Can Targeted Government Investment in Rural Establishments Induce Innovative Activity?

Rural economic development strategies increasingly focus on “homegrown” economic policies, including investing in entrepreneurial development. However, few studies have evaluated the effectiveness of these strategies, in part because of data constraints. Using a mixed-methods approach, basic t-tests, fixed-effect probit regression, and propensity scoring techniques on data from the Small Business Innovation Research Program and the Rural Establishment Innovation Survey, this article tests the effectiveness of federal policies in inducing innovative activity in rural and urban establishments. The authors also explore indirect comparisons between rural and urban establishments. They find that Small Business Innovation Research (SBIR) awards can increase the likelihood that an establishment will act innovatively and that this effect may be larger in rural settings than in urban settings. Results suggest that targeted public investment can induce rural innovation.

The Urban–Rural Divide: The Effects of the Small Business Innovation Research Program in Small and Nonmetro Counties

This study assesses the efficacy of the Small Business Innovation Research Program on innovation, employment, and business formation in small and nonmetropolitan counties. The primary goal is to further understand rural innovation and growth process through government intervention on small business development. Using panel data and employing fixed-effect models, the results suggest that, compared with large metropolitan counties, the Small Business Innovation Research Program may not be an effective program to generate employment and entrepreneurship opportunities in small and nonmetropolitan regions, but it could be a viable source to improve rural innovation outcome. The geographical effects of the program are heterogeneous across implementation years and award agencies. This study contributes to the innovation policy agenda in small and nonmetropolitan regions, which is an important and emerging topic in the field.

Teaching STEM Entrepreneurship With Societal Significance: Building on the Small Business Innovation Research Program

Undergraduate students are aware of problems with societal significance, but few have tacit knowledge on how to address them through entrepreneurship or how to research the multidisciplinary technical, financial, and regulatory requirements. This paper describes a one-semester entrepreneurship course that teaches undergraduate students how to identify societally significant opportunities for STEM-based innovations, and how to de-risk associated business models. This course differs from traditional entrepreneurship education in three ways. First, it builds upon the federal Small Business Innovation Research (SBIR) program (“America’s Seed Fund”). Second, students learn to navigate the multidisciplinary strategic decisions that often accompany business models developed for societally impactful opportunities. Third, by becoming intimately familiar with proposal writing and submission protocols, those students willing to commit to entrepreneurship, or intrapreneurship if in the job market, have better chances of raising significant funds (>$1 M) through the SBIR program than from equity investors or commercial banks. The experiential nature of the course promotes students’ ability to discover tacit opportunities, whereas learning SBIR protocols promotes students’ ability to discover codified opportunities. The paper presents the pedagogical concepts, learning objectives, and evaluation criteria of this novel course.