Are Ideas Getting Harder to Find?

54 Pages Posted: 11 Sep 2017  

Nicholas Bloom

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Charles I. Jones

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

John Van Reenen

Massachusetts Institute of Technology (MIT)

Michael Webb

Stanford University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 2017

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.

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Suggested Citation

Bloom, Nicholas and Jones, Charles I. and Van Reenen, John and Webb, Michael, Are Ideas Getting Harder to Find? (September 2017). NBER Working Paper No. w23782. Available at SSRN: https://ssrn.com/abstract=3035132

Nicholas Bloom (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building, Room 231
579 Serra Mall
Stanford, CA 94305-6072
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650-725-7836 (Phone)

HOME PAGE: http://economics.stanford.edu/faculty/bloom

National Bureau of Economic Research (NBER) ( email )

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Charles I. Jones

Stanford Graduate School of Business ( email )

Stanford GSB
655 Knight Way
Stanford, CA 94305-4800
United States
650-725-9265 (Phone)

HOME PAGE: http://www.stanford.edu/~chadj

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

John Van Reenen

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Michael Webb

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
STANFORD, CA 94305-6072
United States

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