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Publications
  • 2023
  • Working Paper
  • HBS Working Paper Series

Scoring and Funding Breakthrough Ideas: Evidence from a Global Pharmaceutical Company

By: Joshua Krieger, Ramana Nanda, Ian Hunt, Aimee Reynolds and Peter Tarsa
  • Format:Print
  • | Language:English
  • | Pages:54
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Abstract

We study resource allocation to early-stage ideas at an internal startup program of one the largest pharmaceutical firms in the world. Our research design enables us to elicit every evaluator’s scores across five different attributes, before seeing how they would allocate capital to the projects in a head-to-head comparison. In head-to-head comparisons, evaluators displayed a systematically higher preference for projects that scored high on execution-related attributes, compared to the organization’s proposed weight on these attributes. Because of this, projects of similar overall quality perceived as being high risk and high reward were systematically penalized relative to projects perceived as less transformational, but safer bets. Our results shed light on a potential mechanism for why breakthrough ideas are handicapped in R&D funding.

Keywords

Project Selection; Pharmaceuticals; Financing Innovation; Resource Allocation; Innovation and Invention; Research and Development

Citation

Krieger, Joshua, Ramana Nanda, Ian Hunt, Aimee Reynolds, and Peter Tarsa. "Scoring and Funding Breakthrough Ideas: Evidence from a Global Pharmaceutical Company." Harvard Business School Working Paper, No. 23-014, August 2022. (Revised November 2023.)
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About The Authors

Joshua Lev Krieger

Entrepreneurial Management
→More Publications

Ramana Nanda

Entrepreneurial Management
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More from the Authors

    • 2023
    • Faculty Research

    Evaluation and Learning in R&D Investment

    By: Alexander P. Frankel, Joshua L. Krieger, Danielle Li and Dimitris Papanikolaou
    • September 2022
    • Journal of Monetary Economics

    House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data

    By: Sari Pekkala Kerr, William R. Kerr and Ramana Nanda
    • September 2022
    • Management Science

    Find and Replace: R&D Investment Following the Erosion of Existing Products

    By: Joshua L. Krieger, Xuelin Li and Richard T. Thakor
More from the Authors
  • Evaluation and Learning in R&D Investment By: Alexander P. Frankel, Joshua L. Krieger, Danielle Li and Dimitris Papanikolaou
  • House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data By: Sari Pekkala Kerr, William R. Kerr and Ramana Nanda
  • Find and Replace: R&D Investment Following the Erosion of Existing Products By: Joshua L. Krieger, Xuelin Li and Richard T. Thakor
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