4 ms·

The elephant in the room is that taxpayers are subsidizing private tech industry that gets to keep all the profits from commercializations of public research, s

by abalone 12y ago

The elephant in the room is that taxpayers are subsidizing private tech industry that gets to keep all the profits from commercializations of public research, save for the pittance they sometimes pay for tech transfer licenses. There is a bit a selective outrage going on here. How dare those universities try to profit from taxpayer research! The nerve! Meanwhile tech companies make billions of profits on these inventions without paying a dime back to the government, apart from the taxes that all companies pay. At least the pittance that some pay back to universities via tech transfer helps support further public research. The government grants don't always cover the full cost of labs and professorships.

vermontdevil 12y ago
One reason why grants don't always cover the full cost of labs/professorships is because Universities would grab a significant % of the grant into "general overhead" fund. Just another source of revenue for the University as a whole.
ganeumann 12y ago
As a taxpayer I'm certainly entitled to think that the work I am paying for, I own. Just as in almost any other business relationship. As far as I can see, if a professor runs a lab, he or she gets grants to fund it. If they can not get grants, they don't run a lab. The profits from university patents and tech transfer feed the general fund, they don't generally all go back to academic work. That general fund subsidizes many things, like the administrators' and football coach's salaries and the glitzy new student union. I don't really want to subsidize those things. If you really want the NSF-funded work to subsidize more research, then the NSF should own and license the patents. But personally, I'd rather the research be free and have it benefit society.
- throwawaykf05 12y ago
  How much of the total government budget did your taxes contribute to? And how much of that budget was assigned to fund research? How many people share your sentiment that your tax money should benefit corporations (domestic and foreign) that don't pay their fare share of taxes? And how many of these even would have agreed to fund this research due to their political biases (think anti-vaxxers and vaccine research)? Would all your collective tax contributions give you a say in this matter? I don't think this issue is nearly as easy as "publicly funded research should be free". Additionally, is it better (along any number of metrics) to make it free and let existing companies use it, or patent it and give a startup a better chance of commercializing it? (If there are any studies on this question I'd love to read them.) >But personally, I'd rather the research be free and have it benefit society. "Benefit society" sounds nice in theory, but it glosses over an important and long-standing economic problem, that of free-riders. Which is exactly what grandparent comment refers to.
  - ganeumann 12y ago
    Your entire first paragraph is straw men. It doesn't matter how much any individual pays, it doesn't matter what any individual's sentiment is. If Google pays a researcher to do some research, they own it, regardless of how much any individual shareholder paid of that amount or what any individual's sentiment about that research is. Those things are irrelevant. It's not as easy as "publicly funded research should be free", I agree. As I said, it's that funded research should benefit the funders. Startups don't benefit from patents. There is plenty of (probably publicly funded) research to show that. Here's a recent paper on patents and innovation: https://www.aeaweb.org/articles.php?doi=10.1257/jep.27.1.3 https://www.aeaweb.org/articles.php?doi=10.1257/jep.27.1.3, or read Joel Mokyr's "The Enlightened Economy" or "The Lever of Riches" and see how James Watt held up the widespread commercialization of the steam engine by refusing to allow his patents to be used downstream (or read the NBER financed study on the impact of patents on downstream innovation: http://www.nber.org/papers/w20269 http://www.nber.org/papers/w20269). This paper (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029098 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029098) is probably the most targeted towards whether patents help startups or not. The conclusion they came to was "the patent system was working 'neither well nor poorly for [startups]' and tended to favor larger companies." And last, if it benefits "society", that is, all people, how can there be free riders? If you mean it benefits non-taxpayers as well as taxpayers, well, that is one of the points of taxes (as opposed to fees.)
    - tzs 12y ago
