Advanced Grants are awarded for groundbreaking research projects by exceptional academic leaders in terms of originality and significance of their research contributions.

Alexander Ljungqvist, holder of the Stefan Persson Family Chair in Entrepreneurial Finance, will be the first holder of an ERC Advanced Grant in SSE history. The EUR 2.5 million grant will fund a five-year research project into the investibility of disruptive innovations in the United States over the past 250 years.

“Disruptive innovation often creates winners and losers. For example, the safety razor, which was invented by King Gillette in 1904, made its inventor rich while putting many barbers out of work. Workers and savers can, in principle, hedge against the risk of losing their jobs or savings due to creative destruction, by investing their savings in a portfolio that includes the winners,” says Alexander Ljungqvist.

However, this requires that the winners are investible, he adds. Barbers could not have hedged against creative-destruction risk because Gillette’s invention wasn’t investible.

“My focus will be on the role of capital markets in cushioning the adverse effects of disruptive innovations. This will help us better understand the disruption that today’s artificial-intelligence breakthroughs or the energy transition may cause, and what policy interventions might be required.”