In terms of product sales, licensing agreements between universities and companies contributed as much as $187 billion to US Gross Domestic Product (GDP) during 1996-2007, according to new estimates.

Moreover, the total contribution of university licensing to the gross output of industry overall during the period was no less than $108.5 billion and as much as $457.1 billion, based on “very conservative models,” says the research, which was conducted for the US Biotechnology Industry Organization (BIO).

The study authors point out that these totals are “significantly conservative,” because their assessment of the economic impact of university licensing is based solely on royalty data and does not attempt to value other significant economic contributions of university-based research.

The study also estimates that university-licensed products commercialized by industry created at least 279,000 new jobs across the US during 1996-2007, and points out that the annual change in US GDP which is due to university-licensed products has increased every year during the review period.

Welcoming these findings, BIO’s chief executive Jim Greenwood said they provide new evidence for the importance to America’s innovation economy of the Bayh-Dole Act. The proper title of this legislation, which was enacted in December 1980, is the University and Small Business Patent Procedures Act, but is widely referred to by its sponsors’ names, Senators Birch Bayh of Indiana and Bob Dole of Kansas. The Act permits and encourages industry to partner with research universities to turn federally-funded basic research into new products and gives universities, non-profit organizations and small businesses intellectual property (IP) control of their inventions and other IP resulting from federal funding. Under the Act, university inventors can patent their discoveries and license them to commercial partners with maximum flexibility and limited federal bureaucracy, says BIO.

“Because of this inspired piece of legislation, the US leads the world in commercializing university-based research to create new companies and good, high-paying jobs throughout the country,” said Mr Greenwood. Before the Act was passed, 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, says BIO.

However, Mr Greenwood cautioned that technology transfer, and the US patent system on which it is based, cannot be taken for granted, especially in the current economy, “Preserving this system is critical to ensuring US economic revival and spurring the next wave of American innovation in the life sciences,” he said.

BIO has also released a survey of its member companies which shows, it says, that university-based technology transfer serves as a foundation for the creation of many biotechnology companies and industry job growth; half of the companies surveyed 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,” says BIO.

Moreover, 71% of respondents indicated that they have more than half of their in-license agreements with US-based entities, and the responses show clearly that flexible licensing practices, including the ability to obtain exclusive licenses where necessary, is a critical component of successful technology transfer and product commercialization, the organisation notes.

The survey’s findings demonstrate “the need for policymakers to protect and preserve the currently flexible tech transfer system in the United States,” said Mr Greenwood.