Ready for Transfer

Navy Study Highlights Economic Impacts of Tech Transfer

RFT image

Greetings from D.C. Federal laboratory technology transfer works. It creates high-wage jobs; enhances local, regional and federal tax receipts; supports small businesses; and stimulates economic development. These are the general findings of a recent Navy-sponsored study on the economic impacts of a sampling of technology transfer agreements implemented between Navy labs and various partners between 2005 and 2009.

The Economic Contribution of the Department of the Navy Technology Transfer Program, conducted by the Indiana Business Research Center (Indiana University, Kelley School of Business), highlights the economic impact of 103 of the 620 technology transfer agreements with naval laboratories during that period. While this is only a small sample of the hundreds of Navy agreements—and the thousands of active federal technology transfer agreements across all agencies—at any one time (see the caveat below for extrapolating these results beyond the studied group), the results are impressive nonetheless.

Some of the more salient findings from the study include:

  • These 103 agreements were responsible for 670 civilian jobs directly and approximately 2,600 indirectly.
  • Compensation for these jobs averaged over $79,000 per year.
  • Tax receipts (federal, state, and local) on the economic activity driven by these agreements totaled $60 million.
  • Two-thirds of the partners in these agreements had fewer than 100 employees.
  • The estimated direct economic output associated with these agreements totaled $200 million (with an additional $345 million in indirect activity, for a total of over half a billion dollars in economic impact).
  • Sixty-four percent of the agreements were Cooperative Research and Development Agreements (CRADAs), and 30 percent were patent licensing agreements (PLAs); on average, CRADAs supported 8 jobs each, while PLAs supported 10.

Tim Slaper, Director of Economic Analysis, IBRC, hit it on the head when he stated that "[T]his report not only shows the value of technology transfer for our military personnel in the field, such as better equipment and support, but also in the civilian environment as well…" In other words, technology transfer supports agency mission and national economic development and competitiveness—exactly as envisioned in the founding legislation.

Of course, this is only a small sample of agreements (of limited types, for one time period, from one group within a single agency), and for that and other statistical reasons we cannot extrapolate these results across all agencies. As clearly noted in the report, "[T]he estimated economic impact presented in the report applies only to the agreement partners that participated in the study." But it’s still a nice addition to our pool of data for addressing the perennial question about the economic impacts of federal lab tech transfer, a question of increasing relevance in the current economic climate.

The IBRC press release, with links to the executive summary and full report, can be found here (http://newsinfo.iu.edu/news/page/normal/16452.html). See the full report here (http://www.ibrc.indiana.edu/studies/t2.pdf) and the executive summary here (http://www.ibrc.indiana.edu/studies/t2executivesummary.pdf).

Gary can be reached at gkjones@federallabs.org.