The onset of the COVID-19 pandemic not only threatens the health and safety of communities but also the operation and survival of firms and industries that provide essential products and services to the innovative ecosystem. This crisis has hit small businesses (firms with fewer than 500 employees) particularly hard. Obtaining access to emergency financial resources such as the Paycheck Protection Program and forgivable loans offered by federal and state government agencies remains extremely difficult for many U.S. small firms. This holds especially for firms owned by members of underrepresented groups that include minorities, women, and veterans. This project has two primary aims in tracking the different types of small high-tech firms. First, we aim to understand the unique challenges and opportunities that small high-tech firms face in adapting to this unexpected shift and in introducing innovations designed to combat COVID-19. Second, we aim to evaluate state and federal responses to the pandemic by estimating their impacts on the activity of small high-tech firms that drive U.S. innovation. We plan to construct a comprehensive and scalable nationwide database that tracks U.S. small high-tech firms that are current or potential suppliers of critical public heath technologies related to pandemic response. We will make this database publicly available to accelerate broad systematic research. Our results will include detailed insights on the impacts of the pandemic on small business performance. Moreover, the resulting public databases and interactive dashboard will enable policymakers and businesses to identify new opportunities to empower small high-tech firms to grow and supply much needed expertise and resources during the pandemic.
We examine the impact of the COVID-19 pandemic on the U.S. innovative ecosystem. We focus on small high-tech firms (with fewer than 500 employees), including firms owned by members of underrepresented groups (minorities, women, and veterans). Small firms are potential sources of innovation in combating COVID-19, but remain especially vulnerable to the unprecedented health, social, and economic risks arising from this pandemic. We have two primary research aims. First, we seek to characterize changes in the landscape of small high-tech firms resulting from the ongoing pandemic and policy responses. We will build a comprehensive, interactive database to capture shifts in the spatial and temporal patterns of the innovation ecosystem. Second, we seek to use this database for econometric analysis to evaluate the differential impact of state and federal pandemic policies on the performance of small high-tech firms. Specific deliverables include: (i) detailed descriptive statistics characterizing changes in concentrations of business activity in different sectors with geographic precision; (ii) a public dashboard with an interactive map for visualizing changes in the innovative ecosystem at state- and sector-levels; (iii) a public data repository providing access to all aggregated data files used to create our visualization tool; and (iv) econometric models exploiting variation in state policies to determine the causal impacts of these policies on small firms. Our intended broader impact is a clearer picture of which areas of the innovative ecosystem are most susceptible to the effects of COVID-19. We will identify firm-level characteristics that indicate which firms are most and least resilient, as well as those best positioned to assist with government countermeasures against the pandemic. This will illuminate priorities for public and private sector efforts to rebuild innovative activity and allocate support resources more effectively.
This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.