motivation
Technology and innovation underpin finance. In order to manage risk and channel money from savers and investors to entities that need it, technologies arose that pooled risk and money across many, diverse people and organizations. The insurance contract is one example. Social security is another.
Peter L. Bernstein in his history of modern Wall Street describes finance as follows:
“Simply put, Wall Street shapes Main Street. It transforms factories, department stores, banking assets, film producers, machinery, soft-drink bottlers, and power lines into something that can be easily convertible into money and into vehicles for diversifying anonymous buyers or sellers. It makes hard assets liquid, and it puts a price on those assets that promises that they will be put to their most productive uses.
Wall Street also changes the character of the assets themselves. It has never been a place where people merely exchange money for stocks, bonds, and mortgages. Wall Street is a focal point where individuals, businesses, and even entire economies anticipate the future. The daily movements of security prices reveal how confident people are in their expectations, what time horizons they envisage, and what hopes and fears they are communicating to one another.” 1
1
Peter L. Bernstein, Capital Ideas: The Improbable Origins of Modern Wall Street, Free Press, 1992, p. 6
Digitalis Research is particularly interested in how financial support for certain categories of technology (e.g., therapeutics) over others (e.g., research tools) impacts innovation and health.
How should we fund the unfundable to drive better health outcomes?
1
Peter L. Bernstein, Capital Ideas: The Improbable Origins of Modern Wall Street, Free Press, 1992, p. 6
open
questions
Should there be profit in knowledge? How does the tension between open science and private science impact what research gets funded (both by the government and by industry)
How efficient and/or effective is our government-funded system in directing basic science research?
How does the form and level of financing available impact what science/technology is produced?
What is the role of trust in venture capital financing?
Is the current scheme of financing science and technology similar to trickle down economics? That is, rich countries do the science and over some (long) time frame the benefits trickle down to poorer countries?
curation
BOOKS
Robert J. Shiller / Princeton University Press / 2012
“Nobel Prize-winning economist explains why we need to reclaim finance for the common good.”
Doing Capitalism in the Innovation Economy (second edition)
William H. Janeway / Cambridge University Press / 2018
“Reconfiguring the three-player game between Markets, Speculators and the State.”
The Money of Invention:
How Venture Capital Creates New Wealth
Paul Gompers & Josh Lerner / Harvard Business Review Press / 2001
“This volume provides a meaningful framework for understanding the relationship between venture capital and entrepreneurial success.”
The Entrepreneurial State:
Debunking Public vs. Private Sector Myths
Mariana Mazzucato / Penguin / 2013
“In a series of case studies—from IT, biotech, nanotech to today’s emerging green tech—Professor Mazzucato shows that …: the private sector only finds the courage to invest after an entrepreneurial state has made the high-risk investments.”
ARTICLES
Science Is Getting Less Bang for Its Buck
Patrick Collison & Michael Nielsen / The Atlantic / 2018
“Despite vast increases in the time and money spent on research, progress is barely keeping pace with the past. What went wrong?”
PAPERS
A Flexible Design for Funding Public Goods
Vitalik Buterin, Zoe Hitzig & E. Glen Weyl / arXiv / 2020
“We propose a design for philanthropic or publicly-funded seeding to allow (near) optimal provision of a decentralized, self-organizing ecosystem of public goods.”
Venture Capital’s Role in Financing Innovation:
What We Know and How Much We Still Need to Learn
Josh Lerner & Ramana Nanda / Harvard Business Review, Working Paper 20–131 / 2020
“Venture capital financing … has real limitations in its ability to advance substantial technological change.”
Does Venture Capital Spur Innovation?
Josh Lerner and Samuel Kortum / Harvard Business School / 1998
“We … examine the influence of venture capital on patented inventions in the United States across twenty industries over three decades.”
Why Are the Prices So Damn High?
Eric Hell & Alex Tabarrok / Mercatus Center / 2019
“Is there a common factor that unites sectors afflicted by rising prices and sectors blessed by falling prices, or are we simply seeing idiosyncratic price increases driven by random ebbs and flows in technology and demand?”
Finding the Endless Frontier:
Lessons from the Life Sciences Innovation System for Technology Policy
Iain M. Cockburn & Scott Stern / Capitalism and Society / 2013
“Examining the evolution and dynamism of the life sciences innovation system, we emphasize three central foundations: a long-term and relatively stable commitment of financial and human resources by both the public sector and for-profit organizations, market and non-market institutions that encourage competition on the basis of innovation across multiple dimensions, and the promise of significant financial rewards for private sector innovators leveraging publicly funded scientific discoveries.”
COLLABORATION
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