BIO Commissioned Study Calculates Economic Contribution of University/Nonprofit Inventions in the U.S.

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CoverLast month, the Biotechnology Industry Organization (BIO) announced the release of a BIO commissioned study that estimates the economic impact of academic licensing between 1996 and 2013.  The study, entitled "The Economic Contribution of University/Nonprofit Inventions in the United States: 1996-2013," was prepared by Lori Pressman, David Roessner, Jennifer Bond, Sumiye Okubo, and Mark Planting.  The group used an "I-O" approach to estimate the economic impact of academic licensing, wherein "input" and "output," rather than "cost" and "revenue," were examined (the study notes that the use of input and output is apt because the same economic transaction is "output" to one party, the seller, and "input" to the other, the buyer).  A detailed discussion of the I/O approach and the group's assumptions begins on page 6 of the study.

The study indicates that over the 18-year period examined, the total contribution of academic licensors (i.e., academic U.S. AUTM survey respondents) to gross industry output ranges from $282 billion to $1.18 trillion, in 2009 $U.S. Dollars, and the contributions to GDP range from $130 billion to $518 billion, in 2009 $U.S. Dollars.  The study also indicates that over this same period, licensed product sales from U.S. universities, hospitals, and research institutes supported between 1,130,000 million and 3,824,000 million "person years" of employment supported.  The study notes that a long-term trend (see Figure 1 of the study below) is that universities and other nonprofits are performing a larger share of total U.S. R&D.  The study also notes that U.S. R&D performed by universities and colleges from 1953 through 2011 grew from 5.3% to 14.9% of total U.S. R&D, while the fraction of R&D performed by other nonprofits grew from 2.2% to 4.2% (the contribution of academic licensing to U.S. GDP between 1996 and 2013 is shown in Figure 3 of the study; see below).

Long Term Trend

GDP Trends

Among the survey respondents were between 26 and 30 U.S. hospitals and research institutes (HRI's) and between 131 and 164 universities (depending on the year that data was collected).  The survey notes that HRI's were included in the survey because hospitals and research institutes often have close ties to universities and share personnel and evidence suggests that the character of the work performed in research institutes may be similar to that done at universities and colleges.  The study concludes by noting that "[i]t will be interesting to watch these trends as academic licensing continues to mature, patent life is effectively shortened in a now almost 20 year post GATT world, patent laws continue to evolve, and data and databases, both public and private, play an increasing role in society and the economy."

In its announcement of the study, BIO pointed out that the study illustrates that "academic-industry partnerships are a critically important part of our economy," adding that "[a]cademic inventions play a critical role in the creation of spin-off companies that drive state, regional, and national economic growth."

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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