Fact of the Week: Minority-Owned Firms Receive Fewer SBIR Awards, but Are Slightly More Likely To Be Granted Patents for Their Work

Robert D. Atkinson May 17, 2021
May 17, 2021

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Source: Albert. N. Link and Martijn van Hasselt, “Exploring the Impact of R&D on Patenting Activity in Small Women-Owned and Minority-Owned Entrepreneurial Firms,” UNC Greensboro Department of Economics, Working Paper 19-02, January 2019.

Commentary: Albert Link and Martijn van Hasselt, economists at University of Greensboro, examined the demographic characteristics of federal awards issued under the Small Business Innovation Research (SBIR) program from 1992 to 2001. Under federal law, most government agencies must set aside 3.2 percent of their extramural R&D funding for small firms. The authors found that while minority-owned firms received fewer SBIR awards than their share of the business population, the firms that did receive SBIR awards were associated with 0.51 more patent applications, on average, than non-minority firms. While not statistically significant, it is suggestive of greater innovation impact.