“The Beatles have no future in show business…guitar groups are on the way out.”
This is what Decca Records said on January 1, 1962. They decided not to finance the Beatles and instead financially support the group Brian Poole and the Tremeloes. The Beatles sounded less polished, somehow different and, moreover, they were not local, that is, not from London. History showed that this bet was a huge mistake.
Supporting and financing innovation is not an easy task. Let’s translate the Beatles’ example into public funding of academic projects. Should funds go to the most innovative and thus more difficult to forecast project, or to the easier to forecast but less radical project? Should the academic affiliation of the researchers (being “local” or not) have an impact? Radical innovations have been shown to be the main engines of technological progress, thus, all else equal, public funding should be directed to radical projects if the objective is to enhance innovation. Unfortunately, as Albert Banal-Estañol, Inés Macho-Stadler and David Pérez-Castrillo show in “Key Success Drivers in Public Research Grants: Funding the Seeds of Radical Innovation in Academia?” (BSE Working Paper No. 890), Decca Records’ behavior might be the norm when we analyze funding decisions for academic projects.
You say you want a revolution…Financing radical ideas
The authors analyze the award decisions of one of the most important public funding organizations for scientific research worldwide: the UK’s Engineering and Physical Sciences Research Council (EPSRC). The study the authors develop is two-fold:
- First, they empirically determine what makes a project grant application successful.
- Second, and more importantly, they try to determine whether very innovative or radical projects are discriminated.
It is immediately evident that two problems need to be addressed in order to conduct a successful empirical analysis of such a complicated subject. In the first place, it is fundamental to define and identify radical projects. In the second place, when studying the attitude of funding agencies toward very innovative projects, it is key to eliminate any confounding factor that might influence the behavior. For example, if radical projects are worst on average, then few of them might be financed not because of discrimination but because of objective quality standards. The authors deal with both these problems and hence are able to draw conclusions that highlight a half-empty glass.
Radical projects are defined as those projects that are proposed by teams of researchers that are able to bring together different sources of knowledge and research experiences. In fact, knowledge diversity seems to be a key ingredient for radical innovation. Thus, the authors propose three variables that try to capture the essence of radical projects:
- Eclectic researchers:
Interdisciplinary and mobile researchers are more likely to produce radical innovation. - (New) teams:
Teams, by definition, are more likely to span over different knowledge domains that lone researchers thus increasing the probability of very innovative research. Moreover, new teams, that is teams of researchers that did not have interacted in the past, should be also more prone to taking more innovative paths given the novel combinations of knowledge that can be experimented. - Heterogeneous teams:
Similarly to previous reasonings, heterogeneous teams should enjoy greater opportunities to leverage the knowledge of the different members and use a variety of sources of information.
The results the authors present show that the situation is less than ideal. While, on the one hand, the most able researchers are more likely to be funded, the data also show that more radical projects are less likely to be funded. This effect can be worse if the applying researchers are not local.
Obviously, this result might be due to the fact that more radical projects are less likely to succeed, thus leading to lower expected benefits for the granting institution. The authors show that this is not the case. In fact, the radicalism of a project tends to have a positive impact on its research output.
The bias the authors find might be due to different factors, from complexity of radical projects to their inherent riskiness. In any case, what this paper highlights is that this question must be addressed and understood. If we want to avoid missing the next academic Beatles, we cannot just “let it be.”
