In this episode of Laboratory Equipment's LabChat, editor-in-chief Michelle Taylor chats with economic professor Joshua Graff Zivin, who recently wrote a working paper that says appropriate risk-taking is key to successful R&D programs.
In an experiment, nearly 200 MBA and Master of Finance participants from UC San Diego were asked to assume the role of a R&D director at a private company and "invest" in a simulated portfolio where they had to choose between risky and non-risky projects. Based on the projects the participants chose, 52 percent were classified as risk-averse, 36 percent were risk-neutral and only 12 percent were risk-loving. However, Graff Zivin and his co-authors found that the risk-loving participants were most likely to fund breakthrough projects.
Listen to the podcast below as Graff Zivin elaborates on the risk mentality of R&D managers, how that affects the U.S. economic system, and how it all comes together during times of crisis, such as COVID-19.