In Spring 2019 I taught a class on the economics of innovation targeted to interested undergraduates from a wide range of backgrounds (the only prerequisite is Econ 101) and I thought others might find the reading list interesting. The readings are usually anchored to then-recent research in the economics of innovation, but to make the course accessible to people without degrees in economics I tried to find and create accessible overviews of the research. So I hope this is useful for anyone interested in the topic, regardless of their background.
Caveat: these readings are selected to illustrate a big concept in the economics of innovation and to lead to a good discussion. They aren’t necessarily the “best” or “most convincing” paper on the topic and of course this list is far from exhaustive. Needless to say, I don’t necessarily endorse all the arguments made either.
Preliminaries
Why study innovation?
- “We Need a New Science of Progress” (2019) by Patrick Collison and Tyler Cowen
- Marginal Revolution University: introduction to the SolowModel.
Where do ideas come from?
Is necessity the mother of invention?
- “Chapter 3: Lost European Explorers” (2016) in The Secret of Our Success by Joseph Henrich.
If people randomly come up with new ideas, does more people = more ideas?
- Research Digest: “Population Growth and Technological Change: One Million B.C. to 1990” (1998) by Michael Kremer
Do new ideas come from new knowledge?
- Summary of the Report: “Science: The Endless Frontier” (1945) by Vannevar Bush.
- “The Dual Frontier: Patented Inventions and Prior Scientific Advance” (2017) by Mohammed Ahmadpoor and Benjamin Jones
Do better ideas come from experience and learning?
- Excerpt: “Towards an Understanding of Learning by Doing: Evidence from an Automobile Assembly Plant” (2013) by Steven D. Levitt, John A. List, and Chad Syverson.
Is innovation just another form of evolution?
- Excerpt: Life Finds a Way (2019) by Andreas Wagner
- pgs 70-76: “Chapter 4: What are big brains for? Or, how evolution stole our guts” (2016) in The Secret of Our Successby Joseph Henrich
Is innovation about combining different things in a new way?
- Excerpt: The Nature of Technology (2011) by W. Brian Arthur
- Video: “Inventing by Combining Pre-Existing Technologies: Evidence from Patents” (2017) by Matt Clancy
- Research Digest: “Recombinant Growth” (1998) by Martin Weitzman
Putting it all together:
- “Invention and Cumulative Culture Through Tweaks and Leaps in Online Programming Contests” (2018) by Elena Miu, Ned Gulley, Kevin Laland, and Luke Rendell.
- Excerpt (inventing a smartphone keyboard): Creative Selection: Inside Apple’s Design Process During the Golden Age of Steve Jobs (2018) by Ken Kocienda
What background factors matter for innovation?
Why do big cities generate more ideas?
- “Why Big Cities Promote Less Innovation Than They Once Did” (2015) by Eric Jaffe (write-up of “Cities and Ideas” by Packalen and Bhattacharya)
- “The Geography of Innovation” (2017) by Richard Florida (write-up of “The Geography of Unconventional Innovation” by Berkes and Gaetani)
How is innovation affected by institutions?
- Podcast: “How Violence Limits Economic Activity” (2019) on Planet Money (discussion of “Violence and Economic Activity: Evidence from African American Patents, 1870-1940” (2014) by Lisa Cook)
Why do so many people accept things as they are?
- “Is Innovation in Human Nature?” (2016) by Anton Howes
- Non-technical summary: “Who Becomes an Inventor in America? The Importance of Exposure to Innovation” (2018) by Alex Bell, Raj Chetty, Xavier Jaravel, Nevianna Petkova, and John Van Reenen
- 118-120. “Chapter 7: On the Origins of Faith” (2016) in The Secret of Our Success by Joseph Henrich.
How can we incentivize innovation?
What are spillovers and what challenges do they present to businesses doing R&D?
- Research Digest: “Identifying Technology Spillovers and Product Market Rivalry” (2013) by Nicholas Bloom, Mark Schankerman, and John Van Reenen.
What if we just innovate without using the market at all?
- Excerpt: Free Innovation (2016) by Eric von Hippel
Which is better: secrecy or intellectual property rights?
- 1-9: “Patents and Innovation: Evidence from Economic History” (2013) by Petra Moser.
- Podcast: “When Patents Attack!” (2011) from This American Life
- Excerpt: “The Nature and Function of the Patent System” (1977) by Edmund Kitch
What about innovation prizes?
- “Incentivizing Innovation: Adding to the Tool Kit” (2010) by Michael Kremer and Heidi Williams
Can we use tax policy to steer innovation where we want it to go?
- Research Digest (coming): “Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry” (2016) by Philippe Aghion, Antoine Dechezplepretre, David Hemous, Ralf Martin, and John Van Reenen.
Can we boost innovation by increasing the supply of scientists?
- Research Digest (coming): “The Collapse of the Soviet Union and the Productivity of American Mathematicians” (2012) by George Borjas and Kirk Doran.
- “Does Government R&D Policy Mainly Benefit Scientists and Engineers?” (1998) by Austan Goolsbee.
How can we encourage scientists to take bigger risks?
- Research Digest (coming): “Incentives and Creativity: Evidence from the Life Sciences” (2011) by Pierre Azoulay, Joshua S. Graff Zivin, and Gustavo Manso.
Do we need to stop thinking of individual incentives to innovate?
- “The Increasing Dominance of Teams in Knowledge Production” (2007) by Stefan Wuchty, Benjamin F. Jones, and Brian Uzzi.
How should we organize to make innovation happen?
- Excerpt: “Funding Breakthrough Research: Promises and Challenges of the ‘ARPA model’ ” by Pierre Azoulay, Erica Fuchs, Anna Goldstein, and Michael Kierney
- “Google X and the Science of Creativity” by Derek Thompson (2017)
Putting it all together:
- “A Toolkit of Policies to Promote Innovation” (2019) by Nicholas Bloom, Jonathan Van Reenen, and Heidi Williams.
What’s the past and future of innovation?
How has the USA organized research in the past?
- “The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth” (2019) by Ashish Arora, Sharon Belenzon, Andrea Patacconi, and Jungkyu Suh.
What have been the big inventions?
- “What’s Next for the Future of American Innovation?” (2018) by Andrew Van Dam (write-up of “Measuring Innovation over the Long-Run” by Brian Kelly, Dimitris Papanikolaou, Amit Seru, and Matt Taddy)
Is innovation getting harder?
- Research Digest (coming): “Are Ideas getting Harder to Find?” (2019) by Nicholas Bloom, Charles Jones, John Van Reenen, and Michael Webb.
- NBER Reporter Research Summary: “Slower U.S. Growth in the Long- and Medium-Run” (2015) by Robert Gordon
- Research Digest: “Age and Great Invention” (2010) by Benjamin Jones
- Research Digest: “The Burden of Knowledge and the ‘Death of the Renaissance Man’: Is Innovation Getting Harder?” (2009) by Benjamin Jones
Or is the singularity approaching?