BOX 4-6Advanced Ceramics Research (ACR)

From its inception in 1989, ACR sought to become a product development company, capable of manufacturing products for varied industries. The company knew about, but initially rejected, the SBIR program on the grounds that the 5–7 percent allowable profit was too low.

ACR shifted perspectives on the program, however, and has since participated in SBIR programs at DoD, NASA, DoE, and NSF. SBIR awards accounted for nearly all of ACR’s revenues by 1992, but by 2005 only 15–20 percent of its sales were projected to come from STTR/SBIR.

Drawing in part on the advanced research being done at the University of Michigan and its own expertise in both advanced ceramics and manufacturing, ACR developed a general purpose technology for converting AutoCAD drawings first into machine-readable code, and then to direct generation of ceramic, composite, and metal parts.

One market with considerable potential was “flexible carriers for hard-disk drives” for the electronics industry. ACR’s aggressive marketing soon helped the company become a major supplier to firms such as SpeedFam Corporation, Komag, Seagate, and IBM. Demand for this product line grew rapidly, enabling the firm to go to a three-shift, seven-day-a-week operation. Demand for ACR’s electronic products grew fast during the 1990s, from 5,000 to 60,000 units monthly, and ACR built a new 30,000 square foot plant. The electronics market for ACR’s products, however, declined abruptly in 1997, when two of its major customers shifted production to Asia. The loss of its carrier business was a major reversal for the firm. Heavy layoffs resulted, and employment declined to low of about 28 employees in 1998.

The next 2 years are described as a period of reinvention for survival. The firm’s R&D division, formerly a money-loser, became its primary source of revenue. The explicit policy was to undertake only that R&D which had discernible profit margins and the opportunity for near-term commercialization.

Since 2000, ACR has received funding from the Office of Naval Research (ONR) to develop a new low-cost, small unmanned aerial vehicle (UAV), initially for whale watching around Hawaii, in support of the Navy’s underwater sonic activities. Once developed, the UAV’s value as a low-cost, highly flexible, more general purpose battlefield surveillance tool soon became apparent, and ONR provided additional funding to further refine the UAV for use in Iraq.

ACR is now actively engaged in the continued development and marketing of Silver Fox, a small, low-cost UAV, supported by awards under DoD’s SBIR (and STTR) program, which have funded collaboration between ACR and researchers at the University of Arizona, University of California-Berkeley, the University of California-Los Angeles, and MIT.

From: 4, Outcomes

Cover of An Assessment of the SBIR Program at the Department of Defense
An Assessment of the SBIR Program at the Department of Defense.
National Research Council (US) Committee for Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program, Policy and Global Affairs; Wessner CW, editor.
Washington (DC): National Academies Press (US); 2009.
Copyright © 2009, National Academy of Sciences.

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