In this episode of the McKinsey Global Institute’s Forward Thinking podcast, co-host Michael Chui talks with Alec Stapp, co-CEO of the Institute for Progress, a Washington, DC, think tank he co-founded in January 2022. Progress is a policy choice, its founders say, and they have chosen to focus initially on three topics—meta-science, high-skill immigration, and biosecurity. Why those three? Their view is that each one is important, neglected by other researchers, and potentially tractable politically.
Michael Chui (co-host): Janet, we talk a lot with our guests about a lot of really hard problems.
Janet Bush (co-host): Yes, I guess that’s true. From inflation to pandemics to climate change, it can feel a little overwhelming.
Michael Chui: And yet, working at a research organization like MGI, you kind of have to be an optimist to do research on these topics.
Janet Bush: I see what you mean. Unless you’re a complete nihilist, you have to believe that the research findings you produce will actually help to make things better—achieve actual human progress.
Michael Chui: Exactly. Our guest today is co-founder of a new think tank, and they’re focused on policies that can help to accelerate scientific, technological, and industrial progress.
Janet Bush: Interesting. So what specific topics are they studying?
Michael Chui: Things like how scientific research is funded—how to encourage funding to flow toward new breakthrough ideas. How can you bring talent to the places where it can be most productive? And what can we learn from the current pandemic so that we’re better prepared for the next one?
Janet Bush: I would like to be an optimist about these things! I am looking forward to hearing this.
Michael Chui: Alec Stapp is the co-founder and co-CEO of the Institute for Progress. Alec, welcome to the podcast.
Alec Stapp: Thanks for having me, Michael.
Michael Chui: I’d love to start with your background. Where’d you grow up, what’d you study? How’d you end up being a co-founder of the Institute for Progress?
Alec Stapp: Happy to share some of that background. I grew up in Arizona, went to public school out there for high school and college, went to the University of Arizona for undergrad. Through my entire college experience, I was thinking, I’ll go into academia for economics. I was both a double major in economics and mathematics. But the more I learned about the academic experience and life of a researcher, I thought, is that for me? I’m not sure.
Kind of to put off that decision on post-undergraduate experience, I met some friends in college who were doing a startup company in ed tech. And they needed someone. They had the engineer and the designer, but they needed someone with a finance, accounting, business mindset background to join the team. And I thought, “You know what? I’ll try this out. It’s a fun thing to do.”
It was really fun building the business, but the entire time I was reading economics blogs online, really fascinated with policy, and politics in DC, and thinking, at some point I got to find a way to get back into economics. Maybe academia, maybe otherwise.
As the startup was winding down, I was looking at master’s programs as an alternative to PhDs. And George Mason University out here, near DC, has a great two-year master’s program where it’s fully funded, and you also get to be a part-time research assistant at the Mercatus Center, which is a think tank affiliated with GMU.
I moved out to DC, and that was just a great way to get my foot in the door and get into the life of a think tanker. And then, eventually, starting and co-founding a think tank of my own with one of my colleagues, Caleb Watney. That’s how we got to where we are today.
Michael Chui: What is this think tank? It’s a new one. There are ones that have been around for many years. You’ve worked at some. What’s different?
Alec Stapp: I’ve been at quite a few in my short time in DC. I moved out here in 2017. And in my five years, I got to work at a variety of institutions both on the center left and center right, most of which have been around for decades. And really got to learn a lot, had great experiences.
But one of the things I realized, and my co-founder realized, was that Washington policy making and the think tank community needed a burst of new energy and a burst of new institutions.
It’s really hard to transform an institution that’s been around for decades, especially in the think tank space, because at a multi-issue think tank, they’ve picked a lot of positions on issues and had fights in the ’90s and 2000s, and bled for certain positions, and won some fights, lost some fights. And if you’re the new person coming in saying, “I think we should reverse our position on issue X,” the leadership is not really keen to do that.
And so my co-founder and I thought, “Let’s start a new institution with a new set of funders, so we only receive funding from individuals and foundations,” which is different than a lot of think tanks in DC that receive corporate funding. And we thought, let’s hire really well-rounded people who can do research, communications, and direct outreach on Capitol Hill and to various federal government agencies.
