Pop up economics

Summary

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More or Less: "Pop Up Economics"

Host: Tim Harford
Date: January 16, 2013
Episode Theme:
A live storytelling episode exploring the nature of innovation—its incremental progress through marginal gains and the dramatic leaps that result from high-risk ideas. Harford uses recent British cycling triumphs and the story of Nobel Prize-winning scientist Mario Capecchi to examine how innovation happens and how we might better foster it.

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Main Theme Overview

Tim Harford delves into the world of innovation, contrasting two types: marginal, incremental improvements versus big, risky, transformative leaps. Using examples from British cycling and medical research, he questions why institutions often prefer safe, steady progress and ponders how to support those with audacious, breakthrough ideas.

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Key Discussion Points and Insights

1. British Cycling and the Power of Marginal Gains

[02:00 – 06:00]

• Harford opens with the British Olympics cycling team’s dominance, specifically their seven gold medals compared to the rest of the world’s three.
• He recounts the influence of Matt Parker, Head of Marginal Improvements at British Cycling.
  • Parker introduced innovations like electrically heated pants (to keep muscles warm pre-race), cleaning tyres with alcohol, hand hygiene protocols, traveling with orthopedic pillows, and optimizing the "golden hour" between semifinals and finals.
• These examples illustrate “marginal gains” — the philosophy of breaking down every aspect of performance and seeking small, consistent improvements.
• Harford lauds marginal gains, pointing out that tech companies regularly apply them, but questions why public institutions don't do the same in areas like schools or healthcare.
  • Quote (Tim Harford, 05:10):
    “I love the idea of marginal improvements ... but I wish that governments, that corporations would just focus a bit more on these marginal improvements.”

2. Are Marginal Gains Enough?

[06:00 – 08:00]

• Tim expresses a concern: Not all innovations are incremental.
  • “Penicillin wasn’t. The Spitfire, wasn’t. The Internet wasn’t.”
• Some vital innovations are ‘long shots’: unlikely to succeed but world-changing if they do.
• The case for breakthrough innovations is introduced.
  • Quote (Tim Harford, 06:27):
    “Sometimes we make gigantic leaps and they’re very long shots. And it’s not so easy to persuade somebody to fund those long shots.”

3. The Story of Mario Capecchi and the ‘Knockout Mouse’

[08:00 – 19:00]

• Harford tells Mario Capecchi’s remarkable story:
  • In the early 1980s, Capecchi proposed a revolutionary idea to manipulate mouse genes—a near-impossible feat at the time.
  • The US National Institutes of Health (NIH), while supportive of reliable, incremental science, rejected Capecchi’s high-risk proposal.
    • Quote (Tim Harford, 10:20):
      “To the National Institutes for Health, they thought Mario Capecchi’s idea wasn’t just hard—it was impossible. It was science fiction.”
  • Capecchi’s challenging early life is described, including surviving as a semi-feral child in WWII Italy and reuniting with his mother post-war.
  • He went on to study at Harvard under James Watson (co-discoverer of DNA). Watson praised Capecchi’s achievements but Capecchi left, criticizing Harvard’s focus on ‘short-term intellectual gratification’ and incrementalism.
    • Quote (Tim Harford, 14:37):
      “If you want to do great work, if you really want to innovate, if you really want to make a difference, you need more space than that.”
  • Capecchi defied NIH guidance and pursued his gene editing research. He invented the ‘knockout mouse,’ laying the groundwork for gene therapy. In 2007, he shared the Nobel Prize for Medicine.

4. The Trouble with Funding Big Leaps

[19:00 – 22:00]

• Harford returns to his main concern: our systems prioritize incremental improvements and undervalue risky, potentially transformative ideas.

• He notes that most people, when taking high risks, appear unsuccessful until (and unless) they achieve a breakthrough.

  • Quote (Tim Harford, 20:27):
    “If you’re pursuing long shots ... most of them don’t come off. Most of them are failures. You come into the office every day and you look like a loser every single day until the day you make that breakthrough.”

• Harford highlights the Howard Hughes Medical Institute (HHMI), which deliberately funds high-risk, high-reward research, tolerates failure, and seeks truly transformative discoveries.

