Should-Read: Nicholas Bloom, Charles I. Jones, John Van Reenen, and Michael Webb: Are Ideas Getting Harder to Find?

Should-Read: “Harder”… I am not sure this is the way to look at it. Yes, it is becoming harder in the level-log specification they adopt. But why should that be the benchmark? And it is certainly true that innovations have less of an effect on human “utility” because we are so much richer. But why should that come as a surprise?

I have to think about this more…

Nicholas Bloom, Charles I. Jones, John Van Reenen, and Michael Webb: Are Ideas Getting Harder to Find?: “In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms… http://www.nber.org/papers/w23782

…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…