The traditional think tank model is very siloed, where you have your research team that writes white papers and a comms team that does outreach to journalists and goes and does public communication. And then you have the government affairs team that manages the relationships with policy makers. But in our experience, in modern DC policy making, the best people, the most effective people at think tanks are people who are integrated across all those areas.
We found that it’s just a much more effective way of doing things. That’s the model we’re currently testing out, across a wide array of science and innovation issues in particular. So our first three we’re focusing on are high-skill immigration, biosecurity, and meta-science. How do we improve science policy?
Michael Chui: I’d love to get into those. How did you pick those? And what’s your point of view overall?
Alec Stapp: Our point of view overall is, as the Institute for Progress, we want more progress. By that we mean a particular kind that we think we have some relevant expertise in—scientific, technological, and industrial progress.
And really, we want to represent two emerging communities in DC. Progress studies, which is a field kind of founded by Tyler Cowen at GMU and Patrick Collison, co-founder of the company Stripe.
They said, “Look, there are fields like economics, sociology, history that study these different topics, but no single field is focused on how we make faster progress. And that really needs to be the focus, needs to be your north star. And it needs to be more of a practitioners’ thing. It needs to be more like medicine instead of biology. It needs to be implemented in the real world. You need new institutions, like think tanks, for example, to help you implement these ideas.” That’s the progress part of what we do.
The other community is effective altruism, and these are people who—broadly defined, it’s been a community for about 15 years. The question is, how do we do the most good that we can with the given amount of resources, either someone’s time or someone’s money? When you apply that to public policy and how you figure out what to work on, you really do a framework with three criteria.
It’s what’s tractable, what can you actually make change on if you were to work on it? What is important, so if you were to make that change would it matter to the world? How big of an impact could it have? And is it neglected? How many other people are working on it? And if there’s tons of people working on it, then probably your marginal addition of your time or money is not that valuable.
When you use those three criteria—importantness, neglectedness, and tractability—what we decided was for our early areas, science policy, immigration with a focus on high-skill immigration, and biosecurity were the three areas that we thought we should start with. But we’ll expand into other areas over time.
Michael Chui: And did you quantify all these in order to get to these three? Or how did you think about it?
Alec Stapp: You definitely use rough rules of thumb and look at some of the empirical evidence. There’s some seminal papers in the economics literature, one by Michael Clemens at the Center for Global Development. I believe the title of the paper is something like Trillion-dollar bills on the sidewalk? He’s trying to estimate the economic impact of truly open borders across the global economy.
Obviously, this is not a realistic or near-term goal, because this is not going to happen given how nation-states work, and their political incentives. But it’s a useful exercise of thinking, if we were to dramatically increase labor mobility across countries, so a lot of people move towards economic opportunity, what would the impact be? And he calls it Trillion-dollar bills on the sidewalk because it would literally have trillions and trillions and trillions of dollars of total economic impact.
Michael Chui: Let’s go through some of these topics specifically. Why don’t we start with meta-science, which is an interesting term. You’ve also described it as science policy. Is this trillions of dollars lying on the sidewalk?
Alec Stapp: I think it is, and it’s because you have to recognize that the US federal government is the largest funder of R&D in the world, primarily through the NIH [National Institutes of Health] and NSF [National Science Foundation].
The question is, one, is this the appropriate role of government? Should government be one of the largest funders of basic research in the world? And I think it’s a clear market failure where the payoffs for basic science are often decades in the future. It’s very hard to predict ahead of time, what would the commercial application of this particular scientific project be?
Even for venture capitalists who have a ten-to-15-year time horizon to wait for payback, the multidecade timeline is just too long. And often we see in hardware and hard tech, it’s even riskier to wait for that payoff. You often see venture capitalists focus on software innovation, which is really important but not the only important part of innovation.
I think, one, it’s from a basic, is there a market failure here, is there is a public good that the government could be financing, is a very strong argument for lots of scientific funding. And the question is, how are you funding that science? What are the structures, incentives, and really the overall paradigm you’re operating for science in? That’s the question we try to focus on the most. It’s why we call it meta-science and not just science policy.
It’s the meta-science, meaning “science of science.” How do we apply the scientific method to how we’re funding science itself? That means more experimentation, randomization. We should probably be looking at a more diverse set of institutions and types of researchers we’re funding.
