To maintain growth, strong and sustained funding for basic research is necessary to assemble a pipeline of great ideas. Basic research provides the building blocks and foundation for much of what we do in technology transfer. The origins of a great many inventions society depends on today can be traced back to a discovery made at the bench as a basic research project. Some outside observers however, assume that the amount of money we put into research should directly translate to money as licensing revenue.
Over the last two decades, federal research funding has been on the rise each year with around $63.7B reported by 194 respondents in the FY12, AUTM Licensing Survey – up from $12B in 1991. If you were to plot research funding and number of new invention disclosures over time on the same graph, you would find that the two lines mirror each other amazingly well. In other words, research drives innovation.
Some look at the $63.7B a year of federal money in research, compare that to the $2.6B of licensing revenue in FY12, and conclude that this outcome is a bad return on the investment in federal research. Although a tempting comparison to make, it is completely inaccurate, as the two are not linked. Forgotten in this type of analysis is the incredible amount of resources still required to translate that basic discovery into a product. When universities license to a commercial partner, the discovery is not ready for the market; there are many years of additional research and development layered on top of that basic scientific breakthrough. For example, in the case of new drugs, hundreds of millions of dollars will need to be invested beyond the initial research investment in order to get to a product and the risk is still high.
While basic research inspires discoveries that might eventually result in a licensed product, the “payoff” from basic research is measured in many more direct ways such as sharing knowledge through publication and the training a workforce with advanced skills. For example, here at Emory in the past decade, our faculty has been cited more than 31,000 times in publications and more than 18,000 graduate and professional degrees awarded. That is a great deal of knowledge and skills transferred. Only in exceptional cases can one expect basic research findings to traverse the many developmental hurdles and be translated into a commercial product; therefore a simple “input-output” comparison does not make sense.