      > It's not as easy as "publicly funded research should be free", I agree. As I said, it's that funded research should benefit the funders. It does benefit the funders in the case of government grants. The NSF gives a researcher a grant to scientifically study some specific thing. The researcher makes scientific discoveries about the thing. The researcher publishes the research, and also (possibly in collaboration with people who were not involved in the research) thinks about how the new science can be applied to produce real world products. The research gets patents on some of those real world applications of the research results. Note that the public that contributed to funding the research did benefit. The research was released, and they can use it as the basis of further research, or think up useful applications for it (and patent those if someone hasn't already). I think people tend to confuse the research (which is often paid for by government grants, at least in part), and development of practical commercial applications for the results of the research, which is generally not paid for by government grants. Note that if the researcher had not worked on coming up with practical applications and patented them, but instead just published the research and moved on to the next project, that doesn't mean there would not be patents. Anyone would be free to take the published research, figure out how to apply it to practical problems, and likely get a patent on that use of the research results. Their patents would not cover the underlying research--just the use of it as described in their patent.
- abalone 12y ago
  > I'd rather the research be free and have it benefit society. I do too, but the system of private corporations collecting all the profits of public investment is a twisted concept of "benefiting society". Benefiting society ought to mean that the profits of public investment get distributed among the taxpayers in an equitable manner, not just the 1%. Not just by commercializing & marketing products, but actually paying an appropriate share of profits back to the government as you would an early stage investor. Or, conversely, making the products available at a proportionately lower cost, thus benefiting society in a manner proportionate to the risk of the taxpayer investment.
refurb 12y ago
The elephant in the room is that taxpayers are subsidizing private tech industry that gets to keep all the profits from commercializations of public research, save for the pittance they sometimes pay for tech transfer licenses. I work in the biotech industry and from my perspective, I don't see a problem at all with private companies getting rich off of the development of public research. Keep in mind that the company is fronting the hundreds of millions of dollars it takes to commercialize a product. Shouldn't they profit off it? Also, the few example of drugs that have been discovered in an academic setting, the universities got wealthy off of the royalty rights. Hell, Northwestern sold a portion of those rights to Lyrica for $700M cash.[1] [1]http://www.northwestern.edu/newscenter/stories/2007/12/lyrica.html http://www.northwestern.edu/newscenter/stories/2007/12/lyric...
- abalone 12y ago
  > Shouldn't they profit off it? Not saying they shouldn't profit at all. The question is whether they should pay something back to the government for doing all the early stage investment. Consider: Seed Investor A puts 70% of the funding in at the earliest most risky stage. Venture Capitalist B puts in 30% of the funding to take it to market. Yet all of the profits go to VC B, save for a small percentage of sales/payroll. Would you call that a fair deal? Except it's not an analogy. Taxpayers are the seed investor. They are massively subsidizing the tech industry. Which is made even more ironic by how "Libertarian" and "anti big government" Silicon Valley likes to fashion itself. Silicon Valley! A kind of psychological overcompensation, if you ask me. Silicon Valley is a product of DARPA and government spending.[1] Not entirely of course... just the earliest, most risky, most sustained stage of investment over the decade plus it takes to produce fruit, which is then plucked and brought to market. The question is not whether private industry has a role to play or should profit, but rather should private industry keep all of the profits? I think this makes people very uncomfortable, to admit that the state plays a huge role in our allegedly "free market capitalist" economy. [1] The High Return on Investment for Publicly Funded Research https://www.americanprogress.org/issues/technology/report/2012/12/10/47481/the-high-return-on-investment-for-publicly-funded-research/ https://www.americanprogress.org/issues/technology/report/20...

