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The construction of factories for the production of vaccines against new coronavirus It should start now, even if there is no approved vaccine for the disease. This is what the winner of the last Nobel Prize in Economics, Michael Kremer, in the panel Brazilian Conference at Harvard and MIT celebrated this Friday 8.
“Instead of waiting until the vaccine is tested and approved, we have to develop parallel distribution capacity,” said the economist.
Yes, there is a very high risk of investing hundreds of thousands of dollars in production capacity, and the vaccine may not be adequate, according to Kremer. “But in this case, it makes sense to take the risk, because the other one, of not having a vaccine, is disastrous for everyone. One lesson is that we need speed. But another is that we need capacity, “said the economist.
One of the proposals presented by Kremer in the panel of the Brazilian Conference is that the countries that have vaccine manufacturing should invest in their own companies. But if that happens, says the economist, each country will risk that the bet is successful or not.
To increase the chances of success, nations can join forces. “Countries would coordinate investments within a portfolio of platforms and technology and each would have access to emerging vaccines. If they do it together, they could create enough capacity to serve the whole world. ”
Along with the Indian Abhijit Banerjee and the French Esther Duflo, Kremer has dedicated more than 20 years of economic research to the development of new ways of studying and helping the poorest. Last year, the trio won the Nobel Prize in Economics with an experimental approach to the subject.
Based on his experience as scientific director in the Ventures Innovation Development, an open innovation program that tests and scales creative solutions to any kind of global development challenge, the economist showed on the panel of the Brazil Conference how much investment in innovation can bring a great social return.
Of the 43 projects that Development Innovation Ventures had in its portfolio until 2018, only four were possible to quantify the benefits in financial and monetary terms. In the others, they were unable to calculate whether the benefits would outweigh the costs. How do you know if they would be good investments? The teacher explains.
“The benefits of the four projects were five times greater than the total cost of the portfolio. This corresponds to a 75% social rate of return. And if you assume that these programs remain at the same level, with no growth, we would have a benefit to cost ratio of 9 to 1, “he says.” The lesson we can see is that, in fact, innovation has very high rates of return. It is a fantastic investment. ”
For Kremer, the private market is not generating all the investment that society needs. “Innovation, and particularly certain types of innovation, are often underfunded in relation to social needs.” He cites companies like Google and Facebook that use the experimental method every day to try to optimize their online platforms.
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