Two-year study examines how Department of Energy research investments support innovation, entrepreneurship, national priorities
When the federal government invests hundreds of millions of dollars annually in small-business research and development, how should it determine whether those investments make a meaningful impact?
That question was pivotal to a comprehensive National Academies of Sciences, Engineering, and Medicine study co-chaired by UConn business professor Timothy B. Folta, the Thomas John and Bette Wolff Family Chair in Strategic Entrepreneurship at the School of Business.
Folta and Syracuse University economics professor David Popp led a 13-member committee charged with evaluating the U.S. Department of Energy’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The congressionally mandated assessment was conducted over approximately two years and completed earlier this month. It examined how the programs stimulate technological innovation, support small businesses, and advance the energy department’s research and development missions.
“One of the things that attracted me to this project was the opportunity to apply rigorous analysis to questions with important implications for national policy,” Folta says. “The federal government invested $4.5 billion into innovative businesses through the SBIR/STTR programs in 2025, including over $300 million in the DOE innovation and technology programs. We were asked to assess whether and how those Department of Energy investments contribute to the objectives of the programs.”
Evidence-Based Findings Inform National Policy, Benefit Students
The National Academies bring together leading experts to evaluate complex issues facing government and society. They are among the nation’s most respected sources of independent scientific and policy advice. Serving on a National Academies committee is considered a significant professional distinction. Co-chairing one carries the additional responsibility of guiding the committee’s work, bringing together diverse perspectives, and helping develop evidence-based findings and recommendations that can inform national policy.
Folta’s extensive professional research examines entrepreneurial policy, corporate strategy, and investment decisions under uncertainty, expertise he brought to the committee’s evaluation of federal innovation programs.
Interim business dean Bob Day says Folta’s work on this project has benefits both in Washington, D.C. and in Storrs.
“This is a great example of the benefits that materialize when research-focused faculty distinguish themselves as thought leaders within the academic community,” Day says. “When someone is known for their intellectual contributions within a discipline, other important decisionmakers in business and government come to them for expert-level advice and guidance.’’
“Leaders like professor Folta can both use their expertise to help guide important analysis and decisions in our federal government, and then turn around and build those experiences into a richer classroom experience for our students,” he says.
Different Missions Require Different Measures of Success
One of the committee’s key challenges was developing a framework for evaluating the DOE’s innovation programs in light of the agency’s broad and diverse missions.
“One of our most important early conclusions was that success needs to be evaluated in relation to what the Department of Energy is trying to accomplish,” Folta says. “For some offices, commercial success and the creation of new businesses are important objectives. For others, developing specialized scientific instruments or technologies that DOE can use to accomplish its own mission may be equally valuable. If we evaluate all these investments using the same measures, we risk missing some of their most important contributions.”
To conduct the extensive assessment, the committee members analyzed extensive data on program applicants and award recipients, examined innovation and commercialization outcomes, and interviewed individuals involved in administering and participating in the programs.
The study found evidence that the Department of Energy’s investments do support technological innovation and contribute to its missions in different ways. It also identified opportunities to strengthen program effectiveness and address challenges that small businesses face in developing and implementing new technologies.
Academic Research Impacts Much More than Higher Education
One of the most rewarding aspects of the assignment was working with accomplished researchers and industry experts from different disciplines to address consequential policy questions, says Folta, a member of the Boucher Management & Entrepreneurship Department.
“The committee brought together people with very different expertise, and that made the work particularly interesting,’’ Folta says. “As co-chairs, David Popp and I helped the group develop a common understanding of the issues, evaluate a substantial body of evidence, and reach conclusions that could inform decisions by the Department of Energy and Congress.”
Following completion of the study, Folta and Popp briefed congressional staff, Department of Energy officials, and representatives of the U.S. Small Business Administration, which coordinates the federal SBIR/STTR programs. These briefings provided an opportunity to communicate the committee’s findings and recommendations directly to officials involved in overseeing and administering federal innovation programs. The report can be found here: https://www.nationalacademies.org/projects/PGA-STEP-23-01/publication/29579
Folta says the experience demonstrated how academic research and expertise can contribute to consequential decisions beyond the university.
“Much of my research portfolio examines how organizations make investment decisions under uncertainty and how those decisions affect innovation and entrepreneurship,’’ he says. “This project allowed me to bring that perspective to an important federal program while also learning from colleagues with different expertise. It was especially rewarding to see our research inform discussions with the policymakers responsible for these programs.”
