UO management professor's work is at the center of how the U.S. invests in innovation.
32 processing cores, 384 gigabytes of RAM, and 32 terabytes of storage—plus its own air-conditioning unit—that's the supercomputer Lauren Lanahan had to have built just to open the dataset she needed to analyze how small businesses power U.S. defense innovation.
The machine, which cost roughly $70,000, was not designed to run simulations or train artificial intelligence models. It existed for a more basic purpose—allowing Lanahan, an associate professor of management and Inman Research Scholar at the University of Oregon's Lundquist College of Business, and her co-authors to access and analyze one of the largest public datasets in existence: U.S. Department of Defense contracting transactions spanning more than two decades.
"That infrastructure was required just to see the data," Lanahan said. "It took months before we could even begin the analysis."
Lanahan's work sits at the center of a long-running national effort to evaluate the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs—federal initiatives designed to fund early-stage, high-risk research by small businesses working on national priorities.
SBIR and STTR exist to address a fundamental market failure. Many technologies critical to public needs, particularly in national defense, are too risky, too early-stage, or too specialized to attract private investment. Through these programs, the U.S. Congress directs federal agencies provide research funding that allows small firms to pursue ideas the market would otherwise ignore.
Since 2018, Lanahan has served on or consulted for multiple National Academies of Sciences committees reviewing SBIR and STTR programs across federal agencies, including the Department of Energy, National Science Foundation, and, most recently, the Department of Defense. Across these studies, she has served as the lead data analyst, responsible for building and executing the empirical analyses that inform congressional briefings and federal policy recommendations.
The Department of Defense review—presented to Congress and published as a National Academies consensus report and complemented by a National Bureau of Economic Research working paper co-authored by Lanahan with Kyle R. Myers at Harvard University and Evan Johnson at the University of North Carolina at Chapel Hill—offers one of the most comprehensive evaluations to date of how SBIR and STTR function within the defense innovation system.
The research shows that these programs act as a critical gateway for small firms into the defense ecosystem. Companies that receive SBIR or STTR awards are significantly more likely to secure follow-on Department of Defense research funding and to contribute technologies that are later integrated into larger defense systems.
Rather than producing finished products themselves, many SBIR- and STTR-funded firms develop highly specialized components or tools—often referred to as "widgets"—that enable major defense contractors to advance complex projects more efficiently.
The analysis also finds that experience matters. Firms that receive multiple SBIR or STTR awards tend to produce more patents, attract additional investment, and contribute more meaningfully to long-term defense innovation.
The Department of Defense study is only the latest milestone in Lanahan's broader body of policy-relevant research. Her earlier work on Department of Energy SBIR programs demonstrated that public research and development (R&D) investments generate substantial spillover effects that often far exceed what can be measured by tracking only direct funding recipients.
"R&D produces public goods," Lanahan said. "When policymakers focus only on what individual firms do, they dramatically undercount the real economic impact."
That perspective has helped reframe how SBIR and STTR are discussed in Washington, DC, particularly during congressional reviews and reauthorization debates.
A Career-Defining Project
Among the many studies she has contributed to, Lanahan says the Department of Defense research stands out.
"This has been the most meaningful and rewarding research of my career," she said. "It's rare for academic work to directly inform policy decisions at this scale."
She also points to years of collaboration with leading innovation scholars, including the chairs on the committee, Scott Stern at the Massachusetts Institute of Technology and Maryann Feldman at Arizona State University—coordinated through the National Academies—as central to that impact.
"This national network has strengthened the case for these programs," Lanahan said. "Again and again, we've demonstrated that SBIR and STTR are significant economic drivers, and that the evidence strongly supports making these programs permanent instead of putting them up for renewal and debate every few years."
Lanahan also noted that the influence of SBIR and STTR extends far beyond the United States. More than a dozen countries have attempted to emulate the program, along with dozens of state-level versions across the United States.
"This program is part of why the U.S. remains a global leader in technological innovation," Lanahan said. "Other countries are trying to learn from it."
Looking ahead, Lanahan sees opportunities to apply similar large-scale analysis to the role of major defense contractors, examining how relationships with large firms such as Boeing, Lockheed Martin, Raytheon, Northrup Grumman, General Dynamics, and others shape innovation, competition, and long-term economic health.
"If small firms at the margins can have this much impact," she said, "there's much more to learn by studying the system as a whole."
—Jim Engelhardt, Lundquist College Communications