The Economics of Crisis Innovation Policy: A Historical Perspective

10 Pages Posted: 14 Jan 2021

See all articles by Daniel P. Gross

Daniel P. Gross

Duke University - Fuqua School of Business; National Bureau of Economic Research

Bhaven N. Sampat

Columbia University - Mailman School of Public Health

Multiple version iconThere are 2 versions of this paper

Date Written: January 6, 2021

Abstract

Since the beginning of the COVID-19 pandemic, policymakers, researchers, and journalists have made comparisons to World War II. In 1940, a group of top U.S. science administrators organized a major coordinated research effort to support the Allied war effort, including significant investments in medical research which yielded innovations like mass-produced penicillin, antimalarials, and a flu vaccine. We draw on this episode to discuss the economics of crisis innovation. Since the objectives of crisis R&D are different than ordinary R&D (prioritizing speed, coordination, redundancy, and more), we argue that appropriate R&D policy in a crisis requires going beyond the standard Nelson-Arrow framework for research policy.

Keywords: Crisis innovation, R&D policy, Nelson-Arrow, COVID-19, World War II, Office of Scientific Research & Development, National Defense Research Committee, Committee on Medical Research

JEL Classification: H12, H56, N42, N72, O31, O32, O38

Suggested Citation

Gross, Daniel P. and Sampat, Bhaven N., The Economics of Crisis Innovation Policy: A Historical Perspective (January 6, 2021). Available at SSRN: https://ssrn.com/abstract=3762862 or http://dx.doi.org/10.2139/ssrn.3762862

Daniel P. Gross (Contact Author)

Duke University - Fuqua School of Business ( email )

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National Bureau of Economic Research ( email )

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Bhaven N. Sampat

Columbia University - Mailman School of Public Health ( email )

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New York, NY 10032
United States

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