ABSTRACT. We provide background information on U.S.
and U.K. policies promoting innovation in small firms and
also summarize the papers that appear in this special issue.
These studies were presented at a recent workshop that was
jointly organized by the University of Nottingham Institute for
Enterprise and Innovation (UNIEI) and the Board on Science,
Technology, and Economic Policy (STEP) of the U.S.
National Academy of Sciences. Based on a synthesis of these
papers and other evidence that was presented during the
workshop, we conclude that: (1) program evaluation is much
more prevalent in the U.S. than in the U.K.; (2) the U.S.
Advanced Technology Program (ATP) and Small Business
Innovation Research (SBIR) program have been successful;
and (3) shared costs between government and industry and
frequent assessment are the keys to ensuring that such
programs are successful.
This special issue evolved from our shared interest
in the antecedents and consequences of U.S. and
U.K. policies designed to promote innovation in
new-technology based firms (NTBFs). Although
NTBFs constitute only a small percentage of the
population of small companies, they are increas-
ingly being viewed as an engine of economic
growth and job creation. Thus, an analysis of the
effectiveness of these programs is a salient public
policy issue, since successful attempts to address
innovation market failures through such policy
instruments can potentially significantly enhance
entrepreneurial activity and economic develop-
In both countries, a consensus has emerged that
such programs are needed to alleviate critical
innovation market failures in such areas as human
capital, accommodation, and early stage financing
of small NTBFs. That is, policymakers have con-
cluded that a non-negligible percentage of NTBFs
could not survive without some form of govern-
ment assistance during the initial stages of their
The purpose of this introductory paper is to
present some background information on U.S. and
U.K. policies that assist in the development and
growth of NTBFs. We also provide a roadmap for
the remainder of the papers that appear in this
special issue. These papers were presented at a
special two-day workshop held at the Nottingham
University Business School in September 2000,
which was jointly organized by the University of
Nottingham Institute for Enterprise and Innovation
(UNIEI) and the Board on Science, Technology,
and Economic Policy (STEP) of the U.S. National
Academy of Sciences. Finally, we also attempt to
draw some conclusions from the papers and the
discussion that took place during the workshop.
The remainder of this paper is organized as
follows. Section 2 describes the NTBF-related
policies that have been implemented in the U.S.
and U.K., which raise salient issues for academics,
policymakers, and practitioners. Section 3 outlines
the themes and objectives of the workshop, where
evidence was presented on various aspects of these
issues. We also provide a parsimonious descrip-
Policies Promoting Innovation
in Small Firms: Evidence from
the U.S. and U.K.
Small Business Economics 20: 121–127, 2003.
2003 Kluwer Academic Publishers. Printed in the Netherlands.
Donald S. Siegel, Martin Binks and Andy Lockett
Nottingham University Business School
University of Nottingham
Nottingham NG8 1BB
Board on Science, Technology, and Economic Policy
National Research Council
2101 Constitution Avenue, NW FO2014
Washington, D.C. 20418
Donald S. Siegel