Relatively flat US output growth versus rising numbers of US researchers is often interpreted as evidence that ideas are getting harder to find. We build a new 45-year panel tracking the universe of US firms’ patenting to investigate the micro underpinnings of this claim, separately examining the relationships between research inputs and ideas (patents) versus ideas and growth. We find that average patents per R&D input are increasing, the elasticity of patents to R&D inputs is flat or rising, and there is no systematic evidence of a secular decline in patenting after controlling for research inputs. We then document a positive, significant, and fairly steady relationship between firms’ growth in ideas (patents) and labor productivity. Average firm growth after controlling for idea growth, however, declines. Together, these results suggest that innovative efforts play a key role in sustaining growth that has not diminished over the last four decades.

Here is the paper by Teresa C. Fort, Nathan Goldschlag, Jack Liang, Peter K. Schott, and Nikolas Zolas.