“The reason the United States is the world’s undisputed leader in turning cutting-edge science into useful products is because our system provides significant incentives and the private sector goes from the lab to the market. to invest the time, talent and resources needed to
AUTM, which represents the academic technology management profession, has released its 2021 member survey results. The results are impressive, especially given that the U.S. economy is just beginning to emerge from the devastating impact of her COVID-19. 19 Pandemic.
So if you’re hungry for good news, consider:
- Academic institutions will launch 996 startups in 2021 (an average of 2.7 startups per year). Small, entrepreneurial companies like these are driving innovation in America.
- 6,144 academic spin-off companies continued to operate. These companies tend to be located near their parent universities and are vital to the development of the local economy.
- 794 new products created from academic patent licenses. This translates to an average of two or more new product introductions per year.
- 10,347 new licenses and options were implemented. Historically, about 70% of academic licenses are offered to small businesses.
- 8,075 patents have issued to academic institutions and 15,845 new US patent applications have been filed.
Year after year, our system is doing well despite continued attacks on the Bayh-Dole system, which allows academic institutions to own and control federally funded inventions without Washington micromanagement. and is clearly leading the world.
But there is another part of the puzzle that is commonly ignored. Critics have wondered how the resulting discoveries will be commercialized, especially since their price tag has given him the majority of his $81.9 billion to support academic research and development in 2021. Arguing that Washington needs to call the shots on how it will go.
A lot of money, no doubt, but here’s how the National Science Foundation characterizes all of US R&D in “The State of US Science and Engineering 2022.”
“Research and development done in the United States totaled $606.1 billion in 2018 and, according to preliminary estimates, $656 billion in 2019.? The business sector is the main driver of R&D performance, accounting for approximately 83% of R&D growth from 2010 to 2019…
The majority of R&D output is in experimental development (65%) and applied research (19%), with the business sector dominating both. With a focus on new and improved products, services and processes, business units perform 90% of experimental development and 58% of applied research. Higher education institutions conduct the largest proportion of basic research (46%). However, the share of basic research conducted by the business sector increased from 18% in 2012 to an estimated 30% in 2019. computer and electronic products; transportation equipment; professional, scientific and technical services. and information services – account for most of the research and development conducted by the business sector.
Similar to its role in conducting R&D, the business sector funds most applied research (55%) and experimental development (86%). The proportion of basic research funded by the business sector increased from 23% in 2010 to 31% in 2019 (preliminary). However, the federal government remains the largest source of funding for basic research (41%).
Federal R&D funding increased from $127 billion in 2010 to an estimated $139 billion in 2019, but the share of total federally funded R&D spending was 31% in 2010. from an estimated 21% in 2019. This decline occurred across all study types. and sector. “
The reason our system is thriving is not because the government shoulders the burden of developing the inventions it finances and the corporations are free riders. Rather, our system works because companies bring to the table the resources and talent needed to move academic discoveries from the lab to the market. It also means that the private sector assumes the risks inherent in such systems. Often these projects fail and companies suffer.
Further insight into this process is provided in a new paper, “The Relative Contribution of NIH and Private Sector Funding to the Approval of New Biopharmaceuticals,” which focuses on drug development, which is at the heart of the current debate. The study looked at his 23,230 National Institutes of Health (NIH) research grants awarded in 2000 to see which companies had created patents under Bayh-Dole. He has since tracked 8,126 of his disclosed inventions, resulting in 41 treatments, 18 of which have been approved by the FDA.
“NIH funding for the 18 FDA-approved therapies totaled $670 million, while private sector funding (excluding post-approval funding) totaled $44.3 billion.”
The report states:
“Our findings show that fundamental discoveries require substantial additional investment, partnerships, and financial risk-taking by the private sector for new therapies to become FDA-approved therapies. As a case in point, the majority of funding for the 18 drugs approved in our study came from private sector investment, which is consistent with all stages of research and development and observational research. It is important to note that once a product is approved for commercialization, the risk of private sector investment does not go away. Most FDA-approved therapeutics had limited peak sales revenue, including four approved therapeutics that reported zero revenue in the company’s financial statements. (Emphasis added.)
This should not be taken to belittle the role of the NIH’s significant funding of life sciences innovation, nor of the federal government’s funding of American innovation. This is a key driver for making breakthrough discoveries. But the reason the United States is the world’s undisputed leader in turning cutting-edge science into useful products is because our system provides significant incentives and the private sector goes from the lab to the market. otherwise they remain just interesting scientific papers. “
Taken together, these studies show that our system works. It’s time to celebrate it.
