market research can help you flesh out your customer personas and better understand the needs of your target market. Anyone who matches one of your buyer personas represents a potential new customer. This knowledge is critical to your marketing strategy because it helps you create messaging and products that address the needs of your potential customers. 

Market research can also help you discover unreached customer segments that could benefit from your product or service who may not know about your brand yet. There could be customers with certain needs or who fall within a particular demographic that you hadn’t considered in your initial business plan. With a few tweaks to your business’ offerings or marketing strategy, you could reach a whole new customer base and be on your way toward greater revenue. 

• 4. Improving your products and services

Market research can uncover potential shortcomings in your product or service that, if remedied, could improve your revenue and customer satisfaction. 

If your small business creates a product, investigate if its function, appearance, and packaging appeal to your customers. If you offer a service, evaluate if there are gaps in the way that service is delivered, or if there are unnecessary elements of the service you can eliminate.

This type of research is particularly helpful if you launch a new product, because you’ll want to verify that a market opportunity exists before committing to pricey production costs or dedicating your time to planning a new service. 

For example, maybe the market size for your new product idea isn’t large enough to be profitable, but you instead discover there’s a different type of product for which there is high customer demand. Market research hones in on what your customers truly want and need, rather than what you think they do. There could be upsells, product bundles, or other enhancements to your product or service that you hadn’t even considered, but could potentially increase your profits. 

For both current and potential products and services, market research can help you evaluate if your price is competitive. You might realize that your customers are willing to pay more for your product or service and you could generate more revenue with a strategic price adjustment. 

• 5. Refining your brand positioning and marketing 

Market research can give you the knowledge you need to better position your brand and make a more meaningful impact on your target audience . Investigate your target audience’s familiarity with your brand, as well as the associations that come to mind when they think about your business.

It can also be helpful to gather feedback on your brand assets, such as your logo, website, and social media feeds. This feedback can guide you to modify elements of your design and brand voice in order to form a stronger connection with your customers and make a positive impression. 

If you’ve been running your business for some time, you can also narrow your focus to look at the effectiveness of prior marketing campaigns. Collect feedback from customers about their reactions to your marketing messages, and examine technical data such as how many people viewed your ads and the click-through rate on particular campaigns. 

This analysis can help you understand what kind of marketing messages reach and resonate with your audience, so you can create more impactful campaigns in the future, as well as maximize your marketing budget by funnelling funds to the channels that offer the highest return on investment. 

• 6. Staying on top of trends

Whether you’re a new entrepreneur or a seasoned veteran, your business goals need to continually evolve in order to succeed over the long term. It’s important to stay aware of trends around consumer purchasing behaviour, popular social media and advertising platforms , new technology relevant to your product or service, and other factors related to your specific product or service.

Market research around trends in your industry may inspire changes to many different elements of your business, from the products and services you offer to how you communicate with your customers. By staying ahead of the trends, your small business can gain a competitive advantage and you’ll put yourself in a better position for business growth and to continually expand your revenue. 

• 7. Making informed decisions

Market research allows you to make decisions based on data, rather than instincts. It allows you to make choices about the direction of your business with more confidence that you’ll get it right the first time, instead of relying solely on gut instincts. 

Whether you’re launching a new product or thinking about a rebrand, you might have a hunch about what your customers want and what will lead to success, but market research offers evidence about whether or not you’re headed in the right direction. You can feel more certain that your target customers will positively respond to any changes you implement. 

Ultimately, having an excellent product or service doesn’t guarantee your business will succeed if you don’t have a clear picture of why you’re offering it and who you’re offering it to. Market research allows you to confirm and improve your business idea and make the most of your entrepreneurial venture. 

This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.

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Start » strategy, what is research and development .

Research and development provides businesses with the information they need to successfully bring their products or services to market.

In any industry, even the most revolutionary products and services are rarely fully conceptualized on day 1. Most often, success in the market stems from extensive, effective research and development (R&D). This is especially true for small businesses, which contribute a significantly higher percentage of sales to R&D work than larger businesses.

Here’s everything you need to know about R&D and why it’s well worth the investment.

What is research and development?

R&D refers to the various activities businesses conduct to prepare new products or services for the marketplace. Businesses of all sizes and sectors can partake in R&D activities, though the amount of investment can vary. For example, technology and health care companies tend to have higher R&D expenses , as do enterprises with larger budgets.

Typically the first step in the development process, R&D is not expected to yield immediate profits. Rather, it focuses on innovation and setting up a company for long-term profitability. During this process, businesses may secure patents, copyrights, and other intellectual property associated with their products and services.

At larger companies, R&D activities are often handled in-house by a designated R&D department. However, some smaller companies may opt to outsource R&D to a third-party research firm, a specialist, or an educational institution.

[Read more: 7 Ways to Find Small Business Grant Opportunities ]

Types of research and development

R&D activities typically fall into one of three main categories:

• Basic research: Basic research, sometimes called fundamental research, aims to provide theoretical insight into specific problems or phenomena. For example, a company looking to develop a new toy for children might conduct basic research into child play development.
• Applied research: This type of research is practical and conducted with a specific goal in mind, most often discovering new solutions for existing problems. The children’s toy company from the previous example might conduct applied research into developing a toy that facilitates play development in a new or improved way.
• Development research: In development research, researchers focus exclusively on applied research to develop new products and improve existing ones. For example, a team of development researchers may test the hypothetical company’s new toy or implement feedback obtained from customers.

Small businesses have limited resources. They don’t have that endless budget that the Fortune 500 company has, which means the small business will have to get creative to conduct worthwhile research and development.

Becca Hoeft, CEO and Founder of Morris Hoeft Group

Why invest in research and development?

While R&D can require a significant investment, it also yields several advantages. Below are four specific areas where your business can benefit by conducting R&D.

New products

R&D supports businesses in developing new offerings or improving existing ones based on market demand. By conducting research and applying your findings to your final product, companies are more likely to develop something that meets customers’ needs and performs well in the marketplace.

R&D can help businesses understand their place in the market as well as identify inefficiencies in their workflows. Insights from R&D activities can illuminate ways to improve operations as well as where to most effectively allocate resources, increasing overall efficiency.

Cost reductions

While developing a well-researched product or service that performs well is likely to maximize profit, R&D aimed at improving internal processes and technologies can reduce the cost of bringing products and services to market.

Businesses that invest in R&D may be eligible for specific tax incentives. For one, the federal R&D tax credit offers a dollar-for-dollar reduction in tax liability for businesses that partake in various research-based activities. Eligible companies can apply for this credit by submitting Form 6765 with their business taxes.

[Read more: How to Seek Funding for Your Invention ]

Overcoming the challenges of small business R&D

According to Becca Hoeft, CEO and Founder of Morris Hoeft Group , small businesses may face numerous challenges related to R&D that their larger counterparts might not experience.

“Small businesses have limited resources,” said Hoeft. “They don’t have that endless budget that the Fortune 500 company has, which means the small business will have to get creative to conduct worthwhile research and development.”

While R&D funding is available through various government grants, university programs, and research institutions, Hoeft noted that it may take some time and strategic planning to obtain it. She recommended that small business owners start talking publicly about what kind of research they are doing and what they need to conduct it.

“Don’t hide under a rock and expect money to magically appear,” Hoeft told CO—. “Get on a stage at a relevant conference [or] start a blog series about your idea.”

Keep in mind that once you start sharing your ideas and what you want to research, “it’s out there in the universe,” said Hoeft. Therefore, protecting your intellectual property before you begin and during the research process is extremely important.

“Ensure your trademarks, patents, and copyrights are in place to protect you and your small business,” Hoeft added.

[Read more: How to Qualify for and Claim the R&D Tax Credit ]

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Market Research for Small Businesses: The Key to Success

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As a small business owner, you know how competitive the market can be. You need to find ways to differentiate yourself from your competitors and attract customers. This is where market research comes in.

It provides you with valuable insights into your target audience, competition, and market trends, which can help you make informed decisions about your products and services. In this article, we will explore the importance of market research for small businesses and provide practical tips on how to conduct it effectively.

Why Market Research is Important for Small Businesses

Conducting a market analysis for small businesses, conducting a competitor analysis for small businesses, conducting a customer analysis for small businesses, how to conduct online surveys for small business market research, analyzing market research data for small businesses, how to segment your market for small business success, how to build a strong brand for your small business, market research and business plan writing services.

Market research is the process of gathering and analyzing data to inform business decisions. It involves collecting information about customer needs, preferences, and behaviors, as well as market trends and competition.

For small businesses, market research is particularly important because it helps them understand their target market and make informed decisions about their products and services.

By conducting market research, small businesses can identify potential opportunities for growth and development, make data-driven decisions, and ultimately increase their chances of success. While it can be time-consuming and expensive, it is worth the investment for small businesses looking to succeed in the market.

A market analysis is an important part of market research, as it provides an overview of the industry, market size, trends, and potential opportunities and challenges. Here are the steps to follow when conducting a market analysis for your small business:

• Define your market: Identify the specific market you are targeting, such as geographic location, demographics, psychographics, and buying behavior.
• Analyze the market size and growth potential: Determine the size of your target market and its potential for growth. Look at historical data and current trends to predict future growth.
• Research competition: Identify and research your competitors, including their strengths, weaknesses, and market share. This will help you understand how you can differentiate your business from competitors.
• Analyze market trends: Look at trends in the industry and market, including consumer behavior, new products and services, and changes in technology.
• Identify potential barriers to entry: Determine any potential obstacles to entering the market, such as regulatory requirements, high costs, or strong competition.

By conducting a thorough market analysis, small businesses can identify potential opportunities and challenges and develop effective strategies to succeed in the market.

Analyzing your competitors is a critical part of market research for small businesses. By understanding your competitors’ strengths, weaknesses, and strategies, you can identify opportunities to differentiate your business and gain a competitive advantage. Here are the steps to follow when conducting a competitor analysis:

• Identify your competitors: Make a list of your direct and indirect competitors, including their strengths, weaknesses, and market share. Analyze their products and services: Look at the products and services your competitors offer, their quality, pricing, and marketing strategies. Evaluate their strengths and weaknesses: Identify your competitors’ strengths, such as brand recognition or distribution channels, and weaknesses, such as poor customer service or low product quality. Look at their marketing and advertising: Analyze your competitors’ marketing and advertising strategies, including their messaging, channels, and target audience. Identify opportunities and threats: Based on your analysis, identify potential opportunities to differentiate your business and gain a competitive advantage, as well as potential threats to your business.

By conducting a competitor analysis, small businesses can develop effective strategies to differentiate themselves and gain a competitive advantage.

You can download the free swot analysis examples to conduct a competitive analysis.

Understanding your customers’ needs, preferences, and behavior is crucial for small businesses looking to succeed in the market. By conducting a customer analysis, small businesses can gain insights into their customer’s buying behavior, attitudes, and preferences. Here are the steps to follow when conducting a customer analysis:

• Identify your target audience: Determine the specific group of customers you want to target, including demographics, psychographics, and behavior.
• Conduct market research: Gather data on your customers’ buying behavior, preferences, and attitudes. You can use surveys, focus groups, or online analytics tools to gather this information.
• Analyze the data: Once you have gathered the data, analyze it to identify patterns and trends. Look for commonalities in your customers’ behavior, preferences, and attitudes.
• Create customer personas: Based on the data you have gathered, create customer personas to represent your target audience. This will help you understand your customers better and create targeted marketing strategies.
• Use the insights to improve your marketing strategy: Use the insights gained from your customer analysis to create more effective marketing strategies. For example, if you learn that your customers value sustainability, you can incorporate sustainable practices into your business and marketing strategies.

By conducting a customer analysis, small businesses can gain valuable insights into their target audience, which can inform their marketing and business strategies.

Online surveys are a cost-effective and efficient way to gather data from customers and potential customers. Here are the steps to follow when conducting online surveys for small business market research:

• Define your survey objectives: Determine the specific information you want to gather through the survey, such as customer preferences or satisfaction.
• Choose an online survey tool: There are many online survey tools available, such as SurveyMonkey or Google Forms. Choose one that meets your needs and budget.
• Create your survey questions: Create clear and concise survey questions that will provide the information you need. Avoid leading or biased questions.
• Test your survey: Before sending out your survey, test it with a small group of people to identify any errors or confusion.
• Distribute your survey: Send your survey to your target audience through email, social media, or your website.

By conducting online surveys, small businesses can gather valuable data from their target audience and use it to inform their business decisions and strategies.

Once you have gathered market research data, it is essential to analyze it to identify patterns and trends. Here are the steps to follow when analyzing market research data for small businesses:

• Identify patterns and trends:  Look for commonalities in the data, such as trends in customer preferences or behavior
• Identify patterns and trends: Look for commonalities in the data, such as trends in customer preferences or behavior. Use charts, graphs, or tables to help identify patterns and trends.
• Segment the data: Segment the data based on variables such as demographics or behavior. This will help you understand how different groups of customers behave or what their preferences are.
• Compare the data: Compare the data from different sources, such as online surveys and focus groups, to identify similarities and differences.
• Draw conclusions: Based on your analysis, draw conclusions about your target audience, competition, and market trends. Use this information to inform your business decisions and strategies.

By analyzing market research data, small businesses can gain valuable insights into their target audience, competition, and market trends, which can inform their business decisions and strategies.

Segmenting your market involves dividing your target audience into smaller groups based on specific characteristics, such as age, income, or behavior. Here are the steps to follow when segmenting your market for small business success:

• Define your target audience: Identify the specific group of customers you want to target.
• Determine your segmentation criteria: Choose the specific criteria you want to use to segment your market, such as demographics, psychographics, or behavior.
• Gather data: Gather data on your target audience that will allow you to segment them according to your criteria. You can use surveys or focus groups to gather this information.
• Segment your market: Segment your market based on your criteria. You can use software tools or manual methods to segment your market.
• Develop targeted marketing strategies: Once you have segmented your market, develop targeted marketing strategies for each segment. For example, if you are targeting different age groups, you might develop different marketing strategies for each group.

By segmenting their market, small businesses can create targeted marketing strategies that are more effective in reaching their target audience.

Building a strong brand is essential for small businesses looking to differentiate themselves from their competitors and attract customers. Here are the steps to follow when building a strong brand for your small business:

• Define your brand identity : Determine the unique characteristics that define your brand, such as your mission statement, values, and personality.
• Develop your visual identity: Create a visual identity that reflects your brand, such as your logo, color scheme, and typography.
• Create brand messaging: Develop messaging that communicates your brand identity and resonates with your target audience.
• Consistently communicate your brand: Ensure that all aspects of your business consistently communicate your brand, including your website, social media, and marketing materials.
• Build brand recognition: Use marketing strategies to build brand recognition, such as advertising or influencer marketing.

By building a strong brand, small businesses can differentiate themselves from their competitors and build brand loyalty among their target audience.

If you’re a small business owner looking to conduct market research or write a business plan , you may want to consider working with a professional service provider.

Market research services can help you gather and analyze data about your target audience, competition, and industry trends, while business plan writing services can help you create a comprehensive plan for starting or growing your business.

Working with a market research or business plan writing service can save you time and ensure that you are making informed decisions based on reliable data and expert analysis. Additionally, these services can provide you with valuable insights and recommendations that you may not have considered otherwise.

When choosing a market research or business plan writer , be sure to look for a provider with a proven track record of success and experience in your industry. You may also want to consider the cost and level of customization offered by the service, as well as the qualifications and expertise of the team.

Overall, investing in market research and a well-written business plan can help you set your small business up for success and achieve your goals in the competitive market.

In conclusion, market research is essential for small businesses looking to succeed in today’s competitive market. By conducting market analysis, customer analysis, and competitor analysis, small businesses can gain valuable insights into their target audience, competition, and market trends, which can inform their business decisions and strategies.

Additionally, by segmenting their market and building a strong brand, small businesses can differentiate themselves from their competitors and attract customers. While market research can be time-consuming and expensive, it is worth the investment for small businesses looking to succeed in the market.

Looking for a business plan advisor?

Hire our professional business plan advisors now!

Small businesses can use a variety of cost-effective market research methods such as online surveys, customer feedback forms, focus groups, and social media listening to gather insights about their target audience.

Small startups can conduct market research by identifying their target audience, collecting data through surveys, analyzing competitors’ strengths and weaknesses, and testing their product/service in the market to get feedback.

The four types of market research include exploratory research, descriptive research, causal research, and predictive research. Each type helps in understanding different aspects of the market and consumer behavior.

Market research helps small businesses understand their target audience, identify market trends, analyze the competition, and make informed decisions about their products, pricing, and marketing strategies. It helps them minimize risks and maximize profits.

A common example of market research is conducting a customer satisfaction survey to gather feedback on product quality, customer service, and pricing. This data can then be used to improve the product and customer experience.

Market research can be done through primary research (surveys, focus groups, interviews, observations) and secondary research (industry reports, government publications, online databases). The data is then analyzed and used to make informed business decisions.

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Active funding opportunity

Nsf 24-582: nsf small business innovation research / small business technology transfer fast-track pilot programs (sbir-sttr fast-track), program solicitation, document information, document history.

• Posted: June 17, 2024

Program Solicitation NSF 24-582

Full Proposal Deadline(s) (due by 5 p.m. submitting organization’s local time):

     September 18, 2024

     November 06, 2024

     March 05, 2025

     July 02, 2025

     November 05, 2025

Important Information And Revision Notes

The NSF SBIR/STTR Fast-Track programs (also known as America’s Seed Fund powered by NSF) provide non-dilutive, fixed amount cooperative agreements for the development of a broad range of technologies based on discoveries in science and engineering with the potential for societal and economic impacts .

This new pilot effort shares the same goals as the NSF SBIR/STTR Phase I and Phase II funding opportunities, but the NSF SBIR/STTR Fast-Track pilot programs have different eligibility requirements. Small businesses applying to the NSF SBIR/STTR Fast-Track pilot programs must have a lineage of NSF research funding, at least one Senior/Key Personnel to have undergone formal customer discovery training, and the entire team must already be in place (not yet to be determined) at the time of proposal submission. For further information see Eligibility Criteria.

The maximum total SBIR/STTR Fast-Track award amount is $1,555,000 (inclusive of direct and indirect costs, Technical and Business Assistance (TABA) funding, and the small business fee) : $400,000 maximum for the Phase I component and $1,155,000 maximum for the Phase II component. The expected project duration will be between 24 months and 36 months. The duration of a Phase I component can be between 6 months and 12 months, to be specified by the company. The duration of a Phase II component can be between 18 months and 24 months, to be specified by the company.

NSF proposals are confidential and will only be shared with a select number of reviewers and NSF staff (as appropriate). All reviewers have agreed to maintain the confidentiality of the proposal content. Proposals to NSF do not constitute a public disclosure. If selected for an award, the company will be prompted to write a publicly available abstract that summarizes the intellectual merit and broader impact of the project.

The NSF SBIR/STTR Fast-Track pilot programs do not support clinical trials or proposals from companies whose commercialization pathway involves the production, distribution, or sale by the company of chemical components, natural or synthetic variations thereof, or other derivatives related to Schedule I controlled substances.

All proposals must be submitted through Research.gov .

NSF SBIR/STTR Fast-Track pilot proposals will not be accepted in Grants.gov. NSF Fast-Track SBIR and STTR pilot proposals are nearly identical but differ in the amount of work performed by the small business and a not-for-profit institution or a Federally funded research and development center (FFRDC) (as noted in the budget). For more details about the unique requirements of NSF STTR Fast-Track pilot awards, please refer to the Eligibility Information and Proposal Preparation and Submission Instructions sections of this solicitation.

NSF SBIR Fast-Track Pilot proposals submitted to this solicitation that meet all the requirements of an NSF STTR Fast-Track pilot proposal may, at NSF’s discretion, be converted to NSF STTR Fast-Track pilot proposal for award. Similarly, NSF STTR Fast-Track pilot proposals may be converted to NSF SBIR Fast-Track pilot awards at NSF’s discretion.

America’s Seed Fund powered by NSF is committed to assisting SBIR/STTR Phase II recipients to successfully commercialize their innovation research, grow their company and create jobs by attracting new investments and partnerships. To reinforce these commitments, the programs support a broad number of supplements and other opportunities . For more information, see: Supplemental Funding Overview , and the linked Dear Colleagues Letters.

• Funding Agreement : As used in this solicitation, the funding agreement is a Grant – a legal instrument of financial assistance between NSF and a recipient, consistent with 31 USC 6302-6305 and as noted in the NSF Proposal & Award Policies & Procedures Guide (PAPPG) Introduction, Section D ("Definitions & NSF-Recipient Relationships").
• Small Business Concerns (SBCs) : SBCs are independently owned and operated businesses that are not dominant in the field of operation. For this solicitation, firms qualifying as a small business concern are eligible to participate in the SBIR/STTR programs (see Section II. "Eligibility Information" of this solicitation for more details). Please note that the size limit of 500 employees includes affiliates. The firm must be in compliance with the SBA SBIR/STTR Policy Directive and the Code of Federal Regulations (13 CFR 121) .
• SBIR/STTR Data : As defined by the SBA SBIR/STTR Policy Directive , SBIR/STTR Data is all Data developed or generated in the performance of an SBIR or STTR award, including Technical Data and Computer Software developed or generated in the performance of an SBIR or STTR award. The term does not include information incidental to contract or grant administration, such as financial, administrative, cost or pricing or management information.
• SBIR/STTR Data Rights : The Federal Government may, use, modify, reproduce, perform, display, release, or disclose SBIR/STTR Data that are Technical Data within the Government; however, the Government shall not use, release, or disclose the data for procurement, manufacturing, or commercial purposes; or release or disclose the SBIR/STTR Data outside the Government except as permitted by paragraph 10(B) of the SBIR/STTR Policy Directive 's Data Rights Clause or by written permission of the recipient.
• the application of creative, original, and potentially transformative concepts to systematically study, create, adapt, or manipulate the structure and behavior of the natural or man-made worlds;
• the use of the scientific method to propose well-reasoned, well-organized activities based on sound theory, computation, measurement, observation, experiment, or modeling;
• the demonstration of a well-qualified individual, team, or organization ready to deploy novel methods of creating, acquiring, processing, manipulating, storing, or disseminating data or metadata; and/or
• the novel integration of new theories, analysis, data, or methods regarding cognition, heuristics, and related phenomena, which can be supported by scientific rationale.
• Non-Dilutive Funding : financing that does not involve equity, debt, or other elements of the business ownership structure.
• Technical Risk : Technical risk assumes that the possibility of technical failure exists for an envisioned product, service, or solution to be successfully developed. This risk is present even to those suitably skilled in the art of the component, subsystem, method, technique, tool, or algorithm in question. If the new product, service, or solution is successfully realized and brought to the market, it would be difficult for a well-qualified, competing firm to reverse-engineer or otherwise neutralize the competitive advantage generated by leveraging fundamental science or engineering research techniques.
• Technological Innovation  indicates that the new product or service is differentiated from current products or services; that is, the new technology holds the potential to result in a product or service with a substantial and durable advantage over competing solutions on the market. It also generally provides a barrier to entry for competitors.

The proposal submission system, Research.gov, will stop accepting proposals at 5:00 pm submitting organization’s local time. If your submission is late, you will not be able to submit again until the next deadline. Proposers are strongly urged to submit well in advance of the deadline.

An Intellectual Property (IP) Rights agreement is required for STTR proposals and strongly recommended for SBIR proposals when there is a subaward to another institution . A fully signed agreement is not required for STTR proposals at the initial proposal submission but will be required before a recommendation for an award can be made.

A small business must receive an official invitation via the Project Pitch , a process to submit a full Fast-Track proposal. Details regarding this process as well as how to submit a Fast-Track Project Pitch can be found in Section III.A. of this document. Small businesses that meet the Fast-Track eligibility criteria can submit a Fast-Track Project Pitch at any time. Small businesses that have been invited to submit a full Fast-Track proposal can submit a proposal based on that Project Pitch at any time up to 4 months after the date of the invitation.

In addition to the standard NSF Merit Review Criteria, this solicitation provides additional clarification on how Intellectual Merit and Broader Impact might be applied to startups and small businesses. Additional solicitation-specific merit review criteria focused on Commercialization Potential is also applied.

Four documents: Biographical Sketch(es), Current and Pending (Other) Support forms, Collaborators and Other Affiliations (COA), and Synergistic Activities must be submitted for the PI, Co-PI (if STTR), and each Senior/Key Personnel specified in the proposal. Biographical Sketches and Current and Pending Support forms must be prepared using SciENcv: Science Experts Network Curriculum Vitae . Collaborators & Other Affiliations (COA) Information is prepared using the instructions and spreadsheet template .

Synergistic Activities. Each individual identified as a Senior/Key person must provide a document of up to one-page that includes a list of up to five distinct examples of synergistic activities that demonstrate the broader impact of the individual’s professional and scholarly activities that focus on the integration and transfer of knowledge as well as its creation.

In compliance with the CHIPS and Science Act of 2022 , section 10636 (Person or entity of concern prohibition; 42 U.S.C. 19235 ): No person published on the list under section 1237(b) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 ( Public Law 105-261 ; 50 U.S.C. 1701 note ) or entity identified under section 1260h of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 ( 10 U.S.C. 113 note ; Public Law 116-283 ) may receive or participate in any grant, award, program, support, or other activity under the Directorate for Technology, Innovation and Partnerships (TIP) .

In accordance with Section 10632 of the CHIPS and Science Act of 2022 (42 U.S.C. § 19232), the Authorized Organizational Representative (AOR) must certify that all individuals identified as Senior/Key Personnel have been made aware of and have complied with their responsibility under that section to certify that the individual is not a party to a Malign Foreign Talent Recruitment Program.

In accordance with Section 223(a)(1) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (42 U.S.C. § 6605(a)(1)), each individual identified as Senior/Key Personnel is required to certify in SciENcv that the information provided in the Biographical Sketch and Current and Pending (Other) Support documents are accurate, current, and complete. Senior/Key Personnel are required to update their Current and Pending (Other) Support disclosures prior to award, and at any subsequent time the agency determines appropriate during the term of the award. See additional information on NSF Disclosure Requirements in the PAPPG, Chapter II.B. Each Senior/Key Person must also certify prior to proposal submission that they are not a party to a Malign Foreign Talent Recruitment Program and annually thereafter for the duration of the award.

Three (3) Letters of Support from potential product/service users or customers are required; Up to five (5) Letters of Support may be submitted.

Letters of Commitment that confirm the role of any subaward organization(s) in the project and explicitly state the subaward amount are also required.

Additional information on the due diligence process , used as part of the review and selection process, is included in Section VI. The due diligence process may include requests for clarification of the company structure, key personnel, conflicts of interest, foreign influence, cybersecurity practices, or other issues as determined by NSF. Participation in the due diligence process is not a guarantee that an award will be made.

SBIR/STTR Fast-Track proposals that have been declined by NSF are NOT eligible for reconsideration . A decision by NSF not to provide additional funding following either the Stage Gate 1 or Stage Gate 2 review will NOT be eligible for reconsideration or termination review as defined in Chapter XII.A.4 of the PAPPG .

This solicitation contains many instructions that deviate from the standard NSF PAPPG proposal preparation instructions. In the event of a conflict between the instructions in this solicitation and the PAPPG, use this solicitation’s instructions as a guide.

Any proposal submitted in response to this solicitation should be submitted in accordance with the NSF Proposal & Award Policies & Procedures Guide (PAPPG) that is in effect for the relevant due date to which the proposal is being submitted. The NSF PAPPG is regularly revised and it is the responsibility of the proposer to ensure that the proposal meets the requirements specified in this solicitation and the applicable version of the PAPPG. Submitting a proposal prior to a specified deadline does not negate this requirement.

Summary Of Program Requirements

General information.

Program Title:

NSF Small Business Innovation Research / Small Business Technology Transfer Fast-Track Pilot Programs (SBIR-STTR Fast-Track)

The NSF SBIR/STTR and SBIR/STTR Fast-Track pilot programs support moving scientific excellence and technological innovation from the lab to the market. By funding startups and small businesses, NSF helps build a strong national economy and stimulates the creation of novel products, services, and solutions in private, public, or government sectors with potential for broad impact; strengthens the role of small business in meeting federal research and development needs; increases the commercial application of federally supported research results; and develops and increases the US workforce, especially by fostering and encouraging participation by socially and economically disadvantaged and women-owned small businesses. These NSF SBIR/STTR Fast-Track pilot programs provide fixed amount cooperative agreements for the development of a broad range of technologies based on discoveries in science and engineering with potential for societal and economic impacts. Unlike fundamental or basic research activities that focus on scientific and engineering discovery itself, the NSF SBIR/STTR Fast-Track pilot programs support the creation of opportunities to move use-inspired and translational discoveries out of the lab and into the market or other use at scale, through startups and small businesses. The NSF SBIR/STTR Fast-Track pilot programs do not solicit specific technologies or procure goods and services from startups and small businesses. Any invention conceived or reduced to practice with the assistance of SBIR/STTR funding is subject to the Bayh-Dole Act. For more information refer to SBIR/STTR Frequently Asked Questions #75 . NSF promotes inclusion by encouraging proposals from diverse populations and geographic locations. The traditional NSF SBIR/STTR programs include two funding Phases – Phase I and Phase II. All proposers to the programs must first apply for Phase I funding – there is no direct-to-Phase II option. Under a traditional NSF SBIR/STTR Phase I award, a small business can receive non-dilutive funding for research and development (R&D) to demonstrate technical feasibility over 6 to 12 months and then, after completion of a Phase I project, companies may apply for Phase II funding to further develop the proposed technology. There are significant benefits for SBIR/STTR Fast-Track recipients: the submission of only one proposal for Phase I and Phase II and a faster transition from Phase I to Phase II. While startups and small businesses face many challenges, NSF SBIR/STTR Fast-Track funding is intended to specifically focus on challenges associated with technological innovation; that is, on the creation of new products, services, and other scalable solutions based on fundamental science or engineering. A successful Fast-Track proposal must demonstrate how NSF funding will help the small business create a proof-of-concept or prototype by retiring technical risk. NSF seeks unproven, leading-edge, technology innovations that demonstrate the following characteristics: The innovations are underpinned and enabled by a new scientific discovery or meaningful engineering innovation. The innovations still require intensive technical research and development to be fully embedded in a reliable product or service. The innovations have not yet been reduced to practice by anyone and it is not guaranteed, at present, that doing so is technically possible. The innovations provide a strong competitive advantage that are not easily replicable by competitors (even technically proficient ones). Once reduced to practice, the innovations are expected to result in a product or service that would either be disruptive to existing markets or create new markets/new market segments. The NSF SBIR/STTR Fast-Track pilot programs focus on stimulating technical innovation from diverse entrepreneurs and start-ups by translating new scientific and engineering concepts into products and services that can be scaled and commercialized into sustainable businesses with significant societal benefits. The programs provide non-dilutive funding for research and development (R&D) of use-inspired scientific and engineering activities at the earliest stages of the company and technology development. During the course of the award, the emphasis is expected to shift from de-risking those aspects preventing the innovation from reaching technical feasibility and driving the intended impact to a greater focus on commercially relevant development activities that will allow the company to differentiate itself and drive new value propositions to the market and society. NSF encourages input and participation from the full spectrum of diverse talent that society has to offer which includes underrepresented and underserved communities. These NSF programs are governed by 15 USC 638 and the National Science Foundation Act of 1950, as amended ( 42 USC §1861, et seq. ). Introduction to the Program The NSF SBIR/STTR programs focus on stimulating technical innovation from diverse entrepreneurs and startups by translating new scientific and engineering discoveries emerging from the private sector, federal labs, and academia into products and services that can be scaled and commercialized into sustainable businesses with significant societal benefits. These NSF SBIR/STTR Fast-Track pilot programs enable companies based on previous NSF awards (NSF award lineage) to submit a single proposal that, if awarded, can provide a faster pathway from Phase I to Phase II funding. Receipt of full funding under the Fast-Track pilot programs is contingent on the results of a company’s Phase II transition review. The NSF SBIR/STTR Fast-Track pilot programs are part of the Directorate for Technology, Innovation and Partnerships (TIP) , which was recently launched to accelerate innovation and enhance economic competitiveness by catalyzing partnerships and investments that strengthen the links between fundamental research and technology development, deployment, and use.

Cognizant Program Officer(s):

Please note that the following information is current at the time of publishing. See program website for any updates to the points of contact.

NSF SBIR/STTR Inbox, telephone: (703) 292-5111, email: [email protected]

• 47.041 --- Engineering
• 47.049 --- Mathematical and Physical Sciences
• 47.050 --- Geosciences
• 47.070 --- Computer and Information Science and Engineering
• 47.074 --- Biological Sciences
• 47.075 --- Social Behavioral and Economic Sciences
• 47.076 --- STEM Education
• 47.079 --- Office of International Science and Engineering
• 47.083 --- Office of Integrative Activities (OIA)
• 47.084 --- NSF Technology, Innovation and Partnerships

Award Information

Anticipated Type of Award: Fixed Amount Cooperative Agreement

• Approximately 20 awards for SBIR Fast-Track, pending the availability of funds.
• Approximately 16 awards for STTR Fast-Track, pending the availability of funds.
• Approximately $31 M for SBIR Fast-Track
• Approximately $25 M for STTR Fast-Track

Estimated program budget, number of awards and average award size/duration are subject to the availability of funds.