If you look at trends over time, the US has started to fund older researchers. Funding is increasingly concentrated at a small number of institutions, many of which are located in the Northeast of the United States. These are our elite institutions, and they get funding for a good reason.
But oftentimes, breakthrough research happens, by definition, from someone having a contrarian opinion or an anti-consensus opinion. I worry that we’re getting lots of incremental research. And there’s lots of metrics that show this over time, that we seem to be getting less breakthrough fundamental research. And I think having a more experimental approach and finding a diverse group of researchers could help us break through and get more bang for our buck in public money.
Michael Chui: You gave one of your criteria as tractability. What is it that makes this a tractable problem?
Alec Stapp: I think scientific funding is relatively uncontroversial or nonpartisan in nature. So we try to, as an institution, as a think tank, avoid the culture war issues, the most controversial issues, because we think the opportunity in modern-day politics for progress and traction on issues is in these less heated, more nonpartisan areas.
It’s an unassailable goal to say that we should at the very least, given the fixed pot of money we’re currently spending, we should spend it better to get more innovation that directly benefits Americans. It’s very hard to be against that sort of thing.
There’s lots of low-hanging fruit, because we’re doing things really poorly now. For example, one intervention that we recommend, that we’re working on actively, is trying to get a pilot program for a scientific lottery. This idea would be to, say, take a small group of failed grant applicants to either NIH or NSF, and randomize them and fund a small portion of those grants that were almost accepted but didn’t quite make it over the bar. And then compare them to the ones that just made it over the bar and had been accepted through the normal process.
You can measure future citations, future patents that are related to that basic research, and see, OK, did our process actually get us a lot of funding better research, or is it kind of a random process in itself?
Primary investigators report spending more than 40 percent of their time on grant maintenance and other paperwork requirements. It’s possible that all that paperwork and all that red tape is worth it, because it helps sort the good ideas worth funding from the bad ideas. But a scientific lottery could help us learn more about our scientific funding institutions and realize if they’re not that much better, then we need to rethink how we’re actually picking these projects.
Other countries have tried this. New Zealand, for example, implemented their own pilot program, and they found that there’s almost no discernible difference between the projects that were funded through the normal process versus projects that were funded through the lottery program, which is a little scary. If random chance of these minimum-quality projects was just as good as the process you implemented, you should radically rethink how you’re picking things.
Michael Chui: First of all, that statistic is one of the reasons I didn’t end up entering academia. But I’m curious, because another guest of our podcast on a completely different topic, our former colleague Byron Auguste, once said to me, “What Silicon Valley calls innovation, a federal funder might call fraud, waste, and abuse.” How do you think about assigning funding by lottery in the context of what folks might say—“Are you serious?” How does that work?
Alec Stapp: You hit on a key political constraint that we think about a lot and I think is a real barrier to some of these things. There are two options, I think, for this lottery idea that could mitigate some concerns. One, you could only put projects that clear some kind of minimum quality thresholds. You’re not putting any person—they still have to pass through the first filter. Say you only have 20 percent of the bureaucracy or 30 percent of the bureaucracy just as a check on the craziest ideas that could be politically controversial.
And then, two, there is great research from Pierre Azoulay, who’s an economist who studies the science of science. He studied HHMI [Howard Hughes Medical Institute], which is an institution that funds individual scientists, kind of carte blanche. It identifies potential superstars and says, “Instead of funding your next scientific project, we’re going to give you a pot of money to spend however you see fit.” It’s kind of an unconstrained version of scientific funding.
A lottery program or just moving the system towards that could be less controversial, because then you’re saying, “Oh, we just funded this very well-qualified, prestigious individual.”
Michael Chui: It would be like a version of the MacArthur “genius grants,” as they call it.
Alec Stapp: Exactly, exactly.
Michael Chui: Another topic: over time, is the amount spent on R&D as a percentage of GDP by the US federal government declining, and does that make sense?
Alec Stapp: The latest data I’ve seen, and this is a multidecade trend, is that the amount of R&D as a share of GDP in the whole economy, both private and public sector, has been roughly steady. But we’ve shifted from—decades ago, it was basically two-thirds public R&D, one-third private R&D. And now it’s basically completely inverted towards two-thirds private, one-third public.
