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Does the NIH Fund Edge Science?

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  • Mikko Packalen
  • Jay Bhattacharya

Abstract

The National Institutes of Health (NIH) plays a critical role in funding scientific endeavors in biomedicine that would be difficult to finance via private sources. One important mandate of the NIH is to fund innovative science that tries out new ideas, but many have questioned the NIH’s ability to fulfill this aim. We examine whether the NIH succeeds in funding work that tries out novel ideas. We find that novel science is more often NIH funded than is less innovative science but this positive result comes with several caveats. First, despite the implementation of initiatives to support edge science, the preference for funding novel science is mostly limited to work that builds on novel basic science ideas; projects that build on novel clinical ideas are not favored by the NIH over projects that build on well-established clinical knowledge. Second, NIH’s general preference for funding work that builds on basic science ideas, regardless of its novelty or application area, is a large contributor to the overall positive link between novelty and NIH funding. If funding rates for work that builds on basic science ideas and work that builds on clinical ideas had been equal, NIH’s funding rates for novel and traditional science would have been the same. Third, NIH’s propensity to fund projects that build on the most recent advances has declined over the last several decades. Thus, in this regard NIH funding has become more conservative despite initiatives to increase funding for innovative projects.

Suggested Citation

  • Mikko Packalen & Jay Bhattacharya, 2018. "Does the NIH Fund Edge Science?," NBER Working Papers 24860, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24860
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    References listed on IDEAS

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    1. Margaret E. Blume-Kohout & Krishna B. Kumar & Neeraj Sood, 2015. "University R&D Funding Strategies in a Changing Federal Funding Environment," Science and Public Policy, Oxford University Press, vol. 42(3), pages 355-368.
    2. Fiona Murray & Philippe Aghion & Mathias Dewatripont & Julian Kolev & Scott Stern, 2016. "Of Mice and Academics: Examining the Effect of Openness on Innovation," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 212-252, February.
    3. Damien Besancenot & Radu Vranceanu, 2015. "Fear Of Novelty: A Model Of Scientific Discovery With Strategic Uncertainty," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 1132-1139, April.
    4. Mikko Packalen, 2019. "Edge factors: scientific frontier positions of nations," Scientometrics, Springer;Akadémiai Kiadó, vol. 118(3), pages 787-808, March.
    5. Pierre Azoulay & Joshua S. Graff Zivin & Gustavo Manso, 2011. "Incentives and creativity: evidence from the academic life sciences," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 527-554, September.
    6. repec:hal:cepnwp:hal-01117929 is not listed on IDEAS
    7. Danielle Li, 2017. "Expertise versus Bias in Evaluation: Evidence from the NIH," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 60-92, April.
    8. Deepak Hegde & Bhaven Sampat, 2015. "Can Private Money Buy Public Science? Disease Group Lobbying and Federal Funding for Biomedical Research," Management Science, INFORMS, vol. 61(10), pages 2281-2298, October.
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    10. Mikko Packalen & Jay Bhattacharya, 2015. "Age and the Trying Out of New Ideas," NBER Working Papers 20920, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Gold, E. Richard, 2021. "The fall of the innovation empire and its possible rise through open science," Research Policy, Elsevier, vol. 50(5).

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    More about this item

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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