In the realm of technology transfer, it’s often said that robust investment in academic research and development yields beneficial economic results. Economists and policymakers sometimes will argue that, while this may seem or feel true, the data are not there to support this perspective.
A recently published study by the Biotechnology Industry Organization (BIO), in cooperation with AUTM, has delivered supporting data from a rigorous analysis of nearly two decades of economic activity.
Applying an input-output (I-O) framework to the collected data, the research team—Lori Pressman, David Roessner, Jennifer Bond, Sumiye Okubo and Mark Planting—established estimated metrics for gross industry output (GO), effects on gross domestic product (GDP), and the total person-years of employment supported by academic licensing and associated royalties. The team’s data set consisted of 18 years (1996-2013) of AUTM Licensing Activity Survey results.
The results paint a compelling portrait of the value-add provided by academic R&D and licensing. The following are three significant metrics describing the past 18 years*:
- The total contribution of AUTM licensing activity to U.S. GDP ranges from $138 billion to $518 billion.
- The total contribution of AUTM licensing activity to U.S. gross industry output ranges between $282 billion and $1.18 trillion.
- The total number of person-years of employment generated by AUTM licensing activity ranges from 1.13 million to more than 3.824 million over 18 years.
(*All dollar amounts normalized to 2009 dollar valuations.)
Consistent and sustainable growth
Another result is the consistent year-to-year growth in the economic impact of the licensing and royalty revenue stream. And while total research expenditures have also grown steadily, the growth slope of the revenue outcomes is consistently steeper than the rise in R&D expenditures at the reporting institutions. Any economist will attest: This relationship points to a long-term sustainable ecosystem of academic industrial partnerships.
Another key consideration in light of these results: The survey team made multiple methodological assumptions that tended to underestimate economic impact. As such, the reported outcomes are estimated conservatively.
The underlying stories
About the study, Fred Reinhart, senior advisor in the Technology Transfer Office at the University of Massachusetts Amherst and president of AUTM, said, “Here is evidence of extensive and increasing academic technology transfer activity with broad economic benefits, including job creation.
“Just as important,” he continued, “is what underlies these numbers. The data support but do not describe the thousands of stories of academic innovations that have improved the lives of individuals in many countries. This study is inspiring proof that AUTM and AUTM members continue to make a better world by bringing research to life.”
A full copy of the survey report is downloadable at www.bio.org/articles/Value-of-Academic-Industry-Patents, including a complete explanation of the research and analytical methodologies.