The exasperating institutions hindering American progress
There is no greater scientific force in the world than America — and yet, we seem to do everything we can to self-sabotage our own success. The litany of complaints is so far-ranging and profound that entire library shelves of books and blue-ribbon reports have been written on the problem, but here’s a sampling:
- Our immigration system — despite widespread, bipartisan agreement — remains actively skewed against high-skilled talent working in the United States. Our best engineers and scientists are regularly required to decamp, particularly if they are undertaking research careers where funding is inconsistent.
- Our scientific funding institutions, such as the National Science Foundation and the National Institutes of Health, lack ambition due to bureaucratic inertia and political fear, with studies indicating that researchers spend more than 40% of their time writing grant applications and handling administrivia.
- Even when funding is secured today, the future is always in doubt. That lack of consistency means that most new scientists are forced to hop from lab to lab to conduct their work as funding is secured or dries up. That damages the quality of the science itself, as well as the lives of scientists.
- Academic publishing is an absolute hellscape, driven by the profit motives of a handful of leading publishers while every researcher is overloaded by papers that no one reads or even checks for accuracy. Scientific fraud and the replication crisis are voluminous across fields.
For many ambitious and entrepreneurial scientists, the solution has been to end-run the entire establishment in the hopes of finding some niche to do quality work. Lux’s scientist-in-residence Sam Arbesman has long tracked these new institutions of science in what he dubs “The Overedge Catalog,” ranging from independent labs like the Arc Institute to novel underwriting mechanisms like crowdfunding.
Lux itself is attempting to ameliorate the problems with America’s scientific institution with our mini-skunkworks we’ve dubbed Lux Labs, which we announced on Thursday:
Lux Labs formalizes a pattern that we have used repeatedly and to great success across Lux’s funds, where we partner with ambitious people with brilliant and proven ideas and offer them an entrepreneurial pathway to transition from the intellectual ferment of the research lab into the competitive free-for-all of the marketplace.
What is that pathway?
…While our experience shows that no two ideas will follow exactly the same course, commonalities include: negotiating the legalities and politics of securing the right intellectual property rights; incorporating and setting up a startup for growth; capitalizing the business from our own funds as well as those of trusted and strategic partners to ensure that technical and product milestones are achievable; recruiting and promoting the newly-conceived company to valuable technical networks; and advising and guiding the early stages of startup maturation so that even first-time founders can avoid the deadly mistakes we’ve identified across decades of accumulated collective wisdom.
We’ve already seen 20 companies emerge out of our informal approach over the past two decades, and we expect to accelerate such work in the coming years.
Venture firms, of course, focus on the art of creation, about how novel ideas can evolve into the competitive juggernauts of tomorrow. Yet I want to return to the indictment of American scientific institutions, because it’s not enough to highlight the potential creativity that emanates from these places; we also need to highlight just how many ideas founder on the shoals of sclerosis.
One of the great achievements of the past week was news that TSMC’s new semiconductor fabrication facility in Arizona has exceeded the yields of the company’s home facilities in Taiwan. Now, being the jaded analyst that I am, one wonders whether any such gain in yield won’t immediately be transmitted back to headquarters and make this particular facility less competitive, but I digress. Here was a patriotic moment showing that leading-edge manufacturing in America isn’t entirely moribund.
Even so, the entire reason that the T in TSMC stands for Taiwan is because Morris Chang, the founder of the company, departed from the U.S. from his long-time career at Texas Instruments because he had a falling out with the company’s leadership and couldn’t attract interest in his idea of separating the design and manufacturing of chips across different companies (vertical integration was still very much in vogue — as it remains at places like Intel). Actively recruited by the Taiwanese government in the 1980s, he would ultimately build a national champion over the ensuing decades.
Or take Katalin Karikó, one of the pivotal researchers behind mRNA vaccines that would ultimately underpin the delivery of Covid-19 jabs during the pandemic. Her life’s work and story is an astonishing parable of the crisis at the heart of the American research enterprise. As The Daily Pennsylvanian summarized in the aftermath of her selection as a 2023 Nobel laureate in medicine:
However, eight current and former colleagues of Karikó told The Daily Pennsylvanian that — over the course of three decades — the University repeatedly shunned Karikó and her research, despite its groundbreaking potential.
