Katja Mann, Lukas Püttmann, 07 December 2017

Researchers disagree over whether automation is creating or destroying jobs. This column introduces a new indicator of automation constructed by applying a machine learning algorithm to classify patents, and uses the result to investigate which US regions and industries are most exposed to automation. This indicator suggests that automation has created more jobs in the US than it has destroyed.

Xavi Cirera, Edwin A. Goñi Pacchioni, William Maloney, 29 November 2017

Innovation is widely seen as central to the growth of developing countries, and available evidence suggests that the returns to R&D investment should be extremely high.  Yet low-income countries invest very little. This column suggests that this is due to the increasing scarcity of a wide array of factors complementary to innovation, and that this explains the lack of convergence of low-income countries to the technological frontier.    

Christian Helmers, Henry Overman, 25 November 2017

Highly localised research infrastructure investment, such as in the Large Hadron Collider, often leads to major scientific breakthroughs, but there is little evidence on the longer-term and wider geographical impacts on scientific output. This column uses the example of the UK’s Diamond Light Source to study the impact of large facilities on where scientific research is conducted. Not only do such investments substantially increase directly related research in the local area, they also create spillovers on unrelated research through knowledge sharing.

Erika Färnstrand Damsgaard, Per Hjertstrand, Pehr-Johan Norbäck, Lars Persson, Helder Vasconcelos, 23 November 2017

Most developed economies provide significant subsidies to small businesses to encourage innovation. This column argues that while subsidies to reduce entry costs may increase entrepreneurial entry, they can also lead to a reduction in the likelihood of ‘breakthrough’ inventions. Entry costs, which are incurred when an innovation project is successful, prompt small firms and entrepreneurs to pursue high-risk, high-reward innovations.

Saul Lach, Zvika Neeman, Mark Schankerman, 03 November 2017

Understanding how the design of policy to support R&D influences its effectiveness, and how loan programmes should be optimally designed to maximise welfare, is critical to formulating effective, cost-efficient policies. This column uses mechanism design to analyse the optimal structure of R&D loan programmes. The results suggest that optimal policies should ‘target the middle’, as low-risk projects will be funded by the market and high-risk projects are not likely to generate sufficient social payoff to justify support. Moreover, the optimal policy is likely to differ across technology areas, and between industrialised and emerging economies.

Monika Schnitzer, Martin Watzinger, 31 October 2017

Conventional wisdom holds that venture capital-financed start-up companies generate positive spillovers for other businesses, but these spillovers are hard to measure accurately. This column uses a broader analysis of patent spillovers than previous studies to argue that venture capital-financed start-up companies help established companies innovate, and play a significant role in the commercialisation of new technologies. This suggests that subsidies for venture capital investment should be at least as large as current R&D subsidies.

Leonardo Iacovone, Mariana Pereira-López, Marc Schiffbauer, 30 October 2017

In spite of its potential, the use of digital technology is still basic in most developing countries. This column presents evidence that firms in Mexico facing higher external competition have used IT more intensively and efficiently. External competition has encouraged them to make the necessary complementary investments in innovation and organisational changes.

Mark Schankerman, Florian Schuett, 27 October 2017

Critics of the patent system argue that ineffective patent office screening is posing an impediment to innovation. This column develops a model to examine the effect of examination, fees, and court litigation on patent quality. Results show that frontloading fees (i.e. higher fees for application versus approval), capping litigation costs, and intensifying patent office examination all lead to increases in social welfare. Simulations calibrated with existing data suggest that about 65-85% of granted patents are invalid.

Klaus Adam, Henning Weber, 26 September 2017

The productivity of many firms evolves over time, which impacts the optimal inflation rate, that is, the rate of price increase with the least distortionary effect on relative goods prices. This column presents estimates for the US that suggest that, due to firm-level productivity changes, the optimal inflation rate has dropped from somewhat over 2% in the mid-1980s to a current level of roughly 1%.

Nicholas Bloom, Chad Jones, John Van Reenen, Michael Webb, 20 September 2017

The rate of productivity growth in advanced economies has been falling. Optimists hope for a fourth industrial revolution, while pessimists lament that most potential productivity growth has already occurred. This column argues that data on the research effort across all industries shows the costs of extracting ideas have increased sharply over time. This suggests that unless research inputs are continuously raised, economic growth will continue to slow in advanced nations.

David Byrne, Dan Sichel, 22 August 2017

One explanation given for the apparent recent slowdown in labour productivity growth in advanced economies is poor measurement. This column argues that while the available evidence on mismeasurement does not in fact provide an explanation for the slowdown, innovation is much more rapid than would be inferred from official measures, and on-going gains in the digital economy make the productivity slowdown even more puzzling. At the same time, this continued technical advance could provide the basis for a future pickup in productivity growth.