Eligibility Information

Who May Submit Proposals:

Proposals may only be submitted by the following: Small businesses concerns must meet ALL of the following requirements: Proposers that have submitted a SBIR/STTR Fast-Track Project Pitch and received an official invitation from a cognizant NSF SBIR/STTR Program Officer within the 4 months preceding the proposal submission date. To start this process, proposers must first create a log in and submit a Project Pitch document via the NSF SBIR/STTR Fast-Track Project Pitch online form . The cognizant NSF SBIR/STTR Program Officer will use the Project Pitch to determine whether the proposed project is a good fit for the Fast-Track program. Companies qualifying as a small business concern are eligible to participate in the NSF SBIR/STTR Fast-Track pilot programs (see Guide to SBIR/STTR Program Eligibility for more information). Please note that the size limit of 500 employees includes affiliates. The firm must be in compliance with the SBIR/STTR Policy Directive and the Code of Federal Regulations . For STTR proposals, the proposing small business must also include a partner research institution in the project, see additional details below. The SBIR/STTR Fast-Track pilot effort shares the same goals as the NSF SBIR/STTR Phase I and Phase II funding opportunities, but the Fast-Track pilot programs have different eligibility requirements. Small businesses applying to the NSF SBIR/STTR Fast-Track pilot programs must have 1) a lineage of NSF research funding, 2) at least one Senior/Key Personnel to have undergone formal customer discovery training, and 3) the entire team must already be in place (not yet to be determined) at the time of proposal submission. If the small business concern does not meet all three of these criteria, their proposal will be transferred to the NSF SBIR/STTR Phase I program for consideration. Lineage Eligibility Requirement. The technical innovation in the Fast-Track proposal must be derived from a prior NSF research award that is either currently active or was active within the previous five years from the date of submission of the Fast-Track proposal. The Fast-Track Project Pitch and proposal must include the NSF award number and title of the research award that is relied upon to meet the lineage requirement. The Fast-Track proposal’s PI or at least one Senior/Key Personnel must have been supported under the lineage award. If the Fast-Track team member relied upon to meet the lineage requirement is named on the lineage award, no further documentation will be required. If not, the Fast-Track proposal must include a letter from the PI or a Co-PI of the lineage award confirming that either the PI or a named Senior/Key Personnel on the Fast-Track team was engaged in research undertaken under the lineage award. In addition to regular NSF research awards (e.g., CAREER, individual investigator awards, center/institute awards, etc.), Partnerships for Innovation (PFI) and NSF Graduate Research Fellowship Program (GRFP) awards do count as NSF lineage for SBIR/STTR Fast-Track eligibility. NSF Innovation Corps (I-Corps) and NSF SBIR/STTR awards do not count as NSF research lineage and do not convey SBIR/STTR Fast-Track eligibility . Formal Customer Discovery Eligibility Requirement. Companies must have received formal customer discovery training, defined as follows, within the previous two years from the date of the Fast-Track proposal submission. At least one of the Senior/Key Personnel on the Fast-Track proposal must have undergone formal customer discovery training in relation to the proposed technology via a suitably qualified program, such as the NSF I-Corps program or a program at an incubator or accelerator, with a result that at the start of the Fast-Track project the proposing company has a clear understanding of the product-market fit and initial target customers for the proposed technology. Complete Team Eligibility Requirement. Companies must have a complete Fast-Track team in place at the time of proposal submission – i.e., there must be no “to-be-determined” company personnel in budget lines A or B; all company personnel in budget lines A and B must have confirmed their availability for the proposed Fast-Track project per the proposed Phase I and Phase II component budgets; the proposing team must possess the required expertise to perform the proposed Fast-Track project; and the team members must dedicate sufficient time to the technical tasks that must be undertaken to achieve the objectives of the Fast-Track project. In compliance with the CHIPS and Science Act of 2022 , Section 10636 (Person or entity of concern prohibition; 42 U.S.C. 19235): No person published on the list under section 1237(b) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-261; 50 U.S.C. 1701 note) or entity identified under section 1260h of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note; Public Law 116-283) may receive or participate in any grant, award, program, support, or other activity under the Directorate for Technology, Innovation, and Partnerships. Individuals who are a current party to a Malign Foreign Talent Recruitment Program are not eligible to serve as a Senior/Key Person on an NSF proposal or on any NSF award made after May 20, 2024. See current PAPPG for additional information on required certifications associated with Malign Foreign Talent Organization. The Authorized Organizational Representative (AOR) must certify that all individuals identified as Senior/Key Personnel have been made aware of and have complied with their responsibility under that section to certify that the individual is not a party to a Malign Foreign Talent Recruitment Program. The small business concern’s R&D must be performed within the United States. Startups and small businesses funded by NSF must be majority U.S.-owned companies. The companies may not be majority-owned by one or more venture capital operating companies (VCOCs), hedge funds, or private equity firms. Proposals from joint ventures and partnerships are permitted, provided the proposing entity qualifies as a small business concern (see Guide to SBIR/STTR Program Eligibility for more information). “Collaborative Proposal from Multiple Organizations” (a special proposal type in Research.gov) are not allowed. Socially and economically disadvantaged small businesses and women-owned small businesses are also encouraged to apply.

Who May Serve as PI:

The primary employment of the Principal Investigator (PI) must be with the small business concern at the time of award and for the duration of the award, unless a new PI is approved by NSF. Primary employment is defined as at least 51 percent employed by the small business. NSF normally considers a full-time work week to be 40 hours and considers employment elsewhere of greater than 19.6 hours per week to be in conflict with this requirement. The PI must have a legal right to work for the proposing company in the United States, as evidenced by citizenship, permanent residency, or an appropriate visa. The PI does not need to be associated with an academic institution. There are no PI degree requirements (i.e., the PI is not required to hold a Ph.D. or any other degree). A PI must devote a minimum of three calendar months of effort per six months of performance to an NSF SBIR/STTR Fast-Track project.

Limit on Number of Proposals per Organization: 1

An organization must wait for a determination from NSF (e.g., award, decline, or returned without review) regarding a pending NSF SBIR/STTR Fast-Track pilot proposal before submitting a new Project Pitch in the next window. An organization that has submitted a traditional SBIR/STTR Project Pitch, received an invitation to submit a traditional SBIR/STTR Phase I proposal, or has a traditional SBIR/STTR Phase I proposal under review may not submit a Fast-Track Project Pitch until either the traditional SBIR/STTR Project Pitch has been declined (i.e., not invited) or the outcome of the invited traditional SBIR/STTR proposal submission has been made available to the organization. Proposals that have been Returned Without Review may be submitted using the same Project Pitch invitation (assuming that the proposal is received within 4 months of the original invitation).

Limit on Number of Proposals per PI or co-PI: 1

For NSF SBIR Fast-Track – 1 PI, co-PIs are not allowed. For NSF STTR Fast-Track - 1 PI and 1 Co-PI are required (the PI must be an employee of the proposing small business and the Co-PI must be part of the STTR partner research institution). An individual may be listed as the PI for only one proposal submitted at a time to the NSF SBIR/STTR programs (including traditional and Fast-Track). For NSF STTR Fast-Track proposals, a person may act as co-PI on an unlimited number of proposals.

Proposal Preparation and Submission Instructions

A. proposal preparation instructions.

• Letters of Intent: Not required
• Preliminary Proposal Submission: Not required

Full Proposal Preparation Instruction: This solicitation contains information that deviates from the standard NSF Proposal and Award Policies and Procedures Guide (PAPPG) proposal preparation guidelines. Please see the full text of this solicitation for further information.

B. Budgetary Information

Cost Sharing Requirements:

Inclusion of voluntary committed cost sharing is prohibited.

Indirect Cost (F&A) Limitations:

Not Applicable

Other Budgetary Limitations:

Other budgetary limitations apply. Please see the full text of this solicitation for further information.

C. Due Dates

Proposal review information criteria.

Merit Review Criteria:

National Science Board approved criteria. Additional merit review criteria apply. Please see the full text of this solicitation for further information.

Award Administration Information

Award Conditions:

Additional award conditions apply. Please see the full text of this solicitation for further information.

Reporting Requirements:

Standard NSF reporting requirements apply.

I. Introduction

The NSF SBIR/STTR Fast-Track pilot programs focus on stimulating technical innovation from diverse entrepreneurs and startups by translating new scientific and engineering discoveries emerging from the private sector, federal labs, and academia into products and services that can be scaled and commercialized into sustainable businesses with significant societal benefits. The NSF SBIR/STTR Fast-Track pilot programs support moving scientific excellence and technological innovation from the lab to the market. By funding startups and small businesses, NSF helps build a strong national economy and stimulates the creation of novel products, services, and solutions in private, public, or government sectors with potential for broad impact; strengthens the role of small business in meeting federal research and development needs; increases the commercial application of federally supported research results; and develops and increases the US workforce, especially by fostering and encouraging participation by socially and economically disadvantaged and women-owned small businesses.

While startups and small businesses face many challenges, the NSF SBIR/STTR Fast-Track pilot programs are intended to specifically focus on challenges associated with technological innovation; that is, on the creation of new products, services, and other scalable solutions based on fundamental science or engineering. A successful Fast-Track proposal must demonstrate how NSF funding will help the small business create a proof-of-concept or prototype by retiring technical risk.

NSF seeks unproven, leading-edge, technology innovations that demonstrate the following characteristics:

• The innovations are underpinned and enabled by a new scientific discovery or meaningful engineering innovation.
• The innovations still require intensive technical research and development to be fully embedded in a reliable product or service.
• The innovations have not yet been reduced to practice by anyone and it is not guaranteed, at present, that doing so is technically possible
• The innovations provide a strong competitive advantage that are not easily replicable by competitors (even technically proficient ones).
• Once reduced to practice, the innovations are expected to result in a product or service that would either be disruptive to existing markets or create new markets/new market segments.

The NSF SBIR/STTR Fast-Track pilot programs provide non-dilutive funding for the development of deep technologies, based on discoveries in fundamental science and engineering, that offer the potential for societal and economic impacts. The NSF SBIR/STTR Fast-Track pilot programs provide fixed amount cooperative agreements for the development of a broad range of technologies based on discoveries in science and engineering with potential for societal and economic impacts. Unlike fundamental or basic research activities that focus on scientific and engineering discovery itself, the NSF SBIR/STTR Fast-Track pilot programs support the creation of opportunities to move use-inspired and translational discoveries out of the lab and into the market or other use at scale, through startups and small businesses. The NSF SBIR/STTR pilot programs do not solicit specific technologies or procure goods and services from startups and small businesses. The funding provided is non-dilutive and NSF does not receive any stake or interest in the company or in the intellectual property resulting from the funded effort. NSF promotes inclusion by encouraging proposals from diverse populations and geographic locations.

II. Program Description

The aim of the NSF SBIR/STTR Fast-Track pilot programs is to enable eligible companies (see Section IV of this document) that have a complete R&D team (i.e., no “to-be-determined” team members) to submit a single proposal that, if awarded, can provide a faster pathway from Phase I to Phase II funding. A Fast-Track proposal will include a Phase I component and a Phase II component, each with a corresponding budget. Both Phase I and Phase II components of a Fast-Track proposal will be reviewed prior to the start of a Fast-Track project. On completion of the Phase I component, and contingent upon the results of a company’s Phase II transition review (see below for details), a Fast-Track awardee company will be able to transition directly to the Phase II component of the project. The primary benefits for Fast-Track awardee companies are (i) a pathway at the start of an awarded Fast-Track project to the full funding opportunities of the NSF SBIR/STTR Phase I and Phase II programs, and (ii) a faster transition from Phase I to Phase II than for traditional NSF SBIR/STTR Phase I awardees. Receipt of full funding under the Fast-Track programs is contingent upon the success of a company’s Phase II transition review.

The NSF SBIR/STTR Fast-Track pilot programs welcome proposals from almost all areas of technology. The program website presents a number of topic areas, but these are only meant to be suggestive of the types of topic areas that are anticipated. The programs are also open to proposals that focus on technical and market areas not explicitly noted in the aforementioned topics. Proposals that do not have an obvious fit in one of the specific topic areas can be submitted to “Other Topics”. NSF encourages eligible companies from all technology sectors and geographic areas to apply for funding. NSF does not test, verify, or otherwise use the technology developed under its SBIR/STTR Fast-Track awards.

The NSF SBIR/STTR Fast-Track pilot programs are expected to be highly competitive. Only a fraction of proposals submitted will be selected for an award. Thus, there may be many qualified businesses applying to the programs that do not receive funding.

NSF evaluates SBIR/STTR Fast-Track proposals under three distinct, but related merit review criteria: Intellectual Merit, Broader Impacts, and Commercialization Potential.

In addition to the standard NSF Merit Review Criteria (Section VI.A.), the following provides additional clarification of how Intellectual Merit and Broader Impact might be applied to startups and small businesses (Section II and IV.A.2).

The Intellectual Merit criterion encompasses the potential to advance knowledge and leverage fundamental science or engineering research techniques to overcome technical risk. This can be conveyed through the Research and Development (R&D ) of the project.

NSF SBIR/STTR Fast-Track proposals are evaluated via the concepts of Technical Risk and Technological Innovation. Technical Risk assumes that the possibility of technical failure exists for an envisioned product, service, or solution to be successfully developed. This risk is present even to those suitably skilled in the art of the component, subsystem, method, technique, tool, or algorithm in question. Technological Innovation indicates that the new product or service is differentiated from current products or services; that is, the new technology holds the potential to result in a product or service with a substantial and durable advantage over competing solutions on the market. It also generally provides a barrier to entry for competitors. This means that if the new product, service, or solution is successfully realized and brought to the market, it should be difficult for a well-qualified, competing firm to reverse-engineer or otherwise neutralize the competitive advantage generated by leveraging fundamental science or engineering research techniques.

The Broader Impacts criterion encompasses the potential for the company to drive a benefit to society in terms of addressing major societal challenges. Considering the products developed under these programs will have a broad societal reach, will be widely distributed, and will therefore have impacts that are far reaching with people and communities. It is important to ensure adequate assessment of potential benefits and unintended consequences of the proposed technology.

The NSF SBIR/STTR Fast-Track pilot programs support the vision of the NSF, which is a nation that leads the world in science and engineering research and innovation to the benefit of all, without barriers to participation. Proposers may also consider the Broader Impacts Review Criterion at 42 U.S.C. §1862p-14 as related to the potential for broadest societal impact.

An additional, solicitation-specific merit review criteria focused on Commercialization Potential is also required. The Commercialization Potential of the proposed product or service is the potential for the resulting technology to disrupt the targeted market segment by way of a strong and durable value proposition for the customers or users.

• The proposed product or service addresses an unmet, important, and scalable need for the target customer base.
• The proposed small business is structured and staffed to focus on aggressive commercialization of the product/service.
• The proposed small business can provide evidence of good product-market fit (as validated by direct and significant interaction with customers and related stakeholders).

More details and information regarding the NSF SBIR/STTR merit review criteria can be found in Section VI.A of this solicitation and the NSF SBIR/STTR website .

The review of an NSF SBIR/STTR Fast-Track proposal includes both the Phase I and Phase II components of the proposal. A team submitting an NSF SBIR/STTR Fast-Track proposal must have NSF-funded research lineage (see Section IV); customer discovery training in order to develop an understanding of the target market, product-market fit and initial target customers; and a complete team (no “to-be-determined” members).

The Phase I and Phase II components of an NSF SBIR/STTR Fast-Track proposal will be reviewed and evaluated separately. For cases in which reviewers and the cognizant Program Officer deem that the Phase I component is meritorious, but the Phase II component is not, the Program Officer may consider recommending the Fast-Track proposal for a traditional NSF SBIR/STTR Phase I award. The company would subsequently be eligible to apply for NSF SBIR/STTR Phase II funding via the traditional process (i.e., not via the Fast-Track process).

An NSF SBIR/STTR Fast-Track proposal must include specific, quantifiable performance targets for the Phase I component of the project. These Phase I targets may be renegotiated with the cognizant Program Officer during post-review diligence, so that at the start of the Fast-Track project there will be agreed performance targets in place for the Phase I component.

Phase II Transition Review : The Phase II transition review will consist of two stage gates:

Stage Gate 1: Progress Evaluation.

Approximately three (3) months prior to the end of the Phase I component, the NSF SBIR/STTR Fast-Track recipient will be required to participate in a reverse site visit during which they will present to NSF the results of the Phase I project to date. Detailed guidance regarding the reverse site visit will be provided to the recipient four to six weeks prior to the reverse site visit. NSF will evaluate progress made by the Fast-Track recipient company during the Phase I component, taking into account a number of factors including, but not limited to:

• Phase I performance compared with the agreed performance targets;
• commercial progress and commercial traction during Phase I;
• team suitability for Phase II; and
• additional resources – including company personnel, advisors, and funding that are accessible to the company for technical, regulatory, or commercial activities associated with the Phase II component.

Based on the results of NSF’s SBIR/STTR Fast-Track Stage Gate 1 review, if NSF determines, based on this progress evaluation, that a Fast-Track award recipient should have the opportunity to transition to the Phase II component, the company will advance to Stage Gate 2.

Alternatively, NSF may decide that an NSF SBIR/STTR Fast-Track award will not transition to the Phase II component. In such cases, the Fast-Track project will be limited to Phase I funding, and the award will conclude at the end of the Phase I component. NSF will communicate its decision and rationale back to the Fast-Track awardee. The company will not be eligible to apply for regular SBIR/STTR Phase II funding based on the Fast-Track award. NOTE: NSF’s decision not to provide SBIR/STTR Phase II funding following Stage Gate 1 is not subject to reconsideration or termination review as defined in Chapter XII.A.4 of the PAPPG.

Stage Gate 2: CAP Review

NSF SBIR/STTR Fast-Track award recipients who progress beyond the Stage Gate 1 will be required to prepare and submit administrative and supporting financial documentation for review by the NSF Cost Analysis and Pre-Award (CAP) Branch. See https://www.nsf.gov/bfa/dias/caar/sbirrev.jsp for detailed requirements. CAP reviews are conducted to evaluate a prospective recipient's ability to manage a federal award effectively and efficiently, as well as to establish the reasonableness of the dollar amount for the Phase II component of the award. Based on the results of the Stage Gate 2 review, NSF may decide that a Fast-Track award will not receive additional Phase II funding, and the award will conclude at the end of the Phase I component. NSF will communicate its decision and rationale back to the Fast-Track recipient. The company will not be allowed to apply for regular SBIR/STTR Phase II funding based on the Fast-Track award. NOTE: NSF’s decision not to provide SBIR/STTR Phase II funding following Stage Gate 2 is not subject to reconsideration or termination review as defined in Chapter XII.A.4 of the PAPPG.

Companies who pass both Stage Gates 1 and 2 will receive a funding increment for the Phase II component of the award, and they will be eligible to apply for the same Phase II supplemental funding opportunities as are available to a traditional NSF SBIR/STTR Phase II awardee.

III. Award Information

Anticipated Type of Award: Fixed Amount Cooperative Agreement Estimated Number of Awards: 36

Anticipated Funding Amount: $56,000,000

IV. Eligibility Information

Additional Eligibility Info:

Required Project Pitch Invitation: Potential proposers must receive an invitation to submit a full NSF SBIR/STTR Fast-Track pilot proposal. Please see Project Pitch website for details. STTR Research Institution.  The  SBIR/STTR Policy Directive  requires that STTR proposals include an eligible research institution as a subawardee on the project budget. The STTR partner research institution is typically either a not-for-profit institution focused on scientific or educational goals (such as a college or university), or a Federally Funded Research and Development Center (FFRDC). For an NSF STTR Fast-Track proposal, a minimum of 40% of the research, as measured by the budget, must be performed by the small business concern, and a minimum of 30% must be performed by a single partner research institution, with the balance permitted to be allocated to either of these, or to other subawards or consultants. Partnering. Proposing companies are encouraged to collaborate with experienced researchers at available facilities such as colleges, universities, national laboratories, and from other research sites. Funding for such collaborations may include research subawards or consulting agreements. The employment of faculty and students by the small business is allowed, however: For an NSF SBIR Fast-Track proposal , a minimum of two-thirds of the research, as measured by the budget, must be performed by the small business during the Phase I component of the project, and a minimum of one-half of the research, as measured by the budget, must be performed by the small business during the Phase II component of the project. The balance of the budget may be outsourced to subawards or consultants or a combination thereof. The proportion requirements cited above must be met in both the Phase I and Phase II budgets independently. For an NSF STTR Fast-Track proposal , the SBIR/STTR Policy Directive requires proposals to include an eligible research institution as a subawardee on the project budget. The institution is typically either a not-for-profit institution focused on scientific or educational goals (such as a college or university), or a Federally funded research and development center (FFRDC). A minimum of 40% of the research, as measured by the budget, must be performed by the small business. A minimum of 30% must be performed by a single partner research institution. The balance (remaining 30%) may be allocated to the small business, partner research institution, or to other subawards or consultants. The percentage requirements cited above must be met in both the Phase I and Phase II budgets independently. For Both SBIR and STTR Fast-Track proposals, proposals should NOT be marked as a "Collaborative Proposal from Multiple Organizations" during submission. Companies are allowed to switch between SBIR and STTR, and vice versa, as they transition from Phase I to Phase II. Government-Wide Required Benchmarks (applies to previous SBIR/STTR recipients only): Phase I to Phase II Transition Rate Benchmark. For Phase I proposers that have received more than 20 Phase I SBIR/STTR awards from any federal agency over the past five fiscal years, the minimum Phase I to Phase II Transition Rate over that period is 25%. Small businesses that fail to meet this transition requirement will be notified by the Small Business Administration and will not be eligible to submit a Phase I proposal for one (1) year. Commercialization Benchmark (applies to previous SBIR/STTR recipients only). The commercialization benchmark required by the SBIR/STTR Reauthorization Act of 2011 only applies to proposers that have received more than 15 Phase II Federal SBIR/STTR awards over the past 10 fiscal years, excluding the last two years. These companies must have achieved the minimum required commercialization activity to be eligible to submit a Phase I proposal, as determined by the information entered in the company registry, see Completing the Company Registry Commercialization Report: Instructions and Definitions . For more information, see Performance Benchmark Requirements .

V. Proposal Preparation And Submission Instructions

Full Proposal Instructions : Proposals submitted in response to this program solicitation should be prepared and submitted in accordance with the guidelines specified in the NSF Proposal & Award Policies & Procedures Guide (PAPPG). The complete text of the PAPPG is available electronically on the NSF website at: https://www.nsf.gov/publications/pub_summ.jsp?ods_key=pappg . Paper copies of the PAPPG may be obtained from the NSF Publications Clearinghouse, telephone (703) 292-8134 or by e-mail from [email protected] .

See PAPPG Chapter II.D.2 for guidance on the required sections of a full research proposal submitted to NSF. Please note that the proposal preparation instructions provided in this program solicitation may deviate from the PAPPG instructions.

This solicitation contains MANY instructions that deviate from the standard NSF PAPPG proposal preparation instructions. This solicitation contains the information needed to prepare and submit a proposal and refers to specific sections of the PAPPG ONLY when necessary (and noted throughout the solicitation). In the event of conflict between the instructions in this solicitation and the PAPPG, use this solicitation's instructions as a guide.

The following project activities are not responsive to the solicitation:

• Evolutionary development or incremental modification of established products or proven concepts;
• Straightforward engineering or test and optimization efforts that are not hypothesis driven;
• Evaluation or testing of existing products;
• Basic scientific research or research not connected to any specific market opportunity or potential new product;
• Business development, market research, and sales and marketing;
• Clinical trials;
• Research or commercialization pathways involving chemical components, natural or synthetic variations thereof, or other derivatives related to Schedule I controlled substances; or
• Non-profit business concerns.

Non-responsive proposals may be returned without review.

An NSF SBIR/STTR Fast-Track pilot proposal that is Returned Without Review as being not responsive to the solicitation may be significantly revised and submitted for the next deadline if the proposal is still within the timeframe for eligible submission.

Required Project Pitch submission: To submit a full NSF SBIR/STTR Fast-Track proposal, potential proposers must first submit a Project Pitch and receive an invitation. The Project Pitch gives NSF the ability to review for appropriateness to the NSF STTR/STTR Fast-Track programs prior to the full proposal submission process, ensuring that proposers do not expend time or resources preparing full proposals that are not aligned with the program requirements. To start this process, proposers must first create a log-in and submit a Project Pitch via the NSF SBIR/STTR Fast-Track Project Pitch online form . NSF SBIR/STTR program staff will use the Project Pitch to determine whether the proposed project is a good fit for the program objectives.

• All NSF SBIR/STTR Fast-Track Project Pitches MUST be submitted to “Fast-Track” using the drop-down on the site and MUST nominate the most appropriate technical topic area from the list,
• Proposers may submit a Project Pitch at any time, regardless of the NSF SBIR/STTR Fast-Track pilot solicitation window.
• Proposers must include their prior NSF award number (NSF lineage) in the Project Pitch.
• When submitting an SBIR/STTR Fast-Track proposal in Research.gov, you must enter your invited SBIR/STTR Fast-Track Project Pitch Number in the SBIR/STTR Fast-Track Questionnaire . The Phase I award number must be validated before you can continue with the proposal preparation.

REQUIRED REGISTRATIONS: Small businesses applying for NSF SBIR/STTR Fast-Track funding must be registered in the following systems in order to submit a proposal to NSF. The registrations below can take several weeks or even months to process, so please start early.

You must register your company name, physical address, and all other identifying information identically in each of these systems. We recommend that you register your small business in the following order:

• NSF will validate that each proposer’s UEI and SAM registration are valid and active prior to allowing submission of a proposal to NSF. If a registration is not active, an organization will not be able to submit a proposal. Additionally, if the SAM registration is not renewed annually and is not valid, NSF will block any award approval actions.
• Any subawardees or subcontractors are also required to obtain a UEI and register in Research.gov. Entities can obtain a SAM UEI without full SAM registration. If you have a subrecipient that is not fully registered in SAM, but has been assigned a UEI number, please call the IT Help desk for further assistance.
• Small Business Administration (SBA) Company Registration . A Small Business Concern Identification number (SBC ID) is required prior to submission of the proposal. SBA maintains and manages the Company Registry for SBIR/STTR proposers in order to track ownership and affiliation requirements. All SBCs must report ownership information prior to each SBIR/STTR proposal submission and update the SBC if any information changes prior to award. This registration process is free.
• Research.gov. Research.gov is NSF’s online grant management system – how you submit your proposal. For more information, consult the "About Account Management" page. This registration process is free.

Beware of scammers charging fees for SAM and/or SBA registrations.

B. Tips on the Proposal Preparation and Submission

It is suggested that you create a single PDF document for each section of the proposal, aggregate those PDF documents into a single file joining the various sections, then upload this single PDF to Research.gov. This will avoid issues resulting from Research.gov conversion to PDF formats.

Submit a complete proposal:

• Cover Sheet
• SBIR (or STTR) Fast-Track Questionnaire
• SBIR (or STTR) Fast-Track Certification Questions
• Project Summary
• Project Description
• References Cited
• Budget(s) (and Subaward Budget(s), if needed)
• Budget Justification(s) (and Subaward Budget Justification(s), if needed)
• Facilities, Equipment and Other Resources
• Biographical Sketch
• Current and Pending (Other) Support
• Collaborations and Other Affiliations (Single Copy Document)
• Synergistic Activities
• Data Management and Sharing Plan
• Mentoring Plan (Conditionally required)
• Project Schedule
• Letter(s) of Support (Required)
• IP (Intellectual Property) Rights Agreement (Required for STTR proposals and strongly recommended for SBIR proposals when there is a subaward to another institution)
• Other Personnel Biographical Information
• Other Supplementary Documents
• List of Suggested Reviewers (Single Copy Document)
• List of Reviewers Not to Include (Single Copy Document)
• Deviation Authorization (Single Copy Document)
• Additional Single Copy Documents

DO NOT upload information beyond what is specifically required and permitted into the proposal (e.g., do not include marketing materials, research results, academic papers, patent applications, etc.).

DO NOT include samples, videotapes, slides, appendices, or other ancillary items within a proposal submission. Websites containing demonstrations and Uniform Resource Locators (URLs) (if applicable) must be cited in the References Cited section. Note: reviewers are not required to access any information outside the proposal document. Please refer to the NSF PAPPG (Chapter II.C) for more details on accepted proposal fonts and format.

C. Detailed Instructions on Proposal Preparation

Full Proposal Set-up: In Research.gov , complete the following steps:

• Select "Prepare & Submit Proposals,” “Letters of Intent and Proposals”
• Select “Prepare New” and from the pull down “Full Proposal.”
• Funding Opportunity. Either filter by “SBIR” or “STTR” or “Fast-Track”, and select radio button for the NSF SBIR/STTR Fast-Track Pilot Programs.
• Where to Apply. Select program: SBIR Fast-Track or STTR Fast-Track.
• Proposal Type: Select SBIR or STTR.
• Proposal Details: Answer questions:
• Is your organization a sole proprietorship? Yes or No
• Enter Proposal Title, then click on Prepare Proposal
• You will now be on a new proposal page – Select Due Date (upper right corner)

Cover Sheet. The Cover Sheet requests general information about the proposal and proposing organization.

Other Federal Agencies (if applicable). If this proposal is being submitted to other Federal agencies, state or local governments, or non-governmental entities, enter a reasonable abbreviation, up to 10 characters, for each agency or entity. Only the first 5 agencies you enter will appear on the PDF version of the proposal, but all should be entered below. IT IS ILLEGAL TO ACCEPT DUPLICATE FUNDING FOR THE SAME WORK. IF A PROPOSER FAILS TO DISCLOSE EQUIVALENT OR OVERLAPPING PROPOSALS, THE PROPOSER COULD BE LIABLE FOR ADMINISTRATIVE, CIVIL, AND/OR CRIMINAL SANCTIONS.

Human Subjects (if applicable). According to 45 CFR 46 , a human subject is "a living individual about whom an investigator (whether professional or student) conducting research:

• Obtains information or biospecimens through intervention or interaction with the individual, and uses, studies, or analyzes the information or biospecimens; or
• Obtains, uses, studies, analyzes, or generates identifiable private information or identifiable biospecimens.”

NIH provides a Decision Tool to assist investigators in determining whether their project involves non-exempt human subjects research, meetings the criteria for exempt human subjects research, or does not involve human subjects research.

Projects involving research with human subjects must ensure that subjects are protected from research risks in conformance with the relevant Federal policy known as the Common Rule ( Federal Policy for the Protection of Human Subjects, 45 CFR 690 ). All projects involving human subjects must either (1) have approval from an Institutional Review Board (IRB) before issuance of an NSF award; or (2) must obtain a statement from the IRB indicating research exemption from IRB review; or 3) must obtain a just in time IRB designation and documentation. This documentation needs to be completed during due diligence discussions, in accordance with the applicable subsection, as established in section 101(b) of the Common Rule. If certification of exemption is provided after submission of the proposal and before the award is issued, the exemption number corresponding to one or more of the exemption categories also must be included in the documentation provided to NSF. The small business has three basic options with regard to human subjects review:

• Establish your own IRB (see Office for Human Research Protections (OHRP) at the Department of Health and Human Services (HHS): https://www.hhs.gov/ohrp/irbs-and-assurances.html#registernew .
• Use the review board of a (usually local) university or research institution, either via consultants to the project, a project subaward, or directly through its own contacts;
• Use a commercial provider.

For projects lacking definite plans for the use of human subjects, their data, or their specimens, pursuant to 45 CFR § 690.118 , NSF can accept a determination notice that establishes a limited time period under which the PI may conduct preliminary or conceptual work that does not involve human subjects. See more information and instructions regarding this documentation in the PAPPG.

Live Vertebrate Animals (if applicable). Any project proposing use of vertebrate animals for research or education shall comply with the Animal Welfare Act ( 7 USC 2131, et seq. ) and the regulations promulgated thereunder by the Secretary of Agriculture ( 9 CFR 1 .1 -4.11 ) pertaining to the humane care, handling, and treatment of vertebrate animals held or used for research, teaching or other activities supported by Federal awards.

In accordance with these requirements, proposed projects involving use of any vertebrate animal for research or education must be approved by the submitting organization's Institutional Animal Care and Use Committee (IACUC) before an award can be made. For this approval to be accepted by NSF, the organization must have a current Public Health Service (PHS) Approved Assurance. See also PAPPG for additional information on the administration of awards that utilize vertebrate animals. This documentation must be completed before issuance of an NSF award.

SBIR (or STTR) Fast-Track Questionnaire. The SBIR/STTR Fast-Track Questionnaire MUST be filled in completely including Topic and Subtopic, Project Pitch Number, Authorized Company Officer Information, Proposing Small Business Information, SBIR/STTR Award History, Affiliated Companies, and Other Information (including NSF Funding Lineage).

Other Information.

Proprietary Information. To the extent permitted by law, the Government will not release properly identified and marked technical and commercially sensitive data.

If the proposal does not contain proprietary information, uncheck the box in the Phase I Questionnaire.

If the proposal does contain proprietary information identify the proprietary technical data by clearly marking the information and also providing a legend. NSF SBIR/STTR data, including proposals, are protected from disclosure by the participating agencies for not less than 20 years from the delivery of the last report or proposal associated with the given project. Typically, proprietary information is identified in the text either with an asterisk at the beginning and end of the proprietary paragraph, underlining the proprietary sections, or choosing a different font type. An entire proposal should not be marked proprietary.

For Statistical Purposes. Please check all of the appropriate boxes and fill in award numbers as needed.

SBIR (or STTR) Fast-Track Certification Questions. The Fast-Track Certification Questions MUST be filled in completely.

Project Summary . One (1) page MAXIMUM]. The Project Summary should be written in the third person, informative to other persons working in the same or related fields, and insofar as possible, understandable to a scientifically or technically literate lay reader. It should not be an abstract of the proposal. Do not include proprietary information in the summary.

The Project Summary is completed in Research.gov by entering information into the three text boxes in the Project Summary. To be valid, a heading must be on its own line with no other text on that line.

• Overview: Describe the potential outcome(s) of the proposed activity in terms of a product, process, or service. Provide a list of key words or phrases that identify the areas of technical expertise to be invoked in reviewing the proposal and the areas of application that are the initial target of the technology. Provide the subtopic name.
• Intellectual Merit: This section MUST begin with “This Small Business Innovation Research (or Small Business Technology Transfer) Fast-Track project...” Address the intellectual merits of the proposed activity. Briefly describe the technical hurdle(s) that will be addressed by the proposed R&D (which should be crucial to successful commercialization of the innovation), the goals of the proposed R&D, and a high-level summary of the plan to reach those goals.
• Broader Impacts and Commercial Potential: Discuss the expected outcomes in terms of how the proposed project will bring the innovation closer to commercialization under a sustainable business model. In this box, also describe the potential commercial and market impacts that such a commercialization effort would have, if successful. Also discuss potential broader societal and economic impacts of the innovation (e.g., educational, environmental, scientific, societal, or other impacts on the nation and the world).

Project Description. Ten (10) pages MINIMUM and fifteen (15) pages MAXIMUM). The project description is the core of the proposal document, where the PI convinces the expert reviewers/panelists and NSF SBIR/STTR Fast-Track Program Officer that their proposed R&D project meets NSF’s criteria for Intellectual Merit, Broader Impacts, and Commercialization Potential. Note: The incorporation of URLs or websites within the Project Description is not acceptable and the proposal may not be accepted or will be Returned without Review.

