To Boost Growth, Rethink Science Funding

"In August President Biden signed into law a massive boost to scientific research: roughly $200 billion, when fully funded, over the next several years.

The bipartisan law's premise is straightforward. In the long run economic growth depends on innovation, which in turn flows from how much we spend on research and development.

The problem with that premise is the U.S. already spends plenty on R&D, about 3% of gross domestic product in recent years. That exceeds the peaks of the early 1960s during the space race. But the fruits of that effort have been elusive. Total factor productivity, the best metric for innovation's contribution to growth, grew just 0.5% a year over the past decade, half its rate of the 1960s. Other evidence suggests breakthroughs, such as new drug discoveries, are becoming more expensive and time-consuming, and researchers spend ever more years acquiring training and experience before achieving novel discoveries.

In other words, the U.S. is getting progressively less bang for its scientific buck.

Patrick Collison, the Irish-born co-founder of payments technology company Stripe Inc., has spent a lot of the past five years pondering the problem of declining scientific productivity. One popular theory he rejects: the most important discoveries have been made and new insights are more incremental and difficult. That might be true of individual fields, such as physics, but can't be true generally, he argues.

"Every discovery opens up new frontiers and new questions and new possible avenues of investigation," he said in an interview. "The surface area of our knowledge is continually expanding. Just like we are not exhausting the creative possibilities of the English language, because words can be combined in an infinite number of ways, it does not seem to me we are running out of possibilities of discovery in computer science."

Research inputs -- dollars and hours spent -- are a lousy measure of innovation, he added. It doesn't require more resources to make a hit movie or bestselling novel than a dud. The most innovative companies aren't necessarily the biggest spenders. Tesla Inc.'s R&D spending in the past three years is 13% of that of General Motors Co. and Ford Motor Co. combined. Yet Tesla's market value is more than five times its two rivals'.

Clearly, scientific productivity has something to do with how research is done, not how much. One culprit, in the view of Mr. Collison and many others, is that the institutions that fund science have become process-oriented, narrow-minded and risk-averse. Wary of failure, they favor established researchers pursuing narrowly focused, incremental ideas over younger scientists with more heterodox agendas.

True, drug companies backed by federal funds brought breakthrough Covid-19 vaccines to market in record time. Yet Mr. Collison criticizes the federal government for failing to bring a much deeper and eager pool of talent to bear on a multitude of pandemic challenges. Top virologists "were stuck on hold, waiting for decisions about whether they could repurpose their existing funding for this exponentially growing catastrophe," he wrote in an essay last year with George Mason University economist Tyler Cowen, and University of California, Berkeley bioengineering professor Patrick Hsu.

Sensing a need, the three in April, 2020 launched Fast Grants, $10,000 to $500,000 awards funded primarily by private donors and approved in 14 days or less. They got more than 6,000 applications and doled out over 260 grants. Among the projects they backed: a saliva-based Covid test that worked as well as nose swabs by a team at Yale University that, they said, couldn't get timely funding from their own school. Other grantees tested existing drugs against Covid, tracked the spread of variants and investigated long Covid -- the persistence of symptoms long after infection.

When Messrs. Collison, Cowen and Tsu surveyed their recipients about their experiences with traditional funding, 57% told them they spent more than a quarter of their time on grant applications and 78% said they would change their research program a lot if they weren't constrained in how they spent their current funding.

This reinforces a key insight from metascience, also known as the science of science, namely the value of curiosity-driven research. Heidi Williams, an economist at Stanford University and director of science policy at the Institute for Progress, said grants typically commit a scholar to complete a specific project, even if during the research the project proves less promising than expected. Better, she said, to abandon that project and let the researcher redeploy their capital and labor to a problem closer to the frontier of science. This would likely result in more failed projects but, hopefully, more breakthroughs. "Science is about taking risk, and that means many projects aren't going to work. We should build a system for funding science that explicitly acknowledges and supports that."

In a 2009 paper, Massachusetts Institute of Technology economist Pierre Azoulay and his co-authors demonstrated the benefits of funding people over projects. Researchers backed by the Howard Hughes Medical Institute, which takes such an approach, produce far more widely cited papers -- a metric of significance -- than similar researchers funded by the National Institutes of Health. Drawing on those lessons, last year, Mr. Collison co-founded the Arc Institute to pre-fund scientists studying complex human diseases for renewable eight-year terms.

These insights are showing up in federal policy. Legislators intend some of that $200 billion in the Chips and Science Act -- subject to congressional appropriation -- to go to curiosity-driven research. The National Science Foundation, one of the largest conduits for federal research money, is trying to award funding faster and more efficiently. It used a 2009 program to disburse 880 rapid-response grants, which can be approved in just a few weeks by a single program officer, during the early days of the pandemic. This year it launched a new program to catalyze regional-level research that asks researchers to submit a three- to five-page outline rather than a full-blown proposal to make the funding process more efficient.

NSF grants are usually approved by a panel of expert reviewers. NSF Director Sethuraman Panchanathan is exploring whether more transformative ideas could be surfaced by offering each reviewer a "golden ticket" with which they could advance a proposal of their choosing regardless of what the other reviewers say. That way, promising ideas won't be killed by "lowest common denominator" thinking, he said.

At some point, metascientists will turn the microscope on themselves to learn if giving priority to curiosity over specificity and speed over deliberation really enhance discovery and innovation. Until then, the stakes, i.e. future growth, suggest it is a risk worth taking.” [1]

1.  U.S. News -- Capital Account: To Boost Growth, Rethink Science Funding
Ip, Greg. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 18 Nov 2022: A.2.