Surprising applications of economic thinking to scientific collaboration

Author: James Smith, 12/09/14


With contributions from David Brindley.

Fish shoe by Andre Perugia

Fish shoe by Andre Perugia

Suppose you are a talented fisherman and an outstanding shoe-maker. You have abandoned your dreams of a career in the regenerative medicine industry because, in one day, you can catch 100 fish or make one complete pair of shoes. That’s a very satisfying outcome for a day’s work.

Your friend, unfortunately, is less able in both areas. It takes him three days to catch 100 fish and 1.5 days to make a pair of shoes. One hundred fish sell for $80 and a pair of shoes for $70, but you both require 100 fish and one pair of shoes per week for yourselves; how can productivity be maximized? Given that you are better at both catching fish and making shoes than your friend, the intuitive option is to forget about him and just produce the goods yourself. That is not the correct answer.

Working a 6-day week and alternating between the two tasks, after what you keep for yourself, you would have 200 fish and two pairs of shoes to sell, a profit of $300. In the same time, your friend has just one pair of shoes to sell, a profit of $80. Now imagine you focused on fishing and let your friend focus on making shoes – you would have 500 fish to sell and one pair of shoes to buy, a profit of $330; your friend has three pairs of shoes to sell and 100 fish to buy, a profit of $130!

Both people are better off, because they both have a ‘comparative advantage’ with one good, meaning that they can produce it with a relatively lower opportunity cost (i.e. labour time) than the other.

This curious outcome results from the law of comparative advantage, which essentially states that even if one party is worse at producing every single good than another party, it can still benefit that person to specialize and trade as long as both of them are relatively more efficient at producing one good than the other.

Can we apply this thinking to regenerative medicine, or more generally to science?

We are trying to emphasize that, even when counter-intuitive, specialization and cooperation can be beneficial. In this example, goods were exchanged. In science, information can replace goods.

For obvious reasons, specialization is common in scientific and medical research. While specialization is necessary, to achieve the greatest net gains in scientific information – and ultimately patient outcomes – cooperation and exchange of information are also needed. This should not be a passive exercise.

Exemplifying this, the buzz word of the first day of the ‘Partnering for Cures’ conference in New York was ‘consortium’. A consortium may be considered a catalyst for individuals and organizations to pool together resources and focus on a specific problem or set of problems. They are fast becoming important components of the R&D pipeline and are appearing at an ever increasing rate. The Centre for Commercialization of Regenerative Medicine (CCRM) has created an industry consortium that is quite well known in the field.

Crucially, the most effective consortia have representatives from different sectors with different specialities and expertise; clinicians, academics and industrial representatives can together tackle bigger problems more efficiently than any could if they approached it alone, or just with others from within their own sector.

In a panel titled ‘Can research-by-consortium accelerate progress against disease?’ the answer seemed to be an overwhelming ‘yes’. (Given that both bloggers are active members of a consortium [CTSCC], this was a relief!) Uniting different stakeholders in medicine and different scientific disciplines to work towards the same overarching goal – curing disease and advancing new treatments – is likely to be a powerful and efficient way to ensure that patient needs are rapidly met. Building consortia – particularly engaging multiple industry stakeholders spanning biopharma; tools and technology providers; CROs and CMOs – has also been a focus of CCRM and a critical factor behind its success to date.

Fortunately, this message already seems to be resonating strongly in the scientific community – though perhaps not previously in the context of fish and shoes.

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James Smith

James Smith

James Smith is a Research Associate of the CASMI Translational Stem Cell Consortium, where his current research focuses on extracellular vesicle biomanufacturing, iPSC translation and several systematic reviews including immunotherapy, fracture healing, and the use of placebos in surgery. He recently completed a SENS Research Foundation Scholarship at the Harvard Stem Cell Institute and Jeff Karp’s Lab at the Brigham and Women’s Hospital, where he developed a computational model of extracellular vesicle bioprocessing costs. Aside from translational research, James has an active interest in basic biology, achieving a First Class undergraduate degree in Biological Sciences from the University of Oxford. You can find James on LinkedIn.
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