Incentives and creativity: evidence from the academic life sciences

Abstract

This paper tests the hypothesis that freedom to experiment, tolerance for early failure, long time horizons to evaluate results, and detailed feedback on performance stimulate creativity and innovation in scientific research. We do so by studying the careers and output of U.S. academic life scientists funded through two very distinct mechanisms: investigator-initiated R01 grants from the NIH, or appointment as an investigator of the Howard Hughes Medical Institute (HHMI), whose funding practices embody many of the elements mentioned above. Using careful adjustment for selection on observables, we find that HHMI investigators produce high-impact papers at a much higher rate than two control groups of similarly-accomplished NIH-funded scientists. In contrast, the program does not appear to have much effect on the raw number of articles published. We also observe large effects on the probability of being elected to prestigious scientific societies or the training of students that go on to win early career prizes.

Fostering breakthrough technologies — How do optimal funding decisions depend on evaluation accuracy?

“…This condition reflects the empirical finding that breakthrough innovations tend to require long-term funding to succeed (Heinze, 2008;Azoulay et al, 2011). The indirect benefits may, thus, be enabled only if (i) the project is completed and (ii) its future value is in the top α-tail of the prior distribution for these values.…”

Performance contingent pay and autonomy: Implications for facilitating extra-role creativity

“…Academic scientists doing research in the life sciences who were given performance contingent pay linked to pre-defined outputs and short-term time deadlines produced lower quality creative work than scientists who were paid under conditions of greater discretion over performance outcomes and longer time periods to do their scientific work before it was evaluated (Azoulay, Zivin, & Manso, 2011). The crowding out effect was avoided in the condition where the scientists were given more discretion over performance outcomes and time deadlines.…”

A Comparative Study of National Culture and Innovation: Effects of Cultural Dimensions on Traditional Innovation and Online Innovation

“…Innovation is often viewed as a key determinant of long-term profits that require significant investment in money and time to materialize [4,15]. Research also suggests a positive relationship between long-term orientation and openness for change [27] that increases the likelihood of idea creation and innovative outputs [32,49].…”

“…• Open toward innovation [32,48] Open toward innovation stimulates innovation (+) • Long term incentive [4,15] Long-term incentive conducts to innovation (+)…”