Are ideas getting harder to find?

Declining research productivity

We seem to have picked all the low hanging fruit when it comes to new ideas, and the world is set for more parsimonious times. This is the idea put forward in a recent research paper. The paper argues that productivity growth has been low or declining since the 1940s, despite an increase in the number of researchers.

SOURCE: National Bureau of Economic Research


SUMMARY:

 

Declining … research productivity means ever-increasing R&D expenditures are required to keep research in a vast and varied filed of human interests — computer technology, medicine, yields of major crops — ongoing.

“[B]ecause of declining research productivity, it is around 18 times harder today to generate the exponential growth behind Moore’s Law than it was in 1971,” the researchers calculate.

The researchers estimate that research productivity has declined by 4 to 6 percent per year.

  • Looking at the number of drugs approved by the Food and Drug Administration from 1970 through 2015 and the amount spent by the pharmaceutical industry on R&D, the researchers estimate that research productivity has fallen at an average annual rate of 3.5 percent, although the decline has slowed since 2007.
  • Based on clinical trials, average annual research productivity declined by 7.2 percent for heart disease for the years 1968-2011 and 5.2 percent for cancer in 1975-2006.

Declining research production may in part be explained by firms “Shifting to ‘defensive’ R&D to protect their market positions.” Further, they say that overall research productivity may have suffered because of a decline in basic research spending stemming from reductions in publicly funded research as a share of GDP. In conclusion, the researchers note that their findings call into question prevailing economic growth projections.

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