Document Overview
This is a research article titled "Public Procurement of Innovation: Evidence from a German Legislative Reform" with a DOI link to the journal Research Policy (doi 10.1016/j.respol.2019.103873). The text provided, however, is a descriptive analysis by Anna P. Goldstein and Michael Kearney on project management at the US Department of Energy's Advanced Research Projects Agency – Energy (ARPA-E). The document's subject is active management of publicly funded high-risk energy research, not German procurement law.
Research Context
The authors note that public research funding typically involves minimal intervention by program staff, while the private sector often manages projects more hands-on. They state that empirical evidence on risk management within government research programs is lacking, partly because decision-making data is hard to obtain. ARPA-E, created in 2009, was designed as an agile organization outside the traditional structure of the Department of Energy, in the style of DARPA.
Methodology
The study draws on confidential internal data from ARPA-E, compiled during two on-site visits to the agency in 2016. The authors covered management records for all projects in the agency's history and supplemented them with data on publications, intellectual property, market engagement and company founding year, collected from public information. All project data were anonymized on-site to protect awardee confidentiality. The analysis is a statistical, descriptive study of how program directors (PDs) modify project terms.
Key Findings
- PDs hold four real options per the text: abandon, contract or expand budgets or timelines, and use them frequently, especially expanding projects.
- Timeline modifications are highly sensitive to negative ratings, while budget changes are only mildly sensitive to ratings of any kind.
- Projects with a shortened timeline or reduced budget are less likely to generate short-term research outputs than projects of ultimately similar size.
Interpretation
The authors conclude that active project management, combined with high upfront risk tolerance, can be used to enhance the productivity of mission-oriented public research funding. They describe ARPA-E as a public agency that modifies projects in response to performance, so that failing projects are altered or stopped.
Relation to Existing Literature
The paper states that prior work on DARPA is largely commentary, and that there had been no quantitative study of how an actively managed public research program works in practice. The authors position their work as the first to show how a public funding program can use managerial flexibility to mitigate exposure to technical risk.
Why It Matters for Public Research Funding
The authors present the study as relevant to maximizing the impact of public R&D programs, particularly in clean energy, and to program design choices for high-risk government research funding.