New Study Finds That Funding Science Pays Off for Businesses

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The National Institutes of Health (NIH) is the biggest financial backer of life-science research in the world. The institutes fund a full third of biomedical research and development projects in the U.S., plus a majority of what’s called “basic” or “pure” science—that is, research without an immediate application.

But its funding going forward is unclear. The White House’s recently proposed budget calls for deep cuts to our national science budget, especially for basic science, and in February, the House passed a bill imposing political guidelines on government-funded research. So some experts have started describing the benefits of science in the language of business: patents, progress, and profits.

A new analysis of hundreds of thousands of NIH research grants attempts to document its funding impact. It found that around 10 percent of grants directly resulted in a patent and another 30 percent were cited in patents down the line. The report was published today in the journal Science.

The researchers reviewed 365,380 research projects funded between 1980 and 2007, tracking the research from the grant award to publication of the results and beyond. They focused on patents related to drugs, medical devices, and other medical technologies. Of the 40 percent of research grants that played a role in an eventual patent, there was no significant difference between basic and applied research grants. Both categories were equally likely to result in a patent.

Pierre Azoulay of the MIT Sloan School of Management is a co-author on the paper. “The impact on the private sector is a lot more important in magnitude than what we might have thought before,” he said in a press statement. “If you thought the NIH exists in an ivory tower, you’re wrong.”