Study: Industry/University Partnerships Critical to Economy

Jim Greenwood, BIO President

Jim Greenwood, BIO CEO

A study released today by the Biotechnology Industry Organization (BIO) provides first-of-its-kind data on the importance of university/industry research and development partnerships to the U.S. economy. The study of university technology licensing from 1996 to 2007 shows a $187 billion dollar positive impact on the U.S. Gross National Product (GNP) and a $457 billion addition to gross industrial output, using very conservative models.

“It has long been believed that the Bayh-Dole Act, which permits and encourages industry to partner with research universities to turn federally-funded basic research into new and valuable products, is a critical factor in driving America’s innovation economy. Indeed, because of this inspired piece of legislation, the U.S. leads the world in commercializing university-based research to create new companies and good, high-paying jobs throughout the country,” stated BIO President & CEO Jim Greenwood. “This new study provides the evidence to back up that belief.”

Before the passage of the Bayh-Dole Act in 1980, inventions arising from the billions of taxpayer dollars invested annually in university research remained largely on laboratory shelves and were rarely commercialized because of restrictive patenting and licensing practices. This situation changed with passage of the Bayh-Dole Act, which allows university inventors to patent their discoveries and license them to commercial partners with maximum flexibility and limited federal bureaucracy. As a result, the biotech revolution was born, turning inventions into products that are improving public health, cleaning our environment, and feeding the world.

Greenwood added: “We cannot take tech transfer, or the U.S. patent system upon which it is based, for granted, particularly in the current economy. Preserving this system is critical to ensuring U.S. economic revival and spurring the next wave of American innovation in the life sciences.”

Other key findings of the study include:

  • University-licensed products commercialized by industry created at least 279,000 new jobs across the U.S. during the 12-year period;
  • The annual change in U.S. GDP due to university-licensed products grew each year, illustrating that the impact of university patent licensing grows even more important each year.

The study was funded by BIO and headed by Dr. David Roessner, Professor of Public Policy Emeritus at the Georgia Institute of Technology. It assessed the economic impact of university licensing solely based on royalty data, and does not attempt to value other significant economic contributions of university-based research, and thus the estimates are considered to be significantly conservative.

The full study, entitled The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007, is here.

BIO also released today a survey of its member companies which shows that university-based technology transfer serves as a foundation for the creation of many biotechnology companies and industry job growth. Half of surveyed companies were founded on the basis of obtaining an in-license agreement with significant, subsequent job growth.

The survey also shows robust technology transfer occurring between biotech companies and research universities, but very limited in-license agreements with the more restrictive federal government. Survey responses clearly demonstrate that flexible licensing practices, including the ability to obtain exclusive licenses where necessary, is a critical component of successful technology transfer and product commercialization.

Notably, 71% of respondents indicated that they have more than half of their in-license agreements with U.S.-based entities, reflecting U.S. leadership in technology transfer and biotechnology innovation.

“This survey contributes substantially to our understanding of the importance of university-industry collaborations to biotech innovation, and demonstrates the need for policymakers to protect and preserve the currently flexible tech transfer system in the United States,” concluded Greenwood.

A compilation of the survey results is available here and a detailed summary of the results is available here.

Share

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com.

Join the Discussion

3 comments so far.

  • [Avatar for stockardtr]
    stockardtr
    April 2, 2010 09:30 pm

    working american program part android recent

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 1, 2009 06:48 pm

    I think the public benefit from industry/university alliances is fairly self-evident. Universities engage in basic research funded by the federal government that would never be done because it is too speculative and really nothing more than pure science. When such pure science yields breakthroughs they license out to industry, who then uses the technologies in products and services and the public gets the benefit. After the patents expire the technologies, which would never have been built, are open to the public royalty free and in the public domain from that point forward.

    I think anything that benefits the economy also provides direct benefits to the public, particularly the public deriving employment, and indirectly to the rest of the public who derive employment in service industries and industries that thrive when there is disposable income for non-essentials.

    A rising tide lifts all boats. Having said that, such a study would definitely drive home the benefit of science and patents.

    -Gene

  • [Avatar for Gena777]
    Gena777
    November 1, 2009 06:26 pm

    I don’t think there’s ever been much serious question that industry/university R&D partnerships positively affect the economy (as well as patent law). Less clear, however, is the extent to which these alliances benefit the general public. I’m looking forward to seeing the results of such a study.
    http://www.GeneralPatent.com