Source: American Action Forum | Philip Rossetti | February 14, 2018

The primary vehicles for energy innovation research in the United States are the Department of Energy’s (DOE) 17 National Laboratories. Some argue that government funding for innovation research is unnecessary, as the economic benefits, if they materialize, may not be realized for many years, and the funding itself could displace private funding sources. The Trump Administration has proposed cutting funding for federal innovation research labs. To evaluate this position, this paper compares the Labs’ performance with that of the private sector. It finds:

  • The National Labs receive approximately $12 billion per year in funding, approximately $5.4 billion of which is dedicated to non-weapons research. With those funds they produce 1,500 inventions per year, and around 700 patents per year.
  • For the National Labs, total R&D funding per patent produced by the Labs is around $7.6 million, nearly twice the R&D investment outside the labs of $4 million per patent. However, the Labs spend $16.4 million per revenue-generating license agreement, whereas outside the labs it is nearly four times higher at $63.9 million.
  • The National Labs are likely not underperforming compared to alternative innovation investments, but government assessments of the Labs indicate that they could provide even more value if the DOE’s bureaucratic oversight is reformed.

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