Is the world running out of ideas? This pessimistic view seems amply justified by stubbornly slow productivity growth in many economies.
Today’s new technologies are nothing like as important economically as the innovations of the early 20th century, as Robert Gordon has argued: in an influential book he compared video gaming to indoor sanitation. In a recent paper a group of economists from Stanford University and the Massachusetts Institute of Technology — two of the world’s hot springs of idea-generation — calculate that it now takes more than 20 times the number of researchers to generate the same economic growth as it did in the 1930s.
Studies of specific phenomena support the slowdown hypothesis: Moore’s law is fizzling out; new pharmaceutical products take far more investment than they used to; agricultural productivity seems to have ground to a halt.