The truth is that the real goal is not research, but commercialization of research.  We have a lot of smart, creative people in research laboratories and universities already producing tons of output ($35B in federal funds).  Understanding the application of  scientific discovery and developing products to meet the needs of the market is the real value proposition.  Commercialization is done by the business community.

The other critical element is having a willing buyer of innovative technology.  This is where the system within the military breaks down.  Programs and platforms that can use new solutions to solve critical capability gaps, are not authorized to infuse new technologies into their platforms UNLESS it has been thought of by teams of people at the Pentagon.  These are the folks who – with good intentions - define “requirements”.  If an innovative idea or technology appears out of cycle or is not known by this small group of people, it is virtually impossible within a 5 year timeframe, to get that technology vetted, funded or utilized.  And by then of course, it is no longer innovative.

There is even a negative term associated with creative, new capabilities that EXCEED “requirements”.  It is called ”guilding the lilly”.  This means that if you have a technology that is faster, better and cheaper than the requirements that came down from the Pentagon, it can not be considered.  And those who dare to stick their necks out, to take risks in the name of keeping our troops safe and defending our country, are discouraged, at a minimum.

1.  Most of the institutions (large and small) that receive federal R&D funding are focused on perpetuating their research budgets, NOT producing products for commercial consumption.  It is not their mission or part of their culture.  It is not the behaviors that are rewarded internally.  It is not the type of people they hire.  My Mom used to say “You can’t get blood out of a turnip”.  We can’t expect federal labs, research universities or federally funded research & development centers (FFRDC’s) to do anything more than research,  research and more research. 

2.  A distinction is not made between pure research and applied research.  Pure research is necessary for scientific discovery.  It may or may not result in a “solution” to a problem, but it does advance our understanding.  That understanding can be leveraged to move toward applied research and product development.  Productizing ideas is part of the continuum critical for society to benefit from the research.  That link is often lost.  Similarly, applied research DOES need to produce a solution and be intrinsically linked to a strong commercialization effort managed by business professionals.  Although there is a recognition that some applied research is still experimental, evaluation criteria for ongoing funding should include the readiness for and real commitment to solving practical problems.  And this evaluation criteria should be given more weight after initial funding.  A strong commercialization requirement from funding sources would provide more of an incentive for research laboratories and universities to partner with businesses to ensure scientific concepts are developed into usable products.

3.  Universities undermine intellectual property rights through publishing and speaking at seminars.  Going back to a basic management principle:  “behavior that is rewarded is repeated”, publishing and speaking are the criteria against which advancement in academia is judged.  Collaborating with or starting small businesses to commercialize research is not even on the radar.  In fact, many universities penalize professors who are engaged in such activities.  This has to change.

4.  Time is of the essence.  Without an understanding of market principles and a profit motive, government and academia laboratories move at a snail’s pace.  This is a disincentive for businesses to collaborate with research institutions, thereby keeping the output from scientific advancement locked behind closed doors.

5.  Government laboratories and universities are often unaware of innovation taking place outside of their spheres and are not accustomed to collaborating with diverse groups that may be scattered around the world.  But this is how innovation is happening today.  Our research model in the United States is stuck in the 70′s.  The Chinese have a name for individuals who go out into the world in search of innovation and collaborators. They’re called hai gui—sea turtles.  They go out, and they come back with new ideas.  Technology development is far more global than it was and is not the exclusive purview of  academia and government labs anymore.  The  “not-invented-here syndrome” still common in America inhibits progress and has been replaced in many places throughout the world by what the Batelle Institute calls ”proudly found elsewhere.”  That’s a big shift.

6.  There is not a culture of innovation among federal funding sources or government-funded research institutions.  The intention and guidance from the top is absolutely essential.  The message needs to be clear and enforced:  basic research is important, but we’re here to put products out to the community, to the country, to protect our national security and to help foster economic well-being for the United States.  That can be encouraged in lots of ways financially. 

7.  Most successful innovation has come from remarkably complex teams. There are no Lone Rangers anymore.  If you want to have a successful product, every job along the way is important. It requires skills that are provided by a team of engineers, attorneys, accountants, investors, sales people, managers and customer service personnel.  The scientist working alone in his lab is not likely to produce the value that our investment in scientific research requires. 

I welcome your comments.

This is what is needed:

1. DoD’s Leadership should be given financial incentives to improve research outcomes and utilization of innovation developed by small businesses; and

2. DoD’s acquisition community should be provided the financial resources and incentives in manage SBIR projects.

The size of the awards given to small businesses need to increase and the bureaucracy, paperwork and delays should be eliminated, but those are process issues that can be addressed by motivated administrators. It is the involvement in and commitment to collaboration by Program Management and Program Executive Offices with small innovative businesses, that is missing.