The Project Description for a Fast-Track proposal is divided into the following sections:

• Succinctly describe the proposed technical innovation, highlighting those aspects that are innovative and transformative relative to the current state of the art. Describe the innovation in sufficient technical detail for a knowledgeable reviewer to understand why it is innovative and how it can provide benefits in the target applications.
• Describe the primary technical risks associated with developing the proposed innovation and the key technical objectives to be accomplished during Phase I, clearly explaining why these technical objectives are commercially relevant.
• Provide an R&D plan to achieve the key Phase I technical objectives, along with a corresponding timeline. The R&D plan must leverage fundamental science or engineering research and techniques. Associated with this R&D plan, provide a set of clear, quantitative Phase I technical performance targets. Note that these performance targets, if met, must be sufficient to establish or strongly suggest technical viability of the proposed technology, although it is recognized that substantial further development work will likely be needed to generate a commercial product or service.
• If the project involves subawards, explain why the subawardee(s) is(are) appropriate partners and describe the intended outcomes of the subawards.
• Describe the technical performance metrics that you will need to achieve in order to develop (i) a minimum viable product or service, and (ii) a first-generation commercial-grade product or service. Describe the intended technical outcomes of the Phase II component of the project in terms of these two stages of development, clearly explaining how far you plan to progress towards a commercial solution during Phase II.
• Describe the major non-commercial hurdles that will need to be overcome to achieve the above Phase II technical outcomes.
• Provide a detailed R&D plan to transition the Phase I results into the intended Phase II technical outcomes described above, along with a corresponding timeline.
• Clearly describe any security and privacy practices or standards, regulatory requirements, or other industry standards or practices that the proposed technology will need to comply with in order to be widely adopted and explain how you will ensure that the technology is compliant.
• Discuss manufacturing/production, deployment/distribution, and technical scalability of the proposed solution.
• If the project involves subawards, explain why the subawardee(s) is(are) appropriate partners and describe the intended outcomes of the or subawards.
• Explain the motivation for the company in proposing this project.
• Provide a concise description of the relevant qualifications, experience, and expertise of the company founders and the Senior/Key Personnel on the proposed project.
• Describe your vision for the company and the company's expected impact over the next five years.
• Describe any existing company operations and explain how the proposed effort would fit into these activities.
• Provide the revenue and funding history of the company. Include and explicitly indicate any government funding (federal, state, or local) and private investment.
• Describe the expertise and contributions to the project of any consultants that you proposed to engage during the project.
• Describe how you expect to expand the team going into Phase II and present a rationale for the team changes relative to Phase I. In your response include a discussion of Phase II team members who will not be supported by NSF funds.
• Describe the target market (including the size and geography of the target market) and initial target customer(s), with examples where possible.
• Describe results of ongoing customer discovery activities to date. Provide supporting data if possible.
• Clearly describe the proposed product or service, and how it will be delivered to the target customers.
• Clearly describe the value proposition.
• Describe the proposed commercialization and monetization models. Provide a pricing model with supporting evidence.
• Discuss commercial scalability of the proposed solution.
• Describe the competition and explain how your company will build a sustainable competitive advantage.
• Describe the company’s intellectual property strategy and provide a current status.
• Present a financing plan to bring the company to profitability and explain how you will enact this plan.
• Provide a 5-year pro-forma, with underlying assumptions and supporting evidence for the assumptions. Be sure to include a detailed breakdown of expected revenues, cost of goods sold, and company expenses.
• Describe how the proposed product or service offers the potential for broader societal impacts as well as economic benefit (through commercialization under a sustainable business model). Examples of such outcomes may include (but are not limited to) those found in the American Innovation and Competitiveness Act ( P.L. 114-329, Section 102 ) Broader Impacts Review Criterion.
• The NSF SBIR/STTR Fast-Track pilot programs fund the development of new, high-risk technology innovations intended to generate positive societal outcomes. Discuss the envisioned broader impacts and the specific implementation plan, including: the relevant metrics and measurement plan; potential partners; potential risks and associated mitigation strategies; and additional anticipated needs for resources and the plan to secure them.

References Cited. Provide a comprehensive listing of relevant references, including websites or relevant URLs, patent numbers, and other relevant intellectual property citations. If there are no references, include a statement to that effect.

Budget(s) and Budget Justification(s) . Proposers are required to submit budgets with their proposals, including specific dollar amounts by budget category. Proposers must submit a written justification explaining these amounts in detail. NSF SBIR/STTR Fast-Track Program Officers review these proposed budgets and rely on them in determining the final amount awarded for a given SBIR/STTR Fast-Track project. Enter budget figures for each project year into Research.gov. The system will automatically generate a cumulative budget for the entire project.

Detailed documentation of all budget line items is required and MUST be documented in detail on the Budget Justification. The budget should reflect the needs of the proposed R&D project. The maximum total budget shall not exceed $1,555,000: $400,000 for the Phase I component and $1,155,000 for the Phase II component.

IMPORTANT: The budget and budget justification for the Phase I component of the proposed SBIR/STTR Fast-Track project must be uploaded to the year 1 budget in Research.gov, while the Phase II component of the proposed Fast-Track project must be uploaded to the year 2 and year 3 budget in Research.gov.

The Budget Justification must be uploaded to the Research.gov Budget as a single PDF with two distinct sections – one section for the Phase I component of the Fast-Track project budget and one for the Phase II component. For each component, provide details for each non-zero line item of the budget, including a description and cost estimates. Identify each line item by its letter (e.g., A. Senior/Key Personnel). There is a five-page limit for the Budget Justification . Each Subaward Budget Justification, where required, also has a five-page limit. Additional information to help prepare your proposal budget is available here . The Budget Justification must also clearly state the expected duration of the corresponding Phase I or Phase II project component.

You can add Subaward Organization(s) to your proposal (required for STTR submissions and allowed for SBIR submissions), and make changes to personnel information by navigating to the Budget “Manage Personnel and Subaward Organizations” tab.

All activities on an NSF SBIR/STTR Fast-Track pilot project, including services that are provided by consultants, must be carried out in the United States ("United States" means the 50 states, the territories and possessions of the U.S. Federal Government, the Commonwealth of Puerto Rico, the District of Columbia, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau).Based on a rare and unique circumstance, agencies may approve a particular portion of the R/R&D work to be performed or obtained in a country outside of the United States, for example, if a supply or material or other item or project requirement is not available in the United States. The Funding Agreement officer must approve each such specific condition in writing.

Guidelines for the budget and budget justification follows.

Line A – Senior/Key Personnel. List the PI, co-PI (if STTR), and Senior/Key Personnel by name, their time commitments (in calendar months), and the dollar amount requested. Only salaries and wages for employees of the proposing organization should be included on Line A. Research effort is to be estimated in “Months” (1 Month = 173 hours). Months do not include paid time off and represents actual effort that will be dedicated to the project. The PI must be budgeted for a minimum of three calendar months of effort per six months of performance to the proposed NSF SBIR/STTR Fast-Track project.

In the Budget Justification provide the name; title; a brief description of responsibilities for the PI, co-PI (if STTR), and each of the Senior/Key Personnel as well as the annual, monthly, or hourly salary rate; time commitment; and a calculation of the total requested salary.

You can add additional senior/key personnel to your proposal (e.g., for STTR submissions), and make changes to personnel information by navigating to the Budget “Manage Personnel and Subaward Organizations” tab.

The best source for determining an appropriate salary request is the Bureau of Labor Statistics (BLS). In the Budget Justification provide the title; annual, monthly, or hourly salary rate; time commitment; a calculation of the total requested salary; and a description of responsibilities for the PI, co-PI (if STTR), and each of the Senior/Key Personnel.

You can add additional senior/key personnel to your proposal (e.g., for STTR submissions), and make changes to personnel information by navigating to the "Manage Personnel and Subaward Organizations" page.

Line B - Other Personnel. List the number of people, months, and funding for additional personnel: Other Professionals (Technicians, Programmers, etc.), Administrative/Clerical, and/or Other. These personnel must be employed at the proposing company. The budget justification should state individual employee names and titles (to the extent known), expected role in the project, effort in months and annual salary for each person.

Postdoctoral scholars and students (undergraduate and graduate) are generally listed on a subaward budget to a research institution. If they are employees of the company, they may be listed in Line A. Senior/Key Personnel (Line A), or Line B. Other Professionals or Other, as appropriate.

Line C - Fringe Benefits. It is recommended that proposers allot funds for fringe benefits here ONLY if the proposer's usual (established) accounting practices provide that fringe benefits be treated as direct costs. If Fringe Benefits are included on Line C, describe what is included in fringe benefits and the calculations that were used to arrive at the amount requested.

Otherwise, fringe benefits should be included in Line I. Indirect Costs.

Line D - Equipment. Equipment is defined as non-expendable, tangible personal property, having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However, organizations may elect to establish their capitalization threshold as less than $5,000. Equipment should be budgeted consistently with the proposing organization's capitalization policy. Requests should not be made for general purpose or routine equipment that a business conducting research in the field should be expected to have available. The budget justification must explain the need for any equipment and include the item identification/description, vendor identification, quantity, price, and extended amount. The budget justification should also include, as a separate document if needed, pricing documentation (e.g., quotes, invoices, links to online price lists, past purchase orders, etc.) for each budgeted piece of equipment.

Note that the purchase of Equipment may NOT be included in the budget of the Phase I component of a Fast-Track proposal (Year 1), but MAY be included in the budget of the Phase II component of a Fast-Track proposal (Years 2 and 3).

Line E - Travel. NSF requires that the PI budget travel (for the first year of the project only) to attend the NSF SBIR/STTR Awardee Workshop. A good estimate for the Awardee Workshop is $2,000 per person and is limited to $4,000 per year. Other than the Awardee Workshop and funds for Technical And Business Assistance (TABA, see below), all budgeted travel must be directly related to the execution of the research effort. Only domestic travel will be considered.

The Budget Justification must include the purpose for domestic travel and, for each budgeted trip: the destination, purpose of travel, number of days, and the estimated costs for airfare, cab fare, car rental, per diem rates, hotel, and other incidentals. No supporting detail is required for attendance at the Awardee Workshop at $2,000 (or less) per person. If the workshop is organized as virtual only, proposers can (if awarded) reallocate these funds towards other project activities, pending the approval of the cognizant SBIR/STTR Program Officer.

Travel for purposes other than the project R&D effort (e.g., marketing, customer engagements) is not permitted in the NSF SBIR/STTR Fast-Track budget.

Foreign travel expenses are NOT permitted.

Line F - Participant Support Costs. Participant support costs are NOT permitted on an NSF SBIR/STTR Fast-Track budget.

Line G. Other Direct Costs.

Materials and Supplies. Materials and supplies are defined as tangible personal property, other than equipment, costing less than $5,000, or other lower threshold consistent with the policy established by the proposing organization. The Budget Justification should indicate the specifics of the materials and supplies required, including an itemized listing with item/description, vendor, unit cost, quantity, price, and extended amount. Items with a total cost exceeding $5,000 may require pricing documentation (e.g., quote, link to online price list, prior purchase order or invoice) after the proposal is reviewed, as part of the NSF SBIR/STTR Fast-Track Program Officer's due diligence efforts. Please see Section VI. for details.

Publication Costs/Documentation/Distrib. Publication, documentation and distribution costs are not allowed.

Consultant Services. Consultant services include specialized work that will be performed by professionals that are not employees of the proposing small business. All consultant activities must be carried out in the United States (see above).

No person who is an equity holder, employee, or officer of the proposing small business may be paid as a consultant unless an exception is recommended by the cognizant SBIR/STTR Fast-Track Program Officer and approved by the Division Director of Translational Impacts (TI).

The proposal must include a signed agreement ( Letter of Commitment ) from each consultant confirming the services to be provided (role in the project), primary organizational affiliation, number of days committed to the research effort, availability to provide services, and consulting daily rate. The agreement must clearly state the number of days on the project, the consulting daily rate (8 hours/day) and the total dollar amount of the consulting agreement. Include a copy of the signed Letter of Commitment in the "Other Supplementary Documents" section. Multiple letters should be combined as a single PDF before uploading.

The consulting daily rate represents the total labor compensation for an 8-hour period and may not exceed $1,000 per day. Any miscellaneous costs, such as supplies, that are not included as part of the daily rate must be identified and justified. Consultant travel should be shown under the domestic travel category, Line E, but counts as an outsourcing expense for the purpose of determining whether the small business concern meets the minimum level of effort for an NSF SBIR/STTR proposal. Any information above and beyond the above will be considered not responsive and may be removed from your proposal .

Biographical sketches for each consultant may be requested by the cognizant NSF SBIR/STTR Fast-Track Program Officer after the proposal is reviewed, as part of their due diligence efforts. Please see Section VI. for details.

Computer Services . This line can include funds for fee-for-service computing activities or resources (such as supercomputer time, cloud services, etc.). Any extended line item should be accompanied by pricing documentation (e.g., quote, link to online price list, prior purchase order, or invoice) in the budget justification. Requested services with a total cost exceeding $5,000 may require pricing documentation (e.g., quote, link to online price list, prior purchase order or invoice) after the proposal is reviewed, as part of the NSF SBIR/STTR Fast-Track Program Officer's due diligence efforts.

Subaward(s). Subawards may be utilized when a significant portion of the work is performed by another organization and when the work to be done is not widely commercially available. Work performed by a university or research laboratory is one example of a common subaward.

Subawards require a separate subaward budget and subaward budget justification, in the same format as the main budget. To enter a subaward budget in Research.gov, go to the Budget module tab and add Subaward Organization(s) by opening the “Manage Personnel and Subaward Organizations” tab. Each subawardee will have its own budget pages for each year of the project.

A subawardee research institution partner is mandatory for STTR Fast-Track proposals. Explicitly list who the research partner will be and provide a brief description of the work they will perform. A minimum of 40% of the research, as measured by the budget, must be performed by the small business concern and a minimum of 30% of the research, as measured by the budget, must be performed by a single subawardee research institution, with the balance permitted to be allocated to either of these, or to other subawards or consultants. Subawardees are not permitted to request profit (Line K) as part of their budgets.

The proposing organization's budget justification must discuss the tasks to be performed and how these are related to the overall project. Also discuss any organizational relationships (e.g., common ownership or related parties) between the proposing organization and the subawardee, and the type of subaward contemplated (e.g., fixed price or cost reimbursement).

Subawardees (the institution, not the individual PI or researcher) should also provide a Letter of Commitment that confirms the role of each subaward organization in the project and explicitly states the subaward amount(s). Provide this letter(s) as part of the Other Supplementary Documents.

For NSF SBIR Fast-Track proposals, subaward funds do not count as funds spent by the small business, and the total amount requested for subawards (when added to consultant funds and any other subawards) cannot exceed 1/3 of the total Phase I budget component and cannot exceed 1/2 of the total Phase II budget component.

No significant part of the research or substantive effort under an NSF award may be contracted or otherwise transferred to another organization without prior NSF authorization. The intent to enter into such arrangements should be disclosed in the proposal.

No person who is an equity holder, employee, or officer of the proposing small business may be paid under a subaward unless an exception is recommended by the NSF SBIR/STTR Program Director and approved by the TI Division Director.

Any subrecipients named in the proposal are also required to obtain a SAM UEI and register in Research.gov . Subrecipients named in the proposal, however, do not need to be registered in SAM. Entities can obtain a SAM UEI without full SAM registration. If you have a subrecipient that is not fully registered in SAM, but has been assigned a UEI number, please call the IT Help desk for further assistance.

It is the responsibility of the proposing organization to confirm that submitted subaward budgets have been approved by an Authorized Organizational Representative at the subawardee organization.

An IP (Intellectual Property) Rights Agreement is required for STTR proposals and strongly recommended for SBIR proposals when there is a subaward to another institution. A fully signed agreement is not required for STTR proposals at the initial proposal submission but will be required before a recommendation for an award can be made. Provide this Agreement, as a PDF, as part of the Optional Documents.

Other . This line includes the purchase of routine analytical or other services, or fabricated components from commercial sources. The budget justification must explain the need for the services, provide a description of the services, and give a detailed cost itemization. Any single "other" item with a total cost of $5,000 must be further itemized into smaller costs or supported by pricing documentation (e.g., quote, link to online pricing list, past purchase order) in the budget justification. This detail will be requested as part of the NSF SBIR/STTR Fast-Track Program Officer's due diligence efforts.

SBIR/STTR Fast-Track Technical and Business Assistance (TABA): Proposers are encouraged to include up to $6,500 in the Phase I component budget and up to $50,000 in the Phase II component budget to assist in technology commercialization efforts (as outlined in the current SBIR/STTR Policy Directive and the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ). Specifically, this funding is for securing the services of one or more third-party service providers that will assist with one or more of the following commercialization activities:

• Phase II Commercialization Plan research and preparation
• Phase II Broader Impact plan research and preparation
• Making better technical decisions on SBIR/STTR Fast-Track projects;
• Solving technical problems that arise during SBIR/STTR projects;
• Minimizing technical risks associated with SBIR/STTR projects; and
• Commercializing the SBIR/STTR product or process, including securing intellectual property protections

If a proposer is not able to identify what commercial assistance may be required at the time of proposal submission, the proposing small business may block up to the maximum allowable amount for TABA activities (as detailed above) on Line G. Other with the understanding that prior to expending funds for these purposes, the recipient will be required to obtain written approval from the cognizant NSF SBIR/STTR Fast-Track Program Officer.

In addition to the above, for the Phase I component of a Fast-Track project only, NSF permits the inclusion of additional funds on the G budget line, as follows. The funds noted below may ONLY be spent on the commercial or business purposes explicitly permitted below. The proposer may budget up to $10,000 as a direct charge on line G.6 of a Phase I component budget for the following specific purposes related to financials and accounting:

• Hiring a certified public accountant (CPA) to prepare audited, compiled, or reviewed financial statements;
• Hiring a CPA to perform an initial financial viability assessment based on standard financial ratios so the recipient organization would have time to improve their financial position prior to the CAP assessment for the transition to the Phase II component of the Fast-Track project;
• Hiring a CPA to review the adequacy of the recipient's project cost accounting system; and/or purchasing a project cost accounting system.

If the proposer elects to budget funds for one of the above purposes, the Budget Justification should include a brief description of the desired use of funds. The use of funds must be approved by the cognizant NSF SBIR/STTR Fast-Track Program Officer prior to award.

Line I - Indirect Costs . Indirect costs are defined as costs that are necessary and appropriate for the operation of the business, but which are not specifically allocated to the NSF SBIR/STTR Fast-Track project. Common indirect cost expenses include legal and accounting expenses, employee health insurance, fringe benefits, rent, and utilities. If the proposing small business has a Federally negotiated rate, please specify the base and rate and include a copy of the negotiated indirect cost rate agreement. If the proposing business has a history of at least two years of stable operation that reflect the costs expected to occur during the execution of the SBIR/STTR award, please base the indirect rate estimate on this historical data (and provide an explanation if the rate is expected to deviate significantly from the rate used in recent years). Instructions for Indirect Cost Rate (IDC) Proposal Submission Procedures can be found here .

Recipients without experience and knowledge of Federal indirect cost rate negotiation and Federal Acquisition Regulation (FAR) Part 31 Cost Principles may want to consider engaging professional services in preparing an IDC proposal.

If the proposing small business has no negotiated rate with a federal agency, and no previous experience with Federal indirect cost rate negotiation, you may claim (without submitting justification) a total amount of indirect costs (inclusive of fringe benefits) either up to 50% of total budgeted salary and wages on the project or equal to 10% de minimis on MODIFIED total direct costs on the project. Modified Total Direct Cost (MTDC): MTDC means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

Note: NSF does not fund Independent Research and Development (IR&D) as part of an indirect cost rate under its awards. See the FAR 31.205-18(a) for more information.

Line K - Fee . The small business fee is intended to be consistent with normal profit margins provided to profit-making firms for R&D work. Up to seven percent (7%) of the total indirect and direct project costs may be requested as a Small Business Fee for the Phase I budget component. Up to ten percent (10%) of the total indirect and direct project costs may be requested as a fee for the Phase II budget component. The fee applies solely to the small business concern receiving the award and not to any other participant in the project. The fee is not a direct or indirect "cost" item and may be used by the small business concern for any purpose, including additional effort under the NSF SBIR/STTR Fast-Track award (and including items on the "Prohibited Expenditures" list below).

Prohibited Expenditures including, but not limited to, Equipment (during the Phase I component), Foreign Travel (during the Phase I and Phase II components), Participant Support Cots, and Publication Costs are not allowable expenditures as either direct or indirect costs. However, these expenses may be purchased from the small business fee funds (Line K).

Budget Revisions. Budget revisions may be requested by the cognizant SBIR/STTR Program Officer. Revised budgets must contain a revised and complete Budget Justification as described above. Revised budgets with budget impact statements that only address revisions are not acceptable for budget processing, see Budget Revision Instructions .

Note: Should the proposal be considered for funding, the NSF SBIR/STTR Program Officer will refer the proposer to the Cost Analysis and Pre-Award Review (CAP) Division’s SBIR/STTR Administrative/Financial Reviews website . Proposing small businesses in this category will be given 10 calendar days to provide CAP the underlying supporting documentation for their budget. The organization should review and understand the CAP documentation requirements as it prepares its budget. Once NSF requests the underlying supporting documentation for the CAP review, proposers will not be given an opportunity to re-budget unsupported costs. Funding will be provided for only the dollar amount that is reasonable and adequately supported. The awarded budget will reflect the supported dollar amount for the proposed effort. Organizations that accept awards at less than the proposed dollar amount may not reduce the effort to be provided; however, organizations may choose to decline award offers.

Facilities, Equipment and Other Resources. Specify the availability and location of significant equipment, instrumentation, computers, and physical facilities necessary to complete the portion of the research that is to be carried out by the proposing firm in the Phase I or Phase II component of a Fast-Track project. Note that purchase of equipment is NOT permitted in the Phase I component of a Fast-Track proposal. If the equipment, instrumentation, computers, and facilities for this research are not the property (owned or leased) of the proposing firm, include a statement signed by the owner or lessor which affirms the availability of these facilities for use in the proposed research, reasonable lease or rental costs for their use, and any other associated costs. Upload images of the scanned statements into this section.

Many research projects require access to computational, data, analysis, and/or visualization resources to complete the work proposed. For projects that require such resources at scales beyond what may be available locally, researchers in all disciplines can apply for allocations for computer or data resources from over two dozen high-performance computational systems via the Advanced Cyberinfrastructure Coordination Ecosystem: Services & Support (ACCESS) program. See cognizant Program Officer or PAPPG for additional details. If a proposer wants to arrange the use of unique or one-of-a-kind Government facilities, a waiver must be obtained from the Small Business Administration to approve such use.

If no equipment, facilities, or other resources are required for this project, a statement to that effect should be uploaded here.

Senior/Key Personnel Documents. For the Principal Investigator (PI), Co-PI, and for each person listed in the “Senior/Key Personnel” section, the four required documents are listed below.

Biographical Sketch(es) . All proposals are required to include Biographical Sketches for each PI, co-PI (if STTR), and Senior/Key Personnel (individuals with critical expertise who will be working on the project and are employed at the proposing company or at a subaward organization). Proposers must prepare biographical sketch files using SciENcv (Science Experts Network Curriculum Vitae) , which will produce a compliant PDF. Senior/Key Personnel must prepare, save, certify, and submit these documents as part of their proposal via Research.gov.

Full requirements for these documents can be found in the current NSF Proposal and Award Policies and Procedures Guide. Frequently Asked Questions on using SciENcv can be found here .

Current and Pending (Other) Support. This information will provide reviewers with visibility into the potential availability of company personnel during the period of performance if awarded. All PIs, Co-PIs (if STTR), and Senior/Key Personnel must prepare Current and Pending (Other) Support files using SciENcv . Detailed information about the required content is available in the current PAPPG.

For the PI, co-PI (if STTR), and each of the Senior/Key Personnel listed on Line A or B of the budget, please provide the following information, regardless of whether the person will receive salary from the activity:

• Name of sponsoring organization.
• Total award amount (if already awarded) or expected award amount (if pending) for the entire award period covered (including indirect costs).
• Title and performance period of the proposal or award.
• Annual person-months (calendar months) devoted to the project by the PI or Senior/Key Personnel.

Please report:

• All current and pending support for ongoing projects and proposals (from any source, including in kind support or equity investment), including continuing grant and contract funding.
• Proposals submitted to other agencies. Concurrent submission of a proposal to other organizations will not influence the review of the proposal submitted to NSF.
• Upcoming submissions.
• The current Phase I proposal is considered "pending" and therefore MUST appear in the Current and Pending Support form for each PI and Senior/Key Personnel.

Collaborators and Other Affiliations (COA) Information (Single Copy Document). This document must be provided for the PI, Co-PI (if STTR) and each Senior/Key Person. This document will not be viewable by reviewers but will be used by NSF to manage the selection of reviewers. Download the required Collaborators and Other Affiliations template and follow the instructions. Detailed information about the required content is available in the current PAPPG. Frequently Asked Questions on COA can be found here .

Synergistic Activities. Each individual identified as a senior/key person must provide a PDF document of up to one-page that includes a list of up to five distinct examples that demonstrates the broader impact of the individual’s professional and scholarly activities that focus on the integration and transfer of knowledge as well as its creation. Examples of synergistic activities may include but are not limited to the training of junior scientists and engineers in innovation and entrepreneurship; the development of new and novel products, tools, and/or services based on deep technologies; broadening participation of groups underrepresented in STEM; service to the scientific and engineering communities outside the individual’s company; and/or participation in the national and/or international commercial market.

Data Management and Sharing Plan . The Data Management and Sharing Plan should include the statement, "All data generated in this NSF SBIR/STTR Fast-Track project is considered proprietary." This single sentence is sufficient to fulfill the Data Management and Sharing Plan requirement, but proposers may add more detail about how the resulting data will be managed, if they desire. The PDF cannot exceed 2 pages.

Mentoring Plan (Conditionally Required). If a proposal requests funding to support postdoctoral scholars or graduate students at a research institution (through a subaward), a Mentoring Plan MUST be uploaded to the system. The mentoring plan must describe the mentoring that will be provided to all postdoctoral scholars or graduate students supported by the project, regardless of whether they reside at the submitting organization or at any subrecipient organization. Describe only the mentoring activities that will be provided to all postdoctoral scholars or graduate students supported by the project. The PDF cannot exceed 1 page.

Individual Development Plans (IDP) for Postdoctoral Scholars and Graduate Students. For each NSF award that provides substantial support to postdoctoral scholars and graduate students, each individual must have an Individual Development Plan, which is updated annually. The IDP maps the educational goals, career exploration, and professional development of the individual. NSF defines “substantial support” as an individual that has received one person month or more during the annual reporting period under the NSF award. Certification that a postdoctoral scholar(s) and/or graduate student(s) has and IDP must be included in the annual and final reports.

Project Schedule. The required Project Schedule must show the estimated duration and timing of major project tasks that are required to implement the research plan. This document should clearly estimate the initiation and completion of tasks in relation to other tasks within the timeline of the award.

NSF recommends downloading the Project Schedule template and uploading a completed version of this form into Research.gov. This schedule should also provide projected levels of effort for each key person during each reporting period of the project. Key personnel to be listed generally include any senior/key personnel listed on Line A of the main project budget, any persons listed on Line A of any subaward budgets, or any budgeted consultants. The schedule should also include estimates of total level of effort (for all project personnel) and total expenditures for each six-month project period.

Optional. NOTE: Various subsections are REQUIRED depending on the type of proposal (SBIR or STTR), whether the company has a commercialization history, whether this proposal is a resubmission, etc. Please read section requirements carefully.

Letter(s) of Support (REQUIRED) . Three (3) Letters of Support from potential product/service users or customers are required; Up to five (5) Letters of Support may be included. All Letters of Support should be uploaded in Research.gov in one PDF.

Letters of Support should address market validation for the proposed innovation, market opportunity, or small business/team, and add significant credibility to the proposed effort. These Letters should ideally demonstrate that the company has developed partnerships and/or a meaningful dialog with relevant stakeholders (e.g., potential customers, strategic partners, or investors) for the proposed innovation and that a real business opportunity may exist. The Letters of Support must contain affiliation and contact information for the signatory stakeholder.

Letters of commitment and supporting documents from consultants and subawards (or any personnel identified in the Budget Justification) are NOT considered letters of support.

IP (Intellectual Property) Rights Agreement (Required for STTR and strongly recommended for SBIR proposals when there is a subaward to another institution). A fully signed Allocation of Intellectual Property Rights is not required at the initial proposal submission but will be required before a recommendation for an award can be made. For proposal submission, place a draft of the Allocation of Intellectual Property Rights or a letter that includes the name of the partner research institution stating that an agreement will be provided upon Program Officer notification of a potential award recommendation.

The SBIR/STTR Policy Directive indicates: “ The model (IP) agreement will direct the parties to, at a minimum:

• State specifically the degree of responsibility, and ownership of any product, process, or other invention or Innovation resulting from the cooperative research. The degree of responsibility shall include responsibility for expenses and liability, and the degree of ownership shall also include the specific rights to revenues and profits.
• State which party may obtain United States or foreign patents or otherwise protect any inventions resulting from the cooperative research.
• State which party has the right to any continuation of research, including non-STTR follow-on awards. ”

Other Personnel Biographical Information (Strongly Recommended) . This section can be used to provide additional biographical information about project participants who are not listed as Senior/Key Personnel for the small business or for a subawardee as well as for writers of Letters of Support. Biographical sketches should be prepared using SciENcv and uploaded as a single PDF.

Other Supplementary Documents. The required other supplementary documents of an NSF SBIR/STTR Phase II proposal are limited to the following (if applicable).

• Company Commercialization History (required if the proposer has received any prior SBIR or STTR Phase II awards). This section is required for any proposer who has ever received a Phase II SBIR or STTR award (from any Federal agency). All items MUST be addressed in the format given in the NSF Commercialization History Template . Changes to the NSF template, additional narratives and/or commercialization history documents from other agencies are not permitted.
• Letters of Commitment from Subawardees and Consultants (Required, but may be provided in post-award diligence). Please refer to Budget and Budget Justification for details.

List of Suggested Reviewers (Single Copy Document). This section can be used to suggest the names of reviewers who might be appropriate to assess the technical and commercial merits of the proposal. Reviewers who have significant personal or professional relationships with the proposing small business or its personnel should generally not be included.

List of Reviewers Not to Include (Single Copy Document).This section can be used by the proposer to suggest names (or even specific affiliations) of reviewers/panelists not to be involved in the review of their proposal.

Deviation Authorization (Single Copy Document).This section should generally not be used unless NSF staff have specifically instructed the proposer to do so.

Additional Single Copy Documents. This section should be blank.

Cost Sharing:

Proposers are required to prepare and submit all proposals for this solicitation via Research.gov. Detailed instructions regarding the technical aspects or proposal preparation and submission via Research.gov are available at: https://www.research.gov/research-portal/appmanager/base/desktop?_nfpb=true&_pageLabel=research_node_display&_nodePath=/researchGov/Service/Desktop/ProposalPreparationandSubmission.html . For Research.gov user support, call the Research.gov Help Desk at 1-800-673-6188 or e-mail [email protected] . The Research.gov Help Desk answers general technical questions related to the use of the Research.gov system. Specific questions related to this program solicitation should be referred to the NSF program staff contact(s) listed in Section VIII of this funding opportunity.

D. Research.gov Requirements

Proposers are required to prepare and submit all proposals for this program solicitation through use of the NSF Research.gov system. Detailed instructions regarding the technical aspects of proposal preparation and submission via Research.gov are available at: https://www.research.gov/research-web/content/aboutpsm . For Research.gov user support, call the Research.gov Help Desk at 1-800-381-1532 or e-mail [email protected] . The Research.gov Help Desk answers general technical questions related to the use of the Research.gov system. Specific questions related to this program solicitation should be referred to the NSF program staff contact(s) listed in Section VIII of this funding opportunity.

Submission of Electronically Signed Cover Sheets . The Authorized Organizational Representative (AOR) must electronically sign the proposal Cover Sheet to submit the required proposal certifications (see PAPPG Chapter II.C.1.d for a listing of the certifications). The AOR must provide the required electronic certifications at the time of proposal submission. Further instructions regarding this process are available on the Research.gov Website at: https://www.research.gov/research-web/content/aboutpsm .

VI. NSF Proposal Processing And Review Procedures

Proposals received by NSF are assigned to the appropriate NSF program for acknowledgement and, if they meet NSF requirements, for review. All proposals are carefully reviewed by a scientist, engineer, or educator serving as an NSF Program Officer, and usually by three to ten other persons outside NSF either as ad hoc reviewers, panelists, or both, who are experts in the particular fields represented by the proposal. These reviewers are selected by Program Officers charged with oversight of the review process. Proposers are invited to suggest names of persons they believe are especially well qualified to review the proposal and/or persons they would prefer not review the proposal. These suggestions may serve as one source in the reviewer selection process at the Program Officer's discretion. Submission of such names, however, is optional. Care is taken to ensure that reviewers have no conflicts of interest with the proposal. In addition, Program Officers may obtain comments from site visits before recommending final action on proposals. Senior NSF staff further review recommendations for awards. A flowchart that depicts the entire NSF proposal and award process (and associated timeline) is included in PAPPG Exhibit III-1.

A comprehensive description of the Foundation's merit review process is available on the NSF website at: https://www.nsf.gov/bfa/dias/policy/merit_review/ .

Proposers should also be aware of core strategies that are essential to the fulfillment of NSF's mission, as articulated in Leading the World in Discovery and Innovation, STEM Talent Development and the Delivery of Benefits from Research - NSF Strategic Plan for Fiscal Years (FY) 2022 - 2026 . These strategies are integrated in the program planning and implementation process, of which proposal review is one part. NSF's mission is particularly well-implemented through the integration of research and education and broadening participation in NSF programs, projects, and activities.

One of the strategic objectives in support of NSF's mission is to foster integration of research and education through the programs, projects, and activities it supports at academic and research institutions. These institutions must recruit, train, and prepare a diverse STEM workforce to advance the frontiers of science and participate in the U.S. technology-based economy. NSF's contribution to the national innovation ecosystem is to provide cutting-edge research under the guidance of the Nation's most creative scientists and engineers. NSF also supports development of a strong science, technology, engineering, and mathematics (STEM) workforce by investing in building the knowledge that informs improvements in STEM teaching and learning.

NSF's mission calls for the broadening of opportunities and expanding participation of groups, institutions, and geographic regions that are underrepresented in STEM disciplines, which is essential to the health and vitality of science and engineering. NSF is committed to this principle of diversity and deems it central to the programs, projects, and activities it considers and supports.

A. Merit Review Principles and Criteria

The National Science Foundation strives to invest in a robust and diverse portfolio of projects that creates new knowledge and enables breakthroughs in understanding across all areas of science and engineering research and education. To identify which projects to support, NSF relies on a merit review process that incorporates consideration of both the technical aspects of a proposed project and its potential to contribute more broadly to advancing NSF's mission "to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes." NSF makes every effort to conduct a fair, competitive, transparent merit review process for the selection of projects.

