University Tech Licensing Has Substantial Impact on Economy

The Association of University Technology Managers (AUTM), a nonprofit association of academic technology transfer professionals surveys North American universities, hospitals and research institutions each year on a host of data points that reveal licensing activity. Examples of the type of information gathered includes the number of patents, the number of invention disclosures, the number of startups created and the amount of licensing income received. The results are available in the AUTM U.S. Licensing Activity Survey: FY2011, and the AUTM Canadian Licensing Activity Survey: FY2011, published Dec. 10.

This year AUTM included additional questions to better ascertain the economic impact of technology transfer.

In the case of product sales, 58 institutions (31 percent of the 186 respondents) reported that 2,821 of their licenses paid $662 million in running royalties based on $37 billion in product sales, implying an average royalty rate of 1.8 percent. Only 65 of these licenses yielded more than $1 million in royalty income.

Total income for all U.S. institutions from running royalties was $1.5 billion, so if it were assumed that all licenses generating running royalties resulted in the same 1.8 percent average royalty rates, total product sales by all licensees of U.S. institutions would have been approximately $80 billion.

Another way of estimating the total impact on the U.S. economy from product sales is that these 2,821 licenses averaged $23.5 million in product sales per license, so if it were assumed that the 9,145 licenses generating running royalties reported by all U.S. institutions also averaged $23.5 million in product sales per license, total product sales by all licensees of U.S. institutions would have been approximately $120 billion.

“It is clear that product sales of licensed technologies from AUTM members’ institutions have a substantial impact on the U.S. economy,” says AUTM President Todd Sherer, Ph.D., CLP.

In the case of startups, 66 institutions (35 percent of the 186 respondents) reported employment of 24,653 by 1,731 operational startups, an average of 14 employees per startup. Assuming all 3,927 startups still operational averaged 14 employees, total employment would have been 55,929.

“These data are a testament to the large and critical role university’s play in the innovation economy,” says AUTM VP, Metric and Surveys, Richard Kordal, Ph.D., RTTP.

The release of the survey coincides with the 32nd anniversary of the Bayh-Dole Act, the landmark legislation that launched the technology transfer profession. Enacted Dec. 12, 1980, the Bayh-Dole Act created a uniform patent policy among the many federal agencies that fund research, enabling small businesses and non-profit organizations, including universities, to retain title to inventions made under federally-funded research programs.


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