This federal proposal would put the brakes on Kentucky innovation, economies | Opinion

Innovation and entrepreneurship are essential to Kentucky’s economy. And thanks to the launch of innovation hubs across the state, university research and businesses are soaring. But a proposal from Secretary of Commerce Howard Lutnick threatens to derail that progress.

Lutnick claims that taxpayers in Kentucky and beyond receive “zero” return on the federal money invested in university discoveries that become commercial products. His solution? Seize half the royalty profit from any product resulting from government-backed research.

It’s a bold proposal that sounds reasonable at face value. However, taxpayers and Washington already receive benefits from government-backed research in the form of new job and business creation.

What the proposal fails to understand is that the current process by which academic research is translated into real-world products didn’t take shape by accident. It was carefully designed by lawmakers under the Bayh-Dole Act of 1980 to promote innovation, drive economic prosperity, and reward inventors. And by any measure, it has worked far better than expected, particularly here in Kentucky.

Before the Bayh-Dole Act took effect, inventions that benefitted from tax dollars belonged to the federal government. As a result, few were ever translated into practical technologies, cures, and other life-enhancing products.

Bayh-Dole changed that — allowing universities, federal labs, and small businesses to own the patents from their inventions. Crucially, it also allowed them to license these patents to private partners who could turn these inventions into products.

That single reform created a process for turning basic research into a dependable pipeline of products, jobs, and start-ups. It also led to federal funding initiatives like the Small Business Innovation Research and Small Business Technology Transfer programs, which depend on the Bayh-Dole ecosystem. One study found that every one dollar of Department of Defense SBIR investment resulted in $22 of economic impact.

My own company is a prime example.

Through Bayh-Dole, I licensed my technology— which I developed under an SBIR program — from UNC Charlotte and helped launch AquiSense to develop and commercialize our mercury-free UV-C LED water disinfection systems. We built our research and design facility in Charlotte, N.C., and our operations and manufacturing facilities are headquartered in Erlanger, Ky. We have invested over 50 times more than the federal government’s funding to commercialize our products.

Ten years in, we employ dozens of U.S. workers and ship our Kentucky-made equipment worldwide. Today, AquiSense is acknowledged as the global leader in LED-based water treatment systems.

My story isn’t unique. Kentucky’s research ecosystem — anchored by world-class institutions and innovation hubs in Lexington and Louisville — continues to launch university-born startups and attract substantial private investment.

The University of Kentucky alone holds over 1,000 global patent assets and has dozens of affiliated startup companies. In 2025, the university’s overall R&D expenditures generated more than $1 billion in statewide economic impact and supported over 5,000 Kentucky jobs.

But the benefits from Bayh-Dole aren’t merely economic. The law has also led to countless new products and technologies that have changed our way of life for the better. These include everything from blood tests to detect brain injuries to semiconductor manufacturing technology.

This is what real return on taxpayer investment looks like. Seizing half of any royalty profits from these ventures would simply destroy the system of incentives that has made successful products like these — and the jobs and prosperity they promise to create — possible.

Kentucky’s taxpayers already have a winning playbook: fund pathbreaking research, let universities partner with ambitious entrepreneurs, and watch as innovative ideas lead to jobs, growth, and healthier communities.

Following Lutnick’s plan would mean abandoning this successful strategy and penalizing risk-takers and entrepreneurs like myself, who continue to generate dynamism and opportunity throughout our state and the nation at large.

Jennifer Pagán is the Co-Founder and Chief Technology Officer at AquiSense, Inc.