1. Merit Review Principles

These principles are to be given due diligence by PIs and organizations when preparing proposals and managing projects, by reviewers when reading and evaluating proposals, and by NSF program staff when determining whether or not to recommend proposals for funding and while overseeing awards. Given that NSF is the primary federal agency charged with nurturing and supporting excellence in basic research and education, the following three principles apply:

• All NSF projects should be of the highest quality and have the potential to advance, if not transform, the frontiers of knowledge.
• NSF projects, in the aggregate, should contribute more broadly to achieving societal goals. These "Broader Impacts" may be accomplished through the research itself, through activities that are directly related to specific research projects, or through activities that are supported by, but are complementary to, the project. The project activities may be based on previously established and/or innovative methods and approaches, but in either case must be well justified.
• Meaningful assessment and evaluation of NSF funded projects should be based on appropriate metrics, keeping in mind the likely correlation between the effect of broader impacts and the resources provided to implement projects. If the size of the activity is limited, evaluation of that activity in isolation is not likely to be meaningful. Thus, assessing the effectiveness of these activities may best be done at a higher, more aggregated, level than the individual project.

With respect to the third principle, even if assessment of Broader Impacts outcomes for particular projects is done at an aggregated level, PIs are expected to be accountable for carrying out the activities described in the funded project. Thus, individual projects should include clearly stated goals, specific descriptions of the activities that the PI intends to do, and a plan in place to document the outputs of those activities.

These three merit review principles provide the basis for the merit review criteria, as well as a context within which the users of the criteria can better understand their intent.

2. Merit Review Criteria

All NSF proposals are evaluated through use of the two National Science Board approved merit review criteria. In some instances, however, NSF will employ additional criteria as required to highlight the specific objectives of certain programs and activities.

The two merit review criteria are listed below. Both criteria are to be given full consideration during the review and decision-making processes; each criterion is necessary but neither, by itself, is sufficient. Therefore, proposers must fully address both criteria. (PAPPG Chapter II.D.2.d(i). contains additional information for use by proposers in development of the Project Description section of the proposal). Reviewers are strongly encouraged to review the criteria, including PAPPG Chapter II.D.2.d(i), prior to the review of a proposal.

When evaluating NSF proposals, reviewers will be asked to consider what the proposers want to do, why they want to do it, how they plan to do it, how they will know if they succeed, and what benefits could accrue if the project is successful. These issues apply both to the technical aspects of the proposal and the way in which the project may make broader contributions. To that end, reviewers will be asked to evaluate all proposals against two criteria:

• Intellectual Merit: The Intellectual Merit criterion encompasses the potential to advance knowledge; and
• Broader Impacts: The Broader Impacts criterion encompasses the potential to benefit society and contribute to the achievement of specific, desired societal outcomes.

The following elements should be considered in the review for both criteria:

• Advance knowledge and understanding within its own field or across different fields (Intellectual Merit); and
• Benefit society or advance desired societal outcomes (Broader Impacts)?
• To what extent do the proposed activities suggest and explore creative, original, or potentially transformative concepts?
• Is the plan for carrying out the proposed activities well-reasoned, well-organized, and based on a sound rationale? Does the plan incorporate a mechanism to assess success?
• How well qualified is the individual, team, or organization to conduct the proposed activities?
• Are there adequate resources available to the PI (either at the home organization or through collaborations) to carry out the proposed activities?

Broader impacts may be accomplished through the research itself, through the activities that are directly related to specific research projects, or through activities that are supported by, but are complementary to, the project. NSF values the advancement of scientific knowledge and activities that contribute to achievement of societally relevant outcomes. Such outcomes include, but are not limited to: full participation of women, persons with disabilities, and other underrepresented groups in science, technology, engineering, and mathematics (STEM); improved STEM education and educator development at any level; increased public scientific literacy and public engagement with science and technology; improved well-being of individuals in society; development of a diverse, globally competitive STEM workforce; increased partnerships between academia, industry, and others; improved national security; increased economic competitiveness of the United States; and enhanced infrastructure for research and education.

Proposers are reminded that reviewers will also be asked to review the Data Management and Sharing Plan and the Mentoring Plan, as appropriate.

Additional Solicitation Specific Review Criteria

The NSF SBIR/STTR Fast-Track programs have additional criteria that reflect the emphasis on commercialization and complement the standard NSF review criteria listed above. The following elements will be considered in the review of the Commercialization Potential .

• Is there a significant market opportunity that could be addressed by the proposed product, process, or service?
• Does the company possess a significant and durable competitive advantage, based on scientific or technological innovation, that would be difficult for competitors to neutralize or replicate?
• Is there a compelling potential business model?
• Does the proposing company/team have the essential elements, including expertise, structure, and experience, that would suggest the potential for strong commercial outcomes?
• Will NSF support serve as a catalyst to improve substantially the technical and commercial impact of the underlying commercial endeavor?

NSF SBIR/STTR Fast-Track Award Considerations

An NSF SBIR/STTR Fast-Track proposal includes Phase I and Phase II components. Each component includes an R&D plan and a budget. In addition, the proposal will include a section on the company and team and a section on the Commercialization Plan. Hence, the core of a Fast-Track proposal comprises the following elements:

• Phase I Budget and Budget Justification
• Phase II Budget and Budget Justification
• The Company and Team
• Commercialization Plan

The review of an NSF SBIR/STTR Fast-Track proposal will include a review of both the Phase I and Phase II components of the proposal. A team submitting an NSF SBIR/STTR Fast-Track proposal must have NSF-funded research lineage; an understanding of the target market, product-market fit and initial target customers; and a complete team.

An NSF SBIR/STTR Fast-Track proposal must include specific, quantifiable performance targets for the Phase I component of the project. These Phase I targets may be renegotiated with the cognizant Program Officer during post-review diligence, so that at the start of the Fast-Track project, there will be agreed performance targets in place for the Phase I component.

Due Diligence. Once the panel and/or ad hoc review of an individual NSF SBIR or STTR Fast-Track proposal has concluded and the proposal is considered potentially meritorious, a follow-on due diligence process may be conducted in which the Principal Investigator will be asked to provide additional information and/or to answer questions specific to their proposal in order to inform the final decision. This due diligence process will address weaknesses and questions raised during the external merit review as well as by the cognizant SBIR/STTR Fast-Track Program Officer. The due diligence process may include requests for clarification of the company structure, key personnel, conflicts of interest, foreign influence, cybersecurity practices, or other issues as determined by NSF. Participation in the diligence process is not a guarantee of an award.

Financial Viability. If the small business' proposal is to be further considered for funding after it is competitively reviewed, the cognizant NSF SBIR/STTR Fast-Track Program Officer will refer the proposer to the Cost Analysis and Pre-Award Review (CAP) Administrative/Financial Reviews Site . These reviews are conducted to evaluate a prospective recipient's ability to manage a Federal award responsibly, effectively, and efficiently.

After programmatic approval has been obtained, the proposals recommended for funding will be forwarded to the Division of Grants and Agreements for review of business, financial, and policy implications. After an administrative review has occurred, Grants and Agreements Officers perform the processing and issuance of an award or other agreement. Proposers are cautioned that only a Grants and Agreements Officer may make commitments, obligations, or awards on behalf of NSF or authorize the expenditure of funds. No commitment on the part of NSF should be inferred from technical or budgetary discussions with an NSF Program Officer. A Principal Investigator or organization that makes financial or personnel commitments in the absence of a grant or cooperative agreement signed by the NSF Grants and Agreements Officer does so at their own risk.

The Phase I and Phase II components of a NSF SBIR/STTR Fast-Track proposal will be reviewed and evaluated separately. NSF SBIR/STTR Fast-Track proposals submitted to this solicitation for which the Phase I component is considered meritorious but the Phase II component is not considered meritorious may, based on budgetary considerations and at NSF's discretion, be considered for award as regular NSF SBIR/STTR Phase I projects, in which case (if awarded) the company would subsequently apply for NSF SBIR/STTR Phase II funding via the regular process (i.e., not via the Fast-Track process).

NSF requires each NSF SBIR/STTR Fast-Track recipient company to attend and participate in the NSF SBIR/STTR Phase I Awardees Conference.

Once an award or declination decision has been made, Principal Investigators are provided feedback about their proposals. In all cases, reviews are treated as confidential documents. Verbatim copies of reviews, excluding the names of the reviewers or any reviewer-identifying information, and the panel summary (if a panel summary was prepared) will be available to the proposer via research.gov.

NSF SBIR Phase II proposals submitted to this solicitation which are considered meritorious, and which meet all the requirements of the NSF STTR Phase II program may, based on budgetary considerations and at NSF's discretion, be converted for award as an NSF STTR Phase II project. NSF may also, at its discretion, convert NSF STTR Phase II proposals to NSF SBIR Phase II proposals.

Supplemental Funding. America’s Seed Fund powered by NSF is committed to assisting SBIR/STTR Phase II recipients to successfully commercialize their innovation research, grow their company and create jobs by attracting new investments and partnerships. To reinforce these commitments, the programs support a broad number of supplements and other opportunities. For more information, see: Supplemental Funding Overview , and the linked Dear Colleagues Letters.

Debriefing on Unsuccessful Proposals . As outlined in Chapter IV of the PAPPG, a proposer may request additional information from the cognizant Program Officer or Division Director. Proposers may contact the cognizant Program Officer to set up a date/time for a debrief call.

Resubmission. Declined NSF SBIR/STTR Fast-Track proposals are NOT eligible for resubmission. A proposer of a previously declined proposal must submit a new Project Pitch and, if invited, submit a new proposal after substantial revision, addressing the reviewers’, panel’s (if appropriate), and Program Officer’s concerns.

B. Review and Selection Process

Proposals submitted in response to this program solicitation will be reviewed by Ad hoc Review and/or Panel Review.

Reviewers will be asked to evaluate proposals using two National Science Board approved merit review criteria and, if applicable, additional program specific criteria. A summary rating and accompanying narrative will generally be completed and submitted by each reviewer and/or panel. The Program Officer assigned to manage the proposal's review will consider the advice of reviewers and will formulate a recommendation.

After scientific, technical and programmatic review and consideration of appropriate factors, the NSF Program Officer recommends to the cognizant Division Director whether the proposal should be declined or recommended for award. NSF strives to be able to tell proposers whether their proposals have been declined or recommended for funding within six months. Large or particularly complex proposals or proposals from new recipients may require additional review and processing time. The time interval begins on the deadline or target date, or receipt date, whichever is later. The interval ends when the Division Director acts upon the Program Officer's recommendation.

After programmatic approval has been obtained, the proposals recommended for funding will be forwarded to the Division of Grants and Agreements or the Division of Acquisition and Cooperative Support for review of business, financial, and policy implications. After an administrative review has occurred, Grants and Agreements Officers perform the processing and issuance of a grant or other agreement. Proposers are cautioned that only a Grants and Agreements Officer may make commitments, obligations or awards on behalf of NSF or authorize the expenditure of funds. No commitment on the part of NSF should be inferred from technical or budgetary discussions with a NSF Program Officer. A Principal Investigator or organization that makes financial or personnel commitments in the absence of a grant or cooperative agreement signed by the NSF Grants and Agreements Officer does so at their own risk.

Once an award or declination decision has been made, Principal Investigators are provided feedback about their proposals. In all cases, reviews are treated as confidential documents. Verbatim copies of reviews, excluding the names of the reviewers or any reviewer-identifying information, are sent to the Principal Investigator/Project Director by the Program Officer. In addition, the proposer will receive an explanation of the decision to award or decline funding.

VII. Award Administration Information

A. notification of the award.

Notification of the award is made to the submitting organization by an NSF Grants and Agreements Officer. Organizations whose proposals are declined will be advised as promptly as possible by the cognizant NSF Program administering the program. Verbatim copies of reviews, not including the identity of the reviewer, will be provided automatically to the Principal Investigator. (See Section VI.B. for additional information on the review process.)

B. Award Conditions

An NSF award consists of: (1) the award notice, which includes any special provisions applicable to the award and any numbered amendments thereto; (2) the budget, which indicates the amounts, by categories of expense, on which NSF has based its support (or otherwise communicates any specific approvals or disapprovals of proposed expenditures); (3) the proposal referenced in the award notice; (4) the applicable award conditions, such as Grant General Conditions (GC-1)*; or Research Terms and Conditions* and (5) any announcement or other NSF issuance that may be incorporated by reference in the award notice. Cooperative agreements also are administered in accordance with NSF Cooperative Agreement Financial and Administrative Terms and Conditions (CA-FATC) and the applicable Programmatic Terms and Conditions. NSF awards are electronically signed by an NSF Grants and Agreements Officer and transmitted electronically to the organization via e-mail.

*These documents may be accessed electronically on NSF's Website at https://www.nsf.gov/awards/managing/award_conditions.jsp?org=NSF . Paper copies may be obtained from the NSF Publications Clearinghouse, telephone (703) 292-8134 or by e-mail from [email protected] .

More comprehensive information on NSF Award Conditions and other important information on the administration of NSF awards is contained in the NSF Proposal & Award Policies & Procedures Guide (PAPPG) Chapter VII, available electronically on the NSF Website at https://www.nsf.gov/publications/pub_summ.jsp?ods_key=pappg .

Administrative and National Policy Requirements

Build America, Buy America

As expressed in Executive Order 14005, Ensuring the Future is Made in All of America by All of America’s Workers (86 FR 7475), it is the policy of the executive branch to use terms and conditions of Federal financial assistance awards to maximize, consistent with law, the use of goods, products, and materials produced in, and services offered in, the United States.

Consistent with the requirements of the Build America, Buy America Act (Pub. L. 117-58, Division G, Title IX, Subtitle A, November 15, 2021), no funding made available through this funding opportunity may be obligated for infrastructure projects under an award unless all iron, steel, manufactured products, and construction materials used in the project are produced in the United States. For additional information, visit NSF’s Build America, Buy America webpage.

Special Award Conditions:

NSF SBIR/STTR Fast-Track awards are subject to the availability of funds. NSF has no obligation to make any specific number of Fast-Track awards based on a solicitation and may elect to make several or no awards under any specific technical topic or subtopic.

The NSF SBIR/STTR Fast-Track fixed amount cooperative agreements will not exceed $1,555,000 per award and normally will be made for a 24-month period of performance.

NSF requires each NSF SBIR/STTR Fast-Track recipient company to attend and participate in the NSF SBIR/STTR Awardees’ Conference.

Terms and Conditions for awards made under this SBIR/STTR Phase II solicitation were posted in May 2024 and are available on the Award Conditions page, under SBIR/STTR Terms and Conditions . The linked page includes "SBIR/STTR Phase II Cooperative Agreement Financial & Administrative Terms and Conditions (SBIR/STTR-II-CA-FATC)" AND "SBIR/STTR Phase II General Terms & Conditions."

The award notice specifies a pre-determined, fixed amount of NSF support for the project described in the referenced proposal. This amount is based upon the budget approved by NSF for the referenced proposal, as amended.

Phase II Transition:

Phase II component funding will be released to the Fast-Track recipient contingent on successfully passing both Stage Gates 1 and 2 of the Phase II Transition Review.

Companies that do not pass either Stage Gate 1 or 2 will be limited to Phase I funding, and the award will conclude at the end of the Phase I component. The final $25,000 will be made available to the company upon submission and NSF approval of the Phase I final project report and upon submission of a Project Outcomes report.

A decision by NSF not to provide additional funding following either the Stage Gate 1 or Stage Gate 2 review will NOT be eligible for reconsideration or termination review as defined in Chapter XII.A.4 of the PAPPG.

Payment Schedule:

Companies that pass both Stage Gates 1 and 2 will receive access to the final $25,000 of Phase I component funding and a funding increment for the Phase II component of the award. Phase II component payments will generally be managed in accordance with the following schedule:

• 25% Advance Payment.
• 25% upon acceptance by an NSF SBIR Fast-Track Program Officer of first interim report.
• 25% upon acceptance by an NSF SBIR Fast-Track Program Officer of second interim report.
• The remainder of funds, less $25,000, upon acceptance by an NSF SBIR Fast-Track Program Officer of third interim report.
• Final $25,000 upon acceptance by an NSF SBIR Fast-Track Program Officer of a satisfactory final annual project report and upon submission of a Project Outcomes report.

A deviation from the standard payment schedule can be requested if the standard schedule poses significant difficulties for the recipient or would negatively affect the execution of the project. If the standard payment schedule as described above is not appropriate, please request alternative amounts for each payment, and provide a brief justification for the departure from the standard schedule.

Payment of the award amount is subject to compliance with the award terms and conditions and NSF's acceptance of the reports submitted by the recipient. On the basis of its review of these reports and/or other pertinent information, NSF reserves the right to modify the payment schedule or suspend or terminate the award, if NSF determines that such actions are appropriate. If estimated total expenditures are significantly less than the award amount, the recipient shall contact NSF to renegotiate the scope of this award. Similarly, if the recipient expects that the full scope of work will be completed at a total cost significantly lower than the award amount, it is the obligation of the recipient to promptly notify NSF.

C. Reporting Requirements

For all multi-year grants (including both standard and continuing grants), the Principal Investigator must submit an annual project report to the cognizant Program Officer no later than 90 days prior to the end of the current budget period. (Some programs or awards require submission of more frequent project reports). No later than 120 days following expiration of a grant, the PI also is required to submit a final annual project report, and a project outcomes report for the general public.

Failure to provide the required annual or final annual project reports, or the project outcomes report, will delay NSF review and processing of any future funding increments as well as any pending proposals for all identified PIs and co-PIs on a given award. PIs should examine the formats of the required reports in advance to assure availability of required data.

PIs are required to use NSF's electronic project-reporting system, available through Research.gov, for preparation and submission of annual and final annual project reports. Such reports provide information on accomplishments, project participants (individual and organizational), publications, and other specific products and impacts of the project. Submission of the report via Research.gov constitutes certification by the PI that the contents of the report are accurate and complete. The project outcomes report also must be prepared and submitted using Research.gov. This report serves as a brief summary, prepared specifically for the public, of the nature and outcomes of the project. This report will be posted on the NSF website exactly as it is submitted by the PI.

More comprehensive information on NSF Reporting Requirements and other important information on the administration of NSF awards is contained in the NSF Proposal & Award Policies & Procedures Guide (PAPPG) Chapter VII, available electronically on the NSF Website at https://www.nsf.gov/publications/pub_summ.jsp?ods_key=pappg .

VIII. Agency Contacts

Please note that the program contact information is current at the time of publishing. See program website for any updates to the points of contact.

General inquiries regarding this program should be made to:

For questions related to the use of NSF systems contact:

• NSF Help Desk: 1-800-381-1532
• Research.gov Help Desk e-mail: [email protected]

For questions relating to Grants.gov contact:

Grants.gov Contact Center: If the Authorized Organizational Representatives (AOR) has not received a confirmation message from Grants.gov within 48 hours of submission of application, please contact via telephone: 1-800-518-4726; e-mail: [email protected] .

IX. Other Information

The NSF website provides the most comprehensive source of information on NSF Directorates (including contact information), programs and funding opportunities. Use of this website by potential proposers is strongly encouraged. In addition, "NSF Update" is an information-delivery system designed to keep potential proposers and other interested parties apprised of new NSF funding opportunities and publications, important changes in proposal and award policies and procedures, and upcoming NSF Grants Conferences . Subscribers are informed through e-mail or the user's Web browser each time new publications are issued that match their identified interests. "NSF Update" also is available on NSF's website .

Grants.gov provides an additional electronic capability to search for Federal government-wide grant opportunities. NSF funding opportunities may be accessed via this mechanism. Further information on Grants.gov may be obtained at https://www.grants.gov .

About The National Science Foundation

The National Science Foundation (NSF) is an independent Federal agency created by the National Science Foundation Act of 1950, as amended (42 USC 1861-75). The Act states the purpose of the NSF is "to promote the progress of science; [and] to advance the national health, prosperity, and welfare by supporting research and education in all fields of science and engineering."

NSF funds research and education in most fields of science and engineering. It does this through grants and cooperative agreements to more than 2,000 colleges, universities, K-12 school systems, businesses, informal science organizations and other research organizations throughout the US. The Foundation accounts for about one-fourth of Federal support to academic institutions for basic research.

NSF receives approximately 55,000 proposals each year for research, education and training projects, of which approximately 11,000 are funded. In addition, the Foundation receives several thousand applications for graduate and postdoctoral fellowships. The agency operates no laboratories itself but does support National Research Centers, user facilities, certain oceanographic vessels and Arctic and Antarctic research stations. The Foundation also supports cooperative research between universities and industry, US participation in international scientific and engineering efforts, and educational activities at every academic level.

Facilitation Awards for Scientists and Engineers with Disabilities (FASED) provide funding for special assistance or equipment to enable persons with disabilities to work on NSF-supported projects. See the NSF Proposal & Award Policies & Procedures Guide Chapter II.F.7 for instructions regarding preparation of these types of proposals.

The National Science Foundation has Telephonic Device for the Deaf (TDD) and Federal Information Relay Service (FIRS) capabilities that enable individuals with hearing impairments to communicate with the Foundation about NSF programs, employment or general information. TDD may be accessed at (703) 292-5090 and (800) 281-8749, FIRS at (800) 877-8339.

The National Science Foundation Information Center may be reached at (703) 292-5111.