Obviously, like you’re mentioning, there’s multiple ways to interpret that. You could say, “The government doesn’t have the best incentives and profit motive. And so maybe it’s actually better for allocation of scarce resources for the private sector to be the one funding R&D, rather than the government.”
My concern is that on general macroeconomic trends, I think there’s lots of data showing that we’ve had less radical innovation, fewer breakthroughs. So the multidecade trend is not a slam dunk in favor of that model, but maybe it pushes us [in] the other direction of saying, “Something used to be working better, and now it’s not.”
Some of the more microeconomic evidence we have shows that public R&D spending actually often crowds in private investment, doesn’t crowd it out. And often, I think, the way to think about that in a mental model is that government funding often funds earlier-stage research, like we talked about before.
If there’s now more basic science floating around in academia and elsewhere that is then potentially commercializable, and then you have the biotech VC who’s scoping academia, figuring out what could turn into a startup or what could be the next big thing, there’s more potential fruit to pick in that scenario. Based on the bulk of the evidence, there’s often—they’re complementary and not substitutable in that sense. This has been the trend, and I think we should try to reverse it.
Michael Chui: How does that trend look in other countries, or what do we have to learn from other countries?
Alec Stapp: Around the world, the great thing about global development and a lot of other countries getting richer is that they add a lot of scientists and researchers to the mix. And so there’s a very crude way to think about the scientific process and research and development in general, that it’s “How many brains can you throw at a problem?”
There’s good research, from Nick Bloom and colleagues, on “are ideas getting harder to find?” And a very high-level metric they determine—and again, is the scientific process slowing down, are ideas getting harder to find—is that for the average doubling of innovation in a field, it requires eight X the number of researchers in that field.
It gets much, much, much harder. And so in the near term, you’re really just thinking about, “How can we maximize the number of smart people we’re throwing at problems?” Because it is getting harder, probably.
I think about that often in terms of immigration. That’s why high-skill immigration is a particular focus of our institution. The US has these amazing research clusters in Silicon Valley, in New York, in our big cities, near our major universities. Yes, other countries are getting richer, and they’re investing more in science. But really it’s about moving the smartest people to the frontier, so they can do the most important work. And so bringing them to the United States is a clear winner in that.
There has been some great research on this of International Mathematical Olympiad competitions, where they track where do those people go over time, and how do their careers evolve? And I believe they follow those who go into academia, and they track whether they’re in other countries. Do they move to the United Kingdom or the US or other countries?
The stat they found, I believe, was something like, if they move to the US, they have four X the number of citations as if they moved to the United Kingdom. And the UK is a rich country. They’re arguably close to the frontier, also on the frontier. But I think that speaks to what US institutions and clusters are able to do with raw human talent in maximizing their impact on the world.
Other countries are investing at an increasing rate, and that’s great. But I think there’s weirdly still a strong case for clustering as much of that talent in the United States as possible.
Michael Chui: Let’s come back to the talent question in a moment. I did want to follow up on one other question around meta-science. Even in the economics literature, this idea of the Solow Paradox: the innovation and the technology in science precedes its eventual impact on the economy, probably because you often have to have complementary management innovations. Or deployment and scaling is actually really, really hard.
The other thing we’ve discovered in our research is, the time between the commercial availability of an innovation and its plateau and adoption actually hasn’t accelerated that much. It’s one to three decades, roughly speaking. I’d love to get your reflections on that. Once you get past the initial invention, how do we scale that up to actually have impact in the economy?
Alec Stapp: That’s a critical question, and I agree. It’s often this slow, kind of grinding process towards adoption. And I think of this—maybe just to make this concrete with an example, I think we’re seeing this play out right now with electric vehicles, where the market share of new vehicles sold that are electric versus internal combustion engine is rapidly increasing year over year.
Five years ago in the US, it was rounding to zero on the share of electric vehicles. And now it’s a significant percentage, and it’s rising every year. You’ve got to be cautious about a centralized decision maker in the government trying to predict a future market trend.
