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The Stem Cell Scandals and Economic Growth

Posted by: Michael Mandel on December 17

I feel terribly sorry for Hwang Woo Suk, the Korean stem cell scientist. In the space of a few weeks, he’s gone from being one of the best known scientists in the world to the verge of complete disgrace. Even if most of his work is valid, he is a shattered man.

I feel equally sorry for the politicians—in Korea, in the U.S., and elsewhere—who have touted stem cell research as an easy route to more jobs and faster growth. In fact, the phrases “stem cells” and “economic growth” seem permanently glued together. One would almost think that embryonic stem cells could be directly injected into a stagnant economy to make it young and healthy again.

For example, the Korean government hailed Hwang “as a national hero and leader of a project that could serve as a key engine of economic growth.” California, of course, has pledged $3 billion for stem cell research over the next ten years. And on the other side of the country, the Newark Star-Ledger wrote today that


New Jersey became the first state in the country to award public funding for human embryonic stem cell research yesterday, granting $5 million to 17 scientists at university, nonprofit and corporate labs. The work will be focused on potential therapies for devastating and debilitating disorders.

p>“We’re phoning the scientists tonight and we’re sending out their contracts on Monday,” said Sherrie Preische, a physicist who is executive director of the New Jersey Commission on Science and Technology.

California taxpayers approved a $3 billion bond issue last year to support stem cell research. However, none of the money has been distributed because the effort is tied up in legal challenges. Ohio taxpayers have also supported adult stem cell research but have shied away from the more controversial embryonic work.

Many states, including Wisconsin, Connecticut and New York, have laid out ambitious funding plans but none have come as far as New Jersey. “We’ve checked with national legislative organizations, international biological groups and everyone says the same thing — we’re the first,” Preische said.

To an extent, this is all well and good. As readers of my blog, BW articles and books should know, I yield to no one in my support for more money for scientific research. Economic studies show, beyond a doubt, that technological change is the major force driving long-run economic growth and rising living standards (see, for example, my 2004 book Rational Exuberance). And if anything is going to bail us out of our long-term problems (energy, global warming, rising medical costs), it’s going to be technological breakthroughs.

However, the stem cell scandals remind us that the technological road to growth is long and far more uncertain than it seems. New technologies, even the most promising ones, are hell to get working, and even harder to make commercially viable. History is littered with great ideas which turned out to be dead ends—and there’s no way of predicting ahead of time which ones those will be.

I firmly believe that the ultimate impact of any new technology on the economy is fundamentally unpredictable. And I mean ‘fundamentally unpredictable’ here in a very strong sense—if you attempt to identify today the economically important new technologies of 2015 or 2025, you will do no better than chance.

It may turn out that new ways of doing collaborative research, using Internet-based tools, can accelerate the process. I’m impressed, for example, by Kevin Kelly’s writings on the innovations in scientific method. But at least for now, it still seems to take 20-25 years for a new technology to really make an economic impact.

From that perspective, the stem cell scandals start to make more sense. Hwang yielded to the pressure to make a new technology more certain, more mature, more economically important than it could possibly ever be at this stage.

The policy implication, on the global, national, and local level, is that politicians should spread their research largesse over a diversified portfolio of scientific areas. Yes, stem cell research may turn out to be the next big thing or the essential building block for the next scientific revolution—or it may not.

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Reader Comments


December 17, 2005 10:30 AM

I do not understand why you feel sorry for some one in a privileged position chose to wipe his rear-end with the societal norms for his personal gain. Not only did he misrepresent the results of his work for personal gain, he proactively violated research guide lines to procure the stem cells. I equate his activities to the doctors who experimented on Jews and other undesirables during WWII. Again, why do you feel sorry. He owes all of us an apology not an excuse.

Mike Mandel

December 17, 2005 11:37 AM


No one in their right minds would have deliberately started down this path with the intention of concocting a fictitious stem cell breakthrough. I don't know where along the way things went wrong for Hwang, but the usual pattern is that little untruths turn into big lies, and he had no way back because of all the national attention.

I'm not forgiving him..just saying that I feel sorry.


December 17, 2005 04:13 PM

I'm not looking forward to seeing this included in the anti-science framing as a reason why "science isn't always right" (and should therefore be ignored completely). Although Michael's point about Dr. Suk's individual career is understandable, the PR damage he did to the public and political credibility of science isn't trivial.


December 20, 2005 10:41 PM

Never mind.

Americans are too stupid on sterm cell. I don't understand why so many people even won't believe that a cell is not a human.

It needs another enlightment period to wake Americans up to catch up even on evolution theories.


January 21, 2007 07:20 PM

Stem Cell Research is the solution to our problems; don't make it out to be a bad thing!

Caesar Galiano

April 1, 2007 05:26 PM


Can you email me a list of companies that provide instruments or resources tool for the stem cell research project?

Thank you


August 10, 2008 09:52 PM

Embryonic Stem Cell research is bad because the embryos used are potential human beings. What if the next embryo used was yours?


October 18, 2008 08:39 PM

Humans have such amazing potential to do wondrous things, and instead we decide to argue and bicker over them. Stem cell research can be done though donated embryos, as many are. It has such amazing possibilities with it if we gave the proper funding and guidelines to the scientists who can make a cure for diabetes or Parkinson's happen. We need something like this to help not only individuals by the whole nation or world together as one.


February 23, 2010 03:04 PM



February 23, 2010 03:04 PM


Thank you for your interest. This blog is no longer active.



Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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