The National Science Foundation promotes and advances scientific progress in the United States by competitively awarding grants and cooperative agreements for research and education in the sciences, mathematics, and engineering. To get the latest information about program deadlines, to download copies of NSF publications, and to access abstracts of awards, visit the NSF Website at 2415 Eisenhower Avenue, Alexandria, VA 22314 (NSF Information Center) (703) 292-5111 (703) 292-5090 Send an e-mail to: or telephone: (703) 292-8134 (703) 292-5111 Privacy Act And Public Burden Statements The information requested on proposal forms and project reports is solicited under the authority of the National Science Foundation Act of 1950, as amended. The information on proposal forms will be used in connection with the selection of qualified proposals; and project reports submitted by proposers will be used for program evaluation and reporting within the Executive Branch and to Congress. The information requested may be disclosed to qualified reviewers and staff assistants as part of the proposal review process; to proposer institutions/grantees to provide or obtain data regarding the proposal review process, award decisions, or the administration of awards; to government contractors, experts, volunteers and researchers and educators as necessary to complete assigned work; to other government agencies or other entities needing information regarding proposers or nominees as part of a joint application review process, or in order to coordinate programs or policy; and to another Federal agency, court, or party in a court or Federal administrative proceeding if the government is a party. Information about Principal Investigators may be added to the Reviewer file and used to select potential candidates to serve as peer reviewers or advisory committee members. See System of Record Notices , NSF-50 , "Principal Investigator/Proposal File and Associated Records," and NSF-51 , "Reviewer/Proposal File and Associated Records.” Submission of the information is voluntary. Failure to provide full and complete information, however, may reduce the possibility of receiving an award. An agency may not conduct or sponsor, and a person is not required to respond to, an information collection unless it displays a valid Office of Management and Budget (OMB) control number. The OMB control number for this collection is 3145-0058. Public reporting burden for this collection of information is estimated to average 120 hours per response, including the time for reviewing instructions. Send comments regarding the burden estimate and any other aspect of this collection of information, including suggestions for reducing this burden, to: Suzanne H. Plimpton Reports Clearance Officer Policy Office, Division of Institution and Award Support Office of Budget, Finance, and Award Management National Science Foundation Alexandria, VA 22314 Warning: The NCBI web site requires JavaScript to function. more... An official website of the United States government The .gov means it's official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site. The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. Publications Account settings Browse Titles NCBI Bookshelf. A service of the National Library of Medicine, National Institutes of Health. National Research Council (US) Committee on Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program. An Assessment of the Small Business Innovation Research Program: Project Methodology. Washington (DC): National Academies Press (US); 2004. An Assessment of the Small Business Innovation Research Program: Project Methodology. Hardcopy Version at National Academies Press Methodology Paper 1. introduction. As the Small Business Innovation Research (SBIR) program approached its twentieth year of operation, the U.S. Congress requested that the National Research Council (NRC) conduct a “comprehensive study of how the SBIR program has stimulated technological innovation and used small businesses to meet federal research and development needs,” and to make recommendations on improvements to the program. 1 Mandated as a part of SBIR's renewal in 2000, the NRC study is to assess the SBIR program as administered at the five federal agencies that together make up 96 percent of SBIR program expenditures. The agencies, in order of program size, are DoD, NIH, NASA, DoE, and NSF. The objective of the study is not to consider if SBIR should exist or not—Congress has already decided affirmatively on this question. Rather, the NRC Committee conducting this study is charged with providing assessment-based findings to improve public understanding of the program as well as recommendations to improve the program's effectiveness. In addition to setting out the study objectives, this report defines key concepts, identifies potential metrics and data sources, and describes the range of methodological approaches being developed by the NRC to assess the SBIR program. Following some historical background on the SBIR program, this introduction outlines the basic parameters of this NRC study. A Brief History of the SBIR Program In the 1980s, the country's slow pace in commercializing new technologies—compared especially with the global manufacturing and marketing success of Japanese firms in autos, steel, and semiconductors—led to serious concern in the United States about the nation's ability to compete. U.S. industrial competitiveness in the 1980s was frequently cast in terms of American industry's failure “to translate its research prowess into commercial advantage.” 2 The pessimism of some was reinforced by evidence of slowing growth at corporate research laboratories that had been leaders of American innovation in the postwar period and the apparent success of the cooperative model exemplified by some Japanese kieretsu . 3 Yet, even as larger firms were downsizing to improve their competitive posture, a growing body of evidence, starting in the late 1970s and accelerating in the 1980s, began to indicate that small businesses were assuming an increasingly important role in both innovation and job creation. 4 Research by David Birch and others suggested that national policies should promote and build on the competitive strength offered by small businesses. 5 In addition to considerations of economic growth and competitiveness, SBIR was also motivated by concerns that small businesses were being disadvantaged vis-à-vis larger firms in competition for R&D contracts. Federal commissions from as early as the 1960s had recommended the direction of R&D funds toward small businesses. 6 These recommendations, however, were opposed by competing recipients of R&D funding. Although small businesses were beginning to be recognized by the late-1970s as a potentially fruitful source of innovation, some in government remained wary of funding small firms focused on high-risk technologies with commercial promise. The concept of early-stage financial support for high-risk technologies with commercial promise was first advanced by Roland Tibbetts at the National Science Foundation (NSF). As early as 1976, Mr. Tibbetts advocated that the NSF should increase the share of its funds going to small business. When NSF adopted this initiative, small firms were enthused and proceeded to lobby other agencies to follow NSF's lead. When there was no immediate response to these efforts, small businesses took their case to Congress and higher levels of the Executive branch. 7 In response, a White House Conference on Small Business was held in January 1980 under the Carter Administration. The conference's recommendation to proceed with a program for small business innovation research was grounded in: Evidence that a declining share of federal R&D was going to small businesses; Broader difficulties among small businesses in raising capital in a period of historically high interest rates; and Research suggesting that small businesses were fertile sources of job creation. Congress responded under the Reagan Administration with the passage of the Small Business Innovation Research Development Act of 1982, which established the SBIR program. 8 The SBIR Development Act of 1982 The new SBIR program initially required agencies with R&D budgets in excess of $100 million to set aside 0.2 percent of their funds for SBIR. This amount totaled $45 million in 1983, the program's first year of operation. Over the next 6 years, the set-aside grew to 1.25 percent. 9 The legislation authorizing SBIR had two broad goals: “to more effectively meet R&D needs brought on by the utilization of small innovative firms (which have been consistently shown to be the most prolific sources of new technologies) and to attract private capital to commercialize the results of federal research.” SBIR's Structure and Role As conceived in the 1982 Act, SBIR's grant-making process is structured in three phases: Phase I is essentially a feasibility study in which award winners undertake a limited amount of research aimed at establishing an idea's scientific and commercial promise. Today, the legislation anticipates Phase I grants as high as $100,000. 10 Phase II grants are larger – normally $750,000 – and fund more extensive R&D to further develop the scientific and technical merit and the feasibility of research ideas. Phase III. This phase normally does not involve SBIR funds, but is the stage at which grant recipients should be obtaining additional funds either from a procurement program at the agency that made the award, from private investors, or from the capital markets. The objective of this phase is to move the technology to the prototype stage and into the marketplace. Phase III of the program is often fraught with difficulty for new firms. In practice, agencies have developed different approaches to facilitating this transition to commercial viability; not least among them are additional SBIR awards. 11 Some firms with more experience with the program have become skilled in obtaining additional awards. Previous NRC research showed that different firms have quite different objectives in applying to the program. Some seek to demonstrate the potential of promising research. Others seek to fulfill agency research requirements on a cost-effective basis. Still others seek a certification of quality (and the additional awards that can come from such recognition) as they push science-based products toward commercialization. 12 Given this variation and the fact that agencies do not maintain data on Phase III, quantifying the contribution of Phase III is difficult. The 1992 and 2000 SBIR Reauthorizations The SBIR program approached reauthorization in 1992 amidst continued worries about the U.S. economy's capacity to commercialize inventions. Finding that “U.S. technological performance is challenged less in the creation of new technologies than in their commercialization and adoption,” the National Academy of Sciences at the time recommended an increase in SBIR funding as a means to improve the economy's ability to adopt and commercialize new technologies. 13 Accordingly, the Small Business Research and Development Enhancement Act (P.L. 102-564), which reauthorized the program until September 30, 2000, doubled the set-aside rate to 2.5 percent. 14 This increase in the percentage of R&D funds allocated to the program was accompanied by a stronger emphasis on encouraging the commercialization of SBIR-funded technologies. 15 Legislative language explicitly highlighted commercial potential as a criterion for awarding SBIR grants. For Phase I awards, Congress directed program administrators to assess whether projects have “commercial potential” in addition to scientific and technical merit when evaluating SBIR applications. With respect to Phase II, evaluation of a project's commercial potential was to consider, additionally, the existence of second-phase funding commitments from the private sector or other non-SBIR sources. Evidence of third-phase follow-on commitments, along with other indicators of commercial potential, was also sought. Moreover, the 1992 reauthorization directed that a small business' record of commercialization be taken into account when considering the Phase II application. 16 The Small Business Reauthorization Act of 2000 (P.L. 106-554) again extended SBIR until September 30, 2008. It also called for an assessment by the National Research Council of the broader impacts of the program, including those on employment, health, national security, and national competitiveness. 17 Previous NRC Assessments of SBIR Despite its size and tenure, the SBIR program has not been comprehensively examined. There have been some previous studies focusing on specific aspects or components of the program—notably by the General Accounting Office and the Small Business Administration. 18 There are, as well, a limited number of internal assessments of agency programs. 19 The academic literature on SBIR is also limited. 20 Annex E provides a bibliography of SBIR as well as more general references of interest. Against this background, the National Academies' Committee for Government-Industry Partnerships for the Development of New Technologies—under the leadership of its chairman, Gordon Moore—undertook a review of the SBIR program, its operation, and current challenges. The Committee convened government policy makers, academic researchers, and representatives of small business on February 28, 1998 for the first comprehensive discussion of the SBIR program's history and rationale, review existing research, and identify areas for further research and program improvements. 21 The Moore Committee reported that: SBIR enjoyed strong support both within and outside the Beltway. At the same time, the size and significance of SBIR underscored the need for more research on how well it is working and how its operations might be optimized. There should be additional clarification about the primary emphasis on commercialization within SBIR, and about how commercialization is defined. There should also be clarification on how to evaluate SBIR as a single program that is applied by different agencies in different ways. 22 Subsequently, at the request of the DoD, the Moore Committee was asked to review the operation of the SBIR program at Defense, and in particular the role played by the Fast Track Initiative. This resulted in the largest and most thorough review of an SBIR program to date. The review involved substantial original field research, with 55 case studies, as well as a large survey of award recipients. It found that the SBIR program at Defense was contributing to the achievement of mission goals—funding valuable innovative projects—and that a significant portion of these projects would not have been undertaken in the absence of the SBIR funding. The Moore Committee's assessment also found that the Fast Track Program increases the efficiency of the DoD SBIR program by encouraging the commercialization of new technologies and the entry of new firms to the program. More broadly, the Moore Committee found that SBIR facilitates the development and utilization of human capital and technological knowledge. Case studies have shown that the knowledge and human capital generated by the SBIR program has economic value, and can be applied by other firms. And through the certification function, it noted, SBIR awards encourage further private sector investment in the firm's technology. Based on this and other assessments of public private partnerships, the Moore Committee's Summary Report on U.S. Government-Industry Partnerships recommended that “regular and rigorous program-based evaluations and feedback is essential for effective partnerships and should be a standard feature,” adding that “greater policy attention and resources to the systematic evaluation of U.S. and foreign partnerships should be encouraged.” 23 Preparing the Current Assessment of SBIR As noted, the legislation mandating the current assessment of the nation's SBIR program focuses on the five agencies that account for 96 percent of program expenditures (although the National Research Council is seeking to learn of the views and practices of other agencies administering the program as well.) The mandated agencies, in order of program size, are the Department of Defense, the National Institutes of Health, the National Aeronautics and Space Administration, the Department of Energy, and the National Science Foundation. Following the passage of H.R. 5667 in December 2000, extensive discussions were held between the NRC and the responsible agencies on the scope and nature of the mandated study. Agreement on the terms of the study, formalized in a Memorandum of Understanding, was reached in December 2001 (See Annex B ), and the funding necessary for the Academies to begin the study was received in September 2002. The study was officially launched on 1 October 2002. The study will be conducted within the framework provided by the legislation and the NRC's contracts with the five agencies. These contracts identify the following principal tasks: Collection and analysis of agency databases and studies, Survey of firms and agencies, Conduct of case studies organized around a common template, and; Review and analysis of survey and case study results and program accomplishments. As per the Memorandum of Understanding between the NRC and the agencies, the study is structured in two-phases. Phase I of the study, beginning on October 2002, focuses on identifying data collection needs and the development of a research methodology. Phase II of the study, anticipated to start in 2004, will implement the research methodology developed in Phase I of the study. This document outlines the methodological approach being developed under Phase I of the study. It introduces many of the methodological questions to be encountered during Phase II of the NRC study. Finally, it outlines strategies for resolving these questions, recognizing that some issues can only be resolved in the context of the study itself. Given that agencies covered in this study differ in their objectives and goals, the assessment will necessarily be agency-specific. 24 As appropriate, the Committee will draw useful inter-agency comparisons and multiyear comparisons. In this regard, a table with the agencies in one dimension and all of the identified SBIR objectives in the other may be a useful expository tool. The study will build on the methodological models developed for the 1999 NRC study of the DoD's Fast Track initiative, as appropriate, clearly recognizing that the broader and different scope of the current study will require some adjustments. 25 Additional areas of interest, as recognized by the Committee, may also be pursued as time and resources permit. 2. An Overview of the Study Process Following its approval of the broad study parameters of the study in October 2002, the Committee set out an overall roadmap to guide the research process. Tasks included are the development a set of operational definitions, the identification of detailed metrics, the review existing data sources, and the development of primary research methodologies. Closely interrelated, these tasks will be addressed iteratively. (These iterative tasks are represented in the box within Figure 1 .) Following completion of field research, the Committee will conduct its analysis and assessment and will issue its findings and recommendations. The elements of this multi-step process are detailed below: Agree on initial guidelines. These initial guidelines are based on the legislation, the Memorandum of Understanding, and contracts. Clarify objectives. What central questions must the study answer? What other interesting but optional questions should be addressed? What questions will specifically not be considered? This is discussed further in Section 3 of this chapter. Develop operational definitions: For example, while Congress has mandated that the study address the extent to which SBIR supports the agencies' missions, the Committee needs to develop operational definitions of “support” and “agency mission,” in collaboration with agency managers responsible for program operations. This is a necessary step before developing the relevant metrics. This is discussed further in Section 4 of this chapter. Identify metrics for addressing study objectives. The Committee will determine extent of commercialization fostered by SBIR—measured in terms of products procured by agencies, commercial sales, licensing revenue, or other metrics. This is discussed further in Section 5 of this chapter. Identify data sources . Implementation of agreed metrics requires data. A wide mix of data sources will be used, so the availability of existing data and the feasibility of collecting needed data by different methods will also condition the selection of metrics, and the choice of study methods. The existence or absence of specific methodologies and data sets will undoubtedly lead to the modification, adoption, or elimination of specific metrics and methods. This is discussed further in Section 6 of this chapter. Develop primary research methodologies. The study's primary research components will include interviews, surveys, and case studies to supplement existing data. Control groups and counterfactual approaches will be used where feasible and appropriate to isolate the effects of the SBIR program. Other evaluation methods may also be used on a limited basis as needed to address questions not effectively addressed by the principal methods. This is discussed further in Section 7 of this report. Complete Phase I . Phase I of the NRC study will be formally completed once a set of methodologies is developed and documented, is approved by the Committee, and passes successfully through the Academy's peer review process. Implement the research program (NRC Study Phase II). The variety of tasks involved in implementing the research program is previewed in Annex I of this report. Prepare agency-specific reports. Results from the research program will be presented in five agency-specific reports—one for each of the agencies. Where appropriate, agency-specific findings and recommendations will be formulated by the relevant study subcommittee for review and approval by the full Committee. Prepare overview report. A separate summary report, buttressed by the relevant commissioned work and bringing together the findings of the individual agency reports, along with general recommendations, will be produced for distribution. This final report will also draw out, as appropriate, the contrasts and similarities among the agencies in the way they administer SBIR. It will follow the approval procedure outlined above. Organize public meetings to review and discuss findings. Following report review, findings and recommendations will be presented publicly for information, review, and comment. Submit reports to Congress. Disseminate findings broadly. 3. Clarifying Study Objectives Three primary documents condition and define the objectives for this study: These are the Legislation—H.R. 5667 [ Annex A ], the NAS contracs accepted by the five agencies [ Annex B ], and the NAS-Agencies Memorandum of Understanding [ Annex C ]. Based on these three documents, the team's first task is to develop a comprehensive and agreed set of practical objectives that can be reviewed and ultimately approved by the Committee. The Legislation charges the NRC to “conduct a comprehensive study of how the SBIR program has stimulated technological innovation and used small businesses to meet Federal research and development needs.” H.R. 5667 includes a range of questions [see Annex A ]. According to the legislation, the study should: review the quality of SBIR research ; review the SBIR program's value to the agency's mission; assess the extent to which SBIR projects achieve some measure of commercialization; evaluate economic and non-economic benefits; analyze trends in agency R&D support for small business since 1983; analyze—for SBIR Phase II awardees—the incidence of follow-on contracts (procurement or non-SBIR Federal R&D) measuring outcomes for agency strategy and performance; possibly opening Phase II SBIR competitions to all qualifying small businesses (not just SBIR Phase I winners); recouping SBIR funds when companies are sold to foreign purchasers and large companies; increasing Federal procurement of technologies produced by small business; improving the SBIR program. Items under (g) are questions raised by the Congress that will be considered along with other areas of possible recommendation once the data analysis is complete. The NAS proposal accepted by the agencies on a contractual basis adds a specific focus on commercialization following awards, and “broader policy issues associated with public-private collaborations for technology development and government support for high technology innovation, including bench-marking of foreign programs to encourage small business development.” The proposal includes SBIR's contribution to economic growth and technology development in the context of the economic and non-economic benefits listed in the legislation. SBIR does seek to meet a number of distinctly different objectives with a single program, and there is no clear guidance from Congress about their relative importance. The methodology developed to date assumes that each of the key objectives must be assessed separately, that it will be possible to draw some conclusions about each of the primary objectives, and that it will be possible to draw some comparisons between those assessments. Balancing these different objectives by weighing the Committee assessment is a matter for Congress to decide. At the core of the study is the need to determine how far the SBIR program has evolved from merely requiring more mission agency R&D to be purchased from small firms to an investment in new product innovation that might or might not be purchased later by the agency. 4. Developing Operational Definitions and Concepts The study will identify core operational terms and concepts in advance of full development of the methodology. The following represents an initial identification of some terms and concepts: The quality of SBIR research Quality is a relative concept by definition, so an assessment of SBIR research quality must compare it to the quality of other research. 26 Quality is also subjective, so the realization of value may depend on its perceived utility. The principal comparison here will be with other extra-mural research funded by the same agencies. The question of whether comparisons should focus only on R&D by other small businesses is yet to be addressed; this decision may be made on an agency-by-agency basis. 27 SBIR's value to agency missions Given that agency missions and their associated sub-unit objectives differ substantially among, (and even within) agencies, the issue of SBIR's value to agency missions will be addressed largely in the context of individual agency analysis. While a more generic set of answers would be helpful, it will be important to emphasize the challenges posed by multiple agencies with multiple missions, executed by multiple subunits. For example, some agencies, such as DoD and NASA, are “procurement agencies,” seeking tools for the nation's military, while others, such as NSF and NIH, are not. These different goals may change the agency's vision of SBIR's role quite fundamentally. Generic mission elements include: Technology needs ( i.e., agency-identified technology gaps, such as a missing vaccine delivery system identified as a priority by NIH 28 ); Procurement needs ( i.e., technologies that the agency needs for its own internal use, e.g., optical advances for smart weapons at DoD). Expansion or commercialization of knowledge in agency's field of stewardship ( e.g., funding in relatively broad sub-fields of information technology at NSF); 29 Procurement from supply chain providers, Purchase by the agency on the open market via successful commercialization by the SBIR firm (e.g., purchase of DoD-R&D-supported advanced sonar equipment), Use by others of the technology whose development is sponsored by the agency and made available through such means as licensing, partnership arrangements, or by purchase on the open market. (e.g., a power plant may adopt technology available on the market and fostered by DoE's SBIR, or a public health clinic may adopt a new vaccine delivery system available on the market and fostered by NIH's SBIR). To address agency-specific missions (e.g., national defense at DoD, health at NIH, energy at DoE), the Committee will closely consult with agency staff to develop operational definitions of success--in some cases at the level of sub-units (e.g., individual NIH institutes and centers.) Some overlay will likely occur (e.g., defense-health needs.) Finally, agencies will undoubtedly have their own conceptions of how their SBIR program is judged in relation to their missions, and it is possible (perhaps likely) that some of these views will not fit well in the areas listed. The Committee is sensitive to these distinctions and differences, and will articulate these concepts at an early stage. The extent of commercialization SBIR is charged with supporting the commercialization of technologies developed with federal government support. In many agencies, this requirement is articulated as a focus on the “commercialization” of SBIR supported research. 30 At the simplest level, commercialization means, “reaching the market,” which some agency managers interpret as “first sale”: the first sale of a product in the market place, whether to public or private sector clients. 31 This definition is certainly practical and defensible. However, it risks missing significant components of commercialization that do not result in a discrete sale. At the same time, it also fails to provide any guidance on how to evaluate the scale of commercialization, which is critical to assessing the degree to which SBIR programs successfully encourage commercialization: the sale of a single widget is not the same as playing a critical role in the original development of Qualcomm's cell-phone technology. Thus, the Committee's assessment of commercialization will require working operational definitions for a number of components. These include: Sales—what constitutes a sale? Application—how is the product used? For example, products like software are re-used repeatedly. Measuring scale—over what interval is the impact to be measured. (e.g., Qualcomm's SBIR grant was by all accounts very important for the company. The question arises as to how long the dollar value of Qualcomm's wireless related sales, stemming from its original SBIR grant, should be counted.) 32 Licensing—how should commercial sales generated by third party licensees of the original technology be counted. Is the licensing revenue from the licensee to be counted, or the sales of that technology by the licensee—(or both)? Complex sales—technologies are often sold as bundles with other technologies (auto engines with mufflers for example). Given this, how is the share of the total sales value attributable to the technology that received SBIR funding to be defined? Lags—some technologies reach market rapidly, but others can take 10 years or more. What is an appropriate discount rate and timeframe to measure award impact? Metrics for assessing commercialization can be elusive. Notably, one cannot easily calculate the full value of developed “enabling technology” that can be used across industries. Also elusive is the value of material that enables a commercial service. In such cases, a qualitative approach to “commercialization” will need to be employed. While the theoretical concept of additionality will be of some relevance to these questions, practicalities must govern, and the availability of data will substantially shape the Committee's approach in this area. This is particularly the case where useful data must be gathered from thousands of companies, often at very considerable expense in dollars and time. 33 The NRC study will resolve these very practical questions by the early stages of the study's second phase. The Committee plans to adapt, where appropriate, definitions and approaches used in the Fast Track study for the current study. 34 Broad economic effects SBIR programs may generate a wide range of economic effects. While some of these may be best considered in a national context, others fall more directly on participating firms and on the agencies themselves. The Committee will consider these possible benefits and costs in terms of the level of incidence. Participating firms Economic effects on firms include some or all of the following elements: Revenue from sale or adoption of SBIR-developed products, services, or processes (this tracks quite closely but not 100 percent with commercialization) Changes in the firm's access to capital, including ways in which SBIR awards have helped (or hindered) recipient companies access capital markets Product development Entry into market The impact of SBIR on the frequency with which companies develop partnerships The nature of the partnerships—are they public or private partners? Change in employment and capitalization 36 Change in firm productivity Change in profits Work in this section will follow closely on the Fast Track study model, seeking to identify ways in which the recipient firms were affected in the areas listed. 37 The agencies Effects on the agencies include the following: Effects on mission support SBIR has helped to generate technologies that agencies might not otherwise have developed in the same timeframe without the program SBIR is an effective way for agencies to fund competitive research, presumably compared to non-SBIR research funding for small scale requirements There are significant benefits to agency missions from the specific effort of SBIR to capture research by small firms. Benchmark numbers for small business contributions to agency research programs before SBIR (pre-1983), and outside SBIR (other programs?) may be needed. Research efficiency implies a review of the returns to the agency from SBIR investment vs. other research investment. It is important to acknowledge, however, that this analysis will likely not be based on hard rate of return analysis, because the data necessary for such analysis is unlikely to be available at the agency level. Effects on agency procurement efficiency Effects on society Social returns r efer to the returns to society at large, including private returns and spillover effects. Using the Link/Scott approach from Fast Track as a model is expected to help us conceptualize our approach to this broad effect. 38 Other approaches may also be useful. Small business support refers to the positive social externalities associated with a vibrant small business sector, including community cohesiveness and improvements to life made possible new products. Measuring the impact of program support for small business is a major objective, 39 given that support encourages the commercialization of public investment in R&D, the achievement of national missions, and the encouragement of small firm growth. Training in both business development and in technology and innovation The Audtresch/ J. Weigand/ C. Weigand Fast Track paper provides a good methodological basis for addressing “training.” 40 Non-economic benefits While it is possible to view almost all non-economic effects through the lens of economic analysis, pushing all effects to economic measurement is usually not feasible and may not be appropriate. Certain effects have been specifically defined as positive outcomes by Congress, regardless of whether they have any measurable impact on economic well-being. This section addresses non-economic benefits, which will in turn have non-economic metrics attached to them, discussed later in this paper. Knowledge benefits The missions of several agencies explicitly state the requirement of advancing knowledge in the relevant field. For the SBIR program, this requirement can be viewed from two distinct but complementary perspectives: Intellectual property, 41 which is governed by a set of legal definitions, and is susceptible to close measurement via analysis of patent filings and other largely quantitative assessment strategies. 42 Intellectual property rights are generally used to convert knowledge to property for commercial benefit of the owner. At the same time, mechanisms of intellectual property can help to disseminate knowledge to others. A patent, for example, gives the holder exclusive rights, but provides information to others. Intellectual property also includes “trade secrets.” In many cases, the “know how” that firms keep proprietary may be the most important intellectual property produced by the research. These may be less susceptible to measurement. Non-property knowledge is much less well defined but nonetheless of great importance. Non-property knowledge ranges from formal activities (e.g., papers published in refereed journals, and seminars) to very informal activities (e.g., discussions among researchers and worker mobility). Many relevant concepts are discussed in the literature on human capital. Non-property knowledge is related to education and training and encompasses network capital and tacit expertise that an engineer or scientist may possess. Other potential non-economic benefits Environmental impacts Quality of life Trends in agency funding for small business For this study, “small business funding” will be defined as synonymous with SBIR. A definition of “small” is needed. The SBIR definition (fewer than 500 employees) is quite broad. 43 Dividing firm participants into size subcategories may be advantageous. We plan a breakdown of small firms by size, taking into account existing SBA classifications and based on natural divisions as emerge from the data. The agencies have considerable discretion in defining which agency expenditures and disbursements they consider to be R&D, and thus subject to the percentage requirements of the SBIR set aside. Small firms also receive R&D funding directly from the agencies outside the SBIR program, and receive subcontracts for R&D from primes or other subcontractors, whose original funding source was federal R&D. Since in some cases the prime or intermediate contractor may also be a small business, there is an opportunity for double counting as well as for undercounting. It is important to keep in mind that the congressional intent was to increase the amount of federal R&D funding ultimately reaching small businesses. Small businesses, in many cases, cannot take on more R&D funding, as they do not have the expert staff, or the culture to do R&D. Thus, there might conceivably be a sort of saturation effect. The issue of absorptive capacity also occurs in the case of fast moving high tech firms, which may not willing to risk the overhead and delay involved in seeking federal funds at all. In the present study, saturation effects can be examined in part by investigating the relationship between the growth of grant-program funding and the growth of grant-program applications. Insights into the impacts of expansions in grant funding on small-business response capacity and on research quality may be gained by analyzing ATP's experience between 1993 and 1994, based on changes in reviewer technical scores and small business application rates as the program was expanded dramatically between 1993 and 1994. Best practices and procedures in operating SBIR programs Issues related to administrative process, both within agencies and across agencies, will be defined over the course of the first phase of the NRC study. Areas to be addressed may include: Topic development Application procedures and timelines Project monitoring Agency management funding Project funding limitations Bridge funding Post SBIR Phase II support 5. Potential Metrics for Addressing Study Objectives In keeping with the definitions and concepts in the previous section, the NRC study will identify the desired measures for expressing results related to each of the objectives defined in section 3, Clarifying Study Objectives . It is important to note that the metrics ultimately used in the study will be selected partly based on their theoretical importance in answering critical questions, and partly based on practicalities. Here we list a set of draft metrics of clear utility to the study; not all will ultimately be adopted, and, as the research progresses; undoubtedly others will be developed as additional elements emerge as the study moves forward. Research quality 44 Internal measures of research quality—These will be based on comparative survey results from agency managers with respect to the quality of SBIR-funded research versus the quality of other agency research. It is important here to recognize that standards and reviewer biases in the selection for SBIR awards in the selection of other awards may vary. Peer-reviewed publications Technology awards from organizations outside the SBIR agency Patent Citations Agency mission Agency missions vary; for example procurement will not be relevant to NSF and NIH (and some of DoE) SBIR programs. The value of SBIR to the agency mission can best be addressed through surveys at the sub-unit manager level, similar to the approach demonstrated by Archibald and Finifter's (2000) Fast Track study, which provides a useful model in this area. 45 These surveys will seek to address: The alignment between agency SBIR objectives and agency mission Agency-specific metrics (to be determined) The rate at which agency procurement from small firms has changed since inception of SBIR; The change in the time elapsed between a proposal arriving on an agency's desk and the contract arriving at the small business; The rate at which SBIR firm involvement in procurement has changed over time; Comparison of SBIR-related procurement with other procurement emerging from extra-mural agency R&D; Technology procurement in the agency as a whole; Time elapsed between a proposal arriving on an agency's desk and the contract arriving at the small business. Minimization of lags in converting from SBIR Phase I to Phase II Parallel data collection across the five agency SBIR programs is to compile year-by-year program demographics for approximately the last decade. Data compilation requests will include the number of applications, number of awards, ratio of awards to applications, and total dollars awarded for each phase of the multi-phase program. It will cover the geographical distribution of applicants, awards, and success rates; statistics on applications and awards by women-owned and minority-owned companies; statistics on commercialization strategies and outcomes; results of agency-initiated data collection and analysis; and uniform data from a set of case studies for each agency. The Committee plans to draw on the following data collection instruments: Phase I recipient survey Phase II recipient survey SBIR program manager survey COTAR (technical point of contact) survey case data from selected cases Data collected from these surveys and case studies will be added to existing public sources of data that will be used in the study, such as: all agency data covering award applications, awards, outcomes, and program management patent and citation data venture capital data census data Additional data may be collected as a follow-up based on an analysis of response. The study will examine the agency rates of transition between phases, pending receipt of the agency databases for applications and awards of Phase I and Phase II. The Phase II survey will gather information on all Phase III activity including commercial sales, sales to the federal government, export sales, follow-on federal R&D contracts, further investment in the technology by various sources, marketing activities, and identification of commercial products or federal programs that incorporate the products. SBIR Program manager surveys and interviews will address federal efforts to exploit the results of phase II SBIR into phase III federal programs. Commercialization First order metrics for commercialization revolve around these basic areas: Direct sales in the open market as a percentage of total sales Indirect sales (e.g. bundled with other products and services) as a percent of total sales Contracts relating to products Contracts relating to the means of production or delivery—processes SBIR-related products, services, and processes procured by government agencies. Spin-off of firms The issue of commercial success goes beyond whether project awards go to firms that then succeed in the market. It is possible that these firms may well have succeeded anyway, or they may simply have displaced other firms that would have succeeded had their rival not received a subsidy. The issue is whether SBIR increases the number of small businesses that succeed in the market. If the data permit, the study team may try to emulate the research of Feldman and Kelley to test the hypothesis that the SBIR increases/does not increase the number of small businesses that pursue their research projects or achieve other goals. 46 Broad economic benefits Creation of a firm (i.e., has SBIR led to the creation of a firm that otherwise would not have been founded) Growth in size (employment, revenues) Merger activity Increase in stock value/IPO, etc. 47 Formation of collaborative arrangements to pursue commercialization, including pre-competitive R&D or a place in the supply chain Investment in plant (production capacity) Other pre-revenues activities aimed at commercialization, such as entry into regulatory pipeline and development of prototypes From angel investors From venture capitalists Banks and commercial lenders Capital contributions from other firms Stock issue of the SBIR-recipient firm, e.g., initial public offerings (IPO) Subsequent (non-SBIR) funding procurement from government agencies For agencies (Aside from mission support and procurement) Outcomes from SBIR vs. non-SBIR research Agency manager attitudes toward SBIR For society at large Social returns include private returns, agency returns, and spillover effects from research, development, and commercialization of new products, processes, and services associated with SBIR projects. It is difficult, if not impossible, to capture social returns fully, but an attempt will be made to capture at least part of the effects beyond those identified above including the following: Evidence of spillover effects Small business share of agency R&D funding Survival rates for SBIR supported firms Growth and success measures for SBIR vs. non-SBIR firms SBIR impact on entrepreneurial activity among scientists and engineers Management advice from Venture Capital firms Other training effects. Patents filed and granted Patent citations Journal articles and citations Human capital measures Other non-economic benefits Given the complexity of the NRC study, the Committee is unlikely to devote substantial resources to this area. However, some evidence about other non-economic benefits e.g., environmental or safety impacts may emerge from the case studies and interviews. Absolute SBIR funding levels SBIR vs. other agency extra mural research funding received by small businesses Agency funding for small business relative to overall sources of funding in the US economy Best practices in SBIR funding It will be important to analyze the categories below with respect to the size of the firm. Recipient views on process Management views on process Flexibility of process, e.g., award size Timeliness of application decision process Management actions on troubled projects Possible independent variables: demographic characteristics For all of the outcome metrics listed above, it will be important to capture a range of demographic variables that could become independent variables in empirical analyses. What is the best way of assessing SBIR? One approach—utilized by many agencies when examining their SBIR programs—has been to highlight successful firms. Another approach has been to survey firms that have been funded under the SBIR program, asking such questions as whether the technologies funded were ever commercialized, the extent to which their development would have occurred without the public award, and how firms assessed their experiences with the program more generally. It is important to recognize and account for the biases that arise with these and other approaches. Some possible sources of bias are noted below 48 : Response bias—1: Many awardees may have a stake in the programs that have funded them, and consequently feel inclined to give favorable answers (i.e., that they have received benefits from the program and that commercialization would not have taken place without the awards). This may be a particular problem in the case of the SBIR initiative, since many small high-technology company executives have organized to lobby for its renewal. Response bias—2: Some firms may be unwilling to acknowledge that they received important benefits from participating in public programs, lest they attract unwelcome attention. Measurement bias: It may simply be very difficult to identify the marginal contribution of an SBIR award, which may be one of many sources of financing that a firm employed to develop a given technology. Selection bias. This source of bias concerns whether SBIR awards firms that already have the characteristics needed for a higher growth rate and survival, although the extent of this bias is likely overdrawn since an important role of SBIR is to telegraph information about firms to markets operating under conditions of imperfect information. 49 Management bias: information from agency managers, who must defend their SBIR management before the Congress, may be subject to bias in different ways. Size bias: The relationship between firm size and innovative activity is not clear from the academic literature. 50 It is possible that some indexes will show large firms as more successful (publications and total patents for example) while others will show small firms as more successful (patents per employee for example.) A complement of approaches will be developed to address the issue of bias. In addition to a survey of program managers, we intend to interview firms as well as agency officials, employ a range of metrics, and use a variety of methodologies. The Committee is aware of the multiple challenges in reviewing “the value to the Federal research agencies of the research projects being conducted under the SBIR program…” [H.R. 5667, sec. 108]. These challenges stem from the fact that the agencies differ significantly by mission, R&D management structures (e.g., degree of centralization), and manner in which SBIR is employed (e.g., administration as grants vs. contracts); and different individuals within agencies have different perspectives regarding both the goals and the merits of SBIR-funded research. The Committee proposes multiple approaches to assessing the contributions of the program to agency mission, in light of the complicating factors mentioned above: A planned survey of all individuals within studied agencies having SBIR program management responsibilities (that is, going beyond the single "Program Manager" in a given agency). The survey will be designed and implemented with the objective of minimizing framing bias. We will reduce sampling bias by soliciting responses from R&D managers without direct SBIR responsibilities as well as those who have both. Important areas of inquiry include study of the process by which topics are defined, solicitations developed, projects scored, and award selections made. Systematic gathering and critical analysis of the agencies' own data concerning take-up of the products of SBIR funded research. Study of the role of multiple-award-winning firms in performing agency relevant research; A possible study comparing funded and nearly funded projects at NIH (possibly extended to other agencies). 