Research suggests that the DoD invests fewer resources into managing its SBIR program than analogous R&D efforts. Additional funds should be allocated to Program Offices for managing the SBIR program based on the same ratio of costs associated with managing other commercial, governmental and academic R&D and commercialization efforts.

However, to leverage the exciting technologies being produced by small businesses, it takes more than providing administrative funding to the Programs offices. They need cover to stick their necks out to try new ideas, technologies and companies, rather than continuing to rely on the same large, entrenched prime contractors. Most of these large prime contractors are selling and maintaining old technologies with significant profit margins. What incentive do they have to embrace game-changing technologies, especially those that were not developed in-house? None.

Without the likelihood that research conducted by small businesses will be marketable to DOD’s acquisition community, many companies do not take part in the process, leading to lower quality proposals and limited options for the acquisition community. Improving the commercialization process through greater participation by Program Managers and Program Executive Offices will increase the attractiveness of the SBIR program to the small business community, resulting in more competition, and better quality.

Absent steps to incentivize the DoD acquisition community to participate in the SBIR program, it is unlikely that other administrative or financing efforts will be very successful.

For more information on formal research that has been conducted on the effectiveness of the SBIR program see these links: http://sites.nationalacademies.org/PGA/sbir/index.htm;    http://www.rand.org/pubs/testimonies/CT280/;

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With the publication on October 4, 2011 of a final rule in the Federal Register, the U.S. Small Business Administration (SBA) expects to have a federal contracting women-owned small business (WOSB) program up and running in the first quarter of 2011.

The new rule identifies 83 industries in which WOSBs are under-represented or substantially under-represented in the federal contract marketplace {technology development, implementation and support are among them}. In addition to opening up more opportunities for WOSBs, the rule is also another tool to help achieve the statutory goal that 5 percent of federal contracting dollars go to women-owned small businesses.

“Women-owned businesses are one of the fastest growing sectors of our nation’s economy, and even during the economic downturn of the last few years, have been one of the key job creation engines in communities across the country,” SBA Administrator Karen Mills said.

“Despite their growth and the fact that women lead some of the strongest and most innovative companies, women-owned firms continue to be under-represented in the federal contracting marketplace.” With the Oct. 4 publication of the final rule, the SBA, in conjunction with the Federal Acquisition Regulatory Council, will begin a 120-day implementation of the WOSB contracting program, including building the technology and program infrastructure to support the certification process and ongoing oversight. With implementation expected to take several months, the agency expects that federal agencies’ contracting officers will be able to start making contracts available to WOSBs under the program in early 2011.

Some of the components of the Women-Owned Small Business rule include:

1. To be eligible, a firm must be 51 percent owned and controlled by one or more women, and primarily managed by one or more women. The women must be U.S. citizens. The firm must be “small” in its primary industry in accordance with SBA’s size standards for that industry.

2. Based upon the analysis in a study commissioned by the SBA from the Kauffman-RAND Foundation, the final rule identifies 83 industries (identified by “NAICS” codes) in which women-owned small businesses are under-represented or substantially under-represented in federal procurements.

3. In accordance with the statute, the final rule authorizes a set-aside of federal contracts for WOSBs where the anticipated contract price does not exceed $5 million in the case of manufacturing contracts and $3 million in the case of other contracts. Contracts with values in excess of these limits are not subject to set-aside under this program.

4. The final rule removes the requirement, set forth in a prior proposed version, that each federal agency certify that it had engaged in discrimination against women-owned small businesses in order for the program to apply to contracting by that agency.

5. The proposed rule allows women-owned small businesses to self-certify as “WOSBs” or to be certified by third-party certifiers, including government entities and private certification groups. OSBs which self-certify will e required to submit a robust certification verification, to complete the certifications at the federal Online Representation and Certification Application (“ORCA”) Web site, and also to submit a core set of eligibility-related documents to an online “document repository” to be maintained by the SBA. The SBA intends to engage in a significant number of program examinations to confirm eligibility of individual WOSBs.

SBA intends to pursue vigorously punitive action against ineligible firms which seek to take advantage of this program and in so doing to deny its benefits to the intended legitimate WOSBs. Internet Address: http://www.sba.gov/news

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So no fake WOSB’s allowed.

In my opinion, we need to welcome all of the smart minds in the country to help develop innovative technologies for our national defense, regardless of the shape, color or gender of the body in which that mind resides.   This set aside just makes it easier for government program offices to tap into this under-utilized pool of creative, competent contractors.

This starts with shortening the research-to-market cycle, rewarding government employees who push creative ideas, expanding the prime contractor base to include more small and mid-sized businesses, and providing incentives for federally funded research institutions to work with technology entrepreneurs on commercialization.  Together we can produce the results that our military expects from us.

I welcome your comments.