Infectious Diseases and Long-Run Innovation Consequences

Today we welcome two scholars from Texas’s Baylor University whose research into how pathogens affect innovation has taken on new prominence in the wake of the current pandemic. Daniel Bennett is a research professor at Baylor’s Baugh Center for Entrepreneurship & Free Enterprise, and Boris Nikolaev is an assistant professor of entrepreneurship at Baylor’s Hankamer School of Business, a research associate at the Baugh Center, and director of the McLane Scholars Program.

The pair addressed “Historical Disease Prevalence, Cultural Values, and Global Innovation” for Entrepreneurship Theory and Practice. The abstract for the paper appears below, and after that Bennet and Nikolaev discuss the paper and its pertinence for the present moment.

The historical prevalence of infectious diseases has had an enduring effect on innovation around the world. Building on the Parasite Stress Theory of Values, we propose a framework suggestive that the impact of historical disease pathogens on contemporary innovation is transmitted through the development of cultural values as an evolutionary psychological immune system response to ecological conditions. Economic and social interaction between groups was greater (limited) in countries with low (high) pathogen levels, resulting in the development of individualistic (collectivistic) values, which in turn encouraged (impeded) innovation. We provide supportive empirical evidence for a sample of 83 countries.

COVID-19 is a highly infectious disease that has rapidly spread around the world. In an effort to limit transmission among their citizens, many countries have imposed travel restrictions, lockdowns and other social distancing measures that have significantly limited economic and social interactions. Such measures are examples of behavioral (AKA psychological) immune system adaptations to the threat of infectious diseases.

In addition to temporarily disrupting economic and social life, responses triggered by outbreaks of infectious diseases may have long-term social and economic consequences. According to a growing body of interdisciplinary research associated with the Parasite Stress Theory of Values, or PSTV, adaptations of the psychological immune system in response to novel pathogens have played a significant role in the natural selection of cultural values in human evolutionary history.

To avoid exposure to contagious diseases, people living in regions with high levels of pathogenic stress developed various forms of prejudice toward out-group members, including philopatry, xenophobia, neophobia, and ethnocentrism, leading to the emergence of more collectivist cultural values. For example, we have recently observed a rise in xenophobic behavior towards Chinese people during the COVID-19 pandemic. Similarly, certain industries and firms with close government ties have receive special treatment, an example of nepotism.

Meanwhile, groups of people living in regions with low levels of pathogenic stress were less concerned with contracting infectious diseases from out-group members and were, therefore, more open to economic and social interactions with outsiders, leading to the emergence of more individualistic cultural values associated with social tolerance, trust of out-group members, and openness to novel ideas.

A growing body of literature has built on the PSTV to establish a link between historical disease prevalence and long-run consequences such as economic development, income inequality, and the development of economic and political institutions. We link this literature to the domain of innovation. Specifically, we theorize that the relationship between historical disease prevalence and contemporary innovation is mediated by psychological factors manifested in a nation’s cultural values associated with individualism-collectivism.

Specifically, we propose that the long-lasting effects of disease pathogens on innovation were transmitted through the development of cultural values. We theorize that countries with historically low (high) levels of disease pathogens are more (less) innovative today, in part, because they developed—as an evolutionary response to minimize pathogenic contagion—individualistic (collectivistic) cultural values. Combining data on the historical prevalence of infectious diseases, cultural values along the individualism-collectivism spectrum, and a broad, multi-dimensional measure of innovation outputs, we provide strong, robust, and potentially causal empirical evidence in support of our theory for a sample of 83 countries.

Although we started this research well before the COVID-19 phenomenon, our paper is very timely as it provides practical insights on some of the potential long-run implications of how individuals and societies respond to novel infectious diseases.

Want to investigate further?

“Is the Wuhan Coronavirus a Threat to Human Flourishing?” | Daniel Bennett in Foundation for Economic Education
“The Historical Prevalence of Infectious Diseases and Global Innovation” | Daniel Bennett and Boris Nikolaev in Academy of Management Proceedings