  • Studies show HHMI’s projects are more likely to be in the top 1% of most-cited scientific papers, compared to NIH’s steady but safer output.
  • Quote (Tim Harford, 21:20):
    “If you’re interested in research that really makes a difference, that’s in the top 1% most cited papers, you need to fund the long shots.”

5. Conclusion: Balancing Incremental and Radical Innovation

[22:00 – End]

• Harford acknowledges that both marginal gains and moonshot attempts have their place.
  • Marginal improvements are “really important, really valuable,” but transformative breakthroughs demand a different tolerance for risk.
  • The episode concludes with the inspiring note that Mario Capecchi, initially rejected by the NIH, became a principal investigator for the HHMI—an organization celebrated for supporting long-shots.
    • Quote (Tim Harford, 22:50):
      “One of their new principal investigators—his name is Mario Capecchi.”

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Memorable Quotes

• On British cycling’s domination:
  “Team GB, seven gold medals. The entire rest of the world, three gold medals ... That’s pretty good going.” (Tim Harford, 03:30)

• On marginal gains:
  “Marginal improvements, marginal gains ... You just break it down and you look at every single part of it and you ask yourself, could we make this just a little bit better?” (Tim Harford, 05:05)

• On risk-aversion in public funding:
  “They don’t want to fund failures; they want to fund innovations that are almost guaranteed to succeed.” (Tim Harford, 09:52)

• On the need for both approaches:
  “We need both [incremental and radical innovation]. It’s just one of them is really sexy and one of them isn’t.” (Tim Harford, 22:35)

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Episode Structure and Important Timestamps

| Timestamp | Segment | Highlights | |----------------|-----------------------------------------------------|-----------------------------------------------------------------------| | 00:32–06:00 | British Cycling & Marginal Gains | The “hot pants,” Matt Parker, Olympic success | | 06:00–08:00 | Questioning Incrementalism | Are all innovations just small improvements? | | 08:00–19:00 | Mario Capecchi’s Biography and Work | WWII childhood, Harvard, gene editing, NIH rejection, Nobel Prize | | 19:00–22:00 | Systemic Barriers to Breakthroughs | High-risk R&D, looking like a “loser,” the challenge of long shots | | 22:00–End | The Case for Funding Long Shots | HHMI model, impact of bold research, Capecchi’s recognition |

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Summary

Tim Harford’s lively episode skillfully blends Olympic cycling innovation and cutting-edge biomedical science to spotlight a central economic (and societal) dilemma: We thrive by making tiny improvements, but world-changing progress often requires bold, unsupported leaps. Harford urges listeners, institutions, and policymakers to recognize the importance of funding both pathways—to cherish steady gains and to courageously invest in the stubborn, risky, potentially transformative ideas that might just change everything.

Transcript

[A]

You're listening to a programme from BBC Radio 4.

[B]

Dear More or less subscriber Tim Harford has recently recorded a brand new series for BBC Radio 4 called Pop Up Economics, in which he tells a live audience short stories about people and ideas in economics. We thought you might like it, so here's the first episode. If you want to hear the rest of the series, please subscribe to the Pop up economics [e-mail] radio4.

[A]

You made very good time, Tim. I came on my bike and I was wearing electrically heated pants.

[B]

What?

[A]

