News | Aug 5, 2019

Study shows $58 billion impact on economy through military lab’s invention licensing

Researchers dug into sales, employment data for analysis

BOZEMAN, Mont. ­– When thinking about growing their business, many companies look inward for new ideas, but leveraging government research and development can be just as lucrative.

A new study released by TechLink on Monday shows $58 billion in total economic activity by businesses that build products and services around dual-use technologies invented in military laboratories.

Data collected and analyzed for the study showed nearly $27 billion in sales of new products and services by companies with Department of Defense license agreements.

During the seven-month-long study, TechLink’s economic research team contacted 915 companies that hold 1,137 active license agreements–95% of the companies agreed to participate in the study.

The companies reported a total of 214,791 jobs with an average salary of $74,762, according to the analysis.

“Recognize that military laboratories support warfighters first but also the economy by allowing their dual-use inventions to be used by private companies who turn them into products available in commercial markets,” said Brett Cusker, TechLink’s executive director.

“License agreements often allow businesses to build new products on shoestring R&D budgets. And the resulting products are often transitioned through acquisition back to the warfighter,” he said.

U.S. law mandates that federal agencies make their inventions available to the private sector to benefit the nation’s economy. License agreements are used to transfer the intellectual property rights on these inventions from the government to private businesses.

The study’s purpose was to determine the extent to which the license agreements contributed to new economic activity and job creation in the United States, and resulted in the transition of modern technology to U.S. military use.

The collected data was analyzed with the IMPLAN economic impact assessment model to estimate the economic impacts related to these sales.

TechLink, a DOD-funded technology transfer center at Montana State University, conducted the study in collaboration with the Business Research Division of the Leeds School of Business at the University of Colorado Boulder.


Learn more about specific license agreements between U.S. companies and the Department of Defense at the Tech Transfer DealBook.