As researchers bemoan cuts in federal funding for basic science, a new study of millions of patents indicates the value of spending tax dollars on research.

Ever since the great push for technological innovation during World War II and immediately afterward, the U.S. government has played an important role in fueling scientific research and innovation. About 10% of NIH grants now directly result in patents, and some commentators have argued that some industrial breakthroughs like the iPhone owe a great deal to government-funded research.

But amid cuts at the state and federal level, investment in scientific research has flattened over the past decade. As a percentage of gross domestic product, federal science funding has steadily decreased since the 1970s. This trend raises questions about the nation’s ability to sustain its research leadership in areas like biomedicine and technology, particularly since federal funds play a crucial role in fueling basic science breakthroughs.

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The new study, published Thursday in Science, shows that one-third of U.S. patents rely on government-funded research — a number that has increased steadily since the 1970s.

increasing percentage of patents that rely on federal funding
The percentage of U.S. patents granted to U.S. inventors that rely on federally supported research has tripled since the 1970s. Reprinted with permission from Fleming et al., AAAS Science 364:2 (2019).

The report “really reinforces what we already know to be true,” said Steve Gerencser, interim president of The Science Coalition and associate director of government relations at Brown University. “Federal investment in scientific research fuels innovation, drives national and local economies, and secures United States’ place as a global leader.”

The authors of the new study examined millions of U.S. patents granted between 1926 and 2017, as well as related papers and reports, to glean which ones were supported by federal funding: patents owned by the government, those acknowledging federal support, and those that directly cite patents or papers acknowledging such support.

During that time, the total number of U.S. patents dramatically increased; the proportion of patents that relied on federal research grew by an even greater degree.

Lead author Lee Fleming, professor of engineering and faculty director of the Coleman Fung Institute of Engineering Leadership at the University of California, Berkeley, said the findings could have important considerations for lawmakers.

“From a policy perspective, there are a lot of arguments as to why keeping your science base strong is the cornerstone of the national economic and trade policy,” said Fleming. “If we substantially cut government science, we’re risking a third of our patents.”

Gerencser said universities count on federal funding to be substantial but also continuous, so they can plan for bold steps forward in complex fields. “The early stages of research, basic fundamental research, rely on strong partnerships with federal research agencies,” he said. “There are long-term projects, like cancer research and combating the opioid epidemic, that need robust, predictable funding to allow researchers to strategically plan for future projects.”

Since the researchers excluded unclear associations, one-third is actually a conservative estimate, Fleming said. They also found that patents that relied on federal investment were more valuable: They tended to be more novel and were cited and renewed more often than patents that didn’t rely on federal funding.

“We found citations of science often going back 50 years or more,” Fleming said. “It’s like this reservoir, this sponge of scientific knowledge. They keep nurturing it and it just continues to pay off more and more.”

Corporations account for most of the increase in reliance on federal research, Fleming and his team found. While industry research spending has increased significantly since the 1980s, 80 cents of every dollar it spends on research and development goes to development while just 20 cents goes to basic and applied research, according to the American Association for the Advancement of Science. But this may not be as problematic as it seems.

Low investment in basic research by corporations might be interpreted as “evidence of short-sighted lack of research investment” on their part, the researchers wrote, but “can also be interpreted as evidence of the effectiveness of public investment in science and technology research in spurring innovation.”

Since basic research led by industry is generally tied to specific business models and is often difficult to access, open research conducted at universities may have broader public uses and benefits.

The patent analysis also revealed that foreign reliance on federal research has grown steadily, but to a lesser degree than reliance by Americans. The five nations that made the most effective use of U.S. government science in 2017 were, in order of use, Japan, Germany, Korea, England, and France.

Patents aren’t the sole measure of innovation, a fact that the authors readily acknowledge. Fleming noted that some advances are not patentable, and there are many factors involved in the number of patents granted per year, including changes in federal spending, corporate patenting, compliance requirements, and better tracking of patents after the 1970s.

The number of new U.S. patents took off after the passage of the Bayh-Dole Act in 1980. Before then, the federal government owned inventions that it partially funded. Afterward, the bipartisan act granted property rights to universities and others that made inventions using federal funding, and commercialization soared.

The overall number of patents has just about doubled over the past 10 years, as has the number of patents that rely on government research. Some of this is likely attributable to defensive patenting. But even given the limitations of using patents as a measure of innovation, Fleming said that one-third is an impressive proportion that illustrates increasing reliance on government science to drive discoveries.

“I think this report comes at a really critical time,” Gerencser said. “Fiscal year 2020 is right around the corner with potentially devastating sequestration cuts of an estimated $5 billion to federally funded research. If funding is cut, especially significantly, there are ripple effects that are really important to take into consideration.”

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