IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/23782.html
   My bibliography  Save this paper

Are Ideas Getting Harder to Find?

Author

Listed:
  • Nicholas Bloom
  • Charles I. Jones
  • John Van Reenen
  • Michael Webb

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

  • Nicholas Bloom & Charles I. Jones & John Van Reenen & Michael Webb, 2017. "Are Ideas Getting Harder to Find?," NBER Working Papers 23782, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23782
    Note: EFG PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w23782.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fuglie, Keith O. & Heisey, Paul W. & King, John L. & Day-Rubenstein, Kelly & Schimmelpfennig, David & Wang, Sun Ling, 2011. "Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide: Executive Summary," Economic Information Bulletin 291936, United States Department of Agriculture, Economic Research Service.
    2. Robert J. Gordon, 2016. "The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War," Economics Books, Princeton University Press, edition 1, number 10544.
    3. Benjamin F. Jones, 2009. "The Burden of Knowledge and the "Death of the Renaissance Man": Is Innovation Getting Harder?," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 283-317.
    4. Ufuk Akcigit & Murat Alp Celik & Jeremy Greenwood, 2016. "Buy, Keep, or Sell: Economic Growth and the Market for Ideas," Econometrica, Econometric Society, vol. 84, pages 943-984, May.
    5. Philippe Aghion & Antonin Bergeaud & Timo Boppart & Peter J. Klenow & Huiyu Li, 2019. "Missing Growth from Creative Destruction," American Economic Review, American Economic Association, vol. 109(8), pages 2795-2822, August.
    6. Ufuk Akcigit & William R. Kerr, 2018. "Growth through Heterogeneous Innovations," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1374-1443.
    7. Ufuk Akcigit & Douglas Hanley & Nicolas Serrano-Velarde, 2021. "Back to Basics: Basic Research Spillovers, Innovation Policy, and Growth," Review of Economic Studies, Oxford University Press, vol. 88(1), pages 1-43.
    8. Daniel Garcia‐Macia & Chang‐Tai Hsieh & Peter J. Klenow, 2019. "How Destructive Is Innovation?," Econometrica, Econometric Society, vol. 87(5), pages 1507-1541, September.
    9. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-690, September.
    10. Philippe Aghion & Steven Durlauf (ed.), 2014. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 2, number 2.
    11. Li, Chol-Won, 2000. "Endogenous vs. Semi-endogenous Growth in a Two-R&D-Sector Model," Economic Journal, Royal Economic Society, vol. 110(462), pages 109-122, March.
    12. Huffman, Wallace E. & Evenson, Robert E., 1993. "Science for Agriculture: A Long Term Perspective," Staff General Research Papers Archive 10997, Iowa State University, Department of Economics.
    13. Pardey, Philip G. & Chan-King, Connie & Beddow, Jason M. & Dehmer, Steven P., 2016. "Shifting Ground: Food and Agricultural R&D Spending Worldwide, 1960-2011," InSTePP Working Papers 302410, University of Minnesota, International Science and Technology Practice and Policy.
    14. Perrin, R.K. & Kunnings, K.A. & Ihnen, L.A., 1983. "Some Effects Of The U.S. Plant Variety Protection Act Of 1970," Department of Economics and Business - Archive 259743, North Carolina State University, Department of Economics.
    15. Fernandez-Cornejo, Jorge, 2004. "The Seed Industry In U.S. Agriculture: An Exploration Of Data And Information On Crop Seed Markets, Regulation, Industry Structure, And Research And Development," Agricultural Information Bulletins 33671, United States Department of Agriculture, Economic Research Service.
    16. Christopher Laincz & Pietro Peretto, 2006. "Scale effects in endogenous growth theory: an error of aggregation not specification," Journal of Economic Growth, Springer, vol. 11(3), pages 263-288, September.
    17. Wallace E. Huffman & Yu Jin & Zheng Xu, 2018. "The economic impacts of technology and climate change: New evidence from U.S. corn yields," Agricultural Economics, International Association of Agricultural Economists, vol. 49(4), pages 463-479, July.
    18. Ufuk Akcigit & Qingmin Liu, 2016. "The Role Of Information In Innovation And Competition," Journal of the European Economic Association, European Economic Association, vol. 14(4), pages 828-870, August.
    19. Joonkyung Ha & Peter Howitt, 2007. "Accounting for Trends in Productivity and R&D: A Schumpeterian Critique of Semi-Endogenous Growth Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(4), pages 733-774, June.
