| Hello, and welcome to this week’s edition of the Future in Five Questions. Today we feature Dartmouth University economics professor Christopher Snyder. He is the co-director of the University of Chicago’s Market Shaping Accelerator, which aims to create market incentives to solve social problems like climate change and pandemics and plans to dole out $2 million in awards to economists and entrepreneurs who propose those solutions. Snyder discussed why he thinks governments should follow suit in creating those incentives to innovate, the risk involved, and his early love of science fiction. The following has been edited and condensed for clarity: What's one underrated big idea? Innovation could be our best weapon against climate change, pandemics, and other of the biggest problems facing society. This innovation won’t all come from government labs. We are going to have to harness the expertise and drive of commercial firms to move from basic research to inventions and products that can solve these problems. The trouble is that solving these large social problems is not always so profitable. No single customer is willing to pay for the global benefit from removing a ton of carbon dioxide from the atmosphere. By some estimates, vaccines were selling for a hundredth of the health and economic value they generated during the Covid pandemic. Our Market Shaping Accelerator is trying to find ways for public funders to incentivize commercial firms to enter and innovate in these socially valuable areas. It may sound magical, but we think there are opportunities to generate perhaps $10 or $100 of benefit for each public dollar spent. What's a technology that you think is overhyped? I don't have more insight than anyone else into whether blockchain, AI, electric vehicles, or any particular technology is overhyped. But I will say that when substantial public funding is directed toward a particular technological solution, there is no guarantee it will deliver. We saw this in the push for green cookstoves in developing countries — a well-intentioned effort that has fallen short. Despite their advanced features, the stoves didn’t suit consumers, who returned to the old polluting ones. To mention another example, the U.S. has earmarked substantial funding for hydrogen produced using clean electricity. While this method has plenty of potential, it’s not necessarily the only way to cleanly produce this fossil-fuel substitute. Huge underground hydrogen reserves, which geologists have recently hinted might exist, offer another possible source that might be overlooked if we focus solely on a specific production method. The lesson is that innovation funding should be more flexible. By encouraging creativity and adaptability, we open the door to unforeseen solutions that may be more effective. As we advance in other areas like carbon-dioxide removal, where it is hard to know which of dozens of technologies will scale up and get costs down to a reasonable level, keeping our options open is crucial. No one has perfect foresight, and supporting a broad range of potential solutions increases the chances of finding what works best. What book most shaped your conception of the future? Growing up, I read the science fiction collection “The Other Side of Tomorrow” countless times. Some stories were light, but most saw the world facing, and sometimes succumbing, to some existential crisis. I was sensitized at an early age to worry about existential risks in the real world — pandemics, climate change, etc. — that threaten the sweet life we enjoy. The stories also highlighted the role of advanced technology in addressing those risks. The amazing advances we’ve seen in computer, medical, transportation, and other fields prove that innovation’s potential is not science fiction. What could government be doing regarding technology that it isn’t? Governments could use more “pull” funding to promote innovation. Pull funding pays for results, like the approval of a new vaccine or the production of megawatt-hours of electricity from a clean energy source. Contrast this with "push" funding, providing upfront grants or subsidies to selected innovators to attempt an innovation. Push funding has its merits, but it requires decision-makers to bet on who they think will succeed, often without enough information. Pull mechanisms shift that responsibility to those who know best — the innovators themselves — by incentivizing them to deliver real-world results. No innovation, no funding. Pull mechanisms have the potential to drive not only innovation but also its adoption. For example, if the green cookstoves program had tied the reward to sales, manufacturers would have had better incentives to ensure the technology had consumer appeal. I’m excited about the potential for governments to use pull mechanisms in more areas, ranging from climate-resilient crops to prototype vaccines for future pandemics. Rewarding successful innovation, rewarding widespread adoption — these are market incentives that policymakers can leverage to accelerate new technologies that actually make a difference. What surprised you most this year? We launched an innovation challenge to crowdsource ideas for where market shaping can be best used to solve social problems, and received a staggering 186 applications from around the world. We were astonished by the diversity and quality of the submissions. The ideas the MSA is pursuing might never have occurred to us without that challenge. One promising idea is to attack the problem of antibiotic resistance by developing rapid diagnostics, avoiding overprescribing antibiotics for the wrong conditions. Another is to boost incentives to discover repurposed uses for generic drugs. Once a drug goes off patent, there is currently not much profit in learning what other diseases the compound can be used to cure. The success of this crowdsourced approach exceeded our expectations and gave us a glimpse into how much creativity is out there waiting to be harnessed.
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