Know when to fold 'em: An empirical description of risk management in public research funding

2020
Public research funding programs typically make grants with minimal intervention by program staff, rather than using a hands-on approach to project management, which is more common in the private sector. In contrast, program staff at the US Department of Energy's Advanced Research Projects Agency Energy (ARPA-E) are given a set of real options with which to manage funded projects: abandon, contract or expand project budgets or timelines. Using internal data from ARPA-E, we show that active project management enables risk mitigation across a portfolio of research projects. We find that program staff modify projects frequently, especially project timelines, and these changes are more sensitive to poor performance than to strong performance. We also find that projects with a shortened timeline or reduced budget are less likely to generate short-term research outputs, compared to those of ultimately similar size. This evidence suggests that the practice of active project management, when combined with high upfront risk tolerance, can be used to enhance the productivity of mission-oriented public research funding.
RESEARCH POLICY
卷号:49|期号:1
ISSN:0048-7333
收录类型
SSCI
发表日期
2020
学科领域
循证经济学
国家
美国
语种
英语
DOI
10.1016/j.respol.2019.103873
其他关键词
RESEARCH-AND-DEVELOPMENT; REAL OPTIONS; TECHNOLOGY; INVESTMENTS; EXPLORATION; FLEXIBILITY; UNCERTAINTY; COMPLEXITY; DECISION; STRATEGY
EISSN
1873-7625
资助机构
Belfer Center for Science and International Affairs
资助信息
Our analysis originated as a consulting engagement with the National Academies for a study on ARPA-E. A.P.G was supported by a fellowship from the Belfer Center for Science and International Affairs. We are grateful for feedback from anonymous reviewers and from participants in the NBER Productivity seminar. We thank Laura Diaz Anadon, Pierre Azoulay, Paul Beaton, lain Cockburn, Gail Cohen, Jeff Furman, Gilbert Metcalf, Venky Narayanamurti and Scott Stern for helpful discussions. Many thanks also to ARPA-E staff, in particular Dave Dixon, Ron Faibish, Andy Kim and Ashley Leasure, for their assistance in data collection. All errors or omissions are our own.
被引频次(WOS)
4
被引更新日期
2022-01
来源机构
Harvard University Massachusetts Institute of Technology (MIT)
关键词
R&D funding Project management Real options Managerial flexibility