DC on T2

Capitol Corner — November 2018

Published monthly as part of the FLC’s DC Perspective content, Capitol Corner focuses on one notable news item pertaining to the T2 community. The focus stems from agency publications, news sites and DC-central organizations, with original sources, contacts, and links provided. For more information and Corner-related inquiries, please contact dcnews@federallabs.org.

In March, the Trump administration released its management agenda, which unveiled their first Cross-Agency Priority (CAP) Goals to, as we previously reported, enable a more “21st century government.” CAP Goal 14 was published to expedite technology transfer from both federal and private labs to market implementation—creating an ecosystem that benefits both the government and the general public alike. This is already being worked into policy negotiations as the White House ramps up its National Quantum Initiative and rolls out initiatives as part of this year’s National Defense Authorization Act (NDAA), as well as being implemented at civilian-facing agencies like the National Institutes of Health. In fact, the latest NDAA authorized a $75 million budget toward establishing collaboration programs between private industry, academia, and the Department of Defense (DoD).

TechLink has begun to review the current collaboration method between government labs and private firms—Cooperative Research and Development Agreements (CRADAs)—for the first time. The inaugural study, in the spirit of its other economic impact reviews, will analyze how CRADAs impact national defense operations and the economy at-large. This initial study is forecasted to go public in fall 2019, but details are currently under strict confidentiality standards. Company names will not be released as part of the findings.

TechLink, an independent research center located in Montana, has served as an intermediary for technology transfer between the DoD and industry leaders. The center has established licensing agreements between these two parties under the “Defense TechLink” banner since 2000. TechLink’s economic impact reviews have evaluated DoD technology transfer and Small Business Innovation Research (SBIR) programs for their transparency and efficiency during that timeframe, with the last review published in 2015. The follow-up review will be released in the first quarter of 2019 after economic impact analyses of each DoD branch, lab, and research center is complete.

To prepare for next year’s results, which will be published in an future T2 Touchpoint, let’s analyze what comprises such an impact study.

The 2015 study first analyzed the 602 active license agreements between the DoD and private firms from 2000-2014. To assess their economic impact, companies reported sales of products and services under their license agreements, as well as follow-on research and development contract values, and sales by other firms that license additional technologies to the federal government. The second phase of the review used IMPLAN software to model and assess economic impact by reported employment, labor income, and tax revenues in its resultant data sets. A total of 663 license agreements from the pool of companies had known results, with $20.4 billion in total sales achieved over the 14-year sample size. This sales record created an estimated 41,753 jobs directly related to technology transfer and over 140,000 indirect jobs.

The study also concluded that 22 companies were acquired, invested in by private equity firms or angel investors, or were instrumental in the creation of spinoff companies to implement and properly market these military technologies. Over 75 different technologies were successfully funded, with over $600 million in total investments and $438 million in total acquisition value of the surveyed companies.

With that said, Department-wide pivots toward accomplishing CAP Goal 14 seems to indicate larger economic impacts. Jeff Peterson, TechLink’s economic research analyst, confirmed that the new review, including data from 2000-2017, will survey close to 800 companies across the entire DoD’s portfolio of licensing agreements.

While we wait for the updated numbers, you can find more information on Defense TechLink and its economic impact reviews here.

DC on T2