The Panmure House Prize, which is administered by Edinburgh Business School at Heriot-Watt University, in partnership with US-based long-term investment consultancy FCLTGlobal, is named after the 18th century Scottish economist Adam Smith’s final Edinburgh home. It will award $375,000 (£271,000) over five years for research projects into the long-term funding of innovation “in the spirit of Smith”.
The judging panel was chaired by James Anderson, partner at Baillie Gifford, which has been an early and long-term backer of entrepreneurial companies such as Tesla, Tencent and Amazon.
It is hoped that the awarding of the prize can help solve burning questions including health and social inequality, climate change and sustainability.
This year’s inaugural $75,000 prize was awarded to a team based at the Robert H Smith School of Business at the University of Maryland, led by Professor Rachelle Sampson.
Looking at US patents between 1980 and 2017, their project aims to demonstrate that long-term-oriented firms – supported by government-funded research and development, stronger scientific orientation and a more centralised organisation and greater investment – are more likely to produce breakthrough innovations such as Dupont’s nylon or AT&T Bell Labs’ transistor.
And in a last minute decision, the judging panel also decided to award an “extraordinary emergent thought award” of $25,000 to Matteo Tranchero, a PhD candidate based at University of California, Berkeley’s Haas School of Business.
Tranchero’s work aims to understand how investment figures in the ecosystems where breakthrough innovations occur. His work will focus on an optimum ecosystem of the US pharmaceutical industry, where production of the Moderna, BioNTech-Pfizer and Johnson & Johnson Covid-19 vaccines was among the most responsive globally.
Anderson, who is also co-manager of the Scottish Mortgage Investment Trust, said: “Prizes have long proven to be wonderful catalysts for change but the link between Panmure House and the extraordinary heritage and global reputation of Adam Smith gives us an almost unparalleled opportunity.
“Finance and academic economics have generally taken the wrong path in recent decades. But both now have the possibility of breaking out from the dead hand of unrealistic theories.
“The prize is an opportunity to attract the highest calibre of applicants to achieve that goal and I can’t imagine not wanting to be involved. The chance to hear from remarkable individuals, spanning the best of investment practice and profound intellectual insights and to hear them discuss the issues and papers together is a huge privilege.
“I congratulate Professor Rachelle Sampson and Matteo Tranchero on their outstanding proposals and wish them the best of luck as they undertake their research.”
Earlier this year it emerged that investment veteran Anderson was to leave next year after four decades with the Edinburgh fund manager.
Professor Heather McGregor, executive dean of Edinburgh Business School, added: “We have founded this prize in the spirit of Adam Smith to help bridge the gap between academic theory and its practical application in business.
“My congratulations to our winners – their research will become part of a grand tradition stretching all the way back to the height of the Scottish Enlightenment, when Smith himself was resident at Panmure House.”