Ideas are getting harder to find

Ideas are getting harder to find.

Across industries, products and organisations, research effort is rising while research productivity is declining sharply. Since 1930s, in the US research effort has risen 23X with its productivity declining by 41X. Research productivity is falling 5.1% per year.

This thesis has been widely examined in the economics literature at the macro-level. Growth rates are relatively stable over time, while the number of researchers has risen enormously. In short, research productivity has plummeted in virtually every place we look.

In other words, to get the same ultimate output (economic growth) we must put in more and more research input.

In 'Ideas are Getting Harder to Find', Bloom et al. examine whether this declining relationship between research and economic growth holds true for research outcomes also. Is this a problem of finding ideas or a problem of converting those ideas to economic growth?

The problem is finding ideas.

The paper focuses on the relationship between 'research input' and 'idea output' for semiconductors, agriculture and medical research. In each case, research productivity drops.

• It is ~18X harder today to generate the exponential growth of transistor density behind Moore’s Law than it was in 1971 [1971-2015].

• Research productivity declines by 4X for agricultural crop yields. It takes 4X the researchers to grow crop yields at a constant rate [1970-2007].

• For medicine, it is 5X harder to convert research (publications, clinical trials) to save a year of life across a range of illnesses [1950-2014].

At the macro-level, we know from the literature that we need to double research efforts every 13 years to maintain economic growth rate. This is clearly unsustainable.

We now know that research productivity, i.e. finding ideas, is where at least some of this bottleneck is.

Better ways of finding ideas is more important now, than it ever has been.

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Assumptions

• Ideas are different from other goods. An idea can be used simultaneously by multiple people.

• Simultaneous use of a new idea means exponential increase in research can lead to exponential economic growth.

Sources & Inspiration

• Ideas are Getting Harder to Find, Bloom et al. 2020