Emergent Thought Award

Based on the high standard of the submissions received, the judging panel decided to award an extraordinary Emergent Thought Award of $25,000 to Matteo Tranchero, a PhD candidate based at the University of California.

Tranchero’s work aims to understand how investment figures in the ecosystems where breakthrough innovations occur. His work will focus on an optimum ecosystem of the US pharmaceutical industry, where production of the Moderna, BioNTech-Pfizer and Johnson & Johnson Covid-19 vaccines was among the most responsive globally.

“I am humbled that my research has been recognised by such an illustrious panel and I can’t get wait to get started.

“My theory is that transformative change is quite like losing your keys at night. We tend to start looking in the areas we are comfortable with – in the lamp light – even though we quickly see the keys aren’t there and we might make slower progress. Looking in the dark areas is a greater risk but promises greater rewards and – like firms – it’s there that innovation needs support to thrive.

“I hope my research will show that funding could pivot towards rewarding failure, rather than success, as a means of unlocking more breakthrough innovation.”

Research title: Creating an ecosystem for long-term investments in transformative innovation

Recent empirical evidence documents that firms and investors are increasingly biased toward short-term investments, posing a serious threat to long-term transformational innovation. I suggest that the solution to these worrying trends should come from designing an innovation ecosystem that encompasses two key ingredients. First, tolerance toward early-stage failures during the pursuit of long-term investments is a necessary step to achieve sustained innovation. Therefore, investors that tolerate short term losses will likely achieve socially valuable innovation. Second, the public sector should have an active role, but not in regulating or “picking the winners”, but rather in providing the necessary “scientific infrastructure” upon which firms’ innovation takes place. My key contention is that an ecosystem that encompasses both these aspects could result in increased long-term investing to fund radical innovation. I plan to investigate these hypotheses with a novel and detailed empirical study of the pharmaceutical industry in the United States, a technologically dynamic setting where innovation requires to build on public scientific infrastructure with substantial investments with a long horizon. Using state-of-the-art empirical methodologies, this project will further our knowledge on long-term financing of innovation and will result in actionable policy insights, as well as in a major scientific publication.

Matteo Tranchero is a PhD candidate in Management of Organisations at the University of California, Berkeley’s Haas School of Business. His dissertation will be convened by Lee Fleming, Abhishek Nagaraj, Toby Stuart, and Enrico Moretti. He has spoken and published widely on innovation topics including in Research Policy. His prior education includes a BSc and a MSc in Economics from the Sant’Anna School of Advanced Studies and the University of Pisa, as well as visiting periods at the École Normale Supérieure and the Georgia Institute of Technology.