US Bayh-Dole policy gets modelled globally

[Thorsten, Albert, “The Globalization of the Bayh-Dole Act,” Annals of Science and Technology Policy 5.1, GDI-JCR]

As the title of this monograph suggests, the Bayh–Dole Act has been embraced (i.e., imitated) globally. This apparent influence of the Act raises questions about how one should view the Act. Specifically: Was the Bayh–Dole Act simply a timely piece of legislation that serendipitously captured global attention at a time when productivity growth was slowing down in many industrialized nations? Or: Was the Act something else? Did the Bayh–Dole Act represent a new way of viewing technology policy—that is, a new lens through which to view technology policy— within the United States and in other countries?9 Leyden and Link (2015) and Hayter et al. (2019) have offered such a new lens through which to view not only the Bayh–Dole Act of 1980 but also the other technology policies that were promulgated in the United States in the early 1980s. Perhaps this public sector entrepreneurship lens has a broader appeal to understanding the adoption of technology policy initiatives than simply saying that a country imitated a particular U.S. technology policy initiative.10 Many scholars have offered definitions about who an entrepreneur is and what he/she does. Accordingly, a so-called entrepreneurial lens merits a definition, from a public sector perspective, of what makes such a lens or perspective entrepreneurial.11 Leyden and Link (2015, p. 46) define the concept of public sector entrepreneurship in the following way:12 Public sector entrepreneurship . . .refers to innovative public policy initiatives that generate greater economic prosperity by transforming a status quo economic environment into one that is more conducive to economic units engaging in creative activities in the face of uncertainty. Leyden and Link (2015) go on to make a case that the passage of the Bayh–Dole Act is an example of public sector entrepreneurship.13 The Act redirects property rights that brings about the transfer of existing knowledge from a university to the private sector for commercial exploitation. Hayter et al. (2019) elaborate on the fact that the Bayh–Dole Act is an example of public sector entrepreneurship by characterizing the Act through various entrepreneurial dimensions as we have summarized in Table 1.1. One aspect of the Leyden and Link (2015) definition of the concept of public sector entrepreneurship as a lens through which to view public policies to be emphasized in the case of the Bayh–Dole Act is their phrase “engaging in creative activities in the face of uncertainty.” As shown in Table 1.2, data from the European Commission show that, even at the time of the publication of these data in 2017, many universities infrequently collaborate with industry in the commercialization of their R&D results, where collaboration refers to licensing activity or patenting activity. As will be discussed below, Spain was the first country to adopt a Bayh–Dole like university technology policy, and that occurred in 1983. As of the European Commission’s (2017) publication, 83.1 percent of the Spanish academic and higher education institution (HEI) representatives surveyed by the Commission responded that they have no [our emphasis] such collaboration with industry. Austria, at the other end of the distribution with the highest collaboration rate among the countries surveyed, is characterized by 48.4 percent of the respondents having no licensing or patenting activity collaboration with industry. Austria adopted a Bayh–Dole like university technology policy in 2007, as we will also discuss below. There is, of course, a market for licensable or patentable technology from a university.14 Table 1.2 describes participation in this market from the perspective of the university. Table 1.3 presents, to the best of our knowledge, a complete list of countries that have adopted Bayh–Dole like university technology transfer legislation. The data in the table approximate, or so we contend, participation in this market from the perspective of the firm. In the table are the percentage of firms that cooperate in innovation (a concept that UNESCO, 2015 did not clearly define) with universities and HEI as well as with government or public research institutes. Across the countries listed, the mean percentage of firms that cooperate with universities and HEIs is 15.3, the mean percentage of firms that cooperate with government or public research institutes is 13.9. As a final across-country example of the “uncertainty” (a public sector entrepreneurship characteristic; see Table 1.1) about the effectiveness of Bayh–Dole like legislation, consider the data in Table 1.4. Across countries, universities, HEIs, or government or public research institutes are not noted to be “highly important” sources of information for firms. The legislators in the countries listed in Tables 1.3 and 1.4 must have perceived or recognized an opportunity for “transforming a status quo economic environment” (see Table 1.1) as evidenced by the passage of Bayh–Dole like legislation in the face of uncertainty. Perhaps the most frequently asked question about the Bayh–Dole Act has been: How did the Bayh–Dole Act affect university patenting? Many scholars have carefully investigated this question—and it is indeed an important question in the relevant academic research literature from a policy evaluation perspective—as evidenced through the application of various econometric models by various researchers from different disciplines. Specifically, scholars have estimated time series of patent application data either at a specific university, or among selected universities, or in the aggregate using a dichotomous variable to define the year when the Bayh–Dole Act became active (either in 1980 or in 1981 to account for a lag). Drawing on individual publications as well as on the excellent syntheses of this literature by, among others, Berman (2008, 2012) and Grimaldi et al. (2011), the empirical evidence about the patenting effect of the Bayh–Dole Act remains mixed. Few scholars doubt that after the passage of the Bayh–Dole Act, university patenting increased, and it increased substantially at some universities, but many scholars also note that there were other events occurring just before and just after the passage of the Act that are also covariates with an increase in university patenting. We have summarized a portion of this important body of literature in Appendix A to provide background context for the remaining sections in this monograph.15 The most recent, and perhaps a more salient, argument about the economic impact of the Bayh–Dole Act has been offered by Link and van Hasselt (2019).16 They argue, and they show empirically, that the Bayh– Dole Act had a measurable impact on universities forming and opening technology transfer offices (TTOs), which are a prerequisite infrastructure for university in-house patent applications. More specifically, Link and van Hasselt (2019, p. 478) conclude: Whereas the literature has focused on university patenting activity as the relevant metric for assessing the technology impact of the Act, we suggest that the establishment date of TTOs relative to the passage of the Act is also an appropriate metric, and in fact it might be a more appropriate one. Our argument is that formal university patenting generally begins after the establishment of a TTO. . . . [Our empirical findings give] support for the argument that the Act provided an incentive for universities to establish a TTO and thus to position themselves for formally transferring faculty inventions through patent licensing. Perhaps the effect of the Bayh–Dole Act on the institutionalization of university research is what was meant in The Economist article by the statement:17 “More than anything, this single policy measure [known as the Bayh–Dole Act] helped to reverse American’s precipitous slide into industrial irrelevance.” We suggest that one would be hard pressed to argue against the point of view that the establishment of TTO infrastructure at U.S. universities did transform a status quo academic as well as economic environment into one that is more conducive for dealing with the uncertainty of research and that transformation can eventually lead to economic growth and social wellbeing. Our thesis in this monograph is that, in addition to the formation of university technology transfer offices and the university patent applications that followed, an overlooked metric associated with the Bayh–Dole Act is its effect on influencing university-based technology transfer policies in other countries; we refer to this phenomenon by the phrase The Globalization of the Bayh–Dole Act (which is also the title of this monograph).18 To substantiate this thesis, we review related university technology transfer policies in 20 other countries in Section 2 of this monograph. Of course, the scope of these related policies varies from country to country, but one cannot help but notice that there are seeds from the Bayh–Dole Act present in all of them. We discuss these country policies below in chronological order based on the year of the initiating legislation. We conclude this monograph in Section 3 with summary remarks and suggestions for future policy related research. Our attempted tone throughout this monograph is descriptive, that is we have attempted to report in a non-assessing or non-evaluative manner the pattern of globalization of the Bayh–Dole Act.19 However, we do note in Section 3 some correlative patterns. We do so to help to motivate our proffered research agenda.