Trajectories of Innovation: Evaluation and Direction in R&D Project Selection
Sunday, Jan. 7, 2018 10:15 AM - 12:15 PM
- Chair: Joshua Krieger, Harvard Business School
Hubs as lampposts: Academic location and firms’ attention to science
AbstractThe steady decline of firms’ private investment in scientific research in the past-quarter century brings to the fore the question of how they attend to external knowledge—especially in light of the myriad academic discoveries that might be relevant to a firm with bounded resources and attention. Prior literature has focused on internal factors that focus organizational attention, but we propose that external elements matter as well. Specifically, we show that firms are drawn to academic discoveries that originate in “hubs” or geographic concentrations of commercial R&D in a particular field. Testing the impact of hubs on firms’ attention is difficult because different papers may be more or less valuable for industry. We address this identification challenge by analyzing simultaneous discoveries where multiple researchers report the same finding in “twin” papers. Hubs may attract attention to local academic science by enabling informal interactions among academic scientists and industry inventors; indeed, we find that the hub effect is strongest in cities where many scientific conferences are hosted. The “lamppost effect” we find is moderated by institutional prestige and by formal connections between academia and industry.
Rethinking Peer Review: Evidence From the Gates Foundation Grant Process
AbstractThe process of peer review relies on experts to identify promising research proposals, but can also undervalue radical innovations and undermine researcher diversity. We study an unconventional peer review strategy implemented by the Bill & Melinda Gates foundation: anonymous proposals, diverse reviewers, and champion-based funding decisions. Analyzing 7,881 applications and 27,856 application-reviewer pairs, we find that even blind peer review favors applicants that are male, U.S. residents, and have academic affiliations. Reviewers also prefer proposals from their field of expertise; while these scientific preferences diminish with experience, the demographic preferences above do not. Examining outcomes through subsequent publications, we find that the marginal impact of funding is statistically indistinguishable across genders and affiliations. Our results reveal significant demographic challenges and suggest potential improvements for peer review.
Evaluation of Early-stage Ventures: Bias across Different Evaluation Regimes
AbstractThis paper explores the selection mechanisms inside a startup accelerator program, measuring how variation in institutional arrangements impacts how judges evaluate businesses opportunities. Specifically, we focus on the role of gender and status cues in the evaluation of high uncertainty projects by explicitly comparing the evaluation of a fixed set of projects across two "evaluation regimes," using detailed data from a high-quality entrepreneurship program. In the "individual paper regime," early-stage startups are evaluated on an individual basis by judges using a written application to a startup program. In the "committee interview regime", evaluators are grouped together in a committee where they are able to observe a short pitch by the co-founders of the venture, can ask questions and can confer with one another. We find strong differences across our two evaluation regimes. Judges in the committee regime are more likely to use the characteristics of the project team (as well as those of the project) in making their score determination, relative to the paper-based regime. We also find evidence that the decision-making process of judges is different in the committee regime: judges seem to achieve greater converge in their score determination in committees, yet disagree substantially in the paper-based regime. Finally, we find that the saliency of co-founder characteristics is higher in the in-person committee regime, and unlike prior studies, we find that that female-founded firms are judged to be higher quality by both male and female evaluators, but only under the committee regime. Our results point to the central role of the type of evaluation regime on the types of ideas selected and the use of different types of information by evaluators.
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
- L2 - Firm Objectives, Organization, and Behavior