Federal Tech-Transfer Law Pays Tremendous Dividends as Research Universities Spark Regional Economies; New Report Details Impact of Bayh-Dole Act

WASHINGTON—American research universities in recent decades have become engines of innovation for state and regional economies thanks in large part to the federal Bayh-Dole Act, which incentivizes technology commercialization by allowing universities to retain intellectual property rights to inventions and discoveries made with federally funded research, according to a new report from the Information Technology and Innovation Foundation (ITIF). But ITIF warns that tech-transfer pipeline is now coming under pressure due to research funding cuts and calls to weaken the law.

“The Bayh-Dole Act has been instrumental in America’s academic technology-transfer ecosystem,” said Stephen Ezell, ITIF’s vice president for global innovation policy. “Yet America’s leadership in university-driven innovation is under threat from reduced federal research funding and calls to seize intellectual property. Policymakers need to resist those efforts. They would severely undermine American universities’ role as centers of R&D and innovation and as drivers of regional economic and employment growth.”

Enacted in 1980, Bayh-Dole fundamentally reshaped the U.S. innovation ecosystem by enabling universities to retain intellectual property rights to inventions developed with federal support. This shift sparked a dramatic expansion in technology transfer and entrepreneurship, transforming universities into regional growth engines. From 1996 to 2020, U.S. universities disclosed more than 554,000 inventions, secured 141,000 patents, launched 18,000 startup companies, and contributed up to $1 trillion in GDP and $1.9 trillion in gross industrial output.

Nowhere has Bayh-Dole’s impact been more effective than in the life sciences. More than 200 new drugs and vaccines—including many developed through public-private partnerships—trace their roots to university tech transfers enabled by the Act. Today, nearly half of the world’s new drug pipeline originates in the United States, with nearly 70 percent of new drugs in the U.S. pipeline originating from biopharmaceutical start-up companies, and 68 percent of those startups which emerged from a university remaining within 60 miles of their founding campus, anchoring job growth and economic development in communities nationwide. That’s not coincidence. That’s Bayh-Dole.

State-by-State Success Stories Underscore Bayh-Dole’s National Impact

The report finds that the Bayh-Dole Act has catalyzed regional economic growth across the country—especially in states that have nurtured strong university innovation ecosystems.

1. Colorado universities generated more than 2,200 patents and nearly 500 startups from 1996 to 2020. The University of Colorado system alone accounted for 570 startups and breakthrough innovations such as noninvasive diagnostic tools for infectious diseases. Colorado’s university-driven biotech and cleantech sectors now rival those of much larger states.
2. Delaware universities’ innovation strength stems from their deep connection to chemistry, materials science, and biosciences. The University of Delaware has supported cutting-edge research in drug delivery and molecular biology, while Delaware State University has advanced organic photovoltaics. Together, these efforts have reinforced Delaware’s position in advanced manufacturing and health sciences.
3. Georgia saw more than 2,100 patents and over 400 startups driven by university innovation. Georgia, Georgia Tech, and Emory University played central roles in growing the state’s life sciences and digital health clusters. Emory's technology transfer helped develop multiple FDA-approved drugs and vaccines, while Georgia Tech has advanced AI and data science commercialization.
4. Indiana produced over 2,200 patents and more than 350 university-supported startups. Purdue University has distinguished itself with one of the most productive technology transfer programs in the nation. The university’s innovations in advanced materials and digital agriculture have helped transform Indiana’s economy beyond traditional manufacturing.
5. Kansas universities produced over 1,200 patents and nearly 200 startups. The University of Kansas and Kansas State University have played key roles in vaccine development, animal health, and food safety. Kansas State’s veterinary research has fed directly into the growth of the Kansas City Animal Health Corridor, a major driver of regional economic development.
6. North Carolina universities generated more than 2,100 patents and over 300 startups. Research Triangle institutions like NC State, Duke, and UNC-Chapel Hill helped anchor a globally competitive life sciences hub. NC State’s work on phytosanitary treatments enabled North Carolina sweet potato exports to Europe and Asia, demonstrating how research advances can directly support trade and agriculture.

These outcomes illustrate that when universities are empowered and supported, they drive both innovation and economic development—not just in traditional tech hubs, but across the entire country.

Policy Action Is Needed Now

To reverse the trend of slowing R&D, it will take a concerted effort from both universities and policymakers. ITIF offers a series of recommendations:

Universities:

• Seek partnerships with industry to accelerate tech transfer.
• Strengthen internal commercialization infrastructure (e.g., TTOs, incubators).
• Embed entrepreneurship into faculty and graduate training.

Federal and state policymakers:

• Increase public investment in university R&D to match competitor nations.
• Expand and modernize R&D tax credits, including new credits for joint industry-university projects.
• Restore first-year expensing for business R&D to incentivize private-sector innovation aligned with university research.
• Make clear that the price of a resulting product is not a justification for use of Bayh-Dole march-in rights.

“The Bayh-Dole framework is a proven policy success,” Ezell added. “Now Congress must act to keep U.S. universities leading the next wave of global innovation.”

Contact: Austin Slater, [email protected]