Innovation works in mysterious ways. Come on in, I'll tell you all about it. Thank you very much. Thank you very much. Okay. Oh, gosh, me. Right, is everybody ready for some economics? Yes. Excellent. Good. I want to talk to you about innovation, and that means I need to talk to you about two men. It also means I need to talk to you about British cycling. It's been a pretty good year, Right? Just to focus on the velodrome, the Olympic team. Did anybody keep track of how many gold medals we won? A lot. Yeah. Well, I like precision. That's right. Just to be a little more specific, the score was Team gb, seven gold medals. The entire rest of the world, three gold medals. That's pretty good. That's pretty good going. And I was thinking about this. I was watching this amazing performance and I thought, wouldn't it be great if we could figure out what makes them tick, if we could figure out why they're so successful and maybe bottle it and distribute it a little more widely. And now we know. Now we know what the secret is. Is not Chris Hoy's thighs, amazing as they are, something else. The secret is a man called Matt Parker. And it was Matt Parker who came up with the idea of the hot pants. He realized that athletes would warm up and then they'd sit on their bikes ready to go, and their muscles would cool down. And what they needed was electrically heated pants to keep their muscles warm. And then just before they'd go, he'd rip the pants off and away they'd go, the hot pants. It was also Matt Parker who realized that if you rubbed a little alcohol on the wheels of the bike, you could clean dust off the tyres and then they would have a little bit more grip. And as you started out of the starting gates, you'd get going a little bit faster. Matt Parker also pointed out to, to the British Olympians the importance of good hand hygiene. Wash your hands really thoroughly, make sure you get the thumbs, because the Olympic Games are full of people from all over the world, all kinds of foreign germs you've never been exposed to before. People get sick quite a lot. So wash your hands and always, always travel with an orthopedic pillow because you want a good night's sleep. You won't be waking up feeling a bit stiff if you're trying to race for gold. In the velodrome. It was Matt Parker who realized that there was an hour between the sprint semifinals and the sprint finals. And he called it the golden hour. And he said if we could somehow maximize our athletes ability to recover in that hour, that could be a critical advantage. And if you go and look at the numbers, you find again and again and again the British athlete going faster in the final than in the semi final. And again and again and again the foreign athlete going slower in the final. And Matt Parker's job title was head of marginal improvements at British Cycling. And I love the idea of marginal improvements, marginal gains, the idea that you take a process, a complicated process, and you just break it down and you look at every single part of it and you ask yourself, could we make this just a little bit better? And I wish that governments, that corporations would just focus a bit more on these marginal improvements. Some do. Of course, web companies tend to constantly optimize their web pages, but why doesn't the government use marginal improvements in the school system, universities, in the National Health Service? It would be brilliant. We could really do with it. But although I love the idea of marginal improvements, I'm worried about something. I'm worried about the fact that not all innovations are marginal improvements. Penicillin wasn't. The Spitfire, wasn't the Internet wasn't. Sometimes we make gigantic leaps and they're very long shots. And it's not so easy to persuade somebody to fund those long shots. Let me give you an example. The example concerns a scientist called Mario Capechi. Thirty years ago, Mario Capechi applied for funding to the National Institutes for Health, which is a wonderful organization based in the United States. It's taxpayer funded and they do medical research, they fund a lot of vital life saving medical research. But they're kind of into the marginal improvements thing. And that's understandable. They're spending taxpayers money. They don't want to fund failures, they want to fund innovations that are almost guaranteed to succeed. So show me the track record. Show me the previous publications. Show me something, something that will convince me that there will be a result here, there will be a publication, there will be something that we can call progress. And that wasn't what they got from Mario Capechi. When he went to them in the early 1980s, he had this idea he was going to take a gene in a mouse's DNA and he was going to take out that gene, he was going to replace it with a different gene, just a little thing. It's kind of like imagine walking into a medium sized bookshop and opening one book and replacing one sentence on one page of one book only. You're doing the whole thing on a molecular level. You're not going to do that with tweezers and a magnifying glass. It's hard. It's really hard. In the early 1980s and to the National Institutes for Health, they thought Mario Capechi's idea wasn't just hard, it was impossible, it was science fiction. And they said to Capechi, look, you're a great researcher, we're quite happy to give you funding. Please go away and do something boring and forget about the mice. To understand what Mario did next, it's helpful to know a little bit about the man's history. Mario Capechi was born in northern Italy just before the war. And his earliest memory is of the Gestapo knocking on the door of his house and arresting his mother and taking her away to