computers, telecommunications, and aerospace. In 2008, U.S. companies spent $2.5 billion out of their total $219.6 billion R&D investment at U.S. colleges and universities, representing 5 percent of university R&D spending.6 Directly sponsored research is just a small part of the web of intricate academic-industrial interaction that characterizes the U.S. innovation system.

Of the eight mechanisms of technology transfer listed above, the first seven offer significant contributions to the economy, yet it is the eighth (licensing of IP7) that is more often discussed, measured, quantified, and debated than the other mechanisms combined.8 There are several reasons for this. First, patenting and licensing activities by universities are easier to observe and measure than several of the other mechanisms, for example, movement of students and consulting arrangements. Second, in contrast with scholarly publications and most professional interactions, patenting and licensing activities are characterized by readily apparent economic value or distinct potential revenue streams for businesses, universities, and faculty inventors. Third, there has been a dramatic upsurge in patenting and licensing since 1980, which is primarily associated with a change in federal policy brought about by passage of the Bayh-Dole Act. Although the economic value of licensing is readily apparent, the social value of licensing activities (i.e., the net societal benefit of commercialization of a particular IP) is more difficult to estimate and is expected to be larger than the economic value recorded.

6

National Science Board. 2008. Science and Engineering Indicators. See Table 4-1, U.S. R&D expenditures, by funding and performing sectors: 2006. Available at: http://www.nsf.gov/statistics/seind08/c4/tt04-01.htm.

7

See Cohen et al., op. cit., which surveys U.S. manufacturing firms and finds that patents and licensing are relatively unimportant as mechanisms of knowledge transfer. These authors’ survey data were collected in 1994 and confined to manufacturing firms. The growing importance of service sector firms and changes in the use of mechanisms since 1994 may affect the interpretation of these results. See also A. Agrawal and R. Henderson. 2002. Putting patents in context: Exploring knowledge transfer from MIT. Management Science 48:44-60, which reports results of qualitative interviews with MIT professors in mechanical engineering, electrical engineering, and computer science and finds similarly low relative importance of patents and licensing as channels of knowledge transmission. The Agrawal and Henderson data were collected in 2000 and are confined to two specific engineering fields.

8

The use of mechanisms apart from patenting and licensing have been documented using (1) survey responses from manufacturing firms (see Cohen et al., op. cit.); (2) survey responses from university scientists and engineers (see A.N. Link, D.S. Siegel, and B. Bozeman. 2007. An empirical analysis of the propensity of academics to engage in informal university technology transfer. Industrial and Corporate Change 16(4):641-655); (3) structured interviews with academics, technology transfer officers, administrators, and managers (see D.S. Siegel, D. Waldman, D.L. Atwater, and A.N. Link. 2004. Toward a model of the effective transfer of scientific knowledge from academicians to practitioners: Qualitative evidence from the commercialization of university technologies. Journal of Engineering and Technology Management 21:115-142); and (4) industry-specific case studies (see National Academy of Engineering. 2003. The Impact of Academic Research on Industrial Performance. Washington, D.C.: National Academies Press). Cohen et al. and the National Academy of Engineering studied the effect of academic research on industrial R&D, although using distinctly different methods (survey responses and industry-specific case studies, respectively).



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