    20. Daron Acemoglu & Pascual Restrepo, 2016. "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," NBER Working Papers 22252, National Bureau of Economic Research, Inc.
    21. Fuglie, Keith O. & Heisey, Paul W. & King, John L. & Day-Rubenstein, Kelly A. & Schimmelpfennig, David E. & Wang, Sun Ling, 2011. "Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide," Economic Research Report 120324, United States Department of Agriculture, Economic Research Service.
    22. Michael Kremer, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 681-716.
    23. Ngai, L. Rachel & Samaniego, Roberto M., 2008. "Research and Productivity Growth Across Industries," LSE Research Online Documents on Economics 4410, London School of Economics and Political Science, LSE Library.
    24. Richard Blundell & Rachel Griffith & John van Reenen, 1999. "Market Share, Market Value and Innovation in a Panel of British Manufacturing Firms," Review of Economic Studies, Oxford University Press, vol. 66(3), pages 529-554.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2014. "What Do We Learn From Schumpeterian Growth Theory?," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 515-563, Elsevier.
    2. Daron Acemoglu & Ufuk Akcigit & Harun Alp & Nicholas Bloom & William Kerr, 2018. "Innovation, Reallocation, and Growth," American Economic Review, American Economic Association, vol. 108(11), pages 3450-3491, November.
    3. Charles I. Jones, 2019. "Paul Romer: Ideas, Nonrivalry, and Endogenous Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 859-883, July.
    4. Naudé, Wim, 2019. "The decline in entrepreneurship in the West: Is complexity ossifying the economy?," MERIT Working Papers 2019-030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Goldin, Ian & Koutroumpis, Pantelis & Lafond, François & Winkler, Julian, 2020. "Why is productivity slowing down?," MPRA Paper 99172, University Library of Munich, Germany.
    6. Ufuk Akcigit & Murat Celik & Daron Acemoglu, 2014. "Young, Restless and Creative: Openness to Disruption and Creative Innovations," 2014 Meeting Papers 377, Society for Economic Dynamics.
    7. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    8. Yusuke Oh & Koji Takahashi, 2020. "R&D and Innovation: Evidence from Patent Data," Bank of Japan Working Paper Series 20-E-7, Bank of Japan.
    9. Angus C. Chu & Yuichi Furukawa & Sushanta Mallick & Pietro Peretto & Xilin Wang, 2021. "Dynamic effects of patent policy on innovation and inequality in a Schumpeterian economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1429-1465, June.
    10. Lucia Foster & Cheryl Grim & Nikolas Zolas, 2020. "A portrait of U.S. firms that invest in R&D," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 29(1), pages 89-111, January.
    11. Ufuk Akcigit & William R. Kerr, 2018. "Growth through Heterogeneous Innovations," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1374-1443.
    12. Chu, Angus C. & Fan, Haichao & Wang, Xilin, 2020. "Status-seeking culture and development of capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 275-290.
    13. Volker Grossmann & Thomas Steger, 2007. "Growth, Development, and Technological Change," CESifo Working Paper Series 1913, CESifo.
    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. Zheng, Zhijie & Huang, Chien-Yu & Yang, Yibai, 2021. "Inflation And Growth: A Non-Monotonic Relationship In An Innovation-Driven Economy," Macroeconomic Dynamics, Cambridge University Press, vol. 25(5), pages 1199-1226, July.
    16. Peretto, Pietro F., 2018. "Robust endogenous growth," European Economic Review, Elsevier, vol. 108(C), pages 49-77.
    17. Jie Cai & Nan Li, 2019. "Growth Through Inter-sectoral Knowledge Linkages," Review of Economic Studies, Oxford University Press, vol. 86(5), pages 1827-1866.
    18. Dean Scrimgeour, 2015. "Dynamic Scoring in a Romer-Style Economy," Southern Economic Journal, Southern Economic Association, vol. 81(3), pages 697-723, January.
    19. Samaniego, Roberto M., 2013. "Knowledge spillovers and intellectual property rights," International Journal of Industrial Organization, Elsevier, vol. 31(1), pages 50-63.
    20. Diana Dimitrova, 2018. "The 2018 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 98-152.

    More about this item

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:23782. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.