New Ideas Are Out There—We Just Need to Look for Them
AnonTechie writes:
A few theories on why American productivity is on the decline.
The key to a nation's long-run prosperity is increased productivity. If workers can produce more in an hour, day, or week then they can collectively work less or enjoy more of the fruits of their labor: More pickleball courts and more time to play pickleball.
With all the astonishing improvements that we see on our computers and smartphones, it might seem that productivity is about to explode, that our concern will soon be how to distribute income and manage leisure when machines do all the work that people used to do. The reality is the opposite. The annual rate of increase of productivity in the United States averaged nearly 3% between 1870 and 1970 but has since slowed to less than 1%, according to data from the Bureau of Labor Statistics. That 2-percentage-point drop isn't much in the short run, but it is everything in the long run. If productivity continues to increase at 1% annual rate instead of 3%, workers will produce a third less output in 20 years, 50% less in 35 years.
A 2020 study published in the American Economic Review, the flagship journal of the American Economics Association, focused on research productivity because this is a key driver of overall productivity improvements.
They looked at specific industries and concluded that
Our robust finding is that research productivity is falling sharply everywhere we look. Taking the US aggregate number as representative, research productivity falls in half every 13 years: ideas are getting harder and harder to find. Put differently, just to sustain constant growth in GDP per person, the United States must double the amount of research effort every 13 years to offset the increased difficulty of finding new ideas.
The authors don't offer a compelling explanation for the drop in research productivity. We will suggest several possibilities. The title of the article, "Are Ideas Harder to Find?," suggests that productive ideas are increasingly scarce and illusive-that the low-ranking fruit have been harvested.
What are your views on this ??
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