6. Existing Data Sources Specific data requirements are driven by a study's methodology, and their definition would normally follow that discussion. As noted earlier, however, the status of prior agency studies and agency databases will affect the methodologies selected and hence data collection needs. The Committee will make an initial effort to identify and review existing data sources. These will be extended and undoubtedly modified during the early stages of Phase II of the NRC study. In general, existing data will be extracted in the main from the following sources: Agency SBIR databases Published agency reports Internal agency analysis SBA and GAO reports Previously conducted recipient surveys Academic literature Prior NRC studies These existing data sources are briefly discussed below. Existing agency and SBA reports The agencies appear to have produced few major reports on their own SBIR programs, aside from annual reports to SBA. In addition to Fast Track, DoD has unpublished studies; NASA recently completed some analysis; NSF also has some internal assessments. These agency reports must be assessed for accuracy and comprehensiveness, as an early-stage priority under Phase II of the NRC study. 51 Annex E provides a list of these agency studies Existing agency SBIR databases All five agencies maintain databases of awards and awardees. This information typically contains basic information about the awardee (e.g., company name, Principal Investigator, contact address), information about the award (amount, date, award number), and in many cases, additional detailed project information (e.g., proposal summary, commercialization prospects.) 52 In general, the agency databases offer reasonably strong input data – award amounts, dates, Principal Investigator information etc. – and relatively weak output data – commercial impact etc. The agency databases may have information on modifications that have added funds, but do not typically contain sufficient information about the use of funds (The abstract, which may be useful for case study decisions, does not lend itself to statistical use since the sample size is one for each unique abstract.) 53 Thus, the agency databases will be most useful as sources two critical sets of information: Basic information about awards, including some demographic data about awardees; Contact information for awardees, useful as the survey distribution lists are developed. More technically, issues related to agency databases may include: Do the data cover all of the applications received by the agency? Are all grants accounted for? Is the contact data up to date (i.e., what percentage respond to a contact effort based on this information)? What year was the database started? Does it maintain information about non-awardees? What percent of SBIR Phase I awards get converted to Phase II awards How many SBIR Phase II contracts lead to Phase III PI's come and go; firms shrink and grow; firms are acquired; firms may close down, move, or change names; Answers often depend on whom you ask; Firms that are very successful may have new management in place as a result of venture capital activity or other financial arrangements, or due to firm acquisition by another organization; There is often a long gestation between award of the SBIR Phase II and achievement of significant revenues. Often other SBIR grants and other R&D may have occurred in the interval. There may not be anyone still at the firm knowledgeable of the link between the product and the SBIR; The most serious analytical issue may be the dependency on self-reporting, as the agencies generally know little about commercialization except that which is self-reported by the firm. Depth of the data – Does the data reach firm level variables, award data, projects, and outcomes? Conversely, what primary gaps in the data should be filled by primary research? The Committee will also need to assess data collected by agencies beyond that required by SBA, to see if there are opportunities and/or gaps. The expanded role of DoD data R ecent DoD collections include information on projects in the earlier studies, as well as in the next Fast Track: about one-third of the DoD collection is on projects awarded by other agencies. Note that information from the various data collection has not been cross-referenced and analyzed. It will take extensive effort to properly identify each project in each collection (as the collections for example lack common unique identifiers) The form of the data – is the agency data in paper form or is it computerized? Relevant Features of Existing Survey Data Four substantial surveys have addressed commercial and other outcomes from SBIR: GAO (1992), DoD (1997), SBA (1999), and DoD Fast Track. 54 In many areas, these surveys ask similar or identical questions, creating extensive databases of results relevant to many of the metrics being considered for use in this study. The Fast Track surveys each addressed a single SBIR Phase II award, and collected some information on the firm. 80 to 90 percent of the questions were about the specific award. Some firms have only one award. Some have over 100. GAO (1992), SBA (1999) and DoD (1997) each surveyed 100 percent of the SBIR Phase II awards made from 1983 through an end date that was four years prior to the date of the survey: i.e., GAO (1992) surveyed, in 1991, all SBIR Phase II project awards from 1983 through 1987. 55 These studies provide coverage for the early years of the program. The existing survey results showed the distribution of commercialization to be quite skewed. For example, 868 of the 1310 reporting projects in the SBA survey had no sales. Fifty five had over $5 million in sales, one of which was over $240M, two were slightly over $100M, and five were between $46 M and $60M. Those 55 projects represent 1.5 percent of the number surveyed, 4.2 percent of the responses, but 76 percent of the total sales. This means that in collecting commercialization data, firm selection becomes critically important. Surveying a high percentage of the awards (using a long survey) has the related problems of imposing a substantial burden, and risks causing multiple award winners not to respond. 56 A note on the SBA Tech-Net database: SBA maintains a database of information derived from the annual reports made on SBIR by the agencies. 57 Mandatory collected data includes award year and amount, agency topic number, awarding agency, phase, title, and agency tracking number. (Tracking numbers were not mandatory through 1998.) However, this database is far from complete for our purposes: Principal Investigator (PI) Information Today, reporting the PI name is mandatory, but although there are fields for title, email address, and phone, these are not mandatory entries for the agencies to report. As recently as 1998, agencies did not have to report the name of the PI. Company information There are fields for the name, title, phone, and email of a company contact official, but these fields are not mandatory for the agencies to report. Award information Agency award contract or grant number, solicitation number, year of solicitation and number of employees have fields, but they are not mandatory. Technical project information. There are large fields for technical abstract, project anticipated results, and project comments, but they are not mandatory. Women and minorities A lthough information is mandatory on minority or women owned, it was not complete in the SBA data for the years before 1993. 58 Other data. O ther data, such as award date for SBIR Phase I and Phase II, completion date for each phase, additional (non SBIR Phase II) and subsequent funding provided by the agencies, agency POC for each SBIR Phase II, information on cost sharing (if applicable), etc. may be available in some agency data bases. 7. Methodology Development: Primary Research The wide scope of the current study and gaps in the existing data will necessitate a considerable amount of primary research. The approach adopted is to select the methodological elements best suited to complement and supplement existing information. The study objectives will be realized using the most efficient combination of methods. 59 These include analyzing existing studies and databases, interviewing program officials, surveying various program and technical managers and project participants, carrying out case studies, using control groups and counterfactual approaches to isolate the effects of the SBIR program, and other methods such as econometric, sociometric, and bibliometric analysis. These tools will be used on an as needed, limited basis to address questions for which they are best suited. 60 A dictionary of variable names with definitions that are common across all of the instruments will be developed. This dictionary will form a part of the training materials used by interviewers, survey managers, and those populating variables with administrative data. Surveys are an important methodological element of the study. Program staff will be interviewed, with these interviews focusing (at least initially) on process issues – mechanisms, selection procedures, etc. - and on the contribution of the program to the agency. This will include understanding the motivations and objectives of the program managers. What are their goals and incentives? How is their performance within the agency SBIR program judged? Development of a core questionnaire and also a basic reporting template may be appropriate even though interviews with more senior program managers are likely to be free ranging with many open-ended questions and also more agency specific than those with participants. A core template with five derivative templates (one for each of the five agencies identified in the legislation) seems a promising approach. Higher-level research officials, such as deputy institute directors, may be interviewed about the SBIR in comparison with other research support by the agency. SBIR award recipients will also be surveyed. The key issue here will be to identify the correct respondent, one who both knows the answers and is willing to fill out the instrument. The survey will begin by contacting those already in the database of firm information, which covers all applicants for SBIR Phase I or Phase II grants. 61 The database includes the name of the SBIR Point of Contact (POC) for that firm (along with phone, address, and email). In fact, the database covers many firms that have also received awards from NSF, NASA, and DoE. Most NIH awardees do not submit proposals to these agencies and, therefore, are not covered. Surveys will be field-tested ensure that they are effective and encourage compliance. The first step will be to develop a short survey to cover those firms lacking a point of contact (POC). This survey will ask for information about the POC and solicit information on a very small set of firm-related questions. This will facilitate development of a comprehensive database of POC's. Subsequent recipient surveys will be directed to these POC's, although it is likely that certain information will require responses at the corporate level of the firm, and at the level of the primary investigator (PI). The following questionnaires and surveys will likely be administered: Survey of program managers, focusing on major strategic questions and overall program issues and concerns; Survey of technical managers f ocusing on operations and issues of program implementation; Survey of SBIR Phase II participants, f ocusing both on outcomes from SBIR grants (especially commercial outcomes) and on program management issues from the recipient perspective. This survey is likely to have both a general and an agency-specific component. It is also likely to have a section focused on company impacts (as opposed to project impacts); Survey of SBIR Phase I participants, focusing on initial selection and support issues; Additional limited surveys f ocusing on particular aspects of the program, possibly at specific agencies, can be initiated, with limiting parameters to be specified. Each of the survey instruments will have a stated purpose and each will be “mapable” to the objectives of the study to which they relate. 62 All surveys will be pre-tested. These surveys are discussed in more detail below. Program manager survey The program manager survey will focus on strategic management issues and on manager views of the program. It will be designed to capture senior agency views on the operations of the SBIR program focused on concerns such as funding amounts and flexibility, outreach, topic development, top-level agency support for SBIR, and evaluation strategies. The survey may be administered through face-to-face interviews with senior managers, by telephone, by mail, via electronic questionnaire, or through some combination or these approaches. All senior program managers at the agency and all program managers at the sub-unit level (e.g., NIH institutes, DoD agencies) are to be covered. Altogether, there are approximately 45 program managers at this level in the five study agencies. Technical manager survey While program managers should have a strategic view of the SBIR program at their agency, the program is to a considerable extent operated by other managers. The responsibilities of these technical managers (or TMs) are focused on the development of appropriate topics, appointment of selection panels, process management (e.g., ensuring that reviews are received on time and that the selection and management process meets approved timelines), and contacts with the grant recipients themselves. The Committee plans to conduct informal interviews with selected TMs. In addition, a survey instrument is currently being designed which will be sent to each TM in each agency. This instrument will address technical management issues, and will focus on the relationship between SBIR projects and non-SBIR components of each agency's research and development program. TMs, for example, may play a pivotal role in the subsequent take-up of SBIR-funded research within DoD, and the survey is aimed at enhancing assessment of that possibility. The survey will therefore be delivered to all TMs in the five agencies. Approximately 200-300 potential survey recipients are anticipated. SBIR Phase I recipient survey In order to identify characteristics of firms and projects that received SBIR Phase I awards only, the Committee anticipates the implementation of a survey of SBIR Phase I recipients. The objective of this survey is to enhance understanding about project outcomes, and to identify possible weaknesses in the SBIR Phase I—Phase II transition that may have excluded worthy projects from SBIR Phase II funding. (It should be understood that the Committee has no preconceptions on this issue—only that this is an important transition point and winnowing mechanism in SBIR, and should therefore be reviewed.) As there have been more than 40,000 SBIR Phase I grants made, it is not feasible to cover all SBIR Phase I winners. Therefore, the Committee will developed an initial set of selection criteria, aimed at ensuring that outcomes are assessed for a range of potential independent variables. These will include: Size of firm Geographic location Women and minority ownership Multiple vs. single award winners Industry sector SBIR Phase II recipient surveys The SBIR Phase II recipient survey will be a central component of the research methodology. It will address commercial outcomes, process issues, and post-SBIR concerns about subsequent support for successful companies. Surveys must provide data that will allow the Committee to address the various questions defined in sections 3 and 4. Specifically, survey methodologies will need to differentiate between: Funded and unfunded applications Women led/minority led businesses Different geographical regions or perhaps clusters of zip codes SBIR Phase I vs. Phase II awards Firms by size: single-person companies vs. micro corporations vs. relatively large established companies (100+ employees?). 63 Firms by total revenues and by revenues attributable to the SBIR-related commercialization Firms by employment effects Recipients of single vs. multiple awards Other criteria, including the procedural efficiency of converting from Phase I to Phase II The Committee is also interested in finding relevant points of comparison between research quality and research value. However, such comparisons are complicated because SBIR and non-SBIR funding is differentiated not only by the size of the firm but also by the kind of research, by funding rationale, and by time horizon. For example, NSF views SBIR as a tool for funding research that leads to commercialization, while the remaining 97.5 percent of NSF funding is for non-commercial research. Here, a comparison would be inappropriate. In addition, non-SBIR grants operate under different timeframes and are usually at a different phase of the R&D cycle, requiring different resource commitments. To address this point, the Committee will consider if the Phase II survey should be expanded to identify awards that have received some form of quality recognition from and outside agency. For example, if the only competitors for such recognition are other SBIR projects, (as is the case with the Tibbetts Award) this may identify the best SBIR projects but say little about comparisons to non-SBIR projects. All of these data will be collected on an agency-by-agency basis, to ensure sufficient data for the statistical analysis of each agency. The result will be a survey matrix, with an x-axis showing potential explanatory variables such as multiple- vs. single-award winners, and the y-axis showing the individual agencies. 64 (Each cell of the matrix is important to the extent that the specified data help to address study objectives. Detailed articulation between objectives and survey instruments will be an early stage task for SBIR Phase II. See Annex F for a prototype of this matrix. Award numbers. Although data inconsistencies mean that the number of SBIR Phase II awards from 1992 – 2000 is not known exactly, it is estimated that this number is at about 10,800. Based on the three published reports, about 7 percent of these SBIR Phase II awards are from the smaller agencies. Thus, it is estimated that about 10,000 awards have been made by the five study agencies. There are no good data concerning the distribution by firm (some firms have received more than 100 awards, many others just one). Existing Commercialization Data DoD has data by project for 10,372 SBIR Phase II projects. (This includes projects from 1983). Since 1999, firms who have submitted SBIR or STTR proposals to DoD have had to enter firm information and information on sales and investments for all of the SBIR Phase II awards they have received, regardless of awarding agency. The DoD commercialization database contains information on approximately 75 percent of DoD Phase II awards from 1992 to 2000, 67 percent of NASA and DoE awards, 54 percent of NSF awards, and 16 percent of NIH/HHS awards. DoE has provided commercialization data by product, which cannot be directly associated to projects as this may lead to a double counting of awards to firms. NASA does have data by project, although this does not appear to correspond directly to DoD data. Sampling Approaches and Issues The question of sampling is of central importance here, and a more extended discussion of the issues raised can be found in Annex G . The Committee proposes to use an array of sampling techniques, to ensure that sufficient projects are surveyed to address a wide range of both outcomes and potential explanatory variables, and also to address the problem of skew noted earlier. Random Sample. After integrating the 10,000 awards into a single database, a random sample of approximately 20 percent will be sampled for each year; e.g., 20 percent of the 1992 awards. Generating the total sample one year at a time will allow improved access to changes in the program over time, as otherwise the increased number of awards made in recent years could dominate the sample. Random sample by agency. Surveyed awards will then be grouped by agency; additional respondents will be randomly selected as required to ensure that at least 20 percent of each agency's awards were included in the sample. Top Performers. In addition to the random sample, the problem of skew will be dealt with by ensuring that all projects meeting a specific commercialization threshold will be surveyed—most likely $5 million in sales or $5 million in additional investment (derived from the commercialization database). Estimates from current DoD commercialization data indicate that the “top performer” part of the survey would cover approximately 385 projects. Firm surveys: 100 percent of the projects that went to firms with only one or two awards will be polled—these are estimated at approximately 30 percent of the 10,000 SBIR Phase II awards, based on data from 1983 to 1993. These are the hardest firms to find: address information is highly perishable, so response rates are much lower. Coding The project database will track which survey corresponds with each response. For example, it is possible for a randomly sampled project from a firm that had only two awards to be a top performer. Thus, the response could be coded as a random sample for the program, a random sample for the awarding agency, a top performer, and as part of the sample of single or double winners. In addition, the database will code the response for the array of potential explanatory or demographic variables listed earlier. Total number of surveys: With the random sample set at 20 percent, the approach described above will generate approximately 5500 project surveys, and approximately 3000 firm surveys (assuming that each firm receiving at least one project survey also received a firm survey). Although this approach samples more than 50 percent of the awards, multiple award winners would be asked to respond to surveys covering about 20 percent of their projects. Projected response rates . The response rate is expected to be highly variable. It will depends partly on the quality of the address information, which is itself a function of the effort expended on address collection and verification before surveys are administered, and partly on the extent of follow up of non-respondents. The latter is especially important: one agency manager noted that his survey had a final response rate of 70-80 percent, but that the initial rate before follow-up phone calls was approximately 15 percent. As noted in Siegel, Waldman, and Youngdahl (1997) , response rates to technology surveys are notoriously low, averaging somewhere in the teens. Thus, a 20 percent response rate for a technology survey can be considered high, especially if it involves sampling small firms, and there is potential attrition in the sample through exits or mergers and acquisitions. The NRC surveys are expected to exceed this benchmark for two reasons. Experience: The NRC has assembled expertise with an excellent track record of effective sampling of firms. Previous survey work for the Department of Defense SBIR Fast Track survey yielded a response rate of 68 percent. Stewardship: Substantial time and effort will be devoted to following up the survey with phone calls to non-respondents and those that provide incomplete information. While the NRC study expects a significant response rate, based on the same techniques as have proved successful in the past, it is inherently difficult to predict the precise size of the actual result. Draft SBIR Phase II Survey Roadmap Starting date and coverage Surveys administered in 2004 will cover SBIR awards through 2000. 1992 is a realistic starting date for the coverage, allowing inclusion of the same projects as DoD for 1991 and 1992, and the same as SBA for 1991, 1992, and 1993. This would add to the longitudinal capacities of the study. Projects awarded earlier than 1992 suffer from potentially irredeemable data loss: firms and PI's are no longer in place, and data collected at the time was very limited. Delivery modalities Possible delivery modalities for surveys will include: In person (interviews or focus groups) Clearly, there are many advantages to online surveys (such as cost, speed, possibly response rates), and such surveys can now be created at minimal cost using third party services. Response rates become clear fairly quickly, and can rapidly indicate needed follow up for non-respondents. Clarifications of inconsistent responses are also easier using online collection. Finally, online surveys allow dynamic branching of question sets, with some respondents answering selected sub-sets of questions but not others, depending on prior responses. There are also some potential advantages to traditional paper surveys. Paper surveys may be easier to circulate, allowing those responsible at a firm to answer relevant parts of the questionnaire. Firms with multiple SBIR grants also often seek to exercise some quality control over their responses; after assigning surveys to different people, answers may be centrally reviewed for consistency. It may be appropriate to consider a phased approach to the survey work, with more expensive approaches (e.g. phone solicitation) supplementing email, specifically aiming to ensure appropriate coverage of the various groups outlined above. Case study method Case studies will be another central component of the study. Second- and third-level benefits in particular will be addressed primarily through focused case studies, as will information about the procurement needs of Federal agencies. 69 Research objectives addressed primarily through case studies may include: generating detailed data not accessible through surveys pursuing lines of inquiry suggested by surveys identifying anecdotes that illuminate findings that are more general. Common threads in the case studies are expected to reveal some of the general characteristics of the program, and may help the Committee to understand some of the data resulting from the surveys and agency databases. A common template or set of templates will be developed for the consistent collection of information; however, interviewers will be accorded sufficient freedom to develop the cases in a way that best suits each case and also to collect additional data relevant to their current lines of inquiry and to agency specific concerns. The templates will be mapable to the objectives of the study. Each case study template will be pre-tested. Case study questions will focus fruitfully on the firm, in addition to the project. This would allow a different perspective, focusing on questions such as: Why did the firm participate? What types of firm were they? What were their business strategy and plans? Did they seek strategic alliances, partnerships, or investment to commercialize when in the SBIR cycle? Why? and How? How long did it generally take to produce sales from SBIR? What difficulties did they experience in commercializing SBIR? What impact did SBIR have on company formation and development? Additional questions will focus on the nature of the competitive landscape. Who are the customers and suppliers? How has the marketplace changed and what value does the innovated product introduce to the market? Case selection criteria: who participates? Case studies will be directed to company officers and individual research scientists, and to appropriate individuals within the funding agency, and possibly in other agencies. The range of selection criteria will be relevant. (e.g., agency, size of firm, multiple awards, etc.). It is not likely that a sufficient number of case studies can be conducted to generate statistically valid results for all relevant issues: not all “cells” in the research matrix will be fully populated. However, it may also be possible to undertake a sufficient number of cases to generate statistically valid results for a limited set of questions. The interview data mentioned above can be used to supplement case studies, or a small subset of case study questions could be generated for responses from prior interviewees. Process characteristics – ensuring comparability across case study teams It will be important to ensure that the case studies are at least minimally comparable with information collected and the reports generated. By developing n integrated case-study guide and data collection templates the Committee can synthesize information needed for the final report. 70 Specific tasks to facilitate the case-study component of the study include the following: The Committee will develop a common case-study guide for use in the case study process. The guide will outline the case-study approach to be followed, and provide a loosely structured framework for conducting and reporting the cases. It will provide a set of core questions to be used in all the case studies, and will provide formatting and stylistic guidance for writing up the cases. The Committee will develop a data collection template with a core data section that applies to all the case studies, and a specific section for each set of case studies aimed at addressing a separate issue. (See Annex F .) The template will be exact with respect to the metrics to be collected. The template will map to an EXCEL spreadsheet that will be used to facilitate working with the case-study data across cases. As the case studies relevant to the same agency will be conducted by multiple field researchers reporting to the Committee, attention will be given throughout the process to calibrate these individuals in their interviewing styles and to take into account any remaining differences before drawing conclusions from the case studies. Use of counterfactual and control group studies Determining “additionality” entails finding out if a program made a difference that accounts for all or part of an observed change. 71 As a “best practice” principle, additionality means that it is not sufficient to observe that an SBIR award was made and later the awardee commercialized a new product. Rather, a goal of the study will be to determine if the commercialization or its timing or some other associated attribute of importance was likely caused by the SBIR award. Evaluation is directed at ruling out alternative, competing explanations of an observed change. 72 Additionality tests are usually applied by contrasting the changes that occurred in a “program group” with what, hypothetically, they would have done without the program, or, better, what a comparable group that did not participate in the program actually did relative to the program group. In selecting comparison groups, it is important to ensure that they do not differ in important ways other than participation. Additionality tests can be strengthened by using statistical tools and econometric techniques to help rule out other causes. The comparison of what program participants would have done differently without the program is usually ascertained by interviews or surveys, using what are called “counterfactual questions.” Counterfactual questions, for example, have been used in a variety of ATP surveys. 73 They have also been used in ATP case studies to help estimate project impacts. 74 Use of a control group will entail the comparison of a program group with a comparable group that did not participate in the program. Although identifying appropriate control groups will be challenging and can be controversial, the approach is worth considering. Good examples of the use of control groups in evaluation are also available from ATP studies, where they have been used in conjunction with surveys and supporting econometric analysis. 75 Use of other evaluation methods Special studies may be required that use methods other than surveys and case studies—such as bibliometric or sociometric analysis. Such needs will be determined as the study progresses. See Public Law 106-554, Appendix I – H.R. 5667, Section 108. Also Annex A in this volume. David C. Mowery, “America's Industrial Resurgence (?): An Overview,” in David C. Mowery, ed., U.S. Indus yin 2000: Studies in Competitive Perfomance . Washington, D.C.: National Academy Press, 1999, p. 1. Mowery examines eleven economic sectors, contrasting the improved performance of many industries in the late 1990s with the apparent decline that was subject to much scrutiny in the 1980s. Among the studies highlighting poor economic performance in the 1980s are Dertouzos, et al. Made in America: The MIT Commission on Industrial Productivity , Cambridge, MA: The MIT Press, 1989 and Eckstein, et al. DRI Report on U.S. Manufacturing Industries , New York: McGraw Hill, 1984. Richard Rosenbloom and William Spencer, Engines of Innovation: US. Industrial Research at the End of an Era . Boston: Harvard Business Press, 1996. For an account of the growing importance of the small firm in employment and innovation, see Zoltan J. Acs and David B. Audretsch, Innovation and Small Business . Cambridge, Massachusetts: MIT Press, 1991, p. 4. For specifics on job growth, see Steven J. Davis, John Haltiwanger, and Scott Schuh, “Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts,” Business Economics , vol. 29, no. 3, 1994, pp. 113-22. More recently, a report by the Organisation for Economic Cooperation and Development (OECD) notes that small and medium-sized enterprises are attracting the attention of policy makers, not least because they are seen as major sources of economic vitality, flexibility, and employment. Small business is especially important as a source of new employment, accounting for a disproportionate share of job creation. See OECD, Small Business Job Creation and Growth: Facts, Obstacles, and Best Practices , Paris, 1997. David L. Birch, “Who Creates Jobs?” The Public Interest . Vol. 65, 1981, pp. 3-14 For an overview of the origins and history of the SBIR program, see James Turner and George Brown, “The Federal Role in Small Business Research,” Issues in Science and Technology , Summer 1999, pp. 51-58. Additional information regarding SBIR's legislative history can be accessed from the Library of Congress. See L@@@:18800NS:790d?z/yreuqdb/nib-igc/vog.col.samoht//:ptth Today, the set aside is fixed at 2.5 percent. With the accord of the Small Business Administration, which plays an oversight role for the program, this amount can be higher in certain circumstances; e.g., drug development at NIH, and is often lower with smaller SBIR programs, e.g., EPA or the Department of Agriculture. NSF, for example, has what is called a Phase II-B program that allocates additional funding to help potentially promising technology develop further and attract private matching funds. See Reid Cramer, “Patterns of Firm Participation in the Small Business Innovation Research Program in Southwestern and Mountain States,” in National Research Council, The Small Business Innovaion Research Program, An Assessmen of the Department of Defense Fas Track Initiative , op. cit. In this report, we use the term “product” to refer to goods and services produced by the SBIR firm. See National Research Council, The Government Role in Civilian Technology: Building a New Alliance , Washington, D.C.: National Academy Press, 1992, pp. 29. For fiscal year 2003, this has resulted in a program budget of approximately $1.6 billion across all federal agencies, with the Department of Defense having the largest SBIR program at $834 million, followed by the National Institutes of Health (NIH) at $525 million. The DoD SBIR program, is made up of 10 participating components: (see Figure 1 ): Army, Navy, Air Force, Missile Defense Agency (MDA), Defense Advanced Research Projects Agency (DARPA), Chemical Biological Defense (CBD), Special Operations Command (SOCOM), Defense Threat Reduction Agency (DTRA), National Imagery and Mapping Agency (NIMA), and the Office of Secretary of Defense (OSD). NIH counts 23 institutes and agencies making SBIR awards. See Robert Archibald and David Finifter, “Evaluation of the Department of Defense Small Business Innovation Research Program and the Fast Track Initiative: A Balanced Approach,” op. cit. pp. 211-250. A GAO report had found that agencies had not adopted a uniform method for weighing commercial potential in SBIR applications. See U.S. General Accounting Office, 1999 , Federal Research: Evaluations of Small Business Innovation Research Can Be Strengthened , AO/RCED-99-114, Washington, D.C.: United States General Accounting Office. The current assessment is congruent with the Government Performance and Results Act (GPRA) of 1993: http://govinfo ​.library ​.unt.edu/npr/library/misc/s20.html . As characterized by the GAO, GPRA seeks to shift the focus of government decision-making and accountability away from a preoccupation with the activities that are undertaken - such as grants dispensed or inspections made - to a focus on the results of those activities. See http://www ​.gao.gov/new ​.items/gpra/gpra.htm An important step in the evaluation of SBIR will be to identify existing evaluations of SBIR. See for example, GAO, “Federal Research: Small Business Innovation Research shows success but can be strengthened. Washington, D.C.: U.S. General Accounting Office, 1992 ; and GAO, “Evaluation of Small Business Innovation can be Strengthened,” Washington, D.C.: U.S. General Accounting Office, 1999 . There is also a 1999 unpublished SBA study on the commercialization of SBIR surveys Phase II awards from 1983 to 1993 among non-DoD agencies. Agency reports include an unpublished 1997 DoD study on the commercialization of DoD SBIR. Following the authorizing legislation for the NRC study, NIH launched a major review of the achievements of its SBIR program. NASA has also completed several reports on its SBIR program. See Annex C for a list of agency reports. See the attached bibliography. See National Research Council, Small Business Innovation Research: Challenges and Opportunities , C. Wessner, ed., Washington, D.C.: National Academy Press, 1999. See National Research Council, Government-Industry Partnerships for the Development of New Technologies, Summary Report, C. Wessner, ed., Washington, D.C.: National Academies Press, 2002. Particularly, with respect to DoD, methodological comparability will be sought to enable multiyear comparisons. Where possible and appropriate, tracking of progress of previously surveyed/interviewed firms will be considered as well. In particular, the objective of the Fast Track study was to compare Fast Track awards and non-Fast Track awards within the DoD SBIR program , in order to determine the efficacy of Fast Track. See National Research Council, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Tack Initiaive , C. Wessner, ed., National Academy Press, Washington, D.C., 2000. See K. Buchholz. "Criteria for the analysis of scientific quality," Scientometrics 32 (2), 1995:195-218. See M. Brown, T.R. Curlee and S.R. Elliott, “Evaluating Technology Innovation Programs: The Use of Comparison Groups to Identify Impacts,” Research Policy, 24, 1995. See for example, “Micromachined Ultrasound Ejector Arrays For Aerosol-Based Pulmonary Vaccine Delivery.” Response to SBIR Proposal PHS 2001 NIP Topic 009, Technologies to Overcome the Drawbacks of Needles and Syringes Contract No: 200-2001-00112 See, for example, Maryann Feldman and Maryellen Kelley, “Leveraging Research and Development: The Impact of the Advanced Technology Program,” in National Research Council, The Advanced Technology Program , C. Wessner, ed. Washington, D.C.: National Academy Press, 2001, for a potential model of how an agency can use SBIR to help foster specific areas of technical expertise. The paper, however, does not address the extent to which this is a conscious goal of DoD. A key objective of the 1982 Small Business Innovation Development Act is to increase private sector commercialization derived from federal research and development. The role of SBIR in stimulating commercialization was cited as a justification in the reauthorization of the Act in 1992: that SBIR “has effectively stimulated the commercialization of technology development through federal research and development, benefiting both the public and private sectors of the Nation.” For analysis of observed variations in timelines for commercialization, see NISTIR 6917 ”Different Timelines for Different Technologies: Evidence from the Advanced Technology Program” at http://www ​.atp.nist.gov ​/eao/ir-6917/chapt5.htm For a profile of Qualcomm, see http://www ​.inknowvation ​.com/cgi-bin/db4/Qualcomm_Profile ​.html Buisseret, T.J., Cameron, H., and Georghiou, L. (1995) “What difference does it make? Additionality in the public support of R&D in large firms”, International Journal of Technology Managemen, Vol.10 , Nos. 4/5/6 pp. 587-600. See also, Luke Georghiou, “Impact and Additionality of Innovation Policy,” Paper presented at the Six Countries Programme on Innovation, Spring 2002, Brussels. See National Research Council, SBIR: An Assessment of the Department o Defense Fast Track Initiative , 2000, op. cit. Though commonly conceived as a linear process, innovation is characterized by significant complexity. For a discussion of this complexity, see, National Research Council, The Small Business Innovation Research Program: Progam Diversity and Assessmen Challenges , C. Wessner, ed. Washington, D.C.: National Academies Press, 2004. The employment effects of research are most often indirect—through the application or commercialization of the research. See Link, A. N. and Scott, J. T. Public Accountability: Evaluating Technology-Based Institutions , Boston: Kluwer Academic Publishers, 1998. Link and Scott use published agency data and interviews to determine key indicators, including private hurdle rates, additional anticipated development time after Phase II, additional cost, life of the commercialized technology, and proportion of value appropriated by firm. These allow estimates of social and private returns. Link and Scott indicate that the rates of return on the SBIR Phase II investment for Fast Track were 84 percent for society and 25 percent for private investors. See also section 4.5 below. See David Audretsch, Jeurgen Weigand and Claudia Weigand, “The Impact of the SBIR on creating entrepreneurial behavior,” Economic Development Quarterly Vol. 16, No. 1, February 2002, pp. 32-38. Audretsch/Weigand/Weigand identify interesting spillover effects of SBIR grants on non-recipient scientists and engineers, in terms of career paths, entrepreneurial activities and their timing, etc. Intellectual property is divided into two categories: Indusrial property , which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright , which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs. See http://www ​.wipo.org/about-ip/en/ For a summary of such measures, see Table 1 in European Commission, Directorate General Enterprises “Enterprises and SME” Programme, “European Trend Chart on Innovation,” June 2000. Accessed at http://trendchart ​.cordis ​.lu/Reports/Documents ​/Innovation_and_IPR_June2000.pdf According to the Small Business Administration, a small business is a concern that is organized for profit, with a place of business in the United States, and which operates primarily within the United States or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor. Further, the concern cannot be dominant in its field, on a national basis. Finally, the concern must meet the numerical small business size standard for its industry. SBA has established a size standard for most industries in the U.S. economy. The most common size standards are 500 employees for most manufacturing and mining industries, 100 employees for all wholesale trade industries, $6 million for most retail and service industries, $28.5 million for most general & heavy construction industries, $12 million for all special trade contractors, and $0.75 million for most agricultural industries. See also parameters of non-economic benefits, especially Knowledge Benefits, p. 11. See National Research Council, The Smal Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative , op. cit., pp. 211-250. Maryann P. Feldman and Maryellen R. Kelley, “Leveraging Research and Development: The impact of the Advanced Technology Program.” National Research Council, The Advanced Technology Program, Assessing Outcomes , 2001 op. cit. The web site inknowvation.com has a data set on publicly traded SBIR firms. See Joshua Lerner and Colin Kegler, “Evaluating the Small Business Innovation Research Program: A Literature Review, SBIR: An Assessment of the Department of Defense Fast Track Initiative , C. Wessner, ed., op. cit. See Adam Jaffee, “Building Program Evaluation into the Design of Public Research Support Programs,” Oxford Review of Economic Policy , forthcoming. Many empirical studies suggest that small firms are more innovative than large firms or, at minimum, that the difference between large and small firm innovative activity is statistically insignificant. See Zoltan Acs and David B. Audretsch (1991), Innovation and Small Firms (Cambridge: MIT Press); Ricardo J. Caballero and Adam B. Jaffe (1993) ,"How high are the giants' shoulders: an empirical assessment of knowledge spillovers and creative destruction in a model of economic growth," in O.J. Blanchard and S. Fischer (eds.) NBER Macroeconomic Annual 1993 , (Cambridge, MA: MIT Press); and Jaffe and Trajtenberg (2002) , Patents, Citations, and Innovations: A Window on the Knowledge Economy (Cambridge: MIT Press). Concerns relating to size-dependant bias can be addressed by employing James Heckman's well-known techniques for controlling for the effects of sample selection bias. John Scott has recently employed such methods in a survey he conducted on environmental research. See John Scott, T., Environmental Research and Development: US Industrial Research, the Clean Air Act and Environmental Damage (Cheltenham, UK; Northampton, MA, USA: Edward Elgar Publishing, 2003). It will be interesting to see if including such controls (for firm size) in our econometric analysis confirms or rejects the hypothesis that there will be a size dependant bias as a result of the selection of indicators in which large firms will score more broadly than small ones. Another pragmatic step we will take to address this issue is to make sure that any metrics we use are normalized for firm size (e.g., patents per employee) See Annex D for a list of these reports. See NIH/NSF background papers for specifics. It would not be cost effective to try to group abstracts in any fashion. See U.S. General Accounting Office, “Federal Research: Small Business Innovation Research shows success but can be strengthened.” Washington, D.C.: U.S. General Accounting Office, 1992 . The DoD study on the commercialization of DoD SBIR was based on a survey of Phase II awards from 1984–1992. It involved an 80 in-person and 69 telephone interviews with SBIR firms, interviews with DoD program managers and laboratory officials. This study, completed in October 1997, is unpublished. The SBA study on the commercialization of SBIR was based on a 100 percent survey of Phase II awards from 1983 to 1993 of non-DoD agencies, and 43 in-person interviews with SBIR firms. This study, completed in July 1999 is unpublished. The DoD Fast Track study was conducted by the National Research Council. See National Research Council, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative , 2000, op. cit. See GAO (1992) op. cit. An unpublished study by the SBA was completed in 1999, and an unpublished study by DoD was completed in 1997. See footnote 27 for description. All prior efforts addressed only phase II. NIH and perhaps other agencies have indicated that they would be interested in a survey of Phase I winners that did not submit or did not win Phase II award. Tech-Net is an electronic gateway of technology information and resources, maintained by SBA, for and about small high tech businesses. It provides a search engine for researchers, scientists, state, federal, and local government officials, can serve as a marketing tool for small firms, and can "link" investment opportunities for investors and other sources of capital. Visit SBA Tech-Net database at http://tech-net ​.sba.gov/index.html Agencies have often reported information that is not mandatory so some of the above is available for many projects. For example, the SBA database through 1993 had names for 78 percent of the PI. It had phone numbers for just over half of the named PI. Number of firm employees was entered in 5 percent of the entries. For a review of methodologies for evaluating technology programs, see D. Campbell, Research Design for Program Evaluation , Beverly Hills: Sage, 1984. See also L. Georghiou and D. Roessner, “Evaluating Technology Programs,” Research Policy , 29, 2000. See additional discussion related to the counterfactual issue in Section 7 of this chapter, pp. 32-33. Available from BRTRC, the consulting/survey firm with whom NRC worked in the 1999 Fast Track study. “Mapability” means that questions on the survey instrument must map, individually or by groups, to the objectives of the study. A survey is a methodological tool for collecting information to meet a study's objective. Responses to questions about size are often faulty. Some proposal writers enter the size of their division of the company, rather than whole company. Some pull a number out of the air based on the last estimate they heard. A company may apparently vary substantially in size on several proposals that were awarded the same year (even proposals submitted within days of each other.) However, by grouping the sizes in broad groups most of this type of variation can be avoided. One should keep in mind that companies may be very small, for early awards, grow, while continuing to submit, eventually becoming no longer eligible (over 500) then shrink and start submitting again. What is relevant is the size at the time of the award. The matrix is provided in Annex G . See R. Yin, Case Study Research: Design and Methods. Thousand Oaks, CA: Sage, 1995. For an illustration of a large set of case studies written by different researchers and using a common data template to ensure consistent collection of data across projects for combination and analysis, see Advanced Technology Program, Peformance of 50 Completed ATP Projects , Status Report-Number 2, NIST SP 950-2 (Gaithersburg, MD: National Institute of Standards and Technology, 2001). As noted, the SBIR program has not been extensively researched, particularly in light of the program's size and 20 year history. Early examples of evaluations of the SBIR program include Myers, Stern, and Rorke, 1983 ; Price Waterhouse, 1985 ; and the U.S. General Accounting Office, 1987 , 1989 , 1992 . One early assessment by Scott Wallsten of the subset of SBIR awardees that were publicly traded determined that SBIR grants do not contribute additional funding but instead replace firm-financed R&D spending “dollar for dollar.” See Wallsten, S. J. 1998 , Rethinking the Small Business Innovation Research Program,” in Branscomb and Keller, Eds., Investing In Innovation , MIT Press, Cambridge. While Wallsten's paper has the virtue of being one of the first attempts to assess the impact of SBIR, Josh Lerner questions whether employing a regression framework to assess the marginal impact of public funding on private research spending is the most appropriate tool in assessing public efforts to assist small high technology firms. He points out that “it may well be rational for a firm not to increase its rate of spending, but rather to use the funds to prolong the time before it needs to seek additional capital.” Lerner suggests that “to interpret such a short run reduction in other research spending as a negative signal is very problematic.” See Lerner, “Public Venture Capital: Rationales and Evaluation” in The Small Business Innovaion Reseach Program: Challenges and Opportunities , op. cit., p. 125. See also Lerner, “Angel financing and public policy: An overview, Journal of Banking and Finance , vol. 22, no. 6-8, p. 773-784. and Lerner, “The government as venture capitalist: The long-run impact of the SBIR program,” Journal of Business , July, v. 72, 3, pp. 285-97. More broadly, recent research has shown evidence of additionality. For examples, Saul Lach has showed that government R&D subsidies in Israel induced “additionality" in R&D activity for small firms.” See Saul Lach, “Do R&D subsidies stimulate or displace private R&D? Evidence from Israel, Journal of Industrial Economics December 2002, pp. 369-390. Similarly, a study by Feldman and Kelley on the ATP program found that the recipients of awards attracted additional funding, thus meeting the test of additionality, a phenomena they describe as a “halo effect.” See Maryann P. Feldman; Maryellen R. Kelley, “Leveraging Research and Development: Assessing the Impact of the U.S. Advanced Technology Program,” Small Business Economics Vol. 20, No. 2, 2003. More generally, in a major review of the econometric evidence, David, Hall, and Toole, found the evidence for the “crowding out,” of private capital to be at best problematic. See Paul David, Bronwyn Hall, and Andrew Toole, “Is public R&D a complement or substitute for private R&D? A review of the econometric evidence,” Research Policy 29(4-5): 497-530 (2000). The broader point is that these analyses underscore the challenge of assessing the impact of public support for private R&D and the need to address the challenges in a comprehensive fashion. For a further discussion, see R. Ruegg and I. Feller, A Toolkit for Evaluating Public R&D Investments: Models, Methods, and Findings from ATP's First Decade, NIST GCR 02-842 (Gaithersburg, MD: National Institute of Standards and Technology, May 2003). See, for example, J. Powell and K. Lellock, Development, Commercialization, and Diffusion of Enabling Technologies: Progress Report, NISTIR 6491 (Gaithersburg, MD: National Institute of Standards and Technology, April 2000). See A. N. Link, Advanced Technology Program; Early Stage Impacts of the Printed Wiring Board Research Joint Venture , Assessed at Project End , NIST GCR 97-722 (Gaithersburg, MD: National Institute of Standards and Technology, 1997); and Sheila A. Martin, Daniel L. Winfield, Anne E. Kenyon, John R. Farris, Mohan V. Baal, and Tayler H. Bingham, A Framework for Estimating the National Economic Benefits of ATP Funding of Medical Technologies , GCR 97-737 (Gaithersburg, MD: National Institute of Standards and Technology, 1998). See, for example, Maryann Feldman and Maryellen Kelley, Winning an Award from the Advanced Technology Program: Pursuing R&D Strategies in the Public Interest and Benefiting from a Halo Effect, NISTIR 6577 (Gaithersburg, MD: National Institute of Standards and Technology, 2001). Cite this Page National Research Council (US) Committee on Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program. An Assessment of the Small Business Innovation Research Program: Project Methodology. Washington (DC): National Academies Press (US); 2004. Methodology Paper. 