<div dir="ltr"><br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">albert lundquist</b> <span dir="ltr"><<a href="mailto:agltucs1@gmail.com">agltucs1@gmail.com</a>></span><br><br><div dir="ltr"><br><div><div id="m_-1788443546715489908gmail-content" class="m_-1788443546715489908gmail-container" style="box-sizing:border-box;padding:0px;margin:0px auto;width:1155px;outline:none;color:rgb(0,0,0);font-family:"Source Sans Pro",Arial,sans-serif;font-size:16px;background-color:rgb(242,241,235)"><div id="m_-1788443546715489908gmail-story-head" class="m_-1788443546715489908gmail-row" style="box-sizing:border-box;margin-top:1em"><div class="m_-1788443546715489908gmail-col-lg-10 m_-1788443546715489908gmail-col-lg-offset-1 m_-1788443546715489908gmail-col-md-12" style="box-sizing:border-box;min-height:1px;padding-right:7.5px;padding-left:7.5px;float:left;width:975px;margin-left:97.5px"><time datetime="2017-09-14T07:15:26+00:00" style="box-sizing:border-box;display:block;color:rgb(130,0,0);text-transform:uppercase;font-size:1.0625em;line-height:1.52941em">SEPTEMBER 14, 2017</time><h1 style="box-sizing:border-box;margin:0px 0px 12px;font-size:2.8125em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-weight:400;line-height:1.11111em">Stanford scholars say big ideas are getting harder to find</h1><p class="m_-1788443546715489908excerpt" style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.125em;line-height:1.52941em;font-style:italic">Research from Stanford economists finds that productivity has not matched the exponential increases in research development, suggesting the next big idea may be harder to formulate.</p></div></div><div class="m_-1788443546715489908gmail-story-margin-top m_-1788443546715489908gmail-row" style="box-sizing:border-box;margin-top:1.8em"><div class="m_-1788443546715489908gmail-col-sm-1 m_-1788443546715489908gmail-col-lg-offset-1 m_-1788443546715489908gmail-social-share m_-1788443546715489908gmail-hidden-print" style="box-sizing:border-box;min-height:1px;padding-right:7.5px;padding-left:7.5px;float:left;width:97.5px;margin-left:97.5px"><ul class="m_-1788443546715489908gmail-list-inline" style="box-sizing:border-box;margin-top:0px;margin-bottom:1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em;padding-left:0px;list-style:none"><li style="box-sizing:border-box;margin-bottom:0.5em;display:inline-block;padding-right:5px;padding-left:5px"><a href="http://news.stanford.edu/2017/09/14/stanford-scholars-says-big-ideas-getting-harder-find/#" rel="nofollow" title="Share on Facebook" style="box-sizing:border-box;background-color:transparent;color:rgb(77,79,83);font-weight:600;outline:0px;display:block;margin-bottom:8px" target="_blank"><span class="m_-1788443546715489908gmail-fa m_-1788443546715489908gmail-fa-facebook-square m_-1788443546715489908gmail-fa-3x" style="box-sizing:border-box;display:inline-block;font-weight:normal;font-stretch:normal;line-height:1;font-family:FontAwesome;font-size:2.6em"></span><span class="m_-1788443546715489908gmail-sr-only" style="box-sizing:border-box;width:1px;height:1px;padding:0px;overflow:hidden;border:0px">Facebook</span></a></li><li style="box-sizing:border-box;margin-bottom:0.5em;display:inline-block;padding-right:5px;padding-left:5px"><a href="http://news.stanford.edu/2017/09/14/stanford-scholars-says-big-ideas-getting-harder-find/#" rel="nofollow" title="Share on Twitter" style="box-sizing:border-box;background-color:transparent;color:rgb(77,79,83);font-weight:600;outline:0px;display:block;margin-bottom:8px" target="_blank"><span class="m_-1788443546715489908gmail-fa m_-1788443546715489908gmail-fa-twitter-square m_-1788443546715489908gmail-fa-3x" style="box-sizing:border-box;display:inline-block;font-weight:normal;font-stretch:normal;line-height:1;font-family:FontAwesome;font-size:2.6em"></span><span class="m_-1788443546715489908gmail-sr-only" style="box-sizing:border-box;width:1px;height:1px;padding:0px;overflow:hidden;border:0px">Twitter</span></a></li><li style="box-sizing:border-box;margin-bottom:0.5em;display:inline-block;padding-right:5px;padding-left:5px"><a href="mailto:?subject=An%20interesting%20article%20from%20Stanford%20News&body=I%20want%20to%20share%20this%20news%20story%20from%20Stanford%20University%20with%20you%3A%20http%3A%2F%2Fstanford.io%2F2xzW2ay" rel="nofollow" title="Share by email" style="box-sizing:border-box;background-color:transparent;color:rgb(77,79,83);font-weight:600;outline:0px;display:block;margin-bottom:8px" target="_blank"><span