“Scientific discoveries may begin with taxpayer support,” says health expert Sally Pipes. “But turning them into products that improve people’s lives requires secure property rights, private capital, entrepreneurship—and the freedom to take a risk.”
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The federal government once held roughly 28,000 patents on inventions arising from taxpayer-supported research. Almost none of them went anywhere. By 1980, the government had managed to license fewer than 5% of them.
Then Congress changed the rules.
The Bayh-Dole Act of 1980 allowed universities, nonprofits, and small businesses to retain patent rights to federally supported inventions and license those discoveries to private companies willing to develop them.
Nearly half a century later, the impact of that law can be measured in the trillions. A new report estimates that the commercialization of federally supported university and nonprofit research generated as much as $3.3 trillion in economic output and $1.7 trillion in GDP between 1996 and 2025.
Those figures arrive at an important moment. Washington is once again debating the federal government’s role in scientific research—how much taxpayers should spend, which projects should receive support, and what obligations should come with federal funding.
Those are worthwhile debates. But policymakers shouldn’t lose sight of the lesson Bayh-Dole taught nearly half a century ago. Federal support for scientific research delivers its greatest benefits when promising discoveries can move from the laboratory into the marketplace.
A federal research grant can finance a promising discovery. But that discovery may still be years—and millions or even billions of dollars—away from becoming something patients or consumers can actually use.
Universities have to decide which discoveries warrant patenting and find commercial partners willing to license them. Those companies then have to risk their own capital on the research, development, testing, regulatory approvals, manufacturing, and distribution required to bring an invention to market.
Most discoveries never make it that far. In 2024 alone, U.S. research institutions reported more than 26,000 invention disclosures but executed only about 9,500 licenses and options.
That’s what makes intellectual-property protections so important. Companies have to weigh the cost and risk of developing an early-stage invention against the possibility that it will ultimately prove commercially valuable. Patent rights give them a reason to make that bet.
The results extend well beyond that $3.3 trillion headline figure. From 2001 through 2025, Bayh-Dole-enabled technology transfer helped bring more than 17,000 new products to market and launch more than 19,000 startups. Between 1996 and 2025, it supported the equivalent of 7.6 million years of full-time employment.
Much of that activity involves small firms. Roughly 70% of academic licensing agreements go to small companies. Many are university spinouts that turn discoveries made on campus into businesses, jobs, and products.
That record should give policymakers pause before they weaken intellectual-property protections or seek to give the federal government greater control over inventions arising from the research it supports. Doing so could make university discoveries less attractive to the private investors and companies needed to turn them into commercial products.
After all, federal funding can help generate a discovery. It cannot guarantee that anyone will invest the time, money, and expertise required to develop it.
That’s precisely the problem Bayh-Dole was enacted to solve. Before the law, tens of thousands of federally supported inventions sat largely unused in government hands. Since Congress changed the rules, federally supported research has helped generate thousands of companies and products—and trillions of dollars in economic activity.
As Washington rethinks federal research policy, policymakers should remember why that transformation occurred. Scientific discoveries may begin with taxpayer support. But turning them into products that improve people’s lives requires secure property rights, private capital, entrepreneurship—and the freedom to take a risk.
Policies that make intellectual-property rights less secure, make university-industry partnerships more difficult, or otherwise discourage companies from investing in federally supported discoveries may be intended to save the government money or give Washington more control in the short run. But in practice, they risk leaving more promising inventions—and their potential economic impact—stranded in laboratories.
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