Project Selection, Commercial Risks, and the Allocation to Small Business of Federal Research and Development Contracts

  • Edwin Mansfield
  • John Rapoport
  • Jerome Schnee
  • Samuel Wagner
  • Michael Hamburger


The previous chapter was concerned with the nature, organization, and technical outcome of industrial research and development. In this chapter, we continue to focus on industrial research and development, but our attention shifts to different, though related, aspects of this topic. Specifically, we are interested in the extent to which firms are using various quantitative techniques to select R and D projects. These techniques have been the object of considerable investigation by operations researchers and management scientists. Also, we are interested in the extent of the commercial risks—as distinct from technical risks—involved in research and development. The previous chapter dealt only with technical risks.


Small Business Small Firm Large Firm Average Cost Quantitative Technique 
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  1. 1.
    For descriptions of each kind of technique, see N. Baker and W. Pound, “R and D Project Selection: Where We Stand,” IEEE Transactions in Engineering Management (June 1964);Google Scholar
  2. Robert Seiler, Improving the Effectiveness of Research and Development (New York: McGraw-Hill, 1965). These three techniques were the only quantitative selection techniques used by any of the firms.Google Scholar
  3. 4.
    Edwin Mansfield, Industrial Research and Technological Innovation (New York: W. W. Norton for the Cowles Foundation for Research in Economics at Yale University, 1968), Chap. 7.Google Scholar
  4. 8.
    Dennis Meadows, “Estimate Accuracy and Project Selection Models in Industrial Research,” Industrial Management Review (Spring 1968).Google Scholar
  5. 15.
    E. Roberts, “Questioning the Cost-Effectiveness of the R and D Procurement Process,” in Research Program Effectiveness, ed. by M. Yovits, D. Gilford, R. Wilcox, E. Staveley, and H. Lerner ( New York: Gordon and Breach, 1966).Google Scholar

Copyright information

© W. W. Norton & Company, Inc. 1971

Authors and Affiliations

  • Edwin Mansfield
    • 1
  • John Rapoport
    • 2
  • Jerome Schnee
    • 3
  • Samuel Wagner
    • 4
  • Michael Hamburger
    • 5
  1. 1.Wharton SchoolUniversity of PennsylvaniaUSA
  2. 2.Mount Holyoke CollegeUSA
  3. 3.Columbia UniversityUSA
  4. 4.Temple UniversityUSA
  5. 5.Federal Reserve Bank of New YorkUSA

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