class="m_-1788443546715489908gmail-fa m_-1788443546715489908gmail-fa-envelope-square m_-1788443546715489908gmail-fa-3x" style="box-sizing:border-box;display:inline-block;font-weight:normal;font-stretch:normal;line-height:1;font-family:FontAwesome;font-size:2.6em"></span><span class="m_-1788443546715489908gmail-sr-only" style="box-sizing:border-box;width:1px;height:1px;padding:0px;overflow:hidden;border:0px">Email</span></a></li></ul></div><div class="m_-1788443546715489908gmail-col-sm-10 m_-1788443546715489908gmail-col-md-10 m_-1788443546715489908gmail-col-lg-8" style="box-sizing:border-box;min-height:1px;padding-right:7.5px;padding-left:7.5px;float:left;width:780px"><p class="m_-1788443546715489908gmail-byline" style="box-sizing:border-box;margin:0px;font-size:1.0625em;line-height:1.52941em;color:rgb(130,0,0);text-transform:uppercase">BY MAY WONG</p><div id="m_-1788443546715489908gmail-story-content" style="box-sizing:border-box"><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Modern-day inventors – even those in the league of Steve Jobs – will have a tough time measuring up to the productivity of the Thomas Edisons of the past.</p><div class="m_-1788443546715489908gmail-pull-right m_-1788443546715489908gmail-pull-right-wide" style="box-sizing:border-box;float:right;width:535.5px"><a href="https://s3-us-west-1.amazonaws.com/stanford.ucomm.newsms.media/wp-content/uploads/2017/09/13100211/ideas_shutterstock.jpg" style="box-sizing:border-box;background-color:transparent;color:rgb(0,0,0);font-weight:600;outline:0px" target="_blank"><img class="m_-1788443546715489908gmail-size-large m_-1788443546715489908gmail-wp-image-16419 m_-1788443546715489908gmail-img-responsive" src="https://s3-us-west-1.amazonaws.com/stanford.ucomm.newsms.media/wp-content/uploads/2017/09/13100211/ideas_shutterstock-795x530.jpg" alt="Illustration of woman with new ideas" style="box-sizing:border-box;border:0px;vertical-align:middle;display:block;max-width:100%;height:auto"></a><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em"></p><p class="m_-1788443546715489908gmail-media-caption" style="box-sizing:border-box;margin:0.5em 0px 0px;font-size:0.9375em;line-height:1.3em">Stanford economists say tremendous continual increases in research and development will be needed to sustain even today’s low rate of economic growth.<span class="m_-1788443546715489908gmail-media-attrib" style="box-sizing:border-box;font-size:inherit;font-style:italic;text-align:right">(Image credit: Shutterstock)</span></p></div><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">That’s because big ideas are getting harder and harder to find, and innovations have become increasingly massive and costly endeavors, according to new research from economists at <a href="http://siepr.stanford.edu/" style="box-sizing:border-box;background-color:transparent;color:rgb(0,0,0);font-weight:600;outline:0px" target="_blank">the Stanford Institute for Economic Policy Research</a>.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">As a result, tremendous continual increases in research and development will be needed to sustain even today’s low rate of economic growth.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em"><a href="http://siepr.stanford.edu/scholars/nicholas-bloom" style="box-sizing:border-box;background-color:transparent;color:rgb(0,0,0);font-weight:600;outline:0px" target="_blank">Nicholas Bloom</a>, a SIEPR senior fellow and co-author of a <a href="http://www.nber.org/papers/w23782" style="box-sizing:border-box;background-color:transparent;color:rgb(0,0,0);font-weight:600;outline:0px" target="_blank">paper</a>released this week by the National Bureau of Economic Research, contends that so many game-changing inventions have appeared since World War II that it’s become increasingly difficult to come up with the next big idea.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">“The thought now of somebody inventing something as revolutionary as the locomotive on their own is inconceivable,” Bloom said.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">“It’s certainly true if you go back one or two hundred years, like when Edison invented the light bulb,” he said. “It’s a massive piece of technology and one guy basically invented it. But while we think of Steve Jobs and the iPhone, it was a team of dozens of people who created the iPhone.”