Reaching for the Society: The Commercialization Effects of NASA Technology Transfer

How does technology transfer of government inventions affect follow-on innovation? Being aware of the importance of technology development and commercialization, the United States enacted a group of policies in the 1980s that aimed at promoting the commercializing of government-funded research by licensing. It, however, remains questionable whether patenting and licensing are appropriate tools to spur welfare-improving follow-on innovation. We exploit technology-related information from the NASA Technology Transfer Program that fosters the licensing of NASA technologies by third parties and combine it with United States patent data. We find that exclusive licensing agreements are accompanied by increased levels of subsequent technological developments. These follow-on innovations stem from different entities and locations where distinct technologies are invented, which indicates considerable spillover effects. Consequently, our results imply that commercialization by licensing government inventions is an important policy tool to increase the benefits for society.