Gordon and Llura Gund Family Professor of Entrepreneurship; Professor of Strategy
A heat-loving microbe from Yellowstone may seem entirely unrelated to the pharmaceutical labs at Merck or Genentech. Yet a protein isolated from that bacteria helped scientists develop the tools to clone genes, spawning the modern biotech industry.
That’s just one example of a scientific discovery that was driven by curiosity, but led to immense industrial innovation.
A new study has found that this scenario is not unique. Instead, the vast majority of scientific research—often assumed to exist in an ivory tower—actually contributes to the development of patented inventions in the marketplace.
“There’s a lot of attention on how much we invest in science, and the extent to which those investments collectively pay off in practical applications that can drive socioeconomic prosperity or improve health,” says Benjamin Jones, a professor of strategy at the Kellogg School.
Both sides of the debate—those for and against funding basic science—tend to rely on anecdotal examples of successes or failure. But for this study, Jones and Mohammad Ahmadpoor, a postdoctoral researcher at Kellogg, undertook a more systematic examination by focusing on citations.
Researchers cite other academic articles to indicate what previous work the new paper relied on in order to advance a new theory or discovery. And all patents must cite “prior art” on which they are based, which can be either a previous patent or, in some cases, published scientific research. So Jones and Ahmadpoor created a network of citations in and between research papers and patents, which allowed them to trace the impact of basic research on patents.
“This big network of patents and papers suggests there’s a much more widespread interaction between inventions and science than I expected to find.”
Their research found that 80 percent of papers with at least one citation could be connected to a future patent.
“I would not have thought it was that high,” Jones says. “This big network of patents and papers suggests there’s a much more widespread interaction between inventions and science than I expected to find.”
Connecting the Dots Between Science and Patents
Understanding the practical value of scientific research—particularly when it is paid for by federal funding agencies—is important for determining how best to allocate money. But previous analyses typically attempt to trace such payoffs by tracking whether a research scientist directly engages in a marketplace innovation, by applying for a patent or creating a new company.
But scientists do not fly solo: often their ideas are built upon by others. So instead of tracing the marketplace activity of individual researchers, Jones and Ahmadpoor examined a network of citations between all patents filed at the US Patent and Trademark Office from 1976 to 2015 and all scientific papers from 1945 to 2013 indexed by the Web of Science, a searchable online database.
They studied nearly 5 million patents and 32 million journal articles to see whether there was any connection and, if so, how many degrees of separation there were between a paper and a patent.
A paper that was directly cited by a patent was assigned a distance of 1, whereas a paper that was cited by another paper that was then cited by a patent was assigned a distance of 2, and so on. Similarly, a patent that cited another patent that cited a paper received a distance score of 2. Patents that directly referenced papers created a “paper–patent” boundary that divided the two spheres.
“Scientific discoveries are paying off in a couple of decades, not 50 or 100 years in the future.”
Among research articles that receive at least one citation, a full 80 percent could be connected to a future patent. Similarly, 61 percent of patents linked back to a research article. (The remaining patents cited other patents that did not themselves link to research articles.)
“It is actually a huge number of papers that seem to play forward to some extent into practical applications,” Jones says.
Patents in fields such as nanotechnology, biomaterials, or computer science were most likely to cite research papers, while patents dealing with low-technology objects, such as locks or envelopes, were least likely to do so. Pure sciences—mathematics in particular—were the least likely to be directly cited by a patent, yet even mathematics showed substantial links to future patents in indirect ways. (The researchers did not include social sciences in their analysis.)
On average, approximately 6 years passed between patent applications and the published articles they directly cited. Indirect links between papers and future patents typically occurred within 20 years.
“That’s relatively quick,” Jones says. “Scientific discoveries are paying off in a couple of decades, not 50 or 100 years in the future.”
The researchers also found that papers and patents that directly cited one another were the most impactful within their own spheres.
Patents that referenced scientific research were more valuable than other patents. They were 52 percent more likely to become highly cited. And they were more likely to be renewed by the inventor, a measure associated with greater royalties and market value over time.
Similarly, journal articles that were directly referenced by a patent were four times more likely to become “home runs” that are among the most highly cited articles in a field.
“There’s a really dramatic effect of being at this intersection,” Jones says. “Our data suggest that the stuff that’s close to application also turns out to be most impactful within science itself.”
Certain scientific circles hold the view that science should be purely curiosity-driven rather than oriented toward utility. But this study contradicts the notion that the two are mutually exclusive, suggesting that high-impact work spans the intersection of scientific understanding as well as utility.
Jones cites the example of 19th century microbiologist Louis Pasteur, who studied food spoilage and fermentation to identify the process of pasteurization for industrial food safety. In doing so, Pasteur also identified microbes as a source of infections and came up with the germ theory of disease, which is one of history’s most important basic biological insights.
“What we are seeing in our work is that these ‘Pasteurs’ still exist: the people who write papers that are being drawn on by patents are also doing some of the high-impact work in basic science,” Jones says.
Benefits of Basic Science for Businesses
Businesses also receive a boost from remaining close to the paper–patent frontier. Science-intensive patents tend to have greater market value. But where does the science come from?
Although one might suspect it originates in corporate research labs, nearly 80 percent of the papers that are cited directly by patents are written by researchers at universities or nonprofit institutions. But the patents that cite those papers largely come from for-profit firms, as opposed to universities or nonprofits.
The results suggest that businesses that can stay aware of—and tap into—scientific advances quickly can reap rewards from scientific research, according to Jones. One of the reasons for firms to keep up with their research and development side, he says, is so they can spot new developments in the academic sphere and use them for marketplace innovations.
“There’s a handoff of information at the patent–paper boundary, but it really is a handoff from nonprofits, universities, and government labs to for-profit organizations,” Jones says. “That suggests it is valuable for companies to stay very close to these external research labs, because that is where key inputs to the most successful private-sector inventions come from.”