Innovation gets (mostly) harder
One of the most influential economics of innovation papers from the last decade is “Are Ideas Getting Harder to Find” by Bloom, Jones, Van Reenen, and Webb, ultimately published in 2020 but in earlier draft circulation for years. While the paper is ostensibly concerned with testing a prediction of some economic growth models, it’s broader fame is attributable to it’s documentation of a striking fact: across varied domains, the R&D efforts necessary to eke out technological improvement keep getting higher. Let’s take a look at their evidence, as well as some complementary evidence from other papers.
Bloom and coauthors start with Moore’s law, the observation that for the last half century, the number of transistors that can fit on an integrated circuit doubles every two years.
Each doubling of circuits is the fruit of human ingenuity. What Bloom and coauthors show is that the amount of human minds we have to throw at this problem to keep up this pace of doubling keeps rising:
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