Getting More Bang for America’s R&D Buck: 50 Ways the Administration and Congress Can Improve Tech Transfer, Commercialization, and Innovation

The United States needs to do a much better job of transforming knowledge and innovation into new companies and products here at home, but doing so requires new policies that can help more quickly and effectively get technologies out of the laboratory and into the private sector. There are a number of ways federal policies, programs, and institutions supporting tech transfer and commercialization from universities and national labs to the private sector—such as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), the National Science Foundation’s I-Corps program, and Manufacturing USA’s Institutes of Manufacturing Innovation—could be bolstered to improve outcomes in this regard. In particular, a key way to do so is to increase the regional impact of research investments. ITIF and the Brookings Institution have recently proposed 50 innovative policy ideas to do just that.

With current federal R&D funding at modern historical lows (as a share of GDP) and significant new federal funding unlikely given the current political and budgetary environment, the United States will need to do all it can to extract maximum return from its existing research and development (R&D) investments. ITIF and Brookings held an event to discuss what the Trump administration and Congress can do to bolster technology transfer and commercialization policies to ensure that federal R&D investments yield stronger commercial results.

Representative Randy Hultgren (R-IL) kicked off the event by discussing the importance of federal R&D funding in a time of budgetary uncertainty. He suggested that many of the report’s recommendations for localizing innovation investments—such as the creation of microlabs and increasing the flexibility of lab directors to sign off on technology transfer agreements—can improve the effectiveness of federal funding by focusing on entrepreneurs where they are.

ITIF Vice President for Global Innovation Policy Stephen Ezell noted that if the United States invested as much in federal R&D as it did in 1983 as a share of GDP, the federal research budget would be $65 billion larger than it is now. Ezell went on to suggest that although debt reduction should not come at the cost of creating a scientific deficit, the report was written with budgetary realities in mind and its proposals are budget-neutral or have only small fiscal costs. Echoing Ezell, report co-author Scott Andes of the Brookings Institution reiterated the report’s focus on budget neutrality and noted that the benefits of R&D for local and regional economies could create a more powerful political constituency for federal research investment. Andes outlined the report’s five main policy areas: strengthening innovation districts, bolstering institutions such as the Institutes of Manufacturing Innovation, facilitating lab-to-market tech transfer, promoting entrepreneurship, and stimulating innovation.

All of the panelists agreed on the importance of localizing federal R&D investment. Dan Berglund, president and CEO of the State Science & Technology Initiative (SSTI), discussed his organization’s work in bringing state, private, nonprofit, and university funding together to promote technology entrepreneurship. One organization SSTI works with, the Georgia Research Alliance, has contributed to the launch of some 150 new companies which have created over 6,000 new jobs. Berglund noted the jobs created by these programs typically pay 50-200 percent more than the state average. Despite these promising results, Berglund argued that a lack of funding is the major barrier to scaling up such programs, and noted the ITIF-Brookings report’s call for commercialization grants could provide a model for a federal solution.

Anthony Green, vice president of Ben Franklin Technology Partners, focused on his organization’s work in Pennsylvania. Green pointed to the 21st Century Cures Act and the America COMPETES Act as promising moves by Congress on federal R&D, but argued more needs to be done. Green focused on the role universities play in facilitating innovation, arguing academic institutions need people with managerial experience and expertise in commercializing R&D. He suggested three recommendations for universities seeking to translate R&D funding into marketable products: improve communication between university technology transfer offices and academics, strengthen relationships with outside stakeholders, and move from stifling to incentivizing faculty entrepreneurship.

Brian Darmody, associate vice president for corporate and foundation relations at the University of Maryland (UMD), highlighted some of the partnerships his school has formed with the federal government. Agencies and departments like the National Oceanic and Atmospheric Administration, the National Aeronautics and Space Agency, the Food and Drug Administration, the Department of Homeland Security, and the Department of Energy (DOE) have offices in a university-linked research park. With these investments, Darmody explained UMD is seeking to build its own “innovation district” as an updated model of the land-grant university’s traditional focus on agricultural and engineering research. He also spoke about the need to eliminate “innovation chokepoints” that prevent R&D from impacting the economy. To mitigate tension between academic and entrepreneurial imperatives, he suggested universities and states should take steps like establishing makerspaces in campus buildings and revising ethics rules so faculty are not punished for bringing research to market.

Kathleen Kingscott, vice president for strategic partnerships at IBM, agreed corporate and public sector stakeholders benefit from government-funded R&D at universities. According to Kingscott, the ability to innovate is the most important factor companies need to grow. She pointed to IBM’s activities in developing new curricula for fostering innovation and the company’s development of models for protecting intellectual property in collaborative projects involving academia, corporate research, and government agencies. Kingscott said that to galvanize innovation, the United States needs a “great challenge” like the space program in the 1960s. She pointed to food security and health care as contemporary areas ripe for major R&D investments. Kingscott warned of future budget constraints and urged policymakers to maximize the impact of the R&D spending.

Bookending the panel, Representative Ben Ray Luján (D-NM) made two main points that paralleled much of what the other participants had asserted. First, although it has national effects, the “process of innovation is inherently local.” Second, “innovation does not happen in a vacuum. It requires physical, intellectual, and financial infrastructure.” In light of budget constraints, Rep. Luján highlighted five of the ITIF-Brookings report’s suggestions as particularly important: creating public library makerspaces, particularly in rural areas outside traditional innovation hotspots; establishing a DOE Foundation to provide a flexible source for private funds; allowing private use of existing resources to advance entrepreneurial education and job creation; establishing a National Innovation Foundation to “study, promote, and fund the translation of technology from R&D to the market”; and founding the Advanced Research Investment Initiative inside the Department of Commerce to help incentivize private R&D investment.