Recent Research: Are SBIR-funded inventions more likely to make it to market?

Commercializing patented inventions is a common goal of innovation policy, as it drives company revenues and regional economic growth. However, tracking the commercialization of inventions stemming from R&D is challenging. While programs like the Small Business Innovation Research (SBIR) program are explicitly designed to encourage commercialization, most evaluation tools rely on approaches that may be anecdotal or incomplete, such as surveys, case studies, or patent counts. A working paper by Carlo Bottai, Gaétan de Rassenfosse, and Emilio Raiteri proposes a new web-based methodology for detecting commercialization, offering a potentially more objective, real-time way to gauge the return on public innovation investments. It might prove a useful tool for state TBED programs that support R&D grants, research centers, and university-industry research collaboration. 

To test their method, the academic researchers looked at patented inventions derived from Department of Defense (DoD) SBIR-funded research. This web-mining approach systematically searched for digital evidence such as product pages, brochures, and press releases showing that a patent has been turned into a marketable product or service. They then linked those patents to firms and contracts by matching assignees/awardees with federal procurement data. Next, they searched firm websites and related domains for patent numbers and references, using automation and semi-manual classification to detect commercialization evidence. Finally, they compared the commercialization outcomes of SBIR-funded patents with those of a benchmark group of privately funded patents with similar characteristics.  

Looking at 3,070 patents linked to DoD SBIR contracts spanning 1984-2019, they found that roughly 21.5% of DoD SBIR-funded patents showed evidence of commercialization, including both direct links where a patent is visibly tied to a marketed product and indirect links, such as when a later commercial product builds on the original SBIR-funded patent. Commercialization outcomes varied depending on the type of R&D contract. Contracts focused on development produced the clearest commercialization signals, both direct and indirect, reflecting their proximity to market readiness. Basic research contracts showed little measurable commercialization, while applied research contracts exhibited moderate commercialization, mostly through indirect paths, meaning these inventions often required additional development before market use. According to the authors, this pattern suggests that the web-based tool is sensitive to program design and the R&D stage, aligning observed outcomes with what policymakers would expect. 

As would be expected, SBIR Phase II projects were more likely to result in commercialization than Phase I projects. In fact, Phase I contracts showed no measurable commercialization advantage compared to privately funded patents. However, and not a topic discussed in the working paper, the purpose of the SBIR Phase I is to prove concepts that then compete for the larger but more limited in number Phase II awards.  

SBIR Phase II inventions have significantly higher commercialization rates, underlining the critical role of sustained support and larger awards in moving technologies toward market adoption. Also, Phase II commercialization rates increased following the 2000 SBIR reauthorization, which introduced a requirement for commercialization plans in Phase II proposals. The authors compared SBIR-funded patents with a matched set of small-entity, privately funded patents and found that SBIR patents were 17% more likely to be commercialized. While they don’t claim a direct causal link, this result strengthens the argument that SBIR not only stimulates R&D activity but also enhances the odds that inventions transition into products. Commercialization rates for SBIR-funded patents were relatively stable across major technology categories (electronics, communications, chemicals, mechanics), suggesting that the program’s commercialization effect is not confined to a single technological niche. Geographically, patents clustered in a few metropolitan regions, but there was no correlation between regional patent concentration and commercialization success.   

This research describes a new, evidence-driven tool for evaluating commercialization outcomes, showing that SBIR-funded inventions are more likely to reach markets than comparable private inventions. It may offer policymakers and economic development professionals a clearer, faster, and more rigorous way to see which public investments in innovation are paying off.  

This page was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.