Rich countries spend more on research every year. Why is measured productivity growth falling?
Why Is Productivity Slowing Down?
Ian Goldin et al. (2024) · Journal of Economic Literature 62(1)
Article ↗ · Replication data ↗ (openICPSR)
The archive requires an account we do not hold, so the files were not opened. What follows rests on the published abstract and on this platform's own observations.
What the authors found
The review by Goldin, Koutroumpis, Lafond and Winkler documents a slowdown in productivity growth across advanced economies despite rising research inputs, and canvasses the candidate explanations: ideas getting harder to find, declining business dynamism, rising market concentration, mismeasurement of intangibles, and diffusion failing between frontier firms and the rest. No single explanation carries the weight, and the review's contribution is largely in showing which facts any candidate has to fit.
What our data adds
The input side of the puzzle is in this database and the ranking is not what the popular discussion suggests. On research spending as a share of GDP, Israel leads at 6.35 per cent, then Korea at 4.94, Sweden at 3.60, the United States at 3.45 and Japan at 3.44. On researchers per million people, Korea leads the large economies at 9,472, then Sweden at 8,911, Denmark at 8,838 and Singapore at 8,782 — the United States does not appear in the top ten on this measure at all. Two small economies, Israel and Korea, are running research efforts of a scale that used to be the preserve of superpowers.
Each country's most recent reported year.
The input measure behind the productivity puzzle.
| Figure | Value | Indicator |
|---|---|---|
| Israel, R&D spending as a share of GDP | 6.35% | GB.XPD.RSDV.GD.ZS |
| Korea | 4.94% | GB.XPD.RSDV.GD.ZS |
| Korea, researchers per million | 9,472 | SP.POP.SCIE.RD.P6 |
| United States, R&D share | 3.45% | GB.XPD.RSDV.GD.ZS |
Every figure here is computed from observations in this database and can be charted, downloaded or queried.
What this cannot show
This is the input, and the puzzle is about the output per unit of input, which requires the total factor productivity series this database does not carry. There is also a trap in these rankings that caught the first version of this note: taking a single global latest year returns whichever countries report fastest, which put Canada above Korea on research intensity. These figures use each country's own most recent year since 2015, which is the right fix and still means the years being compared are not identical.
The data behind it
Research and development expenditure (% of GDP)
GB.XPD.RSDV.GD.ZS
WBPatent applications, residents
IP.PAT.RESD
WBResearchers in R&D (per million people)
SP.POP.SCIE.RD.P6