Nber Working Paper Series Are Ideas Getting Harder to Find?

In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms: the effective number of researchers and their research productivity. We present a wide range of evidence from various industries, products, and firms showing that research effort is rising substantially while research productivity is declining sharply. A good example is Moore's Law. The number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 18 times larger than the number required in the early 1970s. Across a broad range of case studies at various levels of (dis)aggregation, we find that ideas — and in particular the exponential growth they imply — are getting harder and harder to find. Exponential growth results from the large increases in research effort that offset its declining productivity. Nicholas Bloom Stanford University Department of Economics 579 Serra Mall Stanford, CA 94305-6072 and NBER nbloom@stanford.edu Charles I. Jones Graduate School of Business Stanford University 655 Knight Way Stanford, CA 94305-4800 and NBER chad.jones@stanford.edu John Van Reenen Department of Economics, E62-518 MIT 77 Massachusetts Avenue Cambridge, MA 02139 and NBER vanreene@mit.edu Michael Webb Department of Economics Stanford University 579 Serra Mall Stanford, CA 94305-6072 mww@stanford.edu 2 BLOOM, JONES, VAN REENEN, AND WEBB