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The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth

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  • Ashish Arora
  • Sharon Belenzon
  • Andrea Patacconi
  • Jungkyu Suh

Abstract

A defining feature of modern economic growth is the systematic application of science to advance technology. However, despite sustained progress in scientific knowledge, recent productivity growth in the United States has been disappointing. We review major changes in the American innovation ecosystem over the past century. The past three decades have been marked by a growing division of labor between universities focusing on research and large corporations focusing on development. Knowledge produced by universities is not often in a form that can be readily digested and turned into new goods and services. Small firms and university technology transfer offices cannot fully substitute for corporate research, which had previously integrated multiple disciplines at the scale required to solve significant technical problems. Therefore, whereas the division of innovative labor may have raised the volume of science by universities, it has also slowed, at least for a period of time, the transformation of that knowledge into novel products and processes.

Suggested Citation

  • Ashish Arora & Sharon Belenzon & Andrea Patacconi & Jungkyu Suh, 2020. "The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth," Innovation Policy and the Economy, University of Chicago Press, vol. 20(1), pages 39-93.
    • Handle: RePEc:ucp:ipolec:doi:10.1086/705638
    DOI: 10.1086/705638
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    3. Choi, Jin-Uk & Lee, Chang-Yang, 2022. "The differential effects of basic research on firm R&D productivity: The conditioning role of technological diversification," Technovation, Elsevier, vol. 118(C).
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    6. Kevin A. Bryan & Heidi L. Williams, 2021. "Innovation: Market Failures and Public Policies," NBER Working Papers 29173, National Bureau of Economic Research, Inc.
    7. Sarah Armitage & Noël Bakhtian & Adam B. Jaffe, 2023. "Innovation Market Failures and the Design of New Climate Policy Instruments," NBER Chapters, in: Environmental and Energy Policy and the Economy, volume 5, pages 4-48, National Bureau of Economic Research, Inc.
    8. Julian D. Cortes & Diego Tellez & Jesus Godoy, 2021. "Mission Statement Effect on Research and Innovation Performance," Papers 2104.07476, arXiv.org.
    9. Anckaert, Paul-Emmanuel & Cassiman, David & Cassiman, Bruno, 2020. "Fostering practice-oriented and use-inspired science in biomedical research," Research Policy, Elsevier, vol. 49(2).
    10. Giovanna Ciaffi & Matteo Deleidi & Stefano Di Bucchianico, 2022. "Stagnation despite ongoing innovation: Is R&D expenditure composition a missing link? An empirical analysis for the US (1948-2019)," Department of Economics University of Siena 877, Department of Economics, University of Siena.
    11. Wim Naudé, 2022. "From the entrepreneurial to the ossified economy," Cambridge Journal of Economics, Oxford University Press, vol. 46(1), pages 105-131.
    12. Alexander V. Giczy & Nicholas A. Pairolero & Andrew A. Toole, 2022. "Identifying artificial intelligence (AI) invention: a novel AI patent dataset," The Journal of Technology Transfer, Springer, vol. 47(2), pages 476-505, April.
    13. Naudé, Wim & Nagler, Paula, 2021. "The Rise and Fall of German Innovation," IZA Discussion Papers 14154, Institute of Labor Economics (IZA).
    14. Naudé, Wim, 2020. "From the Entrepreneurial to the Ossified Economy: Evidence, Explanations and a New Perspective," GLO Discussion Paper Series 539, Global Labor Organization (GLO).
    15. Farrukh Nawaz Kayani & Misbah Sadiq, 2022. "Analyzing the Impact of Inward FDI and Economic Growth on CO2 Emissions of Ukraine," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 202-208, September.
    16. Fengjun Xiao & Jiaxin Wang & Jie Li & Hongwu Wang & Weihua Zhu & Hekun Chen, 2023. "For Future Investment, Empirical Study on Enterprise Participation in Basic Research in the Process of Digital Transformation," SAGE Open, , vol. 13(2), pages 21582440231, May.
    17. Kyle R. Myers & Wei Yang Tham & Jerry Thursby & Marie Thursby & Nina Cohodes & Karim Lakhani & Rachel Mural & Yilun Xu, 2023. "New Facts and Data about Professors and their Research," Papers 2312.01442, arXiv.org.
    18. Sheer, Lia, 2022. "Sitting on the Fence: Integrating the two worlds of scientific discovery and invention within the firm," Research Policy, Elsevier, vol. 51(7).
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    20. Hui Geng & Yanrui Wu & Xing Shi, 2022. "International Collaboration and Research Organization Performance: Evidence from China," Economics Discussion / Working Papers 22-11, The University of Western Australia, Department of Economics.

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    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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