The colleagues told a story of a researcher whose work ethic helped her succeed against all odds — including doubtful administrators, language barriers, and a system that cuts costs by demoting researchers who fail to earn grant funding.
One can imagine that a young immigrant scientist just beginning their academic career might run into culture shock and the challenges of navigating a new bureaucracy. But such challenges for Karikó continued well beyond the 1990s until as recently as the decade before winning her field’s highest honor:
Karikó requested to be reinstated to a faculty position at Penn in 2010 but was initially rejected. Karikó wrote that administrators told her that she was "not of faculty quality" — citing how individuals who have previously been demoted can not be promoted back to the faculty track.
Think about that last phrase, “…individuals who have previously been demoted can not be promoted back to the faculty track.” In other words, any setback in the vertiginous career of a scientist will forever be a scarlet letter seared into that individual’s personnel record. Scientific progress must be an endless series of successes, with no room for failure whatsoever (and then we wonder why the replication crisis and “publish or perish” has overwhelmed most fields of science). Worse is the institutional arrogance implied — there is no humility that an institution can just be wrong about a decision like tenure or hiring.
Both Karikó’s battles with administrators to conduct pathbreaking work and Chang’s departure from the United States to find funding for his new business model in chips exemplify the same problem with American science today: its desire for consistent output in the face of incredible uncertainty. Both entrepreneurs had novel ideas, ideas that didn’t immediately work and required prodigious time and engagement to succeed.
Yet, the funding models we have for science demand perfect performance. The NIH’s R01 research grant — the mainstay program that underwrites the largest percentage of federally-funded American bioscientists — is renewed every few years. Since research can take months to get off the ground and many more months to collect and analyze the right data, the R01 gives bioscientists precious little time to make mistakes, explore different directions and take their work in the most ambitious direction possible. A scientist practically has to know their results before they even get started.
There are limited penalties for conducting milquetoast research, what Thomas Kuhn would dub “normal science.” Touch the edges of the field, collect a bit of data, and don’t be overly ambitious. A spectacular failure on an ambitious project is much less likely to get renewal funding than a successful but ultimately irrelevant contribution to the literature. The costs for this institutional pusillanimity are enormous, since the benefits of pathbreaking science can be exponential. As Josh Wolfe wrote in our Q2 quarterly letter to LPs:
Consider: the high-yield wheat developments (1940s-1950s) pioneered by Borlaug that saved a billion lives; the structure of DNA (1953) uncovered by Watson, Crick, and Franklin that laid the foundation for modern genetics and biotechnology; the Polio vaccine (1955), where Salk's breakthrough saved millions from paralysis and death; the LASER (1960), where Theodore Maiman's invention paved the way for everything from CD players to surgical tools; Apollo 11 (1969), in which NASA's successful moon landing showcased American sci-tech prowess; GPS (1978), which provided positioning, navigation and timing services to every industry from logistics and transportation to defense; and onward to the PC, the internet, rapid and cheap genome sequencing, CRISPR gene editing, and more.
That’s why the sclerosis in American scientific institutions is so important to fix. As Josh wrote in a recent op-ed for RealClearPolitics:
The sad fact is that both American political parties are neglecting a key pillar of peace and economic power – meaningful investment in long-horizon scientific research and discovery.
We urgently need the U.S. government to invest in America’s engine of cutting-edge scientific discovery to maintain powerful pipelines of possibility that will ensure our national defense, deter aggression, spawn new industries that generate the jobs of the future, and give America the decisive advantage in a new era of Great Power competition.
All of us need to have more ambition for what America can do. As The Economist recently headlined, “America’s economy is bigger and better than ever.” We have trounced Europe and are locked in ferocious competition with China despite having a quarter of its population. Nasdaq just hit an all-time high yesterday on the back of growing tech valuations.
What would happen if we truly unlocked the talent that’s benched on the sidelines? What would happen if scientists and technologists were freed to pursue the most ambitious paths imaginable, and not just the picayune projects they can select today? We’re doing our part with Lux Labs, but now it’s time for the U.S. government at all levels to unleash the latent energy that’s been waiting to break out. Our scientific institutions need heavy reform — but few investments will pay off as exponentially. It’s worth it.