Obviously, history’s riddled with errors of subsidizing the wrong technology, the wrong standard. But in this case, I think we can be quite confident that the future of motor vehicles is electric, and we need to transition from gas stations to electric vehicle charging stations. This is a clear situation where there’s a network effect, where people won’t buy EVs until there are a sufficient number of electric vehicle charging stations, but private-sector actors won’t invest in the charging stations until there are enough EVs.
It’s this two-sided market thing. It’s clear what’s going on. Yes, it will eventually happen. Tesla’s obviously invested in their own charging network. Other companies will do the same to accelerate this. But I see a clear role for the government.
And again, what’s the market failure you’re trying to address? Well, it’s climate change. Clearly, electric vehicles are much better than internal combustion engines for the climate. I think there is an overriding government interest in subsidizing this and trying to do it in a smart way that builds that network out more quickly than the free market left to its own devices would.
You see that in a lot of situations where the government can serve as a convener of a multistakeholder group in saying, “We’re not going to dictate exactly the technological standard or where this market goes.”
We should be communicating and helping the market view disparate players converge on a standard more quickly that they all—that a majority of them agree is probably the best approach, just because standards have such huge spillovers and benefits for the entire market. That’s something that can accelerate this commercialization and adoption phase you’re talking about. Is the government playing more of a leading role coordinating those actors?
Michael Chui: Got it. All right, let’s come back to the talent topic and one that you’ve talked about, immigration. You talked about a paper that talked about trillions of dollars sitting on the sidewalk to be picked up through open borders. What’s the mechanism? How is it that people moving results in higher GDP?
Alec Stapp: It’s a key story about institutions. In that study, I think, I want to say the example they use, one of the examples he uses, is that a Haitian immigrant moving from Haiti to the United States on average eight X their income.
What you can think about there is, in that scenario, likely an unskilled laborer. But they’re moving into a set of institutions that is just much higher productivity. And this is why we think that focusing on growth and productivity is such a key, because pairing human capital with physical capital and technology is really what unlocks a lot of this value and delivers concrete benefits for people.
The actual legal immigration process itself is a huge mess, and we make it way too difficult. But once the people are here, and they’re matched with employers and high-productivity superstar firms, or they start their own business, we make it relatively easy to start a new business. And we have a great venture capital environment to support that. That’s why I think you see the outsized returns to talent, especially upper-level talent, in the United States having a huge impact.
Michael Chui: What happens, though, in this scenario where people move to the highest-productivity cities? Sometimes productivity is very concentrated geographically. What happens to the places from which these brains are drained?
Alec Stapp: That is definitely a tough question and an important question. The research we have on this—there are certain examples. Like, in the Philippines, they’re known for exporting nurses and other medical talent abroad. Often, schools in the Philippines will train nurses, and then they go work in foreign countries, upper-income countries.
What that research has found is that through the remittances and people who return home after working for years abroad, it’s a net benefit to the domestic country. If they don’t even have the potential to earn that in their home country, but they can send half or more of their income after they’ve immigrated out of the country, they can send half or more home, that’s more investment in their country, that’s directly alleviating human suffering in their home country.
Oftentimes, as immigrants, after having worked abroad for years or in their entire career, they come home, and now they’re mentoring young people, paying for people’s education in their hometown, and just trying to build up their own institutions.
Michael Chui: We’ve done some MGI research that we’ve been involved in. Even within a country or within the EU, there are places that feel left behind, that productivity is relatively low. Maybe folks have gone to places where there’s higher productivity, and they’ve benefited personally. What about those types of communities?
Alec Stapp: This is where you need reforms to laws and institutions in those communities. You need to think about, can we create a special economic zone here? Can we give certain incentives for businesses to move there, make a more pro-growth environment?
At the end of the day, the solution I don’t like is “We should then trap their most talented people there and not let them move to opportunity.” Because who are we helping here, and who are we hurting?
Michael Chui: You talk about high-skill immigration. It sounds like something that other countries, other than the United States, have been involved in. Is that working in other places? Is this basically a global competition for talent?
Alec Stapp: It’s 100 percent a global competition for talent. The United Kingdom just launched a global talent visa program that really is homing in on this high-potential category of immigrant.
They’re now allowing anyone who’s graduated from a world-class university to immediately move to the United Kingdom with a visa. They have a short list of the universities that qualify, so if you graduate from the university you can move to the United Kingdom. What you’re seeing there is, post-Brexit, this is one of the actual benefits of that, is that they’ve taken control of their immigration process, have shifted the focus towards high skilled.