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The goal of the NIMH Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs is to support small businesses to develop technologies that can advance the mission of the Institute, including: Basic neuroscience research Translational and clinical research Clinical diagnosis and treatment Dissemination and implementation of evidence-based research on mental disorders. NIMH SBIR/STTR Program Staff are committed to working with applicants and awardees to support research and development of innovative technologies by small businesses that have the potential to succeed commercially or to provide significant societal benefits, in the areas of neuroscience and mental health. The NIMH has a commitment to supporting a sustainable and diverse biomedical research workforce, see Notice of NIH's Interest in Diversity (NOT-OD-20-031)  . What are the SBIR & STTR programs? The Small Business Innovation Research (SBIR) & Small Business Technology Transfer (STTR) Programs are one of the largest sources of early-stage capital for technology commercialization in the United States. These programs support research and development by small businesses of innovative technologies that have the potential to succeed commercially or provide significant societal benefits. To learn more, visit the SBIR Program website  . Difference between SBIR and STTR   Partnering Requirement Permits partnering Requires a non-profit research institution partner Principle Investigator Primary employment (>50%) must be with the small business PI may be employed by either the research institution partner or small business Work Requirement Subcontracts generally up to: 33% (Phase I) 50% (Phase II) Minimum: 40% Small Business 30% Research Institution Partner The small business is ALWAYS the applicant and awardee. 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Related Articles By: Cole Tretheway | Published on June 7, 2024 By: Lyle Daly | Published on June 5, 2024 By: Christy Bieber | Published on June 5, 2024 By: Lyle Daly | Published on June 4, 2024 The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. Copyright © 2018 - 2024 The Ascent. All rights reserved. Small Businesses at the Frontier of the Generative AI Economy Communities and businesses play a crucial role in shaping the Federal Reserve’s monetary policy. To inform our decision-making, the San Francisco Fed hosts discussions with the people we serve so we can hear their stories and perspectives on how economic data translates into real impacts in the Twelfth District. Our “ Beyond the Numbers ” series shares some of those insights with you. How is the spread of generative artificial intelligence (GenAI) tools through the economy affecting small businesses? Does GenAI open new avenues of opportunity for small businesses to compete with their larger peers, or will larger firms use the technology to strengthen their positions? To address these and other questions facing small businesses, we recently convened a roundtable of executives from across the Twelfth District . Representing the hospitality, restaurant, recruiting, and payment processing industries, the roundtable participants all lead small-scale enterprises currently integrating GenAI technologies into their business practices. They sat down with Mary C. Daly , President and CEO of the San Francisco Fed, Sunayna Tuteja, Senior Vice President and System Chief Innovation Officer for the Federal Reserve System, and Kevin Ortiz, co-head of the EmergingTech Economic Research Network (EERN) . Roundtable discussions like these are a centerpiece of the EERN initiative. A partnership between the SF Fed and the Federal Reserve System Innovation Office, EERN supports a better understanding of how new technologies like GenAI are shaping the economy of the future. Early GenAI Use Cases In previous roundtables focused on artificial intelligence (AI), participants noted that they were using AI tools predominantly for back-office tasks such as data management and generating marketing materials. The small business leaders participating in this discussion echoed these sentiments. An executive from the payments processing industry reported that they have deployed GenAI-powered machines to more accurately read payment slips and determine the appropriate action based on historical data, while a representative of the hospitality industry emphasized GenAI’s usefulness in inventory management and room occupancy demand forecasting. Looking ahead, the small business leaders felt that more tools will be coming on-line that will support customer-facing tasks. An executive from the recruiting industry highlighted GenAI’s potential to ease the task of making initial sales and recruiting calls. They shared that these so-called “cold calls” are repetitive and have a low success rate, which makes it difficult to retain people for these positions (this person reported a turnover rate of nearly 90 percent for this specific role). In the hospitality industry, a participant felt that GenAI allows hotels to offer a more personalized guest experience, including concierge services and improved self-check-in and check-out. This executive also reported that AI generally can help with cost reductions through amplifying the use of Internet of Things (IoT) technologies tied to hotel rooms, including light and air conditioning automatic shut-off sensors and identifying water leakage problems. Productivity and Employment Impacts President Daly noted that one of the biggest open questions about GenAI concerns its effect on productivity, and she asked the leaders about their experiences in this area. The business leaders cited a number of examples where AI tools had already made a positive contribution to productivity, including significantly reducing the time it took to complete routine operations like document processing. As part of the productivity discussion, the participants pointed out that there is not always a clear divide between traditional forms of process automation, which typically require a detailed set of rules on how to address each prompt or scenario, and new GenAI tools, which can identify the best course of action when confronted with novel scenarios. The executive representing the payment processing industry noted that they had integrated advanced automation into their operations for decades. Instead of considering GenAI as an alternative to such automation, the participant felt it was better to view AI as a supplement to make existing automation more efficient and effective. Several roundtable participants reported that they had created new positions focused on integrating AI into their existing automated processes. Two of the participants noted the potential for GenAI to reduce employee headcount at their firms. However, they also noted that by freeing employees up from routine tasks, they could spend more time on higher-value and more engaging face-to-face interactions with clients and customers. The participants also mentioned the power of GenAI to improve the employee training and upskilling process. Finally, one noted that as more and more college students use GenAI in their courses, familiarity and experience with the technology will become more ingrained. This will increase the number of GenAI-literate individuals in the labor force every year. The Potential and Pitfalls of AI for Small Businesses Top of mind for several of the roundtable participants was whether the trend toward adopting GenAI technologies made small businesses more competitive with larger companies in their industry. They emphasized that building and training custom GenAI models for their specific business needs was cost prohibitive. This meant that small businesses would likely need several third-party applications, many of which do not communicate and cannot be integrated with one another, to meet their needs. This puts them at a potential disadvantage relative to bigger businesses with the capital to invest in their own, custom-built GenAI models. President Daly noted that she had heard a similar question about GenAI’s impact on competitiveness from leaders of large enterprises. From the perspective of leaders of large businesses, GenAI would allow smaller businesses to level the playing field with greater access to information and expertise and thus allowing them to offer new products and services at much lower costs. President Daly and the small business leaders concluded that at this initial stage of GenAI’s integration into the economy, it was still too early to tell whether the technology will favor more competition or lead to consolidation across industries. Understanding New Technology and the Fed’s Mission The SF Fed supports a strong economy for all Americans by advancing our country’s monetary, financial, and payment systems. Because new technologies like GenAI can be catalysts of fundamental changes to the economy, it is vital that we understand their early impacts on our businesses and workplaces. For this reason and as part of EERN, we will continue to survey our business and community leaders about their experiences with GenAI and share what we have learned with our wider Twelfth District community. Simon Johnson | Technology and Inequality in the Age of AI POSTS : sf fed blog How Twelfth District Businesses are Rapidly Embracing GenAI AI-nomics: The Nexus of GenAI + the Economy The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System. Part 1. Overview Information National Institutes of Health ( NIH ) CENTERS FOR DISEASE CONTROL AND PREVENTION ( CDC ) FOOD AND DRUG ADMINISTRATION ( FDA )   National Eye Institute ( NEI ) National Heart, Lung, and Blood Institute ( NHLBI ) National Human Genome Research Institute ( NHGRI ) National Institute on Aging ( NIA ) National Institute on Alcohol Abuse and Alcoholism ( NIAAA ) National Institute of Allergy and Infectious Diseases ( NIAID ) National Institute of Arthritis and Musculoskeletal and Skin Diseases ( NIAMS ) National Institute of Biomedical Imaging and Bioengineering ( NIBIB ) Eunice Kennedy Shriver National Institute of Child Health and Human Development ( NICHD ) National Institute on Deafness and Other Communication Disorders ( NIDCD ) National Institute of Dental and Craniofacial Research ( NIDCR ) National Institute of Diabetes and Digestive and Kidney Diseases ( NIDDK ) National Institute on Drug Abuse ( NIDA ) National Institute of Environmental Health Sciences ( NIEHS ) National Institute of General Medical Sciences ( NIGMS ) National Institute of Mental Health ( NIMH ) National Institute of Neurological Disorders and Stroke ( NINDS ) National Institute of Nursing Research ( NINR ) National Institute on Minority Health and Health Disparities ( NIMHD ) National Library of Medicine ( NLM ) National Center for Complementary and Integrative Health ( NCCIH ) National Center for Advancing Translational Sciences ( NCATS ) Division of Program Coordination, Planning and Strategic Initiatives, Office of Research Infrastructure Programs ( ORIP ) National Cancer Institute ( NCI ) CENTERS FOR DISEASE CONTROL AND PREVENTION ( CDC ) Global Health Center ( GHC/CDC ) Office of Readiness and Response ( ORR - CPR/CDC ) National Center on Birth Defects and Developmental Disabilities ( NCBDDD/CDC ) National Center for Chronic Disease Prevention and Health Promotion ( NCCDPHP/CDC ) National Center for Emerging and Zoonotic Infectious Diseases ( NCEZID/CDC ) National Center for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention ( NCHHSTP/CDC ) National Center for Injury Prevention and Control ( NCIPC/CDC ) National Center for Immunization and Respiratory Diseases ( NCIRD/CDC ) National Institute for Occupational Safety and Health ( NIOSH/CDC ) National Center for Environmental Health ( NCEH/CDC ) FOOD AND DRUG ADMINISTRATION ( FDA ) Center for Biologics Evaluation and Research ( CBER/FDA ) Center for Drug Evaluation and Research ( CDER/FDA ) Center for Food Safety and Applied Nutrition ( CFSAN/FDA ) Center for Devices and Radiological Health ( CDRH/FDA ) Center for Veterinary Medicine ( CVM/FDA ) Office of Critical Path Programs ( CPI/FDA ) Office of Orphan Product Development ( OOPD/FDA ) R43 / R44 Small Business Innovation Research (SBIR) Grant - Phase I, Phase II, and Fast-Track April 4, 2024  - Overview of Grant Application and Review Changes for Due Dates on or after January 25, 2025. See Notice NOT-OD-24-084 . November 14, 2023 - Clarification of Implementation of the NIH SBIR and STTR Foreign Disclosure Pre-award and Post-Award Requirements. See Notice  NOT-OD-24-029 . June 12, 2023  - Implementation of the NIH SBIR and STTR Foreign Disclosure Pre-award and Post-Award Requirements­­. See  NOT-OD-23-139 . February 23, 2023  - Notice of Change to Minimum Performance Standards for SBIR and STTR Applicants­­. See  NOT-OD-23-092 . August 31, 2022  - Implementation Changes for Genomic Data Sharing Plans Included with Applications Due on or after January 25, 2023. See Notice  NOT-OD-22-198 . August 5, 2022  - Implementation Details for the NIH Data Management and Sharing Policy. See Notice  NOT-OD-22-189 . See Section III. 3. Additional Information on Eligibility. This Notice of Funding Opportunity (NOFO), issued by the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), and the Food and Drug Administration (FDA), invites eligible United States small businesses to submit Small Business Innovation Research (SBIR) grant applications. United States small businesses that have the research capabilities and technological expertise to contribute to the R&D mission(s) of the NIH, CDC, and FDA awarding components identified in this NOFO are encouraged to submit SBIR grant applications in response to identified topics (see PHS 2024-2 SBIR/STTR Program Descriptions and Research Topics for NIH, CDC, and FDA ). This Parent Notice of Funding Opportunity does not accept clinical trials. Not Applicable Application Due Dates Review and Award Cycles New Renewal / Resubmission / Revision (as allowed) AIDS - New/Renewal/Resubmission/Revision, as allowed Scientific Merit Review Advisory Council Review Earliest Start Date September 05, 2024 * September 05, 2024 * Not Applicable November 2024 January 2025 April 2025 January 05, 2025 * January 05, 2025 * Not Applicable March 2025 May 2025 July 2025 April 05, 2025 * April 05, 2025 * Not Applicable July 2025 August 2025 December 2025 All applications are due by 5:00 PM local time of applicant organization.  Applicants are encouraged to apply early to allow adequate time to make any corrections to errors found in the application during the submission process by the due date. It is critical that applicants follow the SBIR/STTR (B) Instructions in the How to Apply – Application Guide , except where instructed to do otherwise (in this NOFO or in a Notice from the NIH Guide for Grants and Contracts ). Conformance to all requirements (both in the How to Apply – Application Guide and the NOFO) is required and strictly enforced. Applicants must read and follow all application instructions in the How to Apply – Application Guide as well as any program-specific instructions noted in Section IV. When the program-specific instructions deviate from those in the How to Apply – Application Guide , follow the program-specific instructions. Applications that do not comply with these instructions may be delayed or not accepted for review. There are several options available to submit your application through Grants.gov to NIH and Department of Health and Human Services partners. You must use one of these submission options to access the application forms for this opportunity. Use the NIH ASSIST system to prepare, submit and track your application online. Use an institutional system-to-system (S2S) solution to prepare and submit your application to Grants.gov and eRA Commons to track your application. Check with your institutional officials regarding availability. Use Grants.gov Workspace to prepare and submit your application and eRA Commons to track your application. Part 2. Full Text of Announcement Section i. notice of funding opportunity description. The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, also known as America's Seed Fund, are one of the largest sources of early-stage capital for technology commercialization in the United States. These programs enable US-owned and operated small businesses to conduct research and development that has a strong potential for commercialization. National Institutes of Health (NIH), Centers for Disease Control and Prevention (CDC), and the Food and Drug Administration (FDA) support small businesses through the SBIR and STTR programs to develop promising technologies and products that align with their mission to improve health and save lives. The SBIR program, as established by law and reauthorized under Public Law 114-328, Section 1834, Public Law 115-232, and Public Law 117-183, is intended to meet the following goals: stimulate technological innovation in the private sector; strengthen the role of small business in meeting federal research and development needs; increase the private sector commercialization of innovations developed through federal research and development funding; and foster and encourage participation in innovation and entrepreneurship by women and socially or economically disadvantaged persons . The STTR program aims to foster technology transfer through cooperative research and development between small businesses and research institutions. Federal agencies with extramural research budgets over $100 million are required to set-aside 3.2% of their extramural research budget to the SBIR program, and those with extramural research budgets over $1 billion are required to set aside an additional 0.45% to the STTR program. NIH has a commitment to supporting a sustainable and diverse biomedical research workforce (see Notice of NIH's Interest in Diversity, NOT-OD-20-031 ). Research shows that diverse teams working together and capitalizing on innovative ideas and distinct perspectives outperform homogeneous teams. Scientists and trainees from diverse backgrounds and life experiences bring different perspectives, creativity, and individual enterprise to address complex scientific problems. There are many benefits that flow from a diverse NIH-supported scientific workforce, including: fostering scientific innovation, enhancing global competitiveness, contributing to robust learning environments, improving the quality of research, advancing the likelihood that underserved populations and those that experience health disparities and inequities participate in and benefit from health research, and enhancing public trust. In addition, fostering and encouraging participation by socially and economically disadvantaged and women-owned small businesses in technological innovation is one of the goals of the SBIR and STTR programs. ( https://www.sbir.gov/sites/default/files/SBA%20SBIR_STTR_POLICY_DIRECTIVE_May2023.pdf ). This Notice of Funding Opportunity (NOFO) issued by the National Institutes of Health (NIH), Centers for Disease Control and Prevention (CDC), and the Food and Drug Administration (FDA) invites eligible United States small business concerns (SBCs) to submit Small Business Innovation Research (SBIR) Phase I, Phase II, Direct to Phase II (NIH Only), Fast-Track (NIH only), and Phase IIB (NIH only) grant applications. Small business applicants interested in submitting an STTR grant application should submit to PA-24-247 or PAR-24-248 . SBIR and STTR are phased programs. The main objective in SBIR and STTR Phase I is to establish the technical merit and feasibility of the proposed research and development efforts. An SBIR and STTR Phase II continues the R&D efforts to advance the technology toward ultimate commercialization. At the conclusion of an SBIR/STTR Phase II, it is expected that the small business will fully commercialize their product or technology using non-SBIR/STTR funds (either federal or non-federal). Small businesses that are eligible to submit Phase II applications for projects that were supported with a Phase I SBIR or STTR award are expected to submit the regular Phase II application as a "Renewal" application based on the awarded Phase I SBIR or STTR project. Only one Phase II application may be awarded for a specific project supported by a Phase I award. NIH Fast-Track: An NIH SBIR Fast-Track incorporates a submission and review process in which both Phase I and Phase II applications are submitted and reviewed together as one application to reduce or eliminate the funding gap between phases. NIH Direct to Phase II: For small businesses that have already demonstrated scientific and technical merit and feasibility but have not received a Phase I SBIR or STTR for that project, NIH can issue a Direct to Phase II award. The NIH will accept Direct to Phase II applications regardless of the funding source for the proof of principle work on which the proposed Phase II research is based. Direct to Phase II awards should be submitted as “New” applications and not continuations ("Renewal") of Phase I SBIR or STTR projects. NIH Phase IIB: Some projects initiated with SBIR or STTR funding require considerable financing beyond the SBIR and STTR Phase II to achieve commercialization. NIH Institutes and Centers (ICs) may allow small businesses who have been awarded a Phase II SBIR or STTR to submit a Phase IIB (second, sequential Phase II) SBIR or STTR application that will provide additional funding for Phase II SBIR or STTR projects. These renewals are typically offered for those projects that require extraordinary time and effort, including those requiring regulatory approval or developing complex instrumentation, clinical research tools, and behavioral interventions. Commercial potential (i.e. the probability that an application will result in a commercial product) will be strongly considered in review (refer to Section V. Application Review Information) and making funding decisions. An applicant's ability to secure substantial independent third-party investor funds will help validate the commercial potential of the proposed Phase IIB project. Applicants are encouraged to secure substantial independent third-part investor funds (i.e., third-party funds that equal or exceed the requested NIH funds). Examples of third-party investors include, but are not limited to, another company, a venture capital firm, an angel investor, a foundation, a university, a research institution, a State or local government, or any combination of the above. Applicants must provide a commercialization plan that describes the long-term commercialization strategy and details of any independent third-party investor funding that has already been secured or will be provided during the Phase IIB project period. If applicable, the application should include letters of support from third-party investors. NIH ICs that accept Phase IIB applications, either through this SBIR NOFOs or other specific NOFOs, are listed in the current SBIR/STTR Program Descriptions and Research Topics for NIH, CDC, and FDA . Additional requirements and instructions (e.g., submission of a letter of intent) are available in the specific IC research topics section and in the NIH Targeted Funding Opportunities that allow Phase IIB applications. Specific Objectives The SBIR/STTR Program Descriptions and Research Topics for NIH, CDC, and FDA represent scientific program areas that may be of interest to applicant small businesses in the development of projects that have potential for commercialization. Small business concerns that have the research capabilities and technological expertise to contribute to the R&D mission(s) of the NIH, CDC, or FDA awarding components identified in this NOFO are encouraged to submit SBIR grant applications in these areas. SBIR grant applications will also be accepted and considered in any area within the mission of the Components of Participating Organizations listed for this NOFO. In addition to the general SBIR solicitations, some awarding components have additional, specific NIH Targeted Funding Opportunities of potential interest to small businesses. Applicants are not required to identify a potential awarding component prior to submission of the application but may request one on the Assignment Request Form. Staff within the NIH’s Center for Scientific Review (CSR) office, the single receiving point for all NIH, CDC, and FDA grant applications, will assign all applications to the most appropriate Agency and Institute/Center (IC) based on their mission and the science proposed. For specific information about the mission of each NIH IC, visit the List of NIH Institutes, Centers, and Offices website. All applications submitted to this Parent Notice of Funding Opportunity are not allowed to propose  clinical trial(s) . SBIR applications that propose clinical trial(s) should be submitted to PA-24-246 . Further information about the SBIR and STTR programs can be found at  https://seed.nih.gov .  Frequently asked questions  are available to assist applicants and can answer many basic questions about the program. See Section VIII. Other Information for award authorities and regulations. Section II. Award Information Grant: A financial assistance mechanism providing money, property, or both to an eligible entity to carry out an approved project or activity. The  OER Glossary  and the How to Apply – Application Guide provide details on these application types. Only those application types listed here are allowed for the NOFO.   Need help determining whether you are doing a clinical trial? The number of awards is contingent upon NIH appropriations, reauthorization and extension of the SBIR and STTR programs, and the submission of a sufficient number of meritorious applications. Total funding support (direct costs, indirect costs, fee) normally may not exceed $306,872 for Phase I awards and $2,045,816  for Phase II awards. For specific topics, NIH may exceed these total award amounts. The current list of approved topics can be found at https://seed.nih.gov/sites/default/files/HHS_Topics_for_Budget_Waivers.pdf . Each participating component may also set their own budget limit (higher or lower than the above) in the “Limited Amount of Award Section” of their respective topics section. Applicants are strongly encouraged to contact program officials prior to submitting any application in excess of the total award amounts listed above and early in the application planning process. In all cases, applicants should propose a budget that is reasonable and appropriate for completion of the research project.  Phase IIB budgets must be submitted in accordance with participating IC-specific budget limitations described in the current  SBIR/STTR Program Descriptions and Research Topics for the NIH, CDC and FDA. According to statutory guidelines, award periods normally may not exceed 6 months for Phase I and 2 years for Phase II. Applicants are encouraged to propose a project duration period that is reasonable and appropriate for completion of the research project.  NIH grants policies as described in the NIH Grants Policy Statement will apply to the applications submitted and awards made from this NOFO. Section III. Eligibility Information 1. eligible applicants eligible organizations only united states small business concerns (sbcs) are eligible to submit applications for this opportunity. a small business concern is one that, at the time of award of phase i and phase ii, meets all of the following criteria:   1. is organized for profit, with a place of business located in the united states, which operates primarily within the united states or which makes a significant contribution to the united states economy through payment of taxes or use of american products, materials or labor; 2. is in the legal form of an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust or cooperative, except that where the form is a joint venture, there must be less than 50 percent participation by foreign business entities in the joint venture; 3. sbir and sttr.   be a concern which is more than 50% directly owned and controlled by one or more individuals (who are citizens or permanent resident aliens of the united states), other business concerns (each of which is more than 50% directly owned and controlled by individuals who are citizens or permanent resident aliens of the united states), an indian tribe, anc or nho (or a wholly owned business entity of such tribe, anc or nho), or any combination of these; or sbir-only.   be a concern which is more than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these.  no single venture capital operating company, hedge fund, or private equity firm may own more than 50% of the concern, unless that single venture capital operating company,  hedge fund , or  private equity firm  qualifies as a small business concern that is more than 50% directly owned and controlled by individuals who are citizens or permanent resident aliens of the united states; or sbir and sttr.  be a joint venture in which each entity to the joint venture must meet the requirements set forth in paragraph 3 (i) or 3 (ii) of this section. a joint venture that includes one or more concerns that meet the requirements of paragraph (ii) of this section must comply with § 121.705(b) concerning registration and proposal requirements. 4. has, including its affiliates, not more than 500 employees. if the concern is more than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these falls under 3 (ii) or 3 (iii) above, see section iv. application and submission information for additional instructions regarding required application certification. if an employee stock ownership plan owns all or part of the concern, each stock trustee and plan member is considered an owner. if a trust owns all or part of the concern, each trustee and trust beneficiary is considered an owner. definitions: hedge fund has the meaning given that term in section 13(h)(2) of the bank holding company act of 1956 (12 u.s.c. 1851(h)(2)). the hedge fund must have a place of business located in the united states and be created or organized in the united states, or under the law of the united states or of any state. portfolio company means any company that is owned in whole or part by a venture capital operating company, hedge fund, or private equity firm. private equity firm has the meaning given the term “private equity fund” in section 13(h)(2) of the bank holding company act of 1956 (12 u.s.c. 1851(h)(2)). the private equity firm must have a place of business located in the united states and be created or organized in the united states, or under the law of the united states or of any state. venture capital operating company means an entity described in § 121.103(b)(5)(i), (v), or (vi). the venture capital operating company must have a place of business located in the united states and be created or organized in the united states, or under the law of the united states or of any state. anc means alaska native corporation. nho means native hawaiian organization. sbcs must also meet the other regulatory requirements found in 13 c.f.r. part 121. business concerns, other than investment companies licensed, or state development companies qualifying under the small business investment act of 1958, 15 u.s.c. 661, et seq., are affiliates of one another when either directly or indirectly, (a) one concern controls or has the power to control the other; or (b) a third-party/parties controls or has the power to control both. business concerns include, but are not limited to, any individual (sole proprietorship) partnership, corporation, joint venture, association, or cooperative. the how to apply – application guide should be referenced for detailed eligibility information. small business concerns that are more than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these are not eligible to apply to the nih sttr program.   performance benchmark requirements         phase i to phase ii transition rate benchmark:  in accordance with guidance from the sba, the hhs sbir/sttr program is implementing the phase i to phase ii transition rate benchmark required by the sbir/sttr reauthorization act of 2011 and the sbir and sttr extension act of 2022.the benchmark establishes a minimum number of phase ii awards the company must have received relative to a given number of phase i awards received during the 5-fiscal year time period. the transition rate is calculated as the total number of sbir and sttr phase ii awards a company received during the past 5 fiscal years divided by the total number of sbir and sttr phase i awards it received during the past 5 fiscal years excluding the most recently completed year. the transition rate requirement, agreed upon and established by all 11 sbir agencies, was published for public comment in a federal register notice on october 16, 2012 (77 fr 63410) and amended on may 23, 2013 (78 fr 30951).       for sbir and sttr phase i applicants that have received more than 20 phase i awards over the past 5 fiscal years (excluding the most recently-completed fiscal year): companies that do not meet or exceed the benchmark minimum transition rate of 0.25 will not be eligible to apply for a phase i, fast-track, or direct phase ii (if available) award for a period of one year from the date of the application submission. this requirement does not apply to companies that have received 20 or fewer phase i awards over the prior 5-fiscal year period. for application deadlines that fall on or after april 5, 2023: for sbir and sttr phase i applicants that have received more than 50 phase i awards over the past 5 fiscal years (excluding the most recently-completed fiscal year): companies that do not meet or exceed the benchmark minimum transition rate of 0.5 will not be eligible to receive more than 20 total phase i and phase ii awards for a period of one year from the date on which such determination is made. this requirement does not apply to companies that have received 50 or fewer phase i awards over the 5-fiscal year period. on june 1 of each year, sba will identify the companies that fail to meet minimum performance requirements. sba calculates individual company phase i to phase ii transition rates using sbir and sttr award information across all federal agencies. sba will notify companies and the relevant officials at the participating agencies. more information on the phase i to phase ii transition rate requirement is available at sbir.gov. phase ii to commercialization benchmark:  in accordance with guidance from the sba, the hhs sbir/sttr programs are implementing the phase ii to commercialization rate benchmark for phase i applicants, as required by the sbir/sttr reauthorization act of 2011 and the sbir and sttr extension act of 2022. the commercialization rate benchmark was published in a federal register notice on august 8, 2013 ( 78 fr 48537 ), with a reopening of the comment period published on september 26, 2013 (78 fr 59410). for companies that have received more than 15 phase ii awards from all agencies over the past 10 fiscal years (excluding the two most recently completed fiscal year): companies that meet this criterion must show an average of at least $100,000 in revenues and/or investments per phase ii award or at least 0.15 (15%) patents per phase ii award resulting from these awards during the past 10- fiscal year period. applicants that fail this benchmark will not be eligible to apply for new phase i, fast-track or direct phase ii (if applicable) awards for a period of one year. this requirement does not apply to companies that have received 15 or fewer phase ii awards over the 10-fiscal year period, excluding the two most recently completed fiscal years. for application deadlines that fall on or after april 5, 2023: for companies that have received more than 50 phase ii awards from all agencies over the past 10-fiscal years (excluding the two most recently completed fiscal year): companies that meet this criterion must show an average of at least $250,000 of aggregated sales and investment per phase ii award over the past 10-fiscal year period. applicants that fail this benchmark will not be eligible to receive more than 20 total phase i and phase ii awards for a period of one year from the date on which such determination is made. this requirement does not apply to companies that have received 50 or fewer phase ii awards over the 10-fiscal year period, excluding the two most recently completed fiscal years. for application deadlines that fall on or after april 5, 2023: for companies that have received more than 100 phase ii awards from all agencies over the past 10-fiscal years (excluding the two most recently completed fiscal year): companies that meet this criterion must show an average of at least $450,000 of aggregated sales and investment per phase ii award over the past 10-fiscal year period. applicants that fail this benchmark will not be eligible to receive more than 20 total phase i and phase ii awards for a period of one year from the date on which such determination is made. this requirement does not apply to companies that have received 100 or fewer phase ii awards over the 10-fiscal year period, excluding the two most recently completed fiscal years. foreign organizations non-domestic (non-u.s.) entities (foreign organizations) are not eligible to apply. non-domestic (non-u.s.) components of u.s. organizations are not eligible to apply. foreign components, as defined in the nih grants policy statement , may be allowed. required registrations applicant organizations applicant organizations must complete and maintain the following registrations as described in the how to apply – application guide to be eligible to apply for or receive an award. all registrations must be completed prior to the application being submitted. registration can take 6 weeks or more, so applicants should begin the registration process as soon as possible. failure to complete registrations in advance of a due date is not a valid reason for a late submission, please reference nih grants policy statement 2.3.9.2 electronically submitted applications for additional information. system for award management (sam)  – applicants must complete and maintain an active registration, which requires renewal at least annually . the renewal process may require as much time as the initial registration. sam registration includes the assignment of a commercial and government entity (cage) code for domestic organizations which have not already been assigned a cage code. unique entity identifier (uei) – a uei is issued as part of the sam.gov registration process. the same uei must be used for all registrations, as well as on the grant application. sba company registry – see how to apply – application guide  for instructions on how to register and how to attach proof of registration to your application package. applicants must have a uei to complete this registration. sba company registration is not required before sam, grants.gov or era commons registration. era commons – once the unique organization identifier is established, organizations can register with era commons in tandem with completing their grants.gov registration; all registrations must be in place by time of submission. era commons requires organizations to identify at least one signing official (so) and at least one program director/principal investigator (pd/pi) account in order to submit an application. grants.gov – applicants must have an active sam registration in order to complete the grants.gov registration. program directors/principal investigators (pd(s)/pi(s)) all pd(s)/pi(s) must have an era commons account.  pd(s)/pi(s) should work with their organizational officials to either create a new account or to affiliate their existing account with the applicant organization in era commons. if the pd/pi is also the organizational signing official, they must have two distinct era commons accounts, one for each role. obtaining an era commons account can take up to 2 weeks. eligible individuals (program director/principal investigator) any individual(s) with the skills, knowledge, and resources necessary to carry out the proposed research as the program director(s)/principal investigator(s) (pd(s)/pi(s)) is invited to work with his/her organization to develop an application for support. individuals from diverse backgrounds, including individuals from underrepresented racial and ethnic groups, individuals with disabilities, and women are always encouraged to apply for nih support. see, reminder: notice of nih's encouragement of applications supporting individuals from underrepresented ethnic and racial groups as well as individuals with disabilities, not-od-22-019 .  for institutions/organizations proposing multiple pds/pis, visit the multiple program director/principal investigator policy and submission details in the senior/key person profile (expanded) component of the sf424 (r&r) application guide. under the sbir program, for both phase i and phase ii, the primary employment of the pd/pi must be with the small business concern at the time of award and during the conduct of the proposed project. for projects with multiple pds/pis, at least one must meet the primary employment requirement. occasionally, deviations from this requirement may occur.   for the sttr program, the pd(s)/pi(s) may be employed with the sbc or the single, “partnering” non-profit research institution as long as s/he has a formal appointment with or commitment to the applicant sbc, which is characterized by an official relationship between the sbc and that individual. such a relationship does not necessarily involve a salary or other form of remuneration the primary employment of the pd/pi must be with the sbc or the research institution (where they are pd/pi at) at the time of award and during the conduct of the proposed project.  each pd/pi must commit a minimum of 10% effort to the project. the how to apply – application guide  should be referenced for specific details on eligibility requirements. for institutions/organizations proposing multiple pds/pis, see multiple principal investigators section of the how to apply – application guide . 2. cost sharing. This NOFO does not require cost sharing as defined in the NIH Grants Policy Statement Section 1.2 Definition of Terms . 3. Additional Information on Eligibility Number of Applications Applicant organizations may submit more than one application, provided that each application is scientifically distinct. NIH will not accept similar grant applications with essentially the same research focus from the same applicant organization. This includes derivative or multiple applications that propose to develop a single product or service that, with non-substantive modifications, can be applied to a variety of purposes. Applicants may not simultaneously submit identical/essentially identical applications under both this funding opportunity and any other HHS funding opportunity, including the SBIR and STTR Parent announcements. The NIH will not accept duplicate or highly overlapping applications under review at the same time, NIH Grants Policy Statement 2.3.7.4 Submission of Resubmission Application. This means that the NIH will not accept: A new (A0) application that is submitted before issuance of the summary statement from the review of an overlapping new (A0) or resubmission (A1) application. A resubmission (A1) application that is submitted before issuance of the summary statement from the review of the previous new (A0) application. An application that has substantial overlap with another application pending appeal of initial peer review. (see NIH Grants Policy Statement 2.3.9.4 Similar, Essentially Identical, or Identical Applications ). A Phase I awardee may submit a Phase II application either before or after expiration of the Phase I budget period, unless the awardee elects to submit a Phase I and Phase II application concurrently under the Fast-Track procedure. To maintain eligibility to seek Phase II or IIB support, a Phase I awardee should submit a Phase II application, and a Phase II awardee should submit a Phase IIB application, within the first six due dates following the expiration of the Phase I or II budget period, respectively. Recipients of Phase I and Phase II grants, cooperative agreements, or contracts are eligible to submit Phase II and Phase IIB grant applications, respectively, for this opportunity in accordance with each awarding component's guidance in the current  SBIR/STTR Program Descriptions and Research Topics for the NIH, CDC and FDA . In Phase I, normally, two-thirds or 67% of the research or analytical effort is carried out by the small business concern. The total amount of all consultant and contractual arrangements to third parties for portions of the scientific and technical effort is generally not more than 33% of the total amount requested (direct, F&A/indirect, and fee). In Phase II, normally, one-half or 50% of the research or analytical effort is carried out by the small business concern. The total amount of consultant and contractual arrangements to third parties for portions of the scientific and technical effort is generally not more than 50% of the total Phase II amount requested (direct, F&A/indirect, and fee). Deviations from these requirements may be considered on a case by case basis. Please contact a program officer for additional information. Deviations must be approved in writing by the Grants Management Officer (GMO) after consultation with the agency SBIR Program Manager/Coordinator. A small business concern may subcontract a portion of its SBIR or STTR award to a Federal laboratory within the limits above.  