We often hear: ideas are cheap. “Ideas are a dime a dozen. People who implement them are priceless,” claims a 2013 article in Forbes. As a prevailing point of view has it, innovative ideas are plentiful; it’s the idea implementation that represents a bottleneck in the innovation process.
A joint Stanford/MIT research team has recently challenged the “cheap ideas” dogma. The researchers presented a wide range of empirical evidence showing that research productivity, a scientific term for a layman’s “idea,” is actually sharply declining. According to their calculations, in the economy as a whole, research productivity declines at an average rate of 5.3% per year.
Analysis of specific research areas confirms this trend. In semiconductors (the playground of the famous Moore’s Law), research productivity is declining at a rate of 6.8% per year; in agribusiness and pharmaceutical research, the annual decline is about 5.0%.
In other words, contrary to a popular belief, ideas are not plentiful. In reality, we’re experiencing a growing shortage of ideas.
If research productivity is on decline, how then is steady economic growth being sustained? The answer is simple: by rising what economists call research effort–and what in layman’s terms means the number of researchers. Indeed, the number of researchers required to achieve the famous doubling, every two years, of the density of computer chips (Moore’s Law) is more than 18 times larger today than it was in the early 1970s.
In some specific areas of agribusiness research, the number of researchers has risen 23-fold between 1969 and 2009. And while research productivity responsible for the drugs approved by the FDA between 1970 and 2015 has been declining at an annual rate of 3.5%, this decline was offset by the 6.0% annual growth in the number of involved researchers.
Given relatively high salaries of researches involved in pharmaceutical research, there is all the reasons indeed to call them “priceless.” And taking into account the steady growth in their numbers, one shouldn’t be surprised with the galloping costs of today’s drug development.
But let me turn to my favorite subject: crowdsourcing. If the increase in the number of researchers becomes a driving force to ensure steady economic growth—against the background of the falling number of innovative ideas—then crowdsourcing represents one of the approaches to facilitate this process. While keeping the total number of researchers constant, crowdsourcing allows to significantly elevate the effective number of contributors to generate “ideas” for a specific research project.
One could argue that one of the macroeconomic benefits of crowdsourcing is therefore its ability to utilize temporary assemblies of researches without the need of creating permanent research positions.
p.s. You can read the latest issue of my monthly newsletter on crowdsourcing here: http://mailchi.mp/c81d82436a60/are-ideas-really-cheap-and-plentiful. To subscribe to the newsletter, go to http://eepurl.com/cE40az.
Image was provided by Tatiana Ivanov