Why are there so many researchers but low productivity growth?

In a recently published article, Bloom et al. find that “ideas are harder to find”. They find that “aggregate growth rates are relatively stable over time, while the number of researchers has risen enormously”.

And: “Perhaps the best example of this finding comes from Moore’s Law, one of the key drivers of economic growth in recent decades…. the number of researchers required to double chip density today is more than 18 times larger than the number required in the early 1970s… In addition to Moore’s Law, our case studies include agricultural productivity (corn, soybeans, cotton, and wheat) and medical innovations. Research productivity for seed yields declines at about 5 percent per year. We find a similar rate of decline when studying the mortality improvements associated with cancer and heart disease. Finally, we examine two sources of firm- level panel data, Compustat and the US Census of Manufacturing. While the data quality from these samples is coarser than our case studies, the case studies suffer from possibly not being representative. We find substantial heterogeneity across firms, but research productivity declines at a rate of around percent per year in Compustat and 8 percent per year in the Census.

Highly recommended!

Here is the working paper version:

And the published version (Bloom, Nicholas, Charles I. Jones, John Van Reenen, and Michael Webb. 2020. “Are Ideas Getting Harder to Find?” American Economic Review, 110 (4): 1104-44):

https://www.aeaweb.org/articles?id=10.1257/aer.20180338

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