Today, we take for granted that our state universities play a role far beyond their traditional educational mission-especially in the economic arena. University-sponsored research is being licensed to the private sector, or used to form new companies. Universities are managing business incubators. Consulting partnerships between academia and industry are commonplace.
It wasn't always this way. Not long ago, university officials were skeptical of becoming too involved with the private sector. Business leaders and investors didn't recognize the value of innovation being produced on college campuses. And legal structures didn't exist to support collaboration between the two.
Twenty-five years ago, a landmark piece of legislation started to change all this, with two Hoosiers playing a key role. Ralph Davis, from Purdue University's first patent office, recognized that federal patent regulations didn't allow the efficient transfer of technologies from universities to the private marketplace. He began lobbying Indiana's senior U.S. senator, Birch Bayh, to legislate a solution. Bayh coauthored a bill with Sen. Bob Dole, the Patent and Trademark Law Amendments Act (commonly known as the Bayh-Dole Act), establishing a uniform patent policy that gave universities control over intellec tual property, even inventions supported by government funding.
Passed in 1980, the Bayh-Dole Act has had a tremendous long-term economic impact, just like the G.I. bill gave the United States the world's best-trained work force in the latter 20th century and the U.S. Department of Defense's investment in early stages of the Internet helped fuel today's technology boom. The Bayh-Dole Act helped the United States maintain a competitive edge, opening a tremendous source of innovation as we made the transition to an economy fueled by technological and scientific advances.
The Bayh-Dole Act sparked a revolution in university technology transfer. In 1972, only 30 universities had active technologytransfer programs. Ten years later, after the passage of Bayh-Dole, that number had risen to nearly 300. Today, more than 2,500 universities belong to the Association of University Technology Managers. Over the last decade, the number of patents awarded to universities has nearly tripled, while invention disclosures have doubled.
This has contributed significantly to the U.S. economy. More than $40 billion in economic activity can be attributed to commercialization efforts each year, and nearly 3,000 new businesses have emerged from university technology-transfer programs since 1980. The biotechnology sector evolved from basic university research, and industries like information technology and advanced manufacturing also depend heavily on academic innovation as part of the R&D pipeline.
Universities are reaping the rewards of tech transfer, with license fees and royalties to U.S. universities approaching $1 billion each year and an additional $2 billion in direct corporate-sponsored research. These revenues are helping maintain research efforts in spite of widespread state funding cuts.
Here in Indiana, there's a growing recognition that our universities are vital economic assets. Purdue University, for example, was recently ranked among the nation's top 10 universities for commercialization activity. More than 20 companies have been formed from Purdue research over the last three years; the Purdue Research Park, the university's business incubator, is home to Indiana's largest concentration of high-tech companies.
It's fitting that Purdue, where Ralph Davis first approached Birch Bayh about revamping our tech-transfer laws, should be helping Indiana take full advantage of the Bayh-Dole Act. And Indiana University's Research and Technology Corporation is also focused on commercializing cuttingedge research, with many new business opportunities moving into the IU Emerging Technologies Center, one of the nation's fastest-growing university incubators.
Twenty-five years later, as Indiana puts higher education front and center in an effort to grow its life sciences and technology sectors, we should pause to thank two Hoosiers who paved the way for a new role for universities in the 21st-century economy.
Carter is CEO of TechPoint, an organization representing Indiana's technology community.