Interestingly, there’s great data that actually came out that was covered in the Financial Times that anti-immigrant sentiment has plummeted in the United Kingdom. And weirdly, the overall number of immigrants pre-Brexit versus post-Brexit is roughly the same.
Those are the kind of reforms we would like to see, a shift towards a more high-skill composition to build public trust, to then over time increase the rate of immigration. Because the worst is that if you were to increase it in an uncontrolled manner and there’s public backlash, then now we get less immigration in the future. So you have to think about, how do you maximize immigration for the long run, not just today?
Michael Chui: All right, let’s go to the third topic that your institute is focused on, which is biosecurity. How did that end up making the top three list?
Alec Stapp: The pandemic really had a way of focusing minds and making these abstract risks concrete in a way for a lot of people. And so, biosecurity, and we think of that as preventing future pandemics as well as kind of picking some of the low-hanging fruit in biology.
We think, based on talking to experts in the field, we could have had mRNA vaccines a decade or more ago if we’d had both the urgency and the right regulatory environment. If there were a government buyer of those vaccines, and the FDA [U.S. Food and Drug Administration] aligned regulatory procedures, we could have had them much sooner.
It took the crisis to pull that innovation from the market. Why focus on biosecurity now? I think five years ago, if we’re looking at that importantness–neglectedness–intractability framework, you would have thought that it’s not very tractable because it’s not high salience. Politicians don’t like paying to mitigate future risks that they’re not going to get credit for if they don’t happen.
But if you say to people, “There’s a risk of a future pandemic, and it could be ten times worse than COVID,” COVID is still fresh in people’s minds. “Yeah, that was pretty bad, and if there’s a chance it could be ten times worse, we probably should spend some amount of money to stop that.” And so, we think that we’re in this narrow window where it’s worth spending a lot of time as a think tank on biosecurity.
Michael Chui: When you talked about tractability, you’re talking about political tractability, as opposed to necessarily scientific tractability.
Alec Stapp: Yes. That’s kind of how we think about our role in the ecosystem as a DC-based policy think tank. We can’t have as much direct control over where the science is today, and hopefully we can bring it to a place where the science is tractable. What is politically tractable in DC under current constraints?
Michael Chui: How did this one meet the criteria of being neglected?
Alec Stapp: There’s not as many people working on biosecurity as you might hope. You’d think even post-COVID, this would be a huge issue of importance, but it’s actually still quite neglected.
There are a few reasons for that. One, there’s still quite a bias in the field towards public health interventions. There’s a bias towards seeing negative outcomes from the pandemic as due to disparate socioeconomic backgrounds. The idea being, the most disadvantaged groups are the ones most harmed by the pandemic, so to prepare for the next one, public health officials should focus on universal health insurance and reducing the income gaps and the wealth gaps in society, so therefore we’re better prepared next time.
Those might be laudable goals that we need to work on in parallel. But our takeaway as an organization from the pandemic was that what actually worked in mitigating the harms were the vaccines and the therapeutics and some of the PPE [personal protective equipment].
The idea is to beat the next pandemic, which could be much worse than COVID, we should make sure that a lot of our investment in dollars spent is towards developing vaccine candidates and next-generation therapeutics, because that’s the things that actually worked in this crisis. And it’s unrealistic to bet on shifting the entire socioeconomic system in the United States. If that’s your plan to beat the next pandemic, I’m very concerned we won’t be able to do it.
Michael Chui: I am curious, though, as you mention things like vaccines, as you mention things like PPE, if people don’t get vaccinated, if people don’t wear PPE, those are challenges. How do you think about that?
Alec Stapp: It’s an extremely important question, and I think this gets to why we shouldn’t be satisfied with only moderately effective PPE or moderately effective vaccines or moderately effective—really it’s vaccines and PPE.
Because if your intervention relies on massive social adoption, I worry that it’s fragile and could fall apart. What I mean by that is, I recall before Operation Warp Speed was successful and we actually had multiple safe and effective vaccines that initially were 90 percent effective at preventing severe disease, they were thinking, “Oh, our goal is 50 percent effective.”
