New White Paper Highlights How University Research Powers American Innovation – and What Could Be Lost if Policymakers Aren’t Careful

gpuckrein
Jun 16
2 min read

American innovation has long been the envy of the world, built on a foundation of strong intellectual property protections, public-private collaboration, and world-class research institutions. But today, that system is under threat. In Washington, misguided proposals like the Most Favored Nation (MFN) policy – which would import foreign drug pricing schemes into the U.S. – risk dismantling the very ecosystem that fuels cutting-edge breakthroughs and drives local economic growth.

As policymakers consider such sweeping changes, a new report from the Information Technology and Innovation Foundation (ITIF) makes the stakes clear: weakening the incentives and infrastructure behind university-led innovation would be a costly mistake for America's competitive future.

The numbers tell a remarkable story. Academic technology transfer is estimated to have contributed $1.9 trillion to U.S. industrial output from 1996 to 2020 – thanks in large part to transformative legislation like the Bayh-Dole Act. On average, three new startup companies and two new products are launched in the United States every day as a result of university inventions brought to market.

Innovation Stays Local & Drives Regional Growth

Contrary to popular narratives about the U.S. biotech industry being concentrated in coastal hubs, the benefits of university-led research often stay local. Roughly 68 percent of university-licensed life science startups remained within 60 miles of their founding university. This means that when universities innovate, their surrounding communities directly benefit through job creation, economic development, and knowledge spillovers.

ITIF’s report highlights success stories across a diverse array of states – illustrating how technology transfer from major universities paved the way for the development of new diagnostic tools in Colorado, advanced manufacturing processes in Delaware, and the creation of dozens vaccines and therapies from institutions in Georgia. Kansas’ universities played a pivotal role in developing the Kansas City Animal Health Corridor, a major driver of growth in the area. In North Carolina, Research Triangle institutions anchor a dynamic and globally competitive life sciences hub, while in Indiana, universities helped transform the state's economy beyond traditional manufacturing into a national leader in the production of pharmaceuticals and medical devices.

Misguided Policy Puts America’s Edge at Risk

The report also calls attention to how this success faces serious threats. American federal funding of university research as a share of GDP declined 18 percent between 2011 and 2021, placing the United States 27th out of 39 Organization for Economic Co-operation and Development (OECD) countries on this critical measure. Meanwhile, China and other rising economies are making substantial investments in their research capabilities.

The stakes are high. If policymakers are successful in implementing misguided policies like MFN or in weakening intellectual property protections – it would not only compound these challenges but also threaten the delicate ecosystem that has made the United States the global leader in life science innovation.

Smart policy choices have transformed American universities into engines of innovation and regional economic growth. Now, policymakers must ensure these institutions continue leading the next wave of global innovation – because America's patients, workers, and communities across the country depend on it.

Read ITIF’s report here: The Bayh-Dole Act’s Role in Stimulating University-Led Regional Economic Growth