Slack Time and Innovation

by Ajay Agrawal, Christian Catalini, Avi Goldfarb, and Hong Luo

Overview — This study combines data about projects posted on Kickstarter with the timing of school breaks of top US colleges to find that slack time can lead to an increase in creative projects, particularly those that are relatively complex and high quality. Managers in corporations that emphasize innovation should consider providing their employees with coordinated slack time particularly to advance development of novel ideas.

Author Abstract

Traditional innovation models assume that new ideas are developed up to the point where the benefit of the marginal project is just equal to the cost. Because labor is a key input to innovation, when the opportunity cost of time is lower, such as during school breaks or time off from work, then such models predict that the number of ideas developed will be greater, but the average quality will be lower due to the lower expected value of marginal ideas. However, we posit that slack time such as school breaks may be qualitatively different than work time because contiguous blocks may be particularly beneficial for working on complex projects. We present a model incorporating this idea that predicts that although more ideas will be produced during slack time, they will have higher average complexity and perhaps even higher average value. Using data on 165,410 projects posted on Kickstarter (2009–2015), we report findings consistent with the model's predictions.