</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">To better understand the nation’s sluggish economic growth, Bloom and his three co-authors – SIEPR senior fellow <a href="http://siepr.stanford.edu/scholars/chad-jones" style="box-sizing:border-box;background-color:transparent;color:rgb(0,0,0);font-weight:600;outline:0px" target="_blank">Chad Jones</a>, Stanford doctoral candidate Michael Webb, and MIT professor John Van Reenen – examined research productivity at an aggregate national level as well as within three swaths of industry: technology, medical research and agriculture. For another measure, they also analyzed research efforts at publicly traded firms.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Their paper follows a common economic concept that economic growth comes from people creating ideas. In other words, when you have more researchers producing more ideas, you get more economic growth.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">But Bloom and his team find a not-so-rosy imbalance. While research efforts are rising substantially, research productivity – or the ideas being produced per researcher – is declining sharply.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">So the reason the U.S. economy has even grown at all is because steep increases in research and development have more than offset the decline in research productivity, the study found.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Specifically, the number of Americans engaged in R&D has jumped by more than twentyfold since 1930 while their collective productivity has dropped by a factor of 41.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">“It’s getting harder and harder to make new ideas, and the economy is more or less compensating for that,” Bloom said. “The only way we’ve been able to roughly maintain growth is to throw more and more scientists at it.”</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">The paper spelled it out bluntly in numbers: “The economy has to double its research efforts every 13 years just to maintain the same overall rate of economic growth.”</p><h2 style="box-sizing:border-box;font-family:"Source Serif Pro","Times New Roman",Times,serif;line-height:1.17241em;margin-top:1.25em;margin-bottom:0.5em;font-size:1.8125em">New data, new perspective</h2><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Bloom initiated this research a year ago, inspired to dig deeper after speaking on a panel at the SIEPR economic summit that discussed <a href="https://www.youtube.com/watch?v=uRSZr0cbHyM" style="box-sizing:border-box;background-color:transparent;color:rgb(0,0,0);font-weight:600;outline:0px" target="_blank">“Is the Productivity Slowdown for Real?”</a> He admits the paper – and its somewhat pessimistic analysis – has dampened his previous, more optimistic stance.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">“I’ve changed my mind,” Bloom said. “Pretty much all mainstream economists have become rather depressed about productivity growth.”</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">At the 2016 SIEPR Summit, Bloom was more positive about the nation’s productivity, saying its declining rate was only a temporary effect of the financial crisis of 2008. He even caricatured ways of looking at U.S. productivity levels and contended the up-and-down swings between 1950 and 2010 did not necessarily signal a long-running trend of slow productivity growth.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">A year ago, Bloom recalled, “I thought we were recovering from a huge global recession and we’re about to turn around.”</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Now, his perspective takes into account new insights that research productivity – one of the underlying components of economic growth – has been clearly dropping for decades.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">“This paper says productivity growth is slowing down because ideas are getting harder to find,” Bloom said.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">While the study builds on the earlier work of Jones and others on R&D, the new paper also weaves a tight connection between empirical data on what’s happening in the real world and growth models.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">The robust finding of declining idea productivity has implications for future economic research, the paper concluded. The standard assumption in growth models has historically been a constant rate of productivity, and “we believe the empirical work we’ve presented speaks clearly against this assumption,” it states.