110-joshua-gans.jpgThe notion that innovation and failure go hand-in-hand has become popular of late. It begins with the argument that many important innovations involved taking risks with potentially large costs but, most critically, completely unknown upsides. In his soon-to-be published book, Adapt, Tim Harford recounts the story of Mario Capecchi who leveraged safe NIH projects to fund a highly speculative attempt to make specific changes to the DNA of mice. Any rational evaluation at the time (1980) would have put that project in the realm of science fiction. Capecchi proved everyone wrong and we all reaped the rewards in terms of a sea change in cancer research.