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Unformatted text preview: 1970s . It bounc ed bac k between 1996 and 2004, but s inc e 2004 the annual
www.e c onomist.c om/ne ws/br ie f ing/21569381- ide a - innova tion- a nd- ne w- te c hnology- ha ve - stoppe d- dr iving- gr owth- ge tting- inc r e a sing 2/8 1/31/13 I nnova tion pe ssimism: Ha s the ide a s ma c hine br oke n down? | The Ec onomist rate has fallen to 1.33%, whic h is as low as it was from 1972 to 1996. Mr Gordon mus es
that the pas t two c enturies of ec onomic growth might ac tually amount to jus t “one big wav e”
of dramatic c hange rather than a new era of uninterrupted progres s , and that the world is
returning to a regime in whic h growth is mos tly of the ex tens iv e s ort (s ee c hart 3). Mr Gordon s ees it as pos s ible that there were only a few truly fundamental innov ations —the
ability to us e power on a large s c ale, to k eep hous es c omfortable regardles s of outs ide
temperature, to get from any A to any B, to talk to any one y ou need to—and that they hav e
mos tly been made. There will be more innov ation—but it will not c hange the way the world
work s in the way elec tric ity , internalc ombus tion engines , plumbing, petroc hemic als and the
telephone hav e. Mr Cowen is more willing to imagine big tec hnologic al gains ahead, but he
think s there are no more lowhanging fruit. Turning teraby tes of genomic k nowledge into
medic al benefit is a lot harder than dis c ov ering and mas s produc ing antibiotic s .
The pes s imis ts ’ s ec ond line of argument is bas ed on how muc h inv ention is going on. Amid
unc onv inc ing appeals to the number of patents filed and databas es of “innov ations ” put
together quite s ubjec tiv ely , Mr Cowen c ites interes ting work by Charles J ones , an
ec onomis t at Stanford Univ ers ity . In a 2002 paper Mr J ones s tudied the c ontribution of
different fac tors to growth in Americ an perc apita inc omes in the period 195093. His work
indic ated that s ome 80% of inc ome growth was due to ris ing educ ational attainment and
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This document was uploaded on 02/16/2014 for the course MGMT 237 at UPenn.
- Spring '14