ANN ARBOR – As recently reported in Mitechnews.Com, the Small Business Association of Michigan has awarded the state of Michigan a grade of F in entrepreneurial dynamism. The grade was the result of an analysis of 116 distinct factors. Although I can not comment on the other 115, the single comparator cited in the article was incorrect, writes
Mickey Katz-Pek, General Managing Partner, Biotechnology Business Consultants.
As an example of our lagging performance, the author stated that ?Michigan has dropped to a rank of eighteenth in the nation for federal Small Business Innovation Research R&D grants to our cutting-edge small businesses for breakthrough product development.? However, data compiled by the Small Business Administration tells quite a different story.
In fact, the trend is encouragingly positive over the period leading up to the most recent data in 2003. Measured by total-dollars-awarded, Michigan?s national ranking increased from eighteenth to tenth from 2000 to 2003. Dollars to support cutting-edge R&D increased from $16- to $42-million, and the number of awards almost doubled.
The Michigan Economic Development Corporation must receive at least some of the credit for this improved performance. Their determination to recapture Michigan?s fair share of federal R&D funds led to targeted support of an SBIR/STTR assistance program; funded initially through the Michigan Life Science Corridor and subsequently through the Technology Tri-Corridor.
Under this program, which was developed by Biotechnology Business Consultants under contract to the MTTC, new entrepreneurs and existing small businesses receive in-depth training on identification of funding opportunities that match their technical skills and on the preparation of a competitive proposal, followed by detailed critiques of, and additional assistance with, their proposals before submission. MEDC also partially supports the Small Business Development Technology Centers in their SBIR/STTR development activities.
BBC has created a unique, nationally recognized, SBIR/STTR assistance program. The MTTC SBIR assistance program in Michigan covers all technology sectors and all agencies offering SBIR/STTR funding. However, BBC?s depth of experience is with life science companies competing in the SBIR/STTR program of the National Institutes of Health. The SBIR award data since the inception of this assistance program supports the conclusion that a hands-on assistance program can provide companies with a competitive advantage.
NIH recently published its 2004 SBIR data. Michigan companies again show marked improvement. Both number of awards and total dollars awarded more than doubled since 2000. BBC?s MTTC funded program was initiated in 2001. Internal data show that companies either participating in training and/or the proposal review process, increase funding success rate to more than 50 percent, compared to the national average of 24 percent for Phase I proposals submitted to NIH in 2004.
Because of the long funding cycles inherent in grant programs, conclusions about growth and success must be made over a longer time frame than many are willing to take. It is only after four years of providing comprehensive assistance that it is possible to obtain enough data to demonstrate program success.
BBC and the SBDTC believe that small business owners throughout Michigan are benefiting from a growing entrepreneurial environment. We applaud SBAM?s efforts to benchmark Michigan?s performance. However, citing criticisms while using outdated data, without lauding its successes, or offering suggestions for change, is not helpful.
