Publications | Jun 12, 2012

2012 LES article: Economic Impacts Of Technology Transfer: Two Case Studies

News Article Image of 2012 LES article: Economic Impacts Of Technology Transfer: Two Case Studies

TechLink is located at Montana State University located in Bozeman, Montana. (MSU/Kelly Gorham)

Virtually all publicly funded research institutions in the United States, both universities and government laboratories, engage in technology transfer. Their overriding rationale typically is to spur economic growth, create jobs, and contribute to national economic competitiveness. Despite this, public research institutions rarely attempt to directly measure the economic impact of their technology-transfer activities. There are relatively few studies of the direct economic impacts from technology transfer. This article presents two related case studies of economic impacts resulting from technology transfer between Department of Defense (DoD) laboratories and the private sector in the United States.

The first study commissioned by DoD evaluated the economic impacts from technology-transfer partnerships brokered for DoD by an outside organization, TechLink. TechLink is a federally funded technology-transfer center at Montana State University, Bozeman. Since 1999, TechLink has served as a DoD “partnership intermediary.” Its primary focus is helping DoD labs nationwide to license their inventions to U.S. industry. TechLink brokers or facilitates approximately half of all DoD license agreements with industry. In addition, it helps to establish other types of DoD technology-transfer partnerships, including CRADAs and R&D contracts with small companies for development of new technologies. In 2009, DoD requested that TechLink undertake a study of the economic impacts resulting from its ten years of technology-transfer activities on DoD’s behalf. The study was seeking to answer, for each TechLink-brokered agreement, the following key questions: (1) Did any new products, product improvements, or services (including R&D services) result from this agreement? (2) What were the total sales resulting from these new products, improved products, or services? (3) How many jobs were created or retained?

The study found that direct output (sales) resulting from the 326 TechLink-brokered technology-transfer agreements totaled $239.7 million at the time of the study. The $239.7 million in direct sales generated almost $490 million in sales nationwide from indirect and induced sales. Overall, for every dollar in sales attributable to TechLink-brokered technology-transfer agreements, an additional $2 in sales was generated economy-wide from indirect and induced sales. The total economic output or sales was estimated at $729 million.

The study further found that 1,258 jobs were directly sustained to support the $239.7 million in total sales. Over 3,000 additional jobs were added to the economy by indirect, inter-industry sales and jobs generated from the induced effects of household spending. For each job directly attributable to TechLink-brokered technology-transfer agreements, an additional 2.4 jobs were created economy-wide. Overall, an estimated 4,290 jobs resulted from TechLink’s technology-transfer agreements for DoD.

See the full article for the methodology and results of both the TechLink and U.S. Navy economic impacts studies, pdf attached below.

“Economic Impacts Of Technology Transfer: Two Case Studies From The U.S. Department Of Defense” by Will D. Swearingen and Timothy F. Slaper, in Les Nouvelles (Journal of the Licensing Executives Society International), Vol. XLVII (2), 2012, pp. 163-173.