Government R&D, Private Profits and the American Taxpayer

The Academy of Radiology Research has resorted to a creative tactic in a bid to halt the decline in public funding for science: It showed Congress a picture of how much the nation earns from the government’s research dollar.

Every $100 million invested in research by the National Institutes of Health, according to the R&D consulting firm Battelle, generates almost six patents. At the National Science Foundation $100 million generates more than 10. At the National Institute of Biomedical Imaging and Bioengineering — which finances research in radiology — it produces almost 25 patents. And these patents sparked $578.2 million worth of additional R&D further downstream.

“N.I.H. research has helped lower the burden of disease, and people in both parties recognize its importance,” said Jonathan Lewin, chairman of the department of radiology at Johns Hopkins University and head of the academy of radiology. “We decided to look at the economic value of our research to make the argument about this value, too.”

Radiologists hope this sort of analysis could help prioritize public funding in a tight budget era: National Institutes of Health budgets are almost 20 percent smaller than they were 10 years ago.

But beyond the narrow objective of allocating a shrinking budget, the analysis offered by the radiologists raises another possibility to consider. Taxpayer-financed research can generate large rewards down the road. Perhaps the taxpayer could reap a share? In an era of tight budgets, this could finance the research to power American innovation.

The argument has been made most forcefully by Mariana Mazzucato, a professor of economics at the University of Sussex in Britain who specializes in science and technology policy.

She argues that the distribution of risks and rewards in the American economy looks nothing like the myth spun by free-marketeers, which posits a nation populated by entrepreneurial risk-takers overcoming the obstacles thrown up by an overbearing, bureaucratic state to produce the innovations that spark economic growth.

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