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Are Ideas Getting Harder to Find?
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Are Ideas Getting Harder to Find?

Author

Listed:
  • Michael Webb

    (Stanford University)

  • John Van Reenen

    (Sloan School of Management, MIT)

  • Charles Jones

    (Stanford University)

  • Nicholas Bloom

    (Stanford)

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 the research productivity of these people. 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 75 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

  • Michael Webb & John Van Reenen & Charles Jones & Nicholas Bloom, 2017. "Are Ideas Getting Harder to Find?," 2017 Meeting Papers 566, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:566
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    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

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