Innovation as a social bubble: The example of the Human Genome Project

In this paper we present a detailed synthesis of the development of the Human Genome Project (HGP) from the mid 1980s through 2000, in order to test our hypothesis of "social bubbles", which claims that strong social interactions between enthusiastic supporters weave a network of reinforcing feedbacks that lead to widespread endorsement and extraordinary commitment by those involved, beyond what would be rationalized by a standard cost-benefit analysis in the presence of extraordinary uncertainties and risks. The HGP was initiated as a public project funded by government agencies, starting at a moderate pace. The progressive introduction of different actors and the development of various interests catalyzed the project, which eventually became eminent both in the public and private sectors. The competition between the public and the private sector played greatly in favor of both: the financial burden as well as the horizon of the public project were significantly reduced, the private project(s) gained from the hype of the public project, yet had to play an active and collaborative role in order to remain in the game. This is at the core of the social bubble hypothesis. To further our argument, we present quantitative analysis of the development of the biotech sector within the financial stock market. Lastly, we point to the fact that the hypes fueling the bubble during its growth have not been followed by real tangible outcomes over the short expected time horizons. Indeed, at the time of writing (May, 2011), the consensus of the scientific community is that it will take decades to exploit the fruits of the HGP. (C) 2011 Elsevier B.V. All rights reserved.