That was when we weren’t even sure we could create a vaccine. Let’s go for 50 percent. And then for the herd immunity modeling, they were saying, “Well, then we need 90 percent uptake plus, if it’s only 50 percent effective vaccine to actually end the pandemic and get herd immunity.”
Fortunately, the vaccines were more effective, and we didn’t need to rely as much on the herd immunity argument. But going forward, once you realize this is a polarized issue, masking in particular, if the solution requires everyone on the plane and everyone in the room to be masked to protect anyone, it’s probably going to fall apart over time.
But if the mask is effective, an N99 mask that’s comfortable to wear, and it’s protecting me whether anybody else wears anything or not, or if the vaccine is 98 percent effective, and if I take it, it doesn’t matter if the pathogen is transmitting throughout the community, I’m protected, I think those solutions are much more tractable and likely to succeed.
Then, hopefully, we just convince people over time, there’s a beneficial–slash–perverse dynamic where the worse the future pandemic will be, I think the less polarized the situation will be. If the future pathogen has a much higher fatality rate, then I think we’ll see much less opposition to vaccines.
Michael Chui: The G in McKinsey Global Institute is “Global.” And we have a global listenership. I suspect that there are listeners who would hear some of the things you described as being impossible, and wondering why that’s true in the United States. You described, for instance, anything that requires wide-scale adoption by the population simply isn’t going to work. I suspect there are places in the world where people would say, “That seems odd.”
Alec Stapp: Yeah, especially, East Asia, how a lot of those countries did very well with these nonpharmaceutical interventions, and even the pharmaceutical ones that required massive adoption. I think this is a flip side, maybe the downside of certain parts of American culture that are beneficial in other ways.
We talked a lot about innovation and startups here today. I think that often requires being a maverick or a contrarian or saying, “I’m not going to trust the consensus, and I’m going to go my own way and take the big risk and might have the big payoff.”
In those contexts, that kind of American culture I think is highly beneficial. In the context of public health, it’s probably more of a net harm. A lot of people in the DC policy world try to wish that away or assume that away and say, “We’ll just change that, we’ll change American culture and get people to buy into it.”
We take more of a realist philosophy, which is, “That’s probably how it’s going to be for the near future, and so the policy interventions we adopt should accept that reality and maximize within it.” And so, knowing that we are in an era of hyperpolarization and hyperpartisanship, and knowing that things like vaccines and masking are probably going to get polarized, what are the interventions we should suggest or recommend, given those facts? That’s kind of our approach to the issue.
Michael Chui: Your institute is focused on policy solutions and influencing policy with the analysis that you’re doing. We’re also studying how corporations can address some of these broad societal issues, particularly here in the 21st century, where things have been changing. What role do you think corporations can play in addressing some of these issues?
Alec Stapp: I think they can play a huge role. Give a couple of examples. One, on the public–private partnership level, I think Operation Warp Speed is one of the most successful government programs of the last few decades, and it should be a model for future public–private partnership going forward.
A quick review summary for your listeners. The government spent roughly, in total, $16 billion, funding both vaccines and therapeutics. But on the vaccine side, they picked three vaccine platforms, two companies for each, and almost every single vaccine has been successfully through clinical trials and been approved for market. Moderna and Pfizer being the two largest, most successful examples in the vaccinated population and being released in less than a year. Massive success, but the private companies were a critical part of that.
And then a second example would be almost shaming the government into doing what it should be doing already. The example that comes to mind here is Stripe, the payments company, weirdly has a highly effective climate team. And they just announced recently a nearly $1 billion purchase commitment program for direct air carbon capture.
This is a climate issue. Should we be doing more investment in carbon capture technology? I think this is an obvious case, yes. It’s a similar kind of mechanism to what you had in Operation Warp Speed, where you’re guaranteeing a market, where it’s not really economical today in most areas around the world to do carbon capture, and the credit system’s all broken. But if we could get massive investment now, we would get economies of scale, learning by doing. It’s probably going to get cheaper over time.
We should be investing $100 billion in carbon capture technology along a similar model. And if that’s successful and it gets some early wins, I think that actually can move the needle and be a good model for government investment in the future.
Michael Chui: If you don’t mind, I’d love to end with a lightning round.
