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Saved February 14, 2026
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The article examines the slowdown in productivity growth and challenges the common belief that we are running out of innovative ideas. It argues that while research efforts have increased, barriers to commercialization are hindering the translation of these innovations into economic gains. Thus, the issue lies more in market inefficiencies than in the generation of new ideas.
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Fifty years ago, advanced economies began experiencing a slowdown in productivity growth, which is critical since it's the main factor driving income increases. The prevailing belief is that we’re running out of good ideas, suggesting that past scientific and technological advances were easier to achieve. In 2020, economists Nicholas Bloom and colleagues published a paper arguing that as the number of researchers has surged, their output has diminished, implying that ideas are harder to find.
However, Bloom's research indicates that productivity measures across various sectors, including agriculture and computing, have remained stable despite the influx of researchers. The issue seems to lie in the markets' inefficiency at turning innovations into productivity gains rather than a lack of innovative ideas. Barriers to commercialization prevent firms from capitalizing on these breakthroughs. This shift emphasizes that the constraints on economic growth may reside not in research facilities but within market dynamics.
The article draws on Paul Romer’s Nobel Prize-winning work, which links increasing returns to scale with ideas. Romer explains that duplicating production processes doesn’t require replicating ideas, allowing for more efficient use of resources. Bloom’s analysis of productivity growth hinges on a formula that connects research productivity with the number of researchers. For instance, in semiconductors, it now takes 18 times more researchers to achieve the same rate of improvement in chip density compared to the 1970s. Agricultural productivity shows a similar trend: between 1969 and 2009, crop yield growth averaged 1.5% annually, while research efforts increased significantly. Overall, research and development efforts across the economy have escalated substantially since the 1930s, yet the returns on that investment appear to be declining.
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