Fortune

CLOSING AMERICA’S IDEA GAP

WE’RE LIVING IN A GOLDEN ERA OF TECH BREAKTHROUGHS, BUT OUR INNOVATIONS AREN’T DOING AS MUCH AS THEY USED TO TO BOOST ECONOMIC GROWTH. HERE’S WHY WE’RE GETTING LESS BANG FOR OUR R&D BUCK—AND WHAT WE CAN DO TO FIX IT.

IT’S POSSIBLE, without squinting, to gauge the past decade as one of unprecedented technological growth. It ushered in not only the smartphone, but with it a cornucopia of apps for every imaginable want, need, or obsession. It was a decade in which Uber became a noun, a verb, and an analogy too—as in, the “Uber of X.” In these same 10 years, virtual reality headsets and drones joined the litany of everyday playthings; millennial friendships were saved by Venmo; and a completely stateless digital currency became an investor darling, even if most of Bitcoin’s fans still don’t quite grasp how it works. Genetic editing became extraordinarily accessible thanks to a tool named Crispr, and A.I. went from mastering Go to becoming the “self ” in self-driving cars. There’s now an entire economy based on the mobile connectedness that’s built on the devices in our pockets. In 2007, most of these innovations didn’t exist.

So given all that, it would seem absurd to suggest that innovation is somehow less potent than it once was—that, somehow, all those new ideas we’re generating are offering less bang for the buck. But that is precisely what one group of economists have concluded. And it’s worth assessing their argument for a number of reasons, because it has enormous implications for businesses, investors, and society as a whole.

Over the past decade, even as innovation has soared, growth in overall productivity as well as economic output has slowed. Both remain at anemic levels even

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