As a culture we get what we celebrate. Our Lux Capital partner Larry Bock just finished the largest science festival in the world, The USA Science & Engineering Festival, with over half a million participants. The White House just had its own science fair and NYC this week is overflowing with experiments and exhibitions of the World Science Festival.
For my two young daughters, our home celebrates science, might we tip their odds of possessing skeptical world-views and endless curiosities towards one day producing things that matter–a preferable path to celebrating celebrities and consuming things that don’t.
Do we have too few scientists or too many?
A reviewer of a new book on the topic, “Falling Behind? Boom, Bust and the Global Race for Scientific Talent” relates the market for scientists to the “hog cycle”. When there are lots of hogs, prices fall and farmers react by cutting their herd. Then demand or a shock causes a pork shortage and rising prices so farmers increase their herds. But there’s a lag. It takes time for hogs to get fat. Prices keep rising until that little piggy gets to market.
The lag between information (bits) and hogs (atoms), between price signal and supply response, creates instability. It’s like a car driver that skids right and reacts by overcompensating left. In the short-run there is volatility and booms and busts.
About 10 years ago, a hot white paper was circulated called “Rising Above the Gathering Storm” followed 5 years ago by an update “The Gathering Storm increasingly appears to be a Category 5”. The three major threats were (1) the US losing its status as being the top in global science; (2) average K-12 scores falling compared to other countries and (3) not having enough scientists and engineers to fill jobs.
This controversial new book debates the alarmism with a few empirical points I am not entirely convinced by, but suggest that: (1) the averages are skewed down by the underperforming tail of the distribution curve, while the top part of the curve is dominated by bright scientists and engineers; (2) U.S. science isn’t in absolute decline, so much as the rest of the world’s abilities are rising; and (3) job shortage fears are overblown.
An interesting point is made showing how science funding can be like the high-traffic highway road that eases up when a new lane is added, but quickly attracts more vehicles and ends up just as crowded. So too, when NIH funding rises, more scientists seek more funding and the paradox is that fewer get grants and we get more complaints. (On a related note, my colleague Adam Goulburn just wrote a highly informative blog post about the rise of health incubators.)
I’ve had lively debates with macro fund managers and hedge fund friends about whether innovation thrives when capital is scarce (and people invent out of necessity) or when capital is abundant (and more experiments—including crappy ones—get tried, and of all the stuff thrown against the wall, a few important things end up sticking and mattering).
My answer: Yes.
When capital and labor are abundant, more experiments get tried (out of luxury). And when capital and labor are scarce, more experiments get tried (out of necessity). That’s why you always hear us venture capitalists seemingly self-servingly saying that “now is an amazing time to start a new business!”