a concentration camp, probably Dachau. Kopecki's mother never married his father. He was a violent man and she was a political dissident. And she knew that this would probably happen, so she had to make provision for Mario. He couldn't stay with his father, he couldn't stay in a house by himself. So she arranged for some local villagers in northern Italy to look after him. But after a year or so, something went wrong with that plan. We don't know exactly what, but Mario, four and a half, ended up in the care, I use the word advisedly, in the care of his father. And he later said nothing he went through was as painful as being treated violently by his own father. And after just a few weeks, Mario Capechi ran away. And he wasn't even five years old. He spent the war in and out of street gangs, in and out of church hospitals, church, church, orphanages. And by the end of the war, Mario was eight and he was sick, really sick. He was staying in a hospital. He didn't have any clothes because the hospital knew he'd try and run away if they gave him clothes, just had a blanket, they'd give him some chicory, coffee to drink and a bit of dried bed to eat. And he was living in conditions that a lot of Italian orphans were living in and a lot of them died. Mario, of course, did not. On his 9th birthday, somebody turned up at the hospital to collect him. He didn't recognize her. And that was because after spending the entire war in Dachau, his mother had changed beyond recognition. She spent a year combing Italy trying to find him. And she dressed him up in traditional Tyrolean costume. He still got the hat with a feather. And she took him to America where she had relatives. So Mario spent over half his life feral. He doesn't speak any English. And the next thing you need to know is that he went to Harvard. He studied under James Watson, the co discoverer of DNA. And James Watson's a pretty scary man. And Kopecki said to Watson, I want to be a molecular biologist. This is this brand new field studying DNA. I want to be a molecular biologist. Where should I study? And Watson looked at him like he was mad. He said, you should study here at Harvard. You'd be flipping crazy to study anywhere else. Except he didn't say flippin'. And Mario did study under Watson for a couple of years. Watson later said that he achieved more in those two years than most scientists achieve in a lifetime. But then he left. And the reason he left was, is very interesting. He said Harvard had become a bastion of short term intellectual gratification. Too many smart people trying to impress too many other smart people in a hurry, too many marginal improvements. And Kopecki said, if you want to do great work, if you really want to innovate, if you really want to make a difference, you need more space than that. And he went to Utah where they didn't even have a department of molecular biology. He set one up. So a few years later he bumps into this grant making body from the National Institutes for Health who say, ooh, don't do that mouse thing. Very, very risky. Yeah, right. Mario took the money and he spent it exactly the way he wanted to spend it. And he knocked that gene out of the mouse genome. It's called the knockout mouse. He replaced it and he laid the foundation stone for all gene therapy. He went back to the National Institutes for Health three years later and they said, we are very glad you didn't follow our advice. And in 2007, Mario Capechi shared the Nobel Prize for Medicine. Now it's an inspiring story. I love stories about stubborn geniuses, but it makes me worry. The reason I worry is because I would really like an innovation system that doesn't just support stubborn geniuses, but supports anxious, nervous, shy, risk averse geniuses as well. Is that too much to ask? Maybe it is. Is there something we could do? And the answer is, yeah, there's something we can do. There are examples. But it's not easy. And the reason it's not easy is very simple. If you're a Matt Parker, and I stress again, this marginal improvement stuff, it's really important, it's really valuable. If you're a Matt Parker, you come into the office every day with new data proving that things just got a little bit better and you look brilliant. And if you're pursuing long shots, the thing about long shots is most of them don't come off. Most of them are failures. You come into the office every day and you look like a loser every single day until the day you make that breakthrough. Mario Capechi made the breakthrough. But the truth is, sometimes the breakthrough never comes. You look like a loser all your life, you are a loser. And there's no way to tell the difference. But I have drawn comfort from one organization called the Howard Hughes Medical Institute. Just like the nih, it funds medical research. Unlike the nih, it's interested in the long shots. It's happy to see failure. It wants to be convinced that if there is success, it's success that's going to make a difference. And when three economists studied the outputs of the NIH and the hhmi, they found that, sure, the nih, marginal improvements delivers success almost every time and the Howard Hughes Medical Institute fails very often. But if you're interested in research that really makes a difference, that's in the top 1% most cited papers, you need to fund the long shots. You need to do things the way the Howard Hughes Medical Institute do. We need both. It's just one of them is really sexy and one of them isn't. But I am pleased to report that Howard Hughes Medical Institute are very proud of one of their new principal investigators. His name is Mario Capechi. Thank you very much. You can download many more BBC radio 4 programs for free. Find these at BBC co uk radio 4.