The Roots of Progress

Funding models for science and invention

In my last post I wrote about the importance of funding models to progress. Here I want to survey the major types of funding models particularly for science and invention. This list is probably incomplete, but it’s a starting point.

Classifying models

There are different ways we could classify funding models, for instance by:

I don’t find any of those axes to be helpful as the primary way to organize the topics in this area, in part because many types of institutions both perform research in-house and fund research externally. It also doesn’t make sense to examine separately every combination of the three attributes above.

To the extent I am able to choose a primary axis, I think the most helpful one is the type of institution involved. What follows is the breakdown I’m working with now.

Models to support individuals

A remarkable amount of progress in history has been made by individuals researching or inventing outside the context of any formal institution. Models to support this include:

Those without any of the above means still sometimes managed to make progress through working overtime, creative side hustles, or risking debtor’s jail—I gave several examples in my post on early American inventors.

These models were important up until perhaps the 1800s, when much research and invention was done by individuals. Now that most R&D is done in institutions, models of institutional funding have become relatively more important.

Institutional models

Special allocation mechanisms

The models above are based on the types of institutions that fund research, or that organize it. However, a few special allocation mechanisms deserve consideration as models in their own right:

There are also hybrid approaches. For instance, some grants or investments are divided into tranches that are awarded on meeting certain milestones. This combines elements of a basic grant/investment and a prize.

Push vs. pull

Another way to think about funding models is “push” vs. “pull”. In a “push” model, you aggregate funding and adopt a mechanism to get it to researchers, typically a grant program. Usually you announce the program and state your purpose and goals. In a “pull” model, you create an institution to house research, and then you seek and attract funding. Many institutions combine both, e.g., NIH has both a grant program and in-house research.

Push and pull models work together. A foundation (push) may give a grant to a university (pull). Or a prize (push) may justify investment from a for-profit company (pull).

With this framework, we can start to ask some questions, like:

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Social media link image credit: Wikimedia / Graham Norrie

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