Productivity, Innovation and R&D
The long-run history of economic growth is a history of the development, adoption and diffusion of new technologies. But economic growth depends on social innovations, as well as technological ones, and the idea of research and development (R&D) as a systematic way of innovating is one of these. But the link from R&D to productivity growth is not straightforward.
The UK has experienced a long period of disinvestment in R&D by the UK, especially in the business and government sector, with business R&D intensity reaching a low point in 2005, which should be viewed in the light of a wider slowdown in public and private investment.
It is not the invention of a new technology that drives productivity growth across a whole economy, but rather its widespread adoption and, often, its subsequent adaptation in use. In rebuilding the infrastructure for the UK’s innovation economy there needs to be as much focus on translation and innovation diffusion as on discovery.
The paper also includes a number of policy implications.
Author: Richard A. L. Jones (The University of Manchester)