How do you convince someone to take a leap of faith with an early-stage invention?
This study reveals that language choices alone can determine whether or not early-stage scientific inventions receive resource support. There are two dimensions that the evaluators of invention-based entrepreneurial opportunities think about – feasibility and desirability.
What You Need to Know
At the movies, scientific discoveries are often portrayed as a Eureka moment in the laboratory. Reality, however, couldn’t be more different – early-stage scientific inventions often require long cycles of testing, validation, and regulatory approvals before they can be turned into something useful, such as a new vaccine. It is a long and uncertain way from discovery to commercialization.
In a new study published in Research Policy, Phil Kim, Reddi Kotha, Sebastian Fourné and Kristof Coussement reveal that language choices alone can influence whether inventors receive financial backing from their organisations and that examining language choices in opportunity evaluation reports provides a glimpse into decision-making under uncertainty.
More Details
What Did the Researchers Do?
The authors investigated how one type of early-stage opportunity – university-based scientific inventions – are selected to receive support from their Technology Transfer Office (TTO). Using a quantitative, top-down, textual analytical technique, the researchers studied nearly 700 invention evaluation reports from the oldest university TTO in the world at the University of Wisconsin over a seven-year period. These are three- to four-page reports on the commercial potential of the invention, written by a member of the TTO with domain knowledge. These reports are the first official manifestation of scientific inventions – some of which have breakthrough potential.
What Did the Researchers Find?
Feasibility and desirability criteria determine resource support for, or abandonment of, scientific inventions, and thus the pursuit of entrepreneurial action. In terms of feasibility- where the outcome can be achieved- the researchers find that text indicating doubt and lack of maturity is associated with a 10% decline and 15% decline in budgetary support, respectively. For desirability- or how useful and successful the invention might be in terms of being a technological breakthrough with the possibility to change people’s lives- background familiarity and scientific complexity are associated with a 13% and 10% improvement in budgetary support, respectively.
How Can You Use This Research?
Studying very early stage scientific inventions and their pursuit or abandonment provides insights for managers, entrepreneurs, and investors making decisions under extreme uncertainty. Managers have to imagine the potential of an invention to many different industries or social applications, as well as all the development required to transform it into a viable offer. There is very little information to make such a decision, making it quite a ‘leap of faith’.
Conventional thinking is that managers or investors take a bet on the individual for early ideas. But there is a need to develop expertise in thinking about how to evaluate novel ideas beyond relying on the signal of past reputation. It is necessary to develop decision-making routines that are unbiased by past success or inventor fame - even when facing high uncertainty. Valuable ideas can come from anybody, and young scientists and entrepreneurs may have truly transformative ideas. Our study offers decision-makers tools to access, evaluate, and carry forward ideas, irrespective of their origin. To do so, this study reveals specific feasibility and desirability-related decision criteria with impact.
Want To Know More?
Contact: Sebastian Fourné
Article citation: Kim, P. H., Kotha, R., Fourné, S. P. L., & Coussement, K. (2019). Taking leaps of faith: Evaluation criteria and resource commitments for early-stage inventions. Research Policy, forthcoming: https://doi.org/10.1016/j.respol.2019.02.004.