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INNOVATION?
04.09.2024, 21:53 Ready for C2 Proficiency Student's Book Classroom Presentation

AHEAD OF THE CURVE
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ARE WE REACHING THE LIMITS OF

Were there far fewer undiscovered ideas out there Researchers are often like the man searching for his
A than in our more primitive past, how would people D keys under the streetlight, because that is where the
know? This is not an idle question; decoding the mysteries light is. Until some pressure is applied to encourage him
of nature, from atmospheric pressure to electricity to to look elsewhere, the search will often prove fruitless.
DNA, allowed people to bend the natural world to their It is easy to see why firms might take a lackadaisical
will, and to grow richer in the process. A dwindling stock approach to some research questions. Disappointing
of discoverable insights in the pipeline would mean wage growth across advanced economies is a deterrent
correspondingly less scope for progress in the future – a to the invention and use of labour-saving innovations.
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dismal prospect. And some signs suggest that the well Persistently high rates of profit give big firms plenty
of our imagination is about to run dry. Though ever more of money to plough into fancy research labs, but also
researchers are digging for insights, according to new suggest that the competitive pressures which might
research, the flow of new ideas is flagging. prompt them to exploit the resulting discoveries are weak.
But is it? A recent paper by Nicholas Bloom, Charles Despair is premature, however. The effort to find new,
B Jones and Michael Webb of Stanford University, E growth-boosting ideas is not necessarily hopeless,
and John Van Reenen of the Massachusetts Institute of just complicated. Whether herding more researchers
Technology provides relevant evidence. Though striking into the laboratory raises growth might depend on how
an agnostic position as to whether humanity has used up intensively the resulting brainstorms are used. Across
all its eureka moments, they nonetheless conclude that the global economy, many countries have yet fully to
new ideas are getting more expensive to find. The authors exploit ideas already in use by firms at the cutting edge of
consider four different case studies, within which they scientific knowledge. The problem, in other words, is not https://english0905.com/private/
compare research ‘inputs’ (such as the money spent on that oranges are in short supply or are already squeezed
researchers and lab equipment) and outputs. For instance, dry, but rather that of the ten workers at the juice bar,
the number of transistors that can be squeezed onto a only one has learned to do the squeezing. Investments in
microchip has doubled with reassuring regularity for half education and training, to expand the share of workers
a century, every two years or so – a phenomenon known that can use new ideas, or in the quality of management,
as Moore’s Law (after Gordon Moore, a founder of Intel). to improve how effectively ideas are applied within
But companies have run up against a vexing problem: to firms, would do wonders for growth, even if the world’s
continue achieving this success, they have to pour more scientists are idly scratching their heads.
and more resources into the effort over time. The research
In some ways, the accumulation of knowledge can
productivity of each scientist participating in the battle to
F hold back progress. The more that is known, the more
cram in transistors has correspondingly tumbled.
researchers must absorb before they can add to the stock
Analysing the supply side of the innovation equation of human knowledge – or the more they must collaborate
C in isolation can also be misleading. The demand for with other researchers to combine their areas of expertise.
new ideas, and, correspondingly, the incentive to tackle But the incomplete exploitation of currently available
difficult questions, also matters. In his analysis of the knowledge is in some way reassuring.
Industrial Revolution, Robert Allen, then an economic It suggests that people are
historian at Oxford, sought to explain why it started in underperforming relative
Britain rather than anywhere else. Supply-side factors, to their potential: both
such as improved literacy and stronger property rights, in how they use
certainly played a part. But it was the demand for available ideas
labour-saving innovation, prompted by Britain’s relatively and in how
high wages at the time, which gave tinkerers a strong they uncover
incentive to develop and hone the steam engine and new ones.
its applications.

© The Economist Newspaper
Limited, London, 2017

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