</p><h2 style="box-sizing:border-box;font-family:"Source Serif Pro","Times New Roman",Times,serif;line-height:1.17241em;margin-top:1.25em;margin-bottom:0.5em;font-size:1.8125em">Moore’s Law and beyond</h2><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Everywhere they looked, the researchers said they found clear evidence of how exponential investments in R&D have masked the decline in productivity. The tech industry’s signature guidepost, Moore’s Law, which marked its 52nd year in April, is a prime example.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Introduced in 1965 by Gordon Moore, the co-founder of computer chip giant Intel, the theorem postulates that the density of transistors on an integrated circuit would double roughly every two years, doubling computing power.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Moore’s Law has certainly played out – the computing power on a chip today is remarkable compared to even a decade ago – but the study found that the research effort behind the chip innovations rose by a factor of 78 since 1971.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Put another way, the number of researchers required today to maintain that innovative pace is more than 75 times larger than the number that was required in the early 1970s.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">“The constant exponential growth implied by Moore’s Law has been achieved only by a staggering increase in the amount of resources devoted to pushing the frontier forward,” the paper stated.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Other industries also exhibited falloffs in idea productivity.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">For instance, to measure productivity in agriculture, the study’s co-authors used crop yields of corn, soybeans, wheat and cotton and compared them against research expenditures directed at improving yields, including cross-breeding, bioengineering, crop protection and maintenance.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">The average yields across all four crops roughly doubled between 1960 and 2015. But to achieve those gains, the amount of research expended during that period rose “tremendously” – anywhere from a threefold to a more-than-25-fold increase, depending on the crop and specific research measure.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">On average, research productivity in agriculture fell by about 4 to 6 percent per year, the study found.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">A similar pattern of greater input but less output followed in medical research. The study’s authors analyzed R&D spending on new, federally approved drugs against life expectancy rates as a gauge of productivity. They also examined decreases in mortality rates of cancer patients against medical research publications and clinical trials.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">The empirical findings on breast and heart cancer suggest that at least in some areas, “it may get easier to find new ideas at first before getting harder,” the paper stated.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">Turning its focus to publicly traded companies, the study found a fraction of firms where research productivity – as measured by growth in sales, market capitalization, employment and revenue-per-worker productivity – grew decade-over-decade since 1980. But overall, more than 85 percent of the firms showed steady, rapid declines in productivity while their spending in R&D rose.</p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em">The analysis found research productivity for firms fell, on average, about 10 percent per year. It would take 15 times more researchers today than it did 30 years ago to produce the same rate of economic growth.<span style="color:rgb(130,0,0);font-size:1.8125em;font-family:"Source Sans Pro",Arial,sans-serif"> </span></p><p style="box-sizing:border-box;margin:0px 0px 1em;font-family:"Source Serif Pro","Times New Roman",Times,serif;font-size:1.0625em;line-height:1.52941em"><span style="color:rgb(130,0,0);font-size:1.8125em;font-family:"Source Sans Pro",Arial,sans-serif">Policy Research: (650) 724-0614, <a href="mailto:agorlick@stanford.edu" target="_blank">agorlick@stanford.edu</a></span></p></div></div></div></div></div></div>
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