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Publicly-funded Research Lays Critical Foundation for Private Sector

NIH headquarters
NIH funding has a significant impact on the growth of private-sector innovation, according to a new report. | Lydia Polimeni, National Institutes of Health

Nearly 10% of the National Institutes of Health's research grants directly generate a patent and more than 30% generate research papers that are then cited by patents, a new study reveals. The results , published in the 31 March issue of Science, emphasize the critical service provided by research funded by the NIH, an institution facing a cut of nearly 20% under a discretionary budget proposed by the Trump administration.

Publicly-funded research provides society and the private sector with numerous benefits, but quantifying these benefits can often be difficult. Data from publicly-funded research may be shared freely online, making it challenging to keep track of who sees and uses the data. The lag time between discoveries and the realization of their applications, and the spillover effect of a discovery from one branch of science to others, can further hamper efforts to quantify benefits.

"Many improvements in health and welfare are actually developed and marketed by private sector firms, [for example] new drug treatments," said Danielle Li of Harvard Business School. "So in order to assess the value of public investments in biomedical research, we really need to understand the linkages between these investments and private sector output."

To explore this relationship, Li and colleagues analyzed 365,380 grants the NIH funded between 1980 and 2007, which represents almost every NIH grant from that span of time. They found that 8.4% of these grants are directly acknowledged by U.S. patents and that 31% produced research that is cited by patents.

"I personally found the magnitude of the indirect linkages surprising — that a full 30% of NIH funded grants is cited by a patent," said Li. "This is high and does not include the many other important ways that public funding could impact medical innovation — for instance by supporting the training of graduate students and postdocs who end up bringing their skills to industry."

Her team also analyzed the type of research that NIH funded, but found no substantial relationship between whether the grant focused on basic or applied science and its likelihood to be cited by a patent.

"Especially when we talk about investing in science and innovation, where the fruits of those investments may take years or even decades to materialize, we need to make sure that we have a data infrastructure in place to document and evaluate their outcomes," said Li.

"This information can be particularly important in times when the value of these investments is questioned. Data — in either direction — can be helpful in guiding those difficult discussions."