Benefits and Costs of ATP Investments in Component-Based Software

摘要

This report assesses the economic impact of the Advanced Technology Program's (ATP's) focused program in Component-Based Software Development. From 1994 to 2000, ATP provided a total of $42 million in public funds to support 24 separate technology development projects in this emerging field. Quantitative and qualitative analyses presented in this report demonstrate that ATP's support created significant economic benefits. Two-thirds of the funded projects achieved their technical objectives; many of the firms and one joint venture proceeded to release successful commercial products based on the technologies developed. ATP was credited by many of these firms with enabling their R&D efforts, accelerating the technology development process, and increasing the probability of technical and commercial success. When the 24 funded projects are viewed as an investment portfolio, the social returns exceed any reasonable benchmarks for public or private investment. The estimated 80 percent internal (social) rate of return reflects a substantial benefit to the nation in excess of the return to the companies funded and is an indication of inefficient capital markets for projects with high technical risks. The calculated net present value (NPV) of $840 million and benefit to cost ratio (B/C) of 10.5 suggest that the funds were a worthwhile expenditure of public funds.