Science as a source of social alpha

How to improve society is one of the most commonly discussed questions, but it is not always approached with sufficient seriousness. We don’t think analytically enough about which variables can have maximum impact and also which are most feasible to steer.

For instance, the management of science is a radically underappreciated issue. How many managers of scientific labs receive any management training at all, even in the basics? On a scale of 1 to 10, how well are most labs or non-profit scientific ventures run? I’ve asked a number of people in the hard and biological sciences this question, and more often a laugh is the response, rather than a citation of a very specific number. I’ve never heard anyone say they are run just great.

On the other side of the market, the rest of us are failing too. In our social discourse, we have not elevated better scientific management as a social priority. This could be done in our universities, non-profits, research labs, government agencies, and of course in the private sector too. It’s not a sexy policy issue, but science is one of the most significant means for improving society. In the language of finance, you could say that science is a major source of social alpha.

Science offers the added benefit of being relatively easy to influence or control. Trying to improve the management and policy of U.S. science isn’t an easy task, but it is a relatively small part of our economy and the notion of science is relatively well-defined. Furthermore, our government has many direct policy levers such as the National Science Foundation, the National Institutes of Health, the Department of Energy, and the Department of Defense, not to mention numerous state universities. If we can’t improve the performance of our science, you have to wonder what can we do.

In contrast, some other sources of society-wide superior performance are broad and far-ranging in nature, but often too difficult to steer. I have in mind such variables as “trust,” or “having a cooperative culture.” Those are strong positives for societies, but also a little intimidating for a policy program and they can be very difficult to pin down.

Is science really a source of social alpha? Well, science gave the world mRNA vaccines, though not to all societies at the same time. The U.S. and UK cashed in early there, in large part due to their domestic scientific achievements. Science helps keep the U.S. defense establishment strong. Superior science also was essential to the building of the United States as a wealthy, developed nation. If you are hoping that we cure cancer, or limit the problems of climate change, those issues too rely on science. Most generally, science feeds into productivity growth which in turns boosts real wages and the general opportunities available in society.

Science policy could take up a much larger “mind space” in current policy debates. American science was mobilized in part due to the panic over the 1957 Sputnik scare, when the Soviet Union seemed to be ahead of the United States in a number of scientific dimensions. We don’t have a comparably focused scare today, but today’s problems are in fact no less urgent.

The institutions of the National Institutes of Health, the National Science Foundation, the Department of Defense and more all have very specific policies toward science. I do not have all or even most of the answers, but what are the chances that those institutions have the very best policies toward science? Pretty close to zero. And as time passes, those institutions seem to become more bureaucratic, more concerned with process, and less innovative, hardly a surprising evolution to anyone familiar with Washington, D.C.

I think we should experiment more with DARPA-like models, where rotating program managers, operating in relatively flat bureaucratic structures, have the autonomy to commit significant sums of money. I also think in pandemics our science institutions should have wartime-like powers to act more quickly and decisively. Whether or not those particular views are correct, a sustained national dialogue about science could yield substantial dividends.

On the research side, science policy and the study of science, should be far more prominent. In my own field, economics, economics of science is barely a subfield and it probably accounts for less than one percent of all research. In my ideal world, it would account for at least five percent of all of economic research.

Similarly, the history of science has produced thousands of wonderful books and articles, but it is hardly the highest-status or most popular subfield in history. We can appreciate what is there while wishing for much, much more, not just in terms of numerical outputs but also in terms of social status and reach to a broader set of readers.

Better science is one of the biggest “free lunches” standing before us.


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