By James Pethokoukis and Didier Sornette

On a recent episode of “Political Economy,” Didier Sornette sat down to discuss why researchers seem to be getting less productive. Grounding his ideas in the understanding that scientific progress comes in fits and starts, Didier emphasizes the importance of high-risk research and explains the mechanisms that have made our society less tolerant of risk.

Didier is Professor on the Chair of Entrepreneurial Risks in the Department of Management, Technology, and Economics at ETH Zurich. In 2020, he and Peter Cauwels authored “Are ‘Flow of Ideas’ and ‘Research Productivity’ in secular decline?“

Below is an abbreviated transcript of our conversation. You can read our full discussion here. You can also subscribe to my podcast on Apple Podcasts or Stitcher, or download the podcast on Ricochet.

Pethokoukis: Are scientific researchers becoming less productive
than they used to be back in the middle of the 20th century?

Sornette: It depends
always on what you measure. You see an exponential growth of scientific papers.
So by that metric, you’d say things have never been better. The absolute number
of researchers and engineers has never been larger. And even in proportion to
the population, the fraction is also extremely large, has been booming.

But when you look at
the content, the substance of these papers, I could summarize in a bit of a pejorative
way by saying these papers are mostly about well-dressed trivia. In many disciplines,
in order to have the next increment, you need five or 10 times more
researchers. So what we see is the production per dollar spent per researcher
has been really decreasing. So that’s clear; all metrics show this.

What is the existing paradigm on economic growth and
what did you find that challenges it?

I don’t think there is
a consensus. There are these two schools of gradualism versus punctuated
processes. I’m clearly on the side of the punctuation, of the bursts of
productivity. When you look at the history of science and of discoveries, you
can see that there have been long plateaus of status quo. And there is, for
example, the emergence of quantum mechanics or relativity, and of electricity
or the transistor: There are breakthrough discoveries and inventions that
completely changed the picture. And then a whole industry, a whole new, you
could say, technology generation emerges from it.

So this is one of the
problems, by the way, that economic modeling has to face: how to reconcile this
punctuation, this burst of productivity that leads to generation changes with the
management of the process. How, as a decision-maker, as a government, you
allocate resources, given the fact that most of the time you’re going to fund
the research when you’re bleeding money. Nothing comes, nothing comes,
incremental things. And then, suddenly by chance, a great discovery occurs and
feeds the next generation.

What policy advice follows from your findings?

So my advice is a bit
provocative. I would claim we need to waste taxpayer money. Not, of course, to
throw it through the window. Of course not. But to take risks, to go to very
risky endeavors where the probability of success is low. If the probability of
success is large, it means that it’s incremental. There’s no unknown. You are
already doing a kind of extrapolation of something that you know. But most
disruptive technologies, inventions and laws and discoveries, are things which
are not predictable, or very difficult. You have a vague view.

I can tell you, for example,
I was a post-doc of Pierre-Gilles de Gennes, the Noble Prize winner. He was
named the “new Newton of the modern era.” And he was at the peak of this career
and he was saying, “There’s no new discovery possible in this field.” A few
years later, the high-Tc superconductivity revolution came. And was it
predictable that something like this would happen? No. Not even the Nobel Prize
winner, de Gennes, could think about it.

If you’re right, it seems like we should be taking
more risks as a society. Should we be funding more risky research projects?

I think society is not
taking enough risks. For example, I’m sitting on a civil research commission,
and we have been working a lot in allocating funds to grant proposals. And the
official statement is, “Yes, we only fund high-risk, high-return. We encourage
the researcher to take big risks,” and so on. In practice, this is exactly the
opposite. We fund well-dressed trivia — well presented, where essentially a criterion
to reject a proposal is that we think there is a low probability that it would
succeed.

We have this cancer in
society where we only fund essentially certain-results research, which is of
course a recipe for disaster long term. Because success is based on taking a
risk on exploring. And this is the point: We are too much in a society that
wants to exploit, as opposed to explore.

What are the deeper factors that have turned us into a
zero-risk society?

I would time the
beginning of this around 2001, September 11. Around 20 years ago, roughly. Now,
every little hiccup on the planet is a Lehman Brothers moment or a Minsky moment.
So we are now brainwashed into hoping that society is stationary, that nothing
changes, and any hiccup is frightening.

So where does it come
from? I think there are several mechanisms: an aging society, which is more
wealthy. It’s very well known in psychology and economics that we take less
risks when we age. Another one is the role of the media as a mechanism of
attention. And also the emergence in the last decade of social media that tends
to raise any small event, in my opinion, into worldwide phenomena.

I think another
mechanism is also what I would call the “illusion of control.” For example,
when we want to master fires in California. You have had these enormous fires. By
controlling all the small fires, you let the dead wood accumulate. And when
there is a right condition of Santa Ana wind coming from the desert, with this
enormous fuel that has accumulated, no manpower can stop this conflagration.

Another one is inequality. You take risks if you are relatively comfortable, you have a parachute and so on. But for maybe 70 percent/90 percent of the population, who are really struggling on a monthly basis, you don’t want to take risks. So it’s really stopped society from leveraging its human capital. So these are some of the elements I can think of that give rise to the zero-risk society.

James Pethokoukis is the Dewitt Wallace Fellow at the American Enterprise Institute, where he writes and edits the AEIdeas blog and hosts a weekly podcast, “Political Economy with James Pethokoukis.” Didier Sornette sits on the Chair of Entrepreneurial Risks in the Department of Management, Technology, and Economics at ETH Zurich.

The post 5 questions for Didier Sornette on the necessity of high-risk research appeared first on American Enterprise Institute – AEI.