Podcast: Previewing our upcoming Riskgaming scenario, “Powering Up: China’s Global Quest for Electric Vehicle Dominance”
The automobile industry is one of the most pivotal in the world, both due to its scale and its nexus at the heart of the manufacturing systems in countries such as the United States, Germany, Japan, Korea and China. There’s a massive transformation of the industry underway as consumers transition from internal combustion engines to electric vehicles, and China is increasingly leading the way with innovative and affordable cars from the likes of BYD and others. How will the future of the industry change, and how do the political dynamics of China’s leadership affect which countries will win — and which will falter?
Our upcoming Riskgaming scenario, Powering Up: China’s Global Quest for Electric Vehicle Dominance, simulates this complex business environment by fusing the transition from ICEs to EVs with the opaque vagaries of China’s national security and industrial policies. It’s designed by Ian Curtiss, who lived and worked in China for many years before decamping to Arizona and continuing to build a series of tabletop games covering everything from the geopolitics of the modern world to the politics of medieval Europe on the Iberian Peninsula.
Ian and I talk about “Powering Up” and its design, how the tradeoffs in the game can inform decision-making in the real world, and why people are so engaged with the Riskgaming model of gameplay.
The Orthogonal Bet: The role of complexity in world-building
In this episode, Sam speaks with novelist Lev Grossman. A longtime fan of Lev’s novels, Sam delves into his works, including The Magicians trilogy — a splendid set of books about a university for magic, fantastical worlds, and much more. These books are amazing. Lev’s newest book is the novel The Bright Sword, a retelling of the legends of King Arthur, particularly focusing on what happens after Arthur dies.
Lev and Sam discuss the story of King Arthur, its gaps and its history, the layering of gods and stories over time, the nature of magic and religion, the importance of secondary worlds, and the magic in The Magicians versus the magic of The Bright Sword.
🔊 Listen to “The role of complexity in world-building”
Lux Recommends
- I’m always a fan of a good FT Lunch, and this week’s with former Brookings Institution China scholar Li Cheng was exceptional. “Today, Li says bluntly, ‘America is not in the mood to study China.’ But there is a deeper pessimism over changes he has witnessed. ‘Economics has become mathematics. Political science has become statistics. There’s no appreciation for history, or culture. That mindset, do you think that serves US interests?’” No, it does not.
- Sam enjoyed Spreadsheet Day (October 17th), “which celebrates the joy and challenges of working with spreadsheets.” This year, the top three Spreadsheet Day movies recommended by Debra Dalgleish are Moneyball, The Big Short and The Accountant.
- I was entranced by Ben Taub’s hard look at Russian grey zone activities in the Arctic Circle in “Russia’s Espionage War in the Arctic.” “Recently, the Russian security services have shifted their tactics from professional espionage to sabotage and destruction, often undertaken by disposable agents—random criminals who are recruited over Telegram and paid in cryptocurrency or cash. ‘The Russians no longer have any downsides to an operation being exposed,’ Roaldsnes said. He sighed. ‘They ruined a great spy game with this stupid war.’”
- Sam is currently reading Neal Stephenson’s latest novel, a mercifully short tale entitled Polostan: Volume One of Bomb Light that is the entrée into a whole new historical series in the vein of Stephenson’s epically lengthy Baroque Cycle. This novel centers on the early decades of the twentieth century, and the machinations between the U.S. and the emerging Soviet Union.
- Finally, John Lanchester is an excellent writer (I’m a fan of his cli-fi novel, The Wall), and he’s even better when talking about statistics. He published a profile and critique of the Consumer Price Index with The Washington Post that is worth the read entitled simply, “The Number.” “The CPI is crucial for multiple reasons, and one of them is not because of what it is but what it represents. The gathering of data exemplifies our ambition for a stable, coherent society. The United States is an Enlightenment project based on the supremacy of reason; on the idea that things can be empirically tested; that there are self-evident truths; that liberty, progress and constitutional government walk arm in arm and together form the recipe for the ideal state. Statistics — numbers created by the state to help it understand itself and ultimately to govern itself — are not some side effect of that project but a central part of what government is and does.”
That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.
