They model the returns to R&D spending like this: imagine stopping all R&D spending for a single year. You’d save several hundred billion dollars upfront, but there would be no economic growth,1 so we’d miss out on a ~2% increase in per capita GDP.
It’s a cute argument and I like it, though I note that probably-most economic innovation does not come from things-called-R&D-spending. For instance, I’d expect selection pressure on businesses is a major mechanism. People try things and see what makes money, and that’s not usually classified as “R&D”.
It’s a cute argument and I like it, though I note that probably-most economic innovation does not come from things-called-R&D-spending. For instance, I’d expect selection pressure on businesses is a major mechanism. People try things and see what makes money, and that’s not usually classified as “R&D”.