Philippe Aghion, Antonin Bergeaud, Timo Boppart, Peter Klenow, Huiyu Li, 16 August 2017

Slowing growth of total factor productivity has led some to suggest that the world is running out of ideas for innovation. This column suggests that the way output is measured is vital to assessing this, and quantifies the role of imputation in output measurement bias. By differentiating between truly ‘new’ and incumbent products, it finds missing growth in the US economy. Accounting for this missing growth will allow statistical offices to improve their methodology and more readily recognise the ready availability of new ideas, but also has implications for optimal growth and inflation targeting policies.

Daron Acemoğlu, Ufuk Akcigit, Douglas Hanley, William Kerr, 05 July 2017

Substantial headway has been made in the transition to clean technology, but recent political developments threaten this progress. This column examines the transition process using a microeconomic model of competition in production and innovation between clean and dirty technologies. The results suggest that production taxes can deal with dirty emission externalities, while research subsidies are sufficient to redirect innovation towards clean technologies. However, delaying intervention will drastically slow down the overall transition.

Hidemichi Fujii, Shunsuke Managi, 16 June 2017

Patent applications are a good indicator of the nature of technological progress. This column compares trends in applications for artificial intelligence patents in Japan and the US. One finding is that the Japanese market appears to be less attractive for artificial intelligence technology application, perhaps due to its stricter regulations on the collection and use of data.

Charles R. Hulten, Leonard Nakamura, 02 June 2017

Conventional growth theory characterises innovation as ‘resource-saving’, in the sense that it allows the same output to be produced with fewer resources. This column introduces a sources-of-welfare growth model that also includes a measure of ‘output-saving’ innovation, which arises from the expanded scope and efficiency in consumer choice recently brought about by the Internet economy and smartphones. The findings highlight how various new kinds of intangible capital complicate the measurement of GDP.

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Leading economists, managers, research scientists, experts from industry as well as venture capitalists will determine the state of the art in the field of economic theory of innovation and stimulate further work to better understand the innovation process.
The conference will host 21 plenary lectures with outstanding speakers from various prestigious institutions such as Prof. Venki Ramakrishnan, 2009 Nobel Prize in Chemistry, Group Leader of the Medical Research Council Laboratory of Molecular Biology in Cambridge and President of the Royal Society, UK or Prof. Maria Leptin, EMBO Director, Prof. Dietmar Harhoff, Director Max Planck Institute for Innovation and Competition and Prof. Marie Thursby, Georgia Institute of Technology.

Daron Acemoğlu, Pascual Restrepo, 10 April 2017

As robots and other computer-assisted technologies take over tasks previously performed by labour, there is increasing concern about the future of jobs and wages. This column discusses evidence that industrial robots reduced employment and wages between 1990 and 2007. Estimates suggest that an extra robot per 1,000 workers reduces the employment to population ratio by 0.18-0.34 percentage points and wages by 0.25-0.5%. This effect is distinct from the impacts of imports, the decline of routine jobs, offshoring, other types of IT capital, or the total capital stock. 

Ufuk Akcigit, John Grigsby, Tom Nicholas, 27 March 2017

The impact of immigration on US economic development has become a controversial issue in recent policy debates. This column, arising from a study linking Federal Census data with patent records, examines the historical role of immigrant inventors in the process of US technological innovation. Immigrant inventors appear to have been of central importance to American innovation during the 19th and 20th centuries, both through their own inventive activity and through their influence on domestic inventors.

William Maloney, Felipe Valencia Caicedo, 24 March 2017

The generation and diffusion of scientific knowledge and technology are assumed to be drivers of modern economic growth, but there is a lack of firm empirical evidence of this. This column uses the first detailed data on the density of engineers in the western hemisphere to argue that historical differences in innovative capacity, as captured by the density of engineers in 1880, explain a significant fraction of the Great Divergence. The results confirm the imperative of developing higher-order human capital.

David Autor, David Dorn, Gordon Hanson, Gary P. Pisano, Pian Shu, 20 March 2017

The discussion of the decline in US manufacturing during the 2016 presidential election campaign largely focused on job losses. This column examines the effects of Chinese import competition on another metric for the health of the US manufacturing sector – innovation.  Firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output as well as their R&D expenditures. While politicians’ ‘obsession’ with manufacturing is primarily due to job losses, an accompanying reduction in innovation may well affect economic growth in the longer term.

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