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Are Ideas Getting Harder to Find?

Author

Listed:
  • Van Reenen, John
  • Bloom, Nicholas
  • Jones, Chad
  • Webb, Michael

Abstract

In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms: the effective number of researchers and their research productivity. We present a wide range of evidence from various industries, products, and firms showing that research effort is rising substantially while research productivity is declining sharply. A good example is Moore’s Law. The number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 18 times larger than the number required in the early 1970s. Across a broad range of case studies at various levels of (dis)aggregation, we find that ideas—and in particular the exponential growth they imply — are getting harder and harder to find. Exponential growth results from the large increases in research effort that offset its declining productivity.

Suggested Citation

  • Van Reenen, John & Bloom, Nicholas & Jones, Chad & Webb, Michael, 2017. "Are Ideas Getting Harder to Find?," CEPR Discussion Papers 12294, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12294
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    File URL: https://cepr.org/publications/DP12294
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    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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