Michael Hill is head of grants management at the Swiss National Science Foundation. His idea for research impact bonds as a novel funding mechanism is in Nature, here. The idea is to take on a challenge/prize set out by the funding agency and have investors take on the risk by holding a ‘bond’ that pays out their principal plus interest if the project succeeds. I think it’s bunk. The most important scientific advances are not based on ‘moonshot’ frameworks. They are quite often the results of a benchtop ‘accident’ that reveals something entirely unanticipated.
And, in the case of something like LIGO and gravitational waves, what kind of investor would take on that risk in the first place (rigorously determining a movement in space-time less than the diameter of a proton)? You’re right: only the NSF–which essentially went double or nothing on $500M to achieve success. Not the kind of stuff that can be financialized.
To his credit, Hill acknowledges a lot of my critique. But I’d go further: if science can be financialized with a bond-like framework, then let the private sector have at–as in Bell Labs. We call that applied science.
Discoverers and Discoveries 