Innovation in American economy for the future

Killing the Golden Goose: The Decline of Science in Corporate R&D by Ashish Arora, Sharon Belenzon, and Andrea Patacconi.

I briefly discussed this paper with my Osher class at Santa Clara (alumni and retired members of the SCU community).  Many of them were engineers in Silicon Valley… they had lots of say.  It is an interesting phenomenon.  Their comments echo those in the comments at Tyler Cowen’s Marginal Revolution blog.  Would be interesting to see how the relative incentives have changed (why do corporations value patents more now than they did 20 years ago, and what is the compensating differential for corporate R&D scientists, if publication before was a valuable perk)… could it be that academia has become relatively less attractive 9as a profession or source of prestige), and so academic publication no longer has much value for corporate scientists?

Scientific knowledge is believed to be the wellspring of innovation. Historically, firms have also invested in research to fuel innovation and growth. In this paper, we document a shift away from scientific research by large corporations between 1980 and 2007. We find that publications by company scientists have declined over time in a range of industries. We also find that the value attributable to scientific research has dropped, whereas the value attributable to technical knowledge (as measured by patents) has remained stable. These effects appear to be associated with globalization and narrower firm scope, rather than changes in publication practices or a decline in the usefulness of science as an input into innovation. Large firms appear to value the golden eggs of science (as reflected in patents) but not the golden goose itself (the scientific capabilities). These findings have important implications for both public policy and management.

via Marginal REVOLUTION — Small Steps Towards A Much Better World.

About mkevane

Economist at Santa Clara University and Director of Friends of African Village Libraries.
This entry was posted in Teaching macroeconomics, United States. Bookmark the permalink.