Federally-funded research links to innovation and jobs

Mixed messages are to be expected in a down economy, and the US is contributing to the confusion as other countries continue to look to it as an innovation model.

Recent reports cite problems with the US innovation system and tech transfer. Now a new report, ‘Sparking Economic Growth’ from The Science Coalition, a nonprofit organisation of 50 public and private US universities based in Washington, DC, studies the origins of 100 successful companies and lauds federally-funded university research for continuing to spawn innovation, new companies, and jobs.

The federal government is the primary source of money for basic research, supplying about 60 per cent of funding in the US. The second-largest source of basic research funding is academic institutions themselves.

Universities conduct the majority of basic research in the US, some 55 per cent in 2008, and business and industry do less than 20 per cent, according to the report.

The 100 companies employ more than 100,000 people and have annual revenues approaching $100 billion. The report says small businesses with fewer than 500 employees are generating most new jobs in the US now, and university spin-out companies are much more successful than other start-ups in terms of longevity. Of the companies in the report, 69 are privately held, 21 have gone public, and 10 more were acquired.

Sticking close to home

The report also found that many of the companies stay close to home once they are spun out. Of the 100 companies in the report, only 16 are located in a different state from the university where they originated. Two others maintain R&D facilities in the same city as their founding universities.

“I know the critical impact that federal funding for basic research makes,” Susan Desmond-Hellmann, chancellor of the University of California, San Francisco, says in the report. “There is no question that the public benefit is many times greater than the initial investment.”

The companies cited aren’t just in the typical science and technology hotbeds of Silicon Valley and Boston. “Indiana University is vital to the economic vitality of Indiana,” says Tony Armstrong, president of the Indiana University Research and Technology Corp., a non-profit agency that facilitates industry-Indiana University research collaborations.

Four Indiana University spawned companies are noted as success stories in the report. CS-Keys Inc., a biotechnology company focused on third-generation, cancer-associated biomarkers using proteomics, is based on Indiana University technology supported by about $7 million in funding from the National Institutes of Health (NIH) and the National Cancer Institute.

FAST Diagnostics Inc., a medical technology company developing a reusable optical device and single-use injectable fluorescent compound to measure kidney function, and ImmuneWorks Inc., a biotechnology company developing immune tolerance treatments for autoimmune diseases, including idiopathic pulmonary fibrosis of the lung, both draw on university technology supported by NIH funds.

Meanwhile, Therametric Technologies Inc., a dental technology company developing devices and methodology to enhance detection and prevention of tooth decay and other dental problems, is commercialising technology funded by the National Institute for Dental and Craniofacial Research, part of the NIH.

Other companies cited include A123 Systems of Massachusetts, which has new battery technology developed at MIT with grants from the US Department of Energy. A123 also was a recent winner of grant money under the American Recovery and Reinvestment Act.

Sharklet Technologies Inc. of Alachua, FL, has developed a novel approach to combat hospital-acquired infections: a surface technology that mimics the qualities of shark skin, which is resistant to bacterial growth. The original research at the University of Florida was supported by the US Navy, which sought a non-chemical, antibacterial coating for the hulls of ocean-going ships to prevent the growth of marine algae and barnacles.

Feds lead in basic research funds

The US continues to lead in global research and development expenditures from all sources, the report said, but China and other nations are investing aggressively in R&D in order to enhance their innovation capabilities.

The report’s authors say the 100 profiled companies illustrate some of the economic benefits the US gets when companies are created from discoveries in federally funded university laboratories. “Were it not for the federally supported research, these companies - their products and services, and the jobs and economic growth that have resulted - likely would not exist,” the report claims.

Overall, there is a tremendous return on investment from public money is invested in university-based basic research. Research creates jobs directly for the principal investigator, research team, lab technicians and others who help support the work as well as indirectly through innovations that lead to new technologies, industries, and companies.

“Strong and consistent funding for basic research is essential to America’s continued global competitiveness and long-term economic health,” concludes the report