by abalone 12y ago

vermontdevil 12y ago

One reason why grants don't always cover the full cost of labs/professorships is because Universities would grab a significant % of the grant into "general overhead" fund. Just another source of revenue for the University as a whole.

ganeumann 12y ago

As a taxpayer I'm certainly entitled to think that the work I am paying for, I own. Just as in almost any other business relationship. As far as I can see, if a professor runs a lab, he or she gets grants to fund it. If they can not get grants, they don't run a lab. The profits from university patents and tech transfer feed the general fund, they don't generally all go back to academic work. That general fund subsidizes many things, like the administrators' and football coach's salaries and the glitzy new student union. I don't really want to subsidize those things. If you really want the NSF-funded work to subsidize more research, then the NSF should own and license the patents. But personally, I'd rather the research be free and have it benefit society.

throwawaykf05 12y ago
How much of the total government budget did your taxes contribute to? And how much of that budget was assigned to fund research? How many people share your sentiment that your tax money should benefit corporations (domestic and foreign) that don't pay their fare share of taxes? And how many of these even would have agreed to fund this research due to their political biases (think anti-vaxxers and vaccine research)? Would all your collective tax contributions give you a say in this matter? I don't think this issue is nearly as easy as "publicly funded research should be free". Additionally, is it better (along any number of metrics) to make it free and let existing companies use it, or patent it and give a startup a better chance of commercializing it? (If there are any studies on this question I'd love to read them.) >But personally, I'd rather the research be free and have it benefit society. "Benefit society" sounds nice in theory, but it glosses over an important and long-standing economic problem, that of free-riders. Which is exactly what grandparent comment refers to.
- ganeumann 12y ago
  Your entire first paragraph is straw men. It doesn't matter how much any individual pays, it doesn't matter what any individual's sentiment is. If Google pays a researcher to do some research, they own it, regardless of how much any individual shareholder paid of that amount or what any individual's sentiment about that research is. Those things are irrelevant. It's not as easy as "publicly funded research should be free", I agree. As I said, it's that funded research should benefit the funders. Startups don't benefit from patents. There is plenty of (probably publicly funded) research to show that. Here's a recent paper on patents and innovation: https://www.aeaweb.org/articles.php?doi=10.1257/jep.27.1.3 https://www.aeaweb.org/articles.php?doi=10.1257/jep.27.1.3, or read Joel Mokyr's "The Enlightened Economy" or "The Lever of Riches" and see how James Watt held up the widespread commercialization of the steam engine by refusing to allow his patents to be used downstream (or read the NBER financed study on the impact of patents on downstream innovation: http://www.nber.org/papers/w20269 http://www.nber.org/papers/w20269). This paper (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029098 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029098) is probably the most targeted towards whether patents help startups or not. The conclusion they came to was "the patent system was working 'neither well nor poorly for [startups]' and tended to favor larger companies." And last, if it benefits "society", that is, all people, how can there be free riders? If you mean it benefits non-taxpayers as well as taxpayers, well, that is one of the points of taxes (as opposed to fees.)
  - tzs 12y ago
    > It's not as easy as "publicly funded research should be free", I agree. As I said, it's that funded research should benefit the funders. It does benefit the funders in the case of government grants. The NSF gives a researcher a grant to scientifically study some specific thing. The researcher makes scientific discoveries about the thing. The researcher publishes the research, and also (possibly in collaboration with people who were not involved in the research) thinks about how the new science can be applied to produce real world products. The research gets patents on some of those real world applications of the research results. Note that the public that contributed to funding the research did benefit. The research was released, and they can use it as the basis of further research, or think up useful applications for it (and patent those if someone hasn't already). I think people tend to confuse the research (which is often paid for by government grants, at least in part), and development of practical commercial applications for the results of the research, which is generally not paid for by government grants. Note that if the researcher had not worked on coming up with practical applications and patented them, but instead just published the research and moved on to the next project, that doesn't mean there would not be patents. Anyone would be free to take the published research, figure out how to apply it to practical problems, and likely get a patent on that use of the research results. Their patents would not cover the underlying research--just the use of it as described in their patent.
abalone 12y ago
> I'd rather the research be free and have it benefit society. I do too, but the system of private corporations collecting all the profits of public investment is a twisted concept of "benefiting society". Benefiting society ought to mean that the profits of public investment get distributed among the taxpayers in an equitable manner, not just the 1%. Not just by commercializing & marketing products, but actually paying an appropriate share of profits back to the government as you would an early stage investor. Or, conversely, making the products available at a proportionately lower cost, thus benefiting society in a manner proportionate to the risk of the taxpayer investment.

refurb 12y ago

The elephant in the room is that taxpayers are subsidizing private tech industry that gets to keep all the profits from commercializations of public research, save for the pittance they sometimes pay for tech transfer licenses. I work in the biotech industry and from my perspective, I don't see a problem at all with private companies getting rich off of the development of public research. Keep in mind that the company is fronting the hundreds of millions of dollars it takes to commercialize a product. Shouldn't they profit off it? Also, the few example of drugs that have been discovered in an academic setting, the universities got wealthy off of the royalty rights. Hell, Northwestern sold a portion of those rights to Lyrica for $700M cash.[1] [1]http://www.northwestern.edu/newscenter/stories/2007/12/lyrica.html http://www.northwestern.edu/newscenter/stories/2007/12/lyric...

abalone 12y ago
> Shouldn't they profit off it? Not saying they shouldn't profit at all. The question is whether they should pay something back to the government for doing all the early stage investment. Consider: Seed Investor A puts 70% of the funding in at the earliest most risky stage. Venture Capitalist B puts in 30% of the funding to take it to market. Yet all of the profits go to VC B, save for a small percentage of sales/payroll. Would you call that a fair deal? Except it's not an analogy. Taxpayers are the seed investor. They are massively subsidizing the tech industry. Which is made even more ironic by how "Libertarian" and "anti big government" Silicon Valley likes to fashion itself. Silicon Valley! A kind of psychological overcompensation, if you ask me. Silicon Valley is a product of DARPA and government spending.[1] Not entirely of course... just the earliest, most risky, most sustained stage of investment over the decade plus it takes to produce fruit, which is then plucked and brought to market. The question is not whether private industry has a role to play or should profit, but rather should private industry keep all of the profits? I think this makes people very uncomfortable, to admit that the state plays a huge role in our allegedly "free market capitalist" economy. [1] The High Return on Investment for Publicly Funded Research https://www.americanprogress.org/issues/technology/report/2012/12/10/47481/the-high-return-on-investment-for-publicly-funded-research/ https://www.americanprogress.org/issues/technology/report/20...