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Major Study Reveals DOD Licenses Provide Significant Economic Impact Outcomes

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A major study of the economic impacts from Department of Defense (DOD) license agreements with U.S. industry was recently completed. The study’s purpose was to determine the extent to which DOD license agreements active during the 2000-2014 period contributed to new economic activity and job creation in the United States.

The study surveyed 602 companies and asked about the commercial outcomes from their 733 license agreements with 65 different DOD labs. Companies were asked to divulge the total sales of new products and services directly related to these license agreements, as well as other economic outcomes. The research team obtained sales and other economic information for 90 percent of the licenses. Nearly half of the companies surveyed reported sales. Collectively, they reported approximately $20.4 billion in total sales.

IMPLAN economic-impact assessment software was used to estimate the economic impacts related to these sales. Total economy-wide sales, as measured by output, were estimated to be $48.8 billion. Value added was estimated at $23.9 billion, representing new wealth creation. Estimated employment impacts included 182,985 jobs with an average wage of $71,337.

The study was commissioned by the Air Force and the Office of the Secretary of Defense, and undertaken by TechLink, a DOD partnership intermediary at Montana State University‑Bozeman, in collaboration with the Business Research Division at the University of Colorado-Boulder.

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