Utopia, you are standing in it!

Spending on intellectual property products has risen in the USA from 1% in 1950 to 5% now. Public R&D spending in the USA has been pretty static for 60 years. Intellectual property products in the chart below includes traditional research and development, spending on computer software, and spending on entertainment such as movies, TV shows, books, and music. Spending on software and entertainment was only recently measured in the US national accounts. This inclusion of intangible capital investments will radically change the story of economic growth and the business cycle in the 20th century.

Source: Chad Jones (2015).

The growth rate in the USA hasn’t changed much despite this massive increase in intellectual property property product production. Is innovation getting harder? R&D is supposed to boost the growth rate, if you are to believe politicians bearing subsidies for it wherever they find it.

Source: Chad Jones (2015).

Ben Jones in The Burden of Knowledge and the Death of the Renaissance Man: Is Innovation Getting Harder? found that as knowledge accumulates as technology advances, successive generations of innovators may face an increasing educational burden. Innovators can compensate through lengthening their time in education and narrowing expertise, but these responses come at the cost of reducing individual innovative capacities. This has implications for the organization of innovative activity – a greater reliance on teamwork – and has negative implications for economic growth.

This longer period of education and initial study is not compensated by inventors innovating for longer spans of their lifestyle. This rising burden of knowledge is cutting into their best years of their lives. Jones found a broad and dramatic declines in early life-cycle productivity among great minds and ordinary inventors, and a close relationship  of these trends with increased training duration.

Jones found that the age at first invention, specialisation, and teamwork increased over time in a large micro-data set of inventors. Upward trends in academic collaboration and lengthening doctorates can also be explained in his framework of innovation getting harder because of a rising burden of knowledge. Co-authorship in academic literature has increased, including physics, biology, chemistry, mathematics, psychology, and economics. This measure of teamwork has increased 17% per decade.

Using data on Nobel Prize winners, Jones found that the mean age at which the innovations are produced to win the Prize has increased by 6 years over the 20th Century.

• Before 1901, two-thirds of the Nobel laureates did their prize-winning work before the age of 40 and 20 per cent did it before age of 30.
• By 2000, however, great achievements seldom occurred before the age of 40.

It’s now taking longer for scientists to get their basic training and start their careers. There is simply more to learn because knowledge in all fields has grown by quantum leaps in the past century. Nobels are being handed out for different types of work than a century ago.

• There has been a trend away from awarding prizes for abstract, theoretical ideas.
• Now more honours are being bestowed on people who have made discoveries through painstaking lab work and experimentation – which takes a lot of time to do.

Jones’ theory provides an explanation for why productivity growth rates did not accelerate through the 20^th century despite an enormous expansion in collective research effort and levels of education and many more graduates. Innovation is getting harder?