Technology transfer is the process of translating laboratory research into tangible products or services that benefit the economy and society. The U.S. government funds more than 300 research laboratories, known as “federal labs,” located all across the country. They have played a significant role in the development of key civilian technologies, including nuclear energy, electronics, lasers, computers and the internet, pharmaceuticals, smartphones, artificial intelligence, and jet aircraft.
These federal labs receive slightly more government funding for research than universities. For example, the National Institutes of Health intramural research program, which employs more than 7,000 scientists, is the world’s largest biomedical research institution. Federal labs in California have higher research expenditures and employ more scientists and engineers than all 10 University of California campuses.
Unfortunately, federal labs transfer far fewer technologies than universities, with universities consistently reporting more than five times as many invention disclosures and four times as many patents as federal labs.
GOCO labs have more flexibility than GOGO labs. For example, GOCO labs can assume equity in a startup. GOCO lab researchers are not federal employees and have more freedom to assert copyrights, consult with industry, and participate in startups based on lab-developed technologies. They can also generate more royalty payment income than GOGO scientists.
As the new administration seeks to enhance government efficiency and reorganize public institutions, it is time to lift these restrictions and unleash the technology transfer potential of federal labs.
We have four recommendations for advancing the commercialization of federally funded research at government labs.
First, eliminate restrictions on the ability of federal lab scientists to work with firms and entrepreneurs. Scientists at GOGO labs should have the same flexibility to partner with firms and entrepreneurs as their GOCO counterparts. Federal lab scientists should also be able to form a startup company, something university scientists have been doing for years. One of the most successful university scientists is Robert Langer Jr. of the Massachusetts Institute of Technology, who has more than 1,000 patents and has helped found more than 20 companies, including Moderna.
Second, the new administration should make technology transfer a major strategic priority at federal agencies. Federal labs are primarily managed by federal agencies, such as the Department of Energy, Department of Defense, and Department of Health and Human Services. These agency leaders must signal that technology transfer is important and reallocate resources accordingly. Organizations such as FedTech are an excellent mechanism for enhancing engagement with startups.
The third recommendation is to enhance incentives, rewards, and a supportive culture for engagement in technology transfer. Our research on individual and organizational factors in technology transfer has shown the importance of incentives and rewards (both pecuniary and nonpecuniary), championing, and other managerial practices in stimulating commercialization of federally funded research.
For example, Carnegie Mellon University’s decision to allocate a generous 50 percent of the net proceeds from licensed technologies to inventors led to a substantial increase in new companies. Many research universities now reward patent and startup creation in promotion and tenure decisions.
Finally, the Trump administration should expand entrepreneurial training and entrepreneurial leave programs, such as the National Science Foundation’s Innovation Corps and Sandia’s entrepreneurial leave programs. Some federal labs allow scientists to take a leave of absence to start a company based on their research, while retaining the option to return to their position at the lab after a specified period.
These four recommendations will help enhance the effectiveness of that investment, by ensuring that more scientific discoveries move from the laboratory to the marketplace.