Alec Stapp: I have time. We’re good. Let’s do it.
Michael Chui: All right, here we go. What’s your favorite source of inspiration for problems you work on?
Alec Stapp: I would say this comes back to the effective altruism community that I was talking about earlier, this idea of this emerging group of people worldwide who really like to reflect on working on things that can do the most good for the world, given scarce resources of time and money.
That really inspires me when a legislative fight isn’t going well, or it’s doubtful we’re going to get the change we want to see. I try to always think in expected value basis: “Maybe there’s only a 5 percent chance we get this new immigration provision in this key bill that actually becomes law. But if it does, these are trillion-dollar bills on the sidewalk. This is going to have a major impact, that helps people in a concrete way.” And so my co-founder and I are both inveterate optimists.
Michael Chui: What’s the issue you’d most like to work on but fails on the tractability requirement?
Alec Stapp: Most like to work on but fails on the tractability requirement. It’s funny, because we’re going to work on a lot of things.
I’ll go with tax policy. Tax policy is hugely controversial, and I think radical reforms towards a progressive consumption tax could be highly beneficial and create more investment in our economy. But, if you run any kind of public polls, much higher corporate tax rates, much higher taxes on high-income people—which I think are mostly distortionary and have net negative effects—those are very popular.
I think it’s not very tractable to endorse what I think is a pro-investment, pro-growth tax code. And so, I think it’s not tractable at the moment. And we have no plans in the near future to work on tax policy.
Michael Chui: As an inveterate optimist, what worries you most about progress?
Alec Stapp: It’s definitely this low-hanging-fruit question, like I referenced earlier, the “are ideas getting harder to find?” I do have a bit of a strong prior that there’s this low-hanging-fruit model of innovation.
The two models are basically, “Are you picking low-hanging fruit and things just naturally get harder because the most obvious helpful, beneficial ideas are the ones you find first, and then it’s just more difficult, more difficult, more difficult?”
Or is it combinatorial? With every innovation you find, now you can mix and rematch old innovations in new ways, and so innovation gets easier.
My read of the history is that probably it’s mostly a low-hanging-fruit story. My worry about progress is that even if we were to improve our institutions by 10 percent, 20 percent, 30 percent, that it wouldn’t be enough. That the problems just get so much harder over time. There are lots of reasons for optimism, artificial intelligence being one of them. But it could just be that the problems get harder and harder.
Michael Chui: What’s one solution from a country or city around the world that would have the most impact if deployed globally?
Alec Stapp: I’d probably have to go with charter cities here. There’s special economic zones as the things that have happened most recently and successfully, where I think getting urban clusters the right set of rules and institutions around the world would unlock the most growth. And so if you think of that as importing Western, inclusive institutions around the world, then special economic zones might be the one.
Michael Chui: For what topic do corporations have the greatest potential to accelerate progress?
Alec Stapp: I would probably say energy policy.
Michael Chui: If a student asked you what they should study, what would you suggest?
Alec Stapp: I would suggest—I’m so biased. I love economics so much. I would say economics is broadly applicable. It teaches you how to think. And I think thinking in terms of cost benefit and expected value are helpful in a wide variety of domains.
And you don’t need to study economics, but using these mental models I think is really useful in the private sector or public sector. Making good decisions, thinking strategically.
Michael Chui: And finally, what’s one piece of advice you’d give to listeners of this podcast?
Alec Stapp: I would tell everyone to just—I’d recommend the website 80,000 Hours, which is this effective altruism website about thinking about your career. You have roughly 80,000 hours in your career from start to finish as an individual. And you should really just think rigorously about, “Am I doing the most important thing?”
That doesn’t mean everybody should do the same career or the same job, because people have different talents and interests. But I think that you can make radical improvements within your field about how you’re spending your time and how you’re developing your own expertise and your own network.
For me, I had been working in public policy, and I just shifted the types of questions I worked on and decided to launch a new institution with a friend. But I would say, take bigger risks, because if things don’t work out, it’s often not as big of a failure as you think, and you can recover. And yeah, think about working on stuff that has impact for the world.
Michael Chui: Alec Stapp, thanks so much for joining us.
Alec Stapp: Thanks, Michael.