Evaluation of Small Business Innovation Research Programs in Japan

Subsidizing small high-technology firms is now considered to be important in stimulating economies throughout the world. This is because fast growing small firms create new markets and jobs. The Small Business Innovation Research (SBIR) program has played an important role in the United States in subsidization providing two billion dollars every year. Japan started its own SBIR program inspired by that in the United States. This paper examines the direct effects of Japan's SBIR program through the attributes of firms. First, we compared the changes in sales, employment, and the number of patents between SBIR awardees and matching firms. However, SBIR awardees did not demonstrate better performance in sales or employment. Therefore, it seems that the direct effect of Japan's SBIR program has not produced positive results. However, it did increase the number of patents. Second, we examined the overall results by using regression models. Even with control variables, these results were unchanged. Therefore, we concluded that the results were robust.