We live in an age of innovation. So this thought is counterintuitive as well as depressing: a single unit of innovation may take a lot more brainpower now than it did 20, 50 or 100 years ago.
I’m not saying I agree with this thought; I sort of don’t. But it is worth considering if you’re interested in the next 100 years of human development.
The problem
We spend a lot of money on science, and a lot of rhetoric on its importance. Ask most smart people about growing the economy, and you’re likely to hear something about boosting education in STEM – science, technology, engineering and mathematics.
But when you look for the numbers to support the importance of science, here’s what you don’t find: an increase in the rate of innovation that’s commensurate with our rising spending in the field. You don’t find it in Australia, or in the US or, really, anywhere.
Whether measured by science and engineering degrees, or government spending, or number of publications, yearly spending on innovation is up enormously – by somewhere between eight and 80 times that in the past 50 years.
Yet it is hard to argue that the pace of innovation has sped up very much since 1969. World GDP is certainly rising, and across a much broader base than ever before, and that really is great news. And we’ve had a lot of advances over the past 30 years in one field – personal communication.
But scientific developments at the frontier don’t seem to be contributing all that much. The bulk of world GDP growth has come about because places like China and India have started catching up to the developed world.
In other words, research productivity is falling even as we throw more and more resources at it. The result is that rather than exploding growth, we have steady but gradual growth.
In other words, research productivity is falling even as we throw more and more resources at it.
The paper
This train of thought is best captured in a paper called Are Ideas Getting Harder to Find?, version 3.0 of which was released on 15 February 2019. It’s written by three luminaries of the growth field – Nicholas Bloom, Charles Jones and John Van Reenen – plus a young prodigy named Michael Webb (whose CV is guaranteed to make you feel like an underachiever). There are other papers in the field, but this one, in its several variants, has been the most influential.
Their contribution was to have a really good go at measuring research productivity. “We find that research productivity for the aggregate U.S. economy has declined by a factor of 41 since the 1930s,” they write, “an average decrease of more than 5% per year.”
Their point is more powerful because other researchers have already singled out aspects of it. Famously, returns to pharmaceutical research and development have been falling for decades. Two other noted macroeconomists, Robert Gordon (The Rise and Fall Of American Growth) and Tyler Cowen (The Great Stagnation) have written books about declining growth.
The lessons
Not a lot of people are terribly keen yet to tease out what this paper suggests. But it certainly raises a few possibilities.
Among them is that we’ve got to the point where we’re investing too much in science, a field where most of the heavy lifting might just be done by a small group of people who are smarter than almost all of the rest of us. This sounds a little crazy when you first say it. But there is, for instance, a train of thought that says 85% of health research is wasted.
There are even people who believe that most of the big useful fundamental discoveries in physics have now been made. Like this guy, Albert Michelson:
The more important fundamental laws and facts of physical science have all been discovered, and these are now so firmly established that the possibility of their ever being supplanted in consequence of new discoveries is exceedingly remote … Our future discoveries must be looked for in the sixth place of decimals.
Here’s the problem, of course. Michelson said this in 1894. At that moment, Albert Einstein was just eight years away from getting a job at the Swiss Patent office, which would give him plenty of free time to work on a pet theory capable of turning all of physics upside down. Drawing a line from the past to the future can be a mug’s game.