A Federal laboratory, as defined in 15 U.S.C. § 3703, means any laboratory, any federally funded research and development center, or any center established under 15 U.S.C. §§ 3705 & 3707 that is owned, leased, or otherwise used by a Federal agency and funded by the Federal Government, whether operated by the Government or by a contractor. The basis for determining the percentage of work to be performed by each of the cooperative parties in Phase I or Phase II will be the total of the requested costs attributable to each party, unless otherwise described and justified in “Consortium/Contractual Arrangements” of the PHS 398 Research Plan component of SF424 (R&R) application forms. Additional details are contained in the SF424 (R&R) SBIR/STTR Application Guide. Section IV. Application and Submission Information 1. requesting an application package. The application forms package specific to this opportunity must be accessed through ASSIST, Grants.gov Workspace or an institutional system-to-system solution. Links to apply using ASSIST or Grants.gov Workspace are available in Part 1 of this NOFO. See your administrative office for instructions if you plan to use an institutional system-to-system solution. 2. Content and Form of Application Submission It is critical that applicants follow the SBIR/STTR (B) Instructions in the How to Apply – Application Guide , except where instructed in this notice of funding opportunity to do otherwise. Conformance to the requirements in the How to Apply – Application Guide is required and strictly enforced. Applications that are out of compliance with these instructions may be delayed or not accepted for review. All page limitations described in the How to Apply – Application Guide  and the Table of Page Limits must be followed. The following section supplements the instructions found in the How to Apply – Application Guide and should be used for preparing an application to this NOFO. All instructions in the How to Apply – Application Guide must be followed. All instructions in the How to Apply – Application Guide must be followed with the following additional instructions: Facilities & Other Resources In addition to describing the scientific environment and the company support, the applicant must describe the business environment and resources, or how the company will obtain access to the appropriate business resources, for completing and commercializing the proposed product or service. This includes any relevant intellectual property associated with the project necessary to facilitate commercialization.  Other Attachments: 1. SBIR Application Certification for small business concerns majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms Applicant small business concerns that are majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms (e.g. majority VCOC-owned) are required to submit a Certification at time of their application submission per the SBIR Policy Directive .  Follow the instructions below.  Applicants small business concerns who are more than 50% directly owned and controlled by one or more individuals (who are citizens or permanent resident aliens of the United States), other business concerns (each of which is more than 50% directly owned and controlled by individuals who are citizens or permanent resident aliens of the United States), or any combination of these (i.e. NOT majority VCOC-owned) should NOT fill out this certification and should NOT attach it to their application package. Download the “VCOC Certification.pdf” at the NIH SBIR Forms webpage.  Answer the 3 questions and check the certification boxes. The authorized business official must sign the certification. Save the certification using the original file name.  The file must be named “SBIR Application VCOC Certification.pdf”.  DO NOT CHANGE OR ALTER THE FILE NAME.  Changing the file name may cause delays in the processing of your application. When you are completing the application package, attach this certification as a separate file by clicking "Add Attachments" located to the right of Other Attachments field on the “Research and Related Other Project Information” form. All instructions in the How to Apply – Application Guide  must be followed. SBIR/STTR Information Form Resource Sharing Plans : Individuals are required to comply with the instructions for the Resource Sharing Plans as provided in the SF424 (R&R) Application Guide.  Other Plan(s) All instructions in the How to Apply - Application Guide must be followed, with the following additional instructions: All applicants planning research (funded or conducted in whole or in part by NIH) that results in the generation of scientific data are required to comply with the instructions for the Data Management and Sharing Plan. All Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) applicants are required to address a Data Management and Sharing Plan, regardless of the amount of direct costs requested for any one year. However, SBIR and STTR recipients may retain the rights to data generated during the performance of an SBIR or STTR award for up to 20 years after the award date, per the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Policy Directive. An acceptable Data Management and Sharing plan can reference and incorporate these data rights. Further information about SBIR and STTR data rights are enumerated in the NIH GPS . Note that Phase I SBIR/STTR Appendix materials are not permitted.  Only limited items are allowed in the Appendix of other small business applications.  The instructions for the Appendix of the Research Plan are described in the How to Apply - Application Guide ; any instructions provided here are in addition to the How to Apply - Application Guide Instructions. All instructions in the SF424 (R&R) SBIR/STTR Application Guide must be followed. All instructions in the How to Apply - Application Guide must be followed. When involving human subjects research, clinical research, and/or NIH-defined clinical trials follow all instructions for the PHS Human Subjects and Clinical Trials Information form in the How to Apply - Application Guide , with the following additional instructions: If you answered “Yes” to the question “Are Human Subjects Involved?” on the R&R Other Project Information form, you must include at least one human subjects study record using the Study Record: PHS Human Subjects and Clinical Trials Information form or Delayed Onset Study record. Study Record: PHS Human Subjects and Clinical Trials Information Delayed Onset Study Note: Delayed onset does NOT apply to a study that can be described but will not start immediately (i.e., delayed start). All instructions in the How to Apply - Application Guide must be followed. 3. Unique Entity Identifier and System for Award Management (SAM) See Part 2. Section III.1 for information regarding the requirement for obtaining a unique entity identifier and for completing and maintaining active registrations in System for Award Management (SAM), eRA Commons, and Grants.gov 4. Submission Dates and Times Part I.  contains information about Key Dates and time. Applicants are encouraged to submit applications before the due date to ensure they have time to make any application corrections that might be necessary for successful submission. When a submission date falls on a weekend or Federal holiday , the application deadline is automatically extended to the next business day. Organizations must submit applications to Grants.gov (the online portal to find and apply for grants across all Federal agencies). Applicants must then complete the submission process by tracking the status of the application in the eRA Commons , NIH’s electronic system for grants administration. NIH and Grants.gov systems check the application against many of the application instructions upon submission. Errors must be corrected and a changed/corrected application must be submitted to Grants.gov on or before the application due date and time.  If a Changed/Corrected application is submitted after the deadline, the application will be considered late. Applications that miss the due date and time are subjected to the NIH Grants Policy Statement Section 2.3.9.2 Electronically Submitted Applications . Applicants are responsible for viewing their application before the due date in the eRA Commons to ensure accurate and successful submission. Information on the submission process and a definition of on-time submission are provided in the How to Apply – Application Guide . 5. Intergovernmental Review (E.O. 12372) This initiative is not subject to  intergovernmental review . 6. Funding Restrictions All NIH awards are subject to the terms and conditions, cost principles, and other considerations described in the NIH Grants Policy Statement . Pre-award costs are allowable only as described in the NIH Grants Policy Statement . 7. Other Submission Requirements and Information Applications must be submitted electronically following the instructions described in the SF424 (R&R) SBIR/STTR Application Guide.  Paper applications will not be accepted. Applicants must complete all required registrations before the application due date. Section III. Eligibility Information contains information about registration. For assistance with your electronic application or for more information on the electronic submission process, visit  How to Apply – Application Guide . If you encounter a system issue beyond your control that threatens your ability to complete the submission process on-time, you must follow the Dealing with System Issues guidance. For assistance with application submission, contact the Application Submission Contacts in Section VII. Important reminders: All PD(s)/PI(s) must include their eRA Commons ID in the Credential field of the Senior/Key Person Profile form. Failure to register in the Commons and to include a valid PD/PI Commons ID in the credential field will prevent the successful submission of an electronic application to NIH. The applicant organization must ensure that the unique entity identifier provided on the application is the same identifier used in the organization’s profile in the eRA Commons and for the System for Award Management. Additional information may be found in the How to Apply - Application Guide . See more tips for avoiding common errors. Upon receipt, applications will be evaluated for completeness and compliance with application instructions by the Center for Scientific Review, NIH. Applications that are incomplete or non-compliant will not be reviewed. Recipients or subrecipients must submit any information related to violations of federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the federal award. See Mandatory Disclosures, 2 CFR 200.113 and NIH Grants Policy Statement Section 4.1.35 . Send written disclosures to the NIH Chief Grants Management Officer listed on the Notice of Award for the IC that funded the award and to the HHS Office of Inspector Grant Self Disclosure Program at [email protected] .  Applicants are required to follow the instructions for post-submission materials, as described in  the policy . Section V. Application Review Information 1. criteria. Only the review criteria described below will be considered in the review process. Applications submitted to the NIH in support of the NIH mission are evaluated for scientific and technical merit through the NIH peer review system. Reviewers will provide an overall impact score to reflect their assessment of the likelihood for the project to exert a sustained, powerful influence on the research field(s) involved, in consideration of the following review criteria and additional review criteria (as applicable for the project proposed). Reviewers will consider each of the review criteria below, as appropriate for the stage of research, in the determination of scientific merit, and give a separate score for each. An application does not need to be strong in all categories to be judged likely to have major scientific and commercial impact. For example, a project that by its nature is not innovative may be essential to advance a field. Does the project and proposed product or service address an important problem, a critical barrier to progress, or unmet need in the field? Is the prior research that serves as the key support for the proposed project rigorous? If the aims of the project are achieved, how will scientific knowledge, technical capability, and/or clinical practice be improved? How will successful completion of the aims and commercialization of the resulting product or service change the concepts, methods, technologies, treatments, services, or preventative interventions that drive this field? For a Phase I, does the proposed project have commercial potential to lead to a marketable product or service?  For Phase II (all types) and Fast-Track applications, does the Commercialization Plan demonstrate a high probability of commercialization? How strong is the described market opportunity in the Commercialization Plan including: (i) the product or service being developed; (ii) target customers; and (iii) how the product or service will solve a demonstrated customer need?)    Are the PD(s)/PI(s), collaborators, and other researchers well suited to the project and will they provide a meaningful contribution to successfully complete the proposed aims? Do the PD(s)/PI(s) have appropriate experience and training to lead this project? If so, have they demonstrated an ongoing record of accomplishments in their field(s)? If the project is collaborative or multi-PD/PI, do the investigators have complementary and integrated expertise; are their leadership approach, governance and organizational structure appropriate for the project? For projects in later stages, does the team have expertise to commercialize the product or service? How does the proposed product or service represent an innovative solution to important problem, barrier to progress, or unmet need in research or clinical practice? Does the product or service proposed in application challenge and seek to shift current research or clinical practice paradigms? What meaningful competitive advantages does the end product or service proposed offer over existing approaches, instrumentation, or interventions or those in development?   For Phase II (all types) and Fast-Track applications, does the small business present a reasonable plan to create a temporal barrier against other companies aiming to provide a similar solution, including protecting the intellectual property relevant to the product or service being studied or used during the project?      Are the research aims appropriate for the current stage of development? Do the aims represent the necessary steps to further advance the development of the product or service? Are the overall strategy, methodology, and analyses well-reasoned and appropriate to accomplish the specific aims of the project? Have the investigators included any plans to address weaknesses in the rigor of prior research that serves as the key support for the proposed project? Have the investigators presented strategies to ensure a robust and unbiased approach, as appropriate for the work proposed? Are potential problems, alternative strategies, and benchmarks for success presented? If the project is in the early stages of development, will the strategy establish feasibility, and will particularly risky aspects be managed? Have the investigators presented adequate plans to address relevant biological variables, such as sex, for studies in vertebrate animals or human subjects?    For Phase I applications, will the strategy establish feasibility, and will particularly risky aspects be managed? Are there clear, appropriate, measurable goals (milestones) that should be achieved prior to initiating Phase II? For Fast-Track applications, are there clear, appropriate, measurable goals (milestones) that should be achieved prior to initiating Phase II? Will successful completion of the research aims significantly advance development of the proposed product or service toward eventual commercialization? For Phase II (all types) applications, will successful completion of the research aims significantly advance development of the proposed product or service toward eventual commercialization? How well does the application demonstrate progress toward meeting the Phase I (or equivalent) objectives, demonstrating feasibility, and providing a solid foundation for the proposed Phase II activity? If the project involves human subjects and/or NIH-defined clinical research, are the plans to address: 1) the protection of human subjects from research risks, and  2) inclusion (or exclusion) of individuals on the basis of sex/gender, race, and ethnicity, as well as the inclusion or exclusion of individuals of all ages (including children and older adults), justified in terms of the scientific goals and research strategy proposed?    Will the scientific and business environment in which the work will be done contribute to the probability of success and eventual commercialization? Are the small business support, equipment and other physical resources available to the investigators adequate for the project proposed? Will the project benefit from unique features of the scientific environment, subject populations, or collaborative arrangement? For Phase I, applications, does the small business concern have appropriate business expertise and resources, or have they identified appropriate business resources, to accomplish the aims of this project and support commercialization of the proposed product or service? For Phase II (all type) or Fast-Track applications, does the applicant have access to the business experts and resources needed to accomplish the aims of this project and to commercialize the proposed product or service? As applicable for the project proposed, reviewers will evaluate the following additional items while determining scientific and technical merit, and in providing an overall impact score, but will not give separate scores for these items. For Phase II (all types) and  Fast-Track applications, reviewers will consider the following: How well does the application present the market opportunity, including market segments, that its product or technology will address? Does the applicant understand the barriers to commercialization of its product or service (e.g., regulatory approval, insurance reimbursement, competitive products, customer preferences)? Does the application have appropriate strategies to address these barriers? Does the application provide appropriate post-SBIR product development and commercialization milestones and explain how these milestones will be achieved? Does the application present a plan for funding the development and commercialization of the product or service? If applicable, did the applicant obtain letters of interest or commitment for such funding and/or resources? Are the executives, management team, and business experts well suited to advance the development and commercialization of the proposed product or service? If not, is there a plan in place to add the necessary expertise as the product or service advances towards commercialization? Is there a sound strategy for driving product adoption and generating revenue from the product or service (e.g., product sales, licensing, partnerships)? For research that involves human subjects but does not involve one of the categories of research that are exempt under 45 CFR Part 46, the committee will evaluate the justification for involvement of human subjects and the proposed protections from research risk relating to their participation according to the following five review criteria: 1) risk to subjects, 2) adequacy of protection against risks, 3) potential benefits to the subjects and others, 4) importance of the knowledge to be gained, and 5) data and safety monitoring for clinical trials. For research that involves human subjects and meets the criteria for one or more of the categories of research that are exempt under 45 CFR Part 46, the committee will evaluate: 1) the justification for the exemption, 2) human subjects involvement and characteristics, and 3) sources of materials. For additional information on review of the Human Subjects section, please refer to the Guidelines for the Review of Human Subjects . When the proposed project involves human subjects and/or NIH-defined clinical research, the committee will evaluate the proposed plans for the inclusion (or exclusion) of individuals on the basis of sex/gender, race, and ethnicity, as well as the inclusion (or exclusion) of individuals of all ages (including children and older adults) to determine if it is justified in terms of the scientific goals and research strategy proposed. For additional information on review of the Inclusion section, please refer to the Guidelines for the Review of Inclusion in Clinical Research . The committee will evaluate the involvement of live vertebrate animals as part of the scientific assessment according to the following three points: (1) a complete description of all proposed procedures including the species, strains, ages, sex, and total numbers of animals to be used; (2) justifications that the species is appropriate for the proposed research and why the research goals cannot be accomplished using an alternative non-animal model; and (3) interventions including analgesia, anesthesia, sedation, palliative care, and humane endpoints that will be used to limit any unavoidable discomfort, distress, pain and injury in the conduct of scientifically valuable research. Methods of euthanasia and justification for selected methods, if NOT consistent with the AVMA Guidelines for the Euthanasia of Animals, is also required but is found in a separate section of the application. For additional information on review of the Vertebrate Animals Section, please refer to the Worksheet for Review of the Vertebrate Animals Section. Reviewers will assess whether materials or procedures proposed are potentially hazardous to research personnel and/or the environment, and if needed, determine whether adequate protection is proposed. For Resubmissions, the committee will evaluate the application as now presented, taking into consideration the responses to comments from the previous scientific review group and changes made to the project. In addition to the Phase II specific review criteria, the committee will consider the following for Phase IIB applications:  1) the progress made in the last funding period. 2) the commercial potential (i.e. the probability that an application will result in a commercial product or service), which may be validated by the applicant's ability to secure substantial independent third-party investor funds (i.e., third-party funds that equal or exceed the requested NIH funds). For Revisions, the committee will consider the appropriateness of the proposed expansion of the scope of the project. If the Revision application relates to a specific line of investigation presented in the original application that was not recommended for approval by the committee, then the committee will consider whether the responses to comments from the previous scientific review group are adequate and whether substantial changes are clearly evident. As applicable for the project proposed, reviewers will consider each of the following items, but will not give scores for these items, and should not consider them in providing an overall impact score. Reviewers will consider whether work to be performed outside of the United States is thoroughly justified, based on a rare and unique circumstance, and necessary to the overall completion of the project. Reviewers will assess the information provided in this section of the application, including 1) the Select Agent(s) to be used in the proposed research, 2) the registration status of all entities where Select Agent(s) will be used, 3) the procedures that will be used to monitor possession use and transfer of Select Agent(s), and 4) plans for appropriate biosafety, biocontainment, and security of the Select Agent(s). Reviewers will comment on whether the Resource Sharing Plan(s) (e.g., Sharing Model Organisms ) or the rationale for not sharing the resources, is reasonable. For projects involving key biological and/or chemical resources, reviewers will comment on the brief plans proposed for identifying and ensuring the validity of those resources. Reviewers will consider whether the budget and the requested period of support are fully justified and reasonable in relation to the proposed research. If applicable, reviewers will consider whether work to be performed outside of the United States is thoroughly justified, based on a rare and unique circumstance, and necessary to the overall completion of the project. 2. Review and Selection Process  Applications will be evaluated for scientific and technical merit by (an) appropriate Scientific Review Group(s) convened by Center for Scientific Review (CSR), in accordance with NIH peer review policy and procedures , using the stated review criteria. Assignment to a Scientific Review Group will be shown in the eRA Commons. As part of the scientific peer review, all applications will receive a written critique. Applications may undergo a committee process in which only those applications deemed to have the highest scientific and technical merit (generally the top half of applications under review) will be discussed and assigned an overall impact score. CDC and FDA will not accept appeals for applications submitted in response to this NOFO. Applications will be assigned on the basis of established PHS referral guidelines to the appropriate NIH, CDC, or FDA Institute or Center. Applications will compete for available funds with all other recommended applications submitted in response to this NOFO. Following initial peer review, recommended applications will receive a second level of review by the appropriate national Advisory Council or Board. The following will be considered in making funding decisions: Scientific and technical merit of the proposed project as determined by scientific peer review. Availability of funds. Relevance of the proposed project to program priorities. Security risk as assessed by the HHS Due Diligence Program . If the application is under consideration for funding, NIH will request "just-in-time" information from the applicant as described in the  NIH Grants Policy Statement Section 2.5.1. Just-in-Time Procedures . This request is not a Notice of Award nor should it be construed to be an indicator of possible funding. Prior to making an award, NIH reviews an applicant’s federal award history in SAM.gov to ensure sound business practices. An applicant can review and comment on any information in the Responsibility/Qualification records available in SAM.gov.  NIH will consider any comments by the applicant in the Responsibility/Qualification records in SAM.gov to ascertain the applicant’s integrity, business ethics, and performance record of managing Federal awards per 2 CFR Part 200.206 “Federal awarding agency review of risk posed by applicants.” This provision will apply to all NIH grants and cooperative agreements except fellowships. Disclosure Requirements Regarding Ties to Foreign Countries SBIR and STTR applicants under consideration for award will be required to submit the U.S. Small Business Administration (SBA) Required Disclosures of Foreign Affiliations or Relationships to Foreign Countries form (referred to as the "Disclosure Form" hereafter), during the JIT process.  Applicants are required to disclose all funded and unfunded relationships with foreign countries, using the Disclosure Form, for all owners and covered individuals. A “covered individual” is defined as all senior key personnel identified by the SBC in the application (i.e., individuals who contribute to the scientific development or execution of a project in a substantive, measurable way). Upon request, applicants must submit the completed Disclosure Form and any additional agency-specific information electronically in eRA Commons via the Just-In-Time (JIT) process as described in the NIH Grants Policy Statement Section 2.5.1. Applicants must continue to comply with NIH Other Support disclosure requirements as provided in NIH GPS Section 2.5.1 and may be required to provide similar information on the Disclosure Form for covered individuals identified in the application. Applicants that fail to submit a completed Disclosure Form during the JIT process will not be considered for funding. If participating in this NOFO, SBC applicants applying to CDC and FDA will follow each agency’s policies for submitting additional documents during the pre-award process.  Denial of Awards Applicants are encouraged to consider whether their entity’s relationships with foreign countries of concern will pose a security risk.Prior to issuing an award, NIH, CDC, and FDA will determine whether the SBC submitting the application: has an owner or covered individual that is party to a malign foreign talent recruitment program; has a business entity, parent company, or subsidiary located in the People’s Republic of China or another foreign country of concern ; or has an owner or covered individual that has a foreign affiliation with a research institution located in the People’s Republic of China or another foreign country of concern. A finding of foreign involvement with countries of concern will not necessarily disqualify an applicant. Final award determinations will be based on the above finding of foreign involvement and whether the applicant’s involvement falls within any of the following risk criteria, per the Act: interfere with the capacity for activities supported by NIH, CDC, or FDA to be carried out; create duplication with activities supported by NIH, CDC, or FDA; present concerns about conflicts of interest; were not appropriately disclosed to NIH, CDC, or FDA; violate Federal law or terms and conditions of NIH, CDC, or FDA; or pose a risk to national security. Generally, NIH, CDC, and FDA will not provide SBC applicants the opportunity to address any identified security risks prior to award. NIH, CDC, and FDA will not issue an award under the SBIR/STTR program if the covered relationship with a foreign country of concern identified in this guidance is determined to fall under any of the criteria provided. 3. Anticipated Announcement and Award Dates After the peer review of the application is completed, the PD/PI will be able to access their Summary Statement (written critique) via the  eRA Commons . Refer to Part 1 for dates for peer review, advisory council review, and earliest start date. Information regarding the disposition of applications is available in the NIH Grants Policy Statement Section 2.4.4 Disposition of Applications . Section VI. Award Administration Information 1. award notices. A Notice of Award (NoA) is the official authorizing document notifying the applicant that an award has been made and that funds may be requested from the designated HHS payment system or office. The NoA is signed by the Grants Management Officer and emailed to the recipient’s business official. In accepting the award, the recipient agrees that any activities under the award are subject to all provisions currently in effect or implemented during the period of the award, other Department regulations and policies in effect at the time of the award, and applicable statutory provisions. Recipients must comply with any funding restrictions described in Section IV.6. Funding Restrictions . Any pre-award costs incurred before receipt of the NoA are at the applicant's own risk.  For more information on the Notice of Award, please refer to the  NIH Grants Policy Statement Section 5. The Notice of Award and NIH Grants & Funding website, see  Award Process. Institutional Review Board or Independent Ethics Committee Approval: Recipient institutions must ensure that protocols are reviewed by their IRB or IEC. To help ensure the safety of participants enrolled in NIH-funded studies, the recipient must provide NIH copies of documents related to all major changes in the status of ongoing protocols. 2. Administrative and National Policy Requirements The following Federal wide and HHS-specific policy requirements apply to awards funded through NIH: The rules listed at 2 CFR Part 200 , Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. All NIH grant and cooperative agreement awards include the NIH Grants Policy Statement as part of the terms and conditions in the Notice of Award (NoA). The NoA includes the requirements of this NOFO. For these terms of award, see the NIH Grants Policy Statement Part II: Terms and Conditions of NIH Grant Awards, Subpart A: General and Part II: Terms and Conditions of NIH Grant Awards, Subpart B: Terms and Conditions for Specific Types of Grants, Recipients, and Activities . HHS recognizes that NIH research projects are often limited in scope for many reasons that are nondiscriminatory, such as the principal investigator’s scientific interest, funding limitations, recruitment requirements, and other considerations. Thus, criteria in research protocols that target or exclude certain populations are warranted where nondiscriminatory justifications establish that such criteria are appropriate with respect to the health or safety of the subjects, the scientific study design, or the purpose of the research.  For additional guidance regarding how the provisions apply to NIH grant programs, please contact the Scientific/Research Contact that is identified in Section VII under Agency Contacts of this NOFO.   All federal statutes and regulations relevant to federal financial assistance, including those highlighted in  NIH Grants Policy Statement Section 4 Public Policy Requirements, Objectives and Other Appropriation Mandates. Recipients are responsible for ensuring that their activities comply with all applicable federal regulations.  NIH may terminate awards under certain circumstances.  See  2 CFR Part 200.340 Termination and  NIH Grants Policy Statement Section 8.5.2 Remedies for Noncompliance or Enforcement Actions: Suspension, Termination, and Withholding of Support .  The Office of Inspector General Hotline accepts tips from all sources about potential fraud, waste, abuse and mismanagement in Department of Health & Human Services programs. The reporting individual should indicate that the fraud, waste and/or abuse concerns an SBIR/STTR grant or contract, if relevant. Report Fraud. 3. Data Management and Sharing Consistent with the 2023 NIH Policy for Data Management and Sharing, when data management and sharing is applicable to the award, recipients will be required to adhere to the Data Management and Sharing requirements as outlined in the NIH Grants Policy Statement . Upon the approval of a Data Management and Sharing Plan, it is required for recipients to implement the plan as described. SBIR and STTR recipients may retain the rights to data generated during the performance of an SBIR or STTR award for up to 20 years after the award date, per the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Policy Directive. An acceptable Data Management and Sharing plan can reference and incorporate these data rights. Further information about SBIR and STTR data rights are enumerated in the NIH GPS . 4. Reporting When multiple years are involved, recipients will be required to submit the Research Performance Progress Report (RPPR) annually and financial statements as required in the NIH Grants Policy Statement Section 8.4.1 Reporting.   To learn more about post-award monitoring and reporting, see the NIH Grants & Funding website, see  Post-Award Monitoring and Reporting .  NIH requires that SBIR/STTR recipients submit the following reports within 120 days of the end of the grant budget period unless the recipient is under an extension. Final RPPR   Final Invention Statement and Certification (HHS 568) Annual Invention Utilization Reports Federal Financial Report (FFR) Failure to submit timely final reports may affect future funding to the organization or awards with the same PD/PI.NIH NOFOs outline intended research goals and objectives. Post award, NIH will review and measure performance based on the details and outcomes that are shared within the RPPR, as described at 2 CFR 200.301. Disclosure of Foreign Relationships Reporting Requirements Recipients are responsible for monitoring their relationships with foreign countries of concern post-award, for any changes that may impact previous disclosures. SBCs receiving an award under the SBIR/STTR program are required to submit an updated Disclosure Form to report any of the following changes to NIH, CDC, and FDA throughout the duration of the award: any change to a disclosure on the Disclosure Form; any material misstatement that poses a risk to national security; and any change of ownership, change to entity structure, or other substantial change in circumstances of the SBC that NIH, CDC, and FDA determine poses a risk to national security. Regular, annual updates are required at the time of all SBIR/STTR annual, interim, and final Research Performance Progress Reports (RPPRs). For changes that occur between RPPR submissions, recipients must request prior approval from NIH for legal actions such as merger, acquisition, and successor-in-interest or any other change in ownership, entity structure, covered individual, or other substantive changes in circumstances no later than 30 days before the proposed change. See NIH Grants Policy Statement 8.1.3 Requests for Prior Approva l  and NIH Grants Policy Statement 18.5.2.2 Change in Organization Size & Change of Recipient Institution Actions for more details. Disclosure Forms are required for any changes as described above. Recipients are required to upload these updated disclosures using the Additional Materials (AM) tool in eRA Commons.  If the recipient reports a covered foreign relationship that meets any of the risk criteria prohibiting funding described in this NOFO, NIH, CDC, and FDA may deem it necessary to terminate the award for material failure to comply with the federal statutes, regulations, or terms and conditions of the federal award. Refer to NIH GPS Section 8.5.2 Remedies for Noncompliance or Enforcement Actions: Suspension, Termination, and Withholding of Support for more information. Recipients are encouraged to monitor their covered foreign relationships post-award and avoid entering into relationships, both funded and unfunded, that may pose a security risk and jeopardize their ability to retain their award. Agency Recovery Authority and Repayment of Funds An SBC will be required to repay all amounts received from NIH, CDC, and FDA under the award if either of the following determinations are made upon assessment of a change to their disclosure: the SBC makes a material misstatement that NIH, CDC, and FDA determine poses a risk to national security; or there is a change in ownership, change in entity structure, or other substantial change in circumstances of the SBC that NIH, CDC, and FDA determine poses a risk to national security. The repayment requirements and procedures provided in Section 8.5.4 Recovery of Funds of the NIH GPS apply and may also be subject to additional noncompliance and enforcement actions as described in Section 8.5.2 of the GPS. Recipients are required to follow the repayment procedures provided in the Guidance for Repayment of Grant Funds to the NIH. Section VII. Agency Contacts We encourage inquiries concerning this funding opportunity and welcome the opportunity to answer questions from potential applicants. eRA Service Desk (Questions regarding ASSIST, eRA Commons, application errors and warnings, documenting system problems that threaten submission by the due date, and post-submission issues) Finding Help Online:  https://www.era.nih.gov/need-help  (preferred method of contact) Telephone: 301-402-7469 or 866-504-9552 (Toll Free) General Grants Information (Questions regarding application instructions, application processes, and NIH grant resources) Email:  [email protected]  (preferred method of contact) Telephone: 301-480-7075 Grants.gov Customer Support (Questions regarding Grants.gov registration and Workspace) Contact Center Telephone: 800-518-4726 Email:  [email protected] SBA Company Registry (Questions regarding required registration at the SBA Company Registry and for technical questions or issues) Website to Email: http://sbir.gov/feedback?type=reg NIH SEED (Small business Education and Entrepreneurial Development) Telephone: 301-827-8595  Email: [email protected] For Agency, Institute and Center Scientific/Research (Program) contacts, please see middle column here: https://seed.nih.gov/aboutseed/contact-us/hhs-small-business-program-managers Examine your eRA Commons account for review assignment and contact information (information appears two weeks after the submission due date). For Agency, Institute and Center Scientific/Research (Program) contacts, please see right column here: https://seed.nih.gov/aboutseed/contact-us/hhs-small-business-program-managers . Section VIII. Other Information Recently issued trans-NIH policy notices may affect your application submission. A full list of policy notices published by NIH is provided in the NIH Guide for Grants and Contracts . All awards are subject to the terms and conditions, cost principles, and other considerations described in the NIH Grants Policy Statement . Awards are made under the authorization of Sections 301 and 405 of the Public Health Service Act as amended (42 USC 241 and 284) and under Federal Regulations 2 CFR Part 200. The SBIR Program is mandated by the Small Business Innovation Development Act of 1982 (P.L. 97-219), reauthorizing legislation (P.L. 99-443) P.L. 102-564, P.L. 112-81 (SBIR/STTR Reauthorization Act of 2011), as reauthorized and extended under P.L. 114-328, Section 1834, P.L. 115-232, and P.L. 117-183. The basic design of the NIH SBIR Program is in accordance with the Small Business Administration (SBA) SBIR and STTR Policy Directive. The STTR Program is mandated by the Small Business Reauthorization Act of 1997 (P.L. 105-135), and reauthorizing legislation, P.L. 107-50, P.L. 112-81 (SBIR/STTR Reauthorization Act of 2011), as reauthorized and extended under P.L. 114-328, Section 1834, P.L. 115-232, and P.L. 117-183. The basic design of the NIH STTR Program is in accordance with the Small Business Administration (SBA) SBIR and STTR Policy Directive. AbbVie cuts 2024 profit forecast on R&D expenses Medium Text Company Abbvie Inc Follow Sign up here. Reporting by Mariam Sunny in Bengaluru; Editing by Shinjini Ganguli Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab Business Chevron China's BYD acquires 20% stake in Thai dealer Rever Automotive China's BYD , will acquire a 20% stake in its local distributor Rever Automotive in Thailand, its largest market outside of China where it is an electric vehicle market leader, the companies said Saturday. 133 COMMENTS About SBIR and STTR are competitive programs that fund small businesses to conduct R&D with potential for commercialization. Learn about the mission, eligibility, phases, and participating agencies of the SBIR/STTR programs. Market research and competitive analysis Market research blends consumer behavior and economic trends to confirm and improve your business idea. It's crucial to understand your consumer base from the outset. Market research lets you reduce risks even while your business is still just a gleam in your eye. Gather demographic information to better understand opportunities and ... How to Do Market Research for Small Business: 8 Affordable Market Set up survey questions once, then focus on other parts of your small business while the results come in. 5. Facebook groups: How to use Facebook for market research. Facebook has risen as one of the major community-building platforms for small business. Small Business: Articles, Research, & Case Studies Between 2008 and 2014, the Top 4 banks sharply decreased their lending to small business. This paper examines the lasting economic consequences of this contraction, finding that a credit supply shock from a subset of lenders can have surprisingly long-lived effects on real activity. 31 Jul 2017. HBS Case. Top Small Business Statistics of 2024 Of course, the salary of the average business owner varies greatly. On the low end, small business owners earn an average salary of $32,000 and earn as much as $147,000 on the average high end ... The Ultimate Guide to Market Research for Small Businesses Conducting market research is a vital step for small businesses and entrepreneurs. It provides the data and insights needed to make informed decisions, understand your target audience, identify opportunities, and gain a competitive advantage. By following the steps outlined in this guide and utilizing the recommended tools, you can conduct ... Home Learn how to apply for non-dilutive funding to develop your technology and chart a path toward commercialization through the SBIR and STTR programs. Explore opportunities, success stories, and impact of America's Seed Fund for small businesses and entrepreneurs. 21 Best Market Research Resources for Small Businesses Leverage market research to inform your business decisions. Doing market research is a powerful way to reduce the risk for your small business or startup. The more you know about your customers and your industry, the less likely you are to waste money on marketing and advertising campaigns that don't reach the right people. How to Do Market Research for Small Businesses Big businesses spend months and huge budgets to understand their customers, but small business owners have to be thriftier to understand their customers without access to big-budget resources. In this guide, we break down exactly how you can conduct market research to grow your small business with minimal investments in time and budget. A Small Business Guide to Conducting Market Research Conduct phone interviews. Create an online survey. Host a focus group. If your business is online, a survey may be the fastest and easiest way to collect market research. For brick-and-mortar ... Small Business Hub: A Research Guide for Entrepreneurs SimplyAnalytics has data which answers key business research questions, provides small businesses with a tool for making sound business decisions, and helps users understand the socio-demographic and economic conditions of any geographic area in the United States. There are thousands of data variables related to demographics, employment ... Market Research for Small Business: What It Is and Key Goals Market research is the activity of collecting information about your target market and potential customers. A critical part of any business plan, market research helps you better understand your industry and more accurately predict if your small business can be profitable. Ownr's free business plan generator, Blueprint, makes your competitive ... SBIR.gov The SBIR and STTR programs fund a diverse portfolio of startups and small businesses across technology areas and markets to stimulate technological innovation, meet Federal research and development (R&D) needs, and increase commercialization to transition R&D into impact. We foster and encourage participation in innovation and entrepreneurship ... Use Small Business Market Research to Grow Uncover 18 ways to use surveys in small business research here. 2. Digital intelligence software. Similarweb is a great place to start any market research for a small business. View high-level estimations for any website or app, and better understand the size, reach, and potential traffic sources. Small Business Innovation Research The Small Business Innovation Research (or SBIR) program is a U.S. government funding program, coordinated by the Small Business Administration, intended to help certain small businesses conduct research and development (R&D). Funding takes the form of contracts or grants. The recipient projects must have the potential for commercialization and ... A Small Business Guide to Research and Development (R&D) One hundred businesses will be honored and one business will be awarded $25,000. Apply Now! Research & development (R&D) is crucial for businesses to successfully bring their products or services to market. With an R&D budget, here's how to protect your intellectual property with copyrights, trademarks, and patents. Market Research for Small Businesses: The Top Guide for 2024 Small business market research refers to the practice of gathering all available information about your target market as well as your customers. You use this market research to confirm a new product's success, improve an existing product, or better understand and improve brand perception. Plan your business Fund your business. It costs money to start a business. Funding your business is one of the first — and most important — financial choices most business owners make. How you choose to fund your business could affect how you structure and run your business. Choose a funding source. Small Business Innovation Research (SBIR) and Small Business Technology The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are competitive non-dilutive funding programs that fund eligible small businesses to engage in Federal Research/Research and Development (R/R&D). At DOE, the funding takes the form of grants and cooperative agreements. How to Do Effective Market Research for Small Businesses Here are the steps to follow when conducting a market analysis for your small business: Define your market: Identify the specific market you are targeting, such as geographic location, demographics, psychographics, and buying behavior. 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SEC.gov The Office of the Advocate for Small Business Capital Formation and the Division of Corporation Finance's Office of Small Business Policy launched an expanded Capital Raising Hub, which includes all of the SEC's small business educational resources for entrepreneurs and their investors. Methodology Paper As the Small Business Innovation Research (SBIR) program approached its twentieth year of operation, the U.S. Congress requested that the National Research Council (NRC) conduct a "comprehensive study of how the SBIR program has stimulated technological innovation and used small businesses to meet federal research and development needs," and to make recommendations on improvements to the ... Small Business Research The Small Business Innovation Research (SBIR) & Small Business Technology Transfer (STTR) Programs are one of the largest sources of early-stage capital for technology commercialization in the United States. 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PA-24-245: PHS 2024-2 Omnibus Solicitation of the NIH, CDC and FDA for The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, also known as America's Seed Fund, are one of the largest sources of early-stage capital for technology commercialization in the United States. These programs enable US-owned and operated small businesses to conduct research and development ... AbbVie cuts 2024 profit forecast on R&D expenses AbbVie lowered its 2024 adjusted profit forecast on Wednesday, citing $937 million in milestones, and research and development expenses related to acquisitions. assignment essay homework paper phd report resume review speech thesis