Skip to main content


The Changing Structure of American Innovation: Cautionary Remarks for Economic Growth
Ashish Arora, Duke University and NBER
Sharon Belenzon, Duke University and NBER
Andrea Patacconi, Norwich Business School
Jungkyu Suh, Duke University

A defining feature of modern economic growth is the systematic application of science to advance technology. However, despite continuous progress in scientific knowledge, recent productivity growth in the U.S. has been disappointing. Arora, Belenzon, Patacconi, and Suh review major changes in the American innovation ecosystem over the past century and note that the past three decades have been marked by a growing division of labor between universities focusing on research and large corporations focusing on development. Knowledge produced by universities is not often in forms that can be readily digested and turned into new goods and services by companies, especially as large companies themselves withdraw from research. Small firms and university technology transfer offices cannot fully substitute for corporate research, which integrated multiple disciplines and components at the scale required to solve significant technical problems. Therefore, whereas the division of innovative labor may have raised the volume of science by universities, it also slowed, at least for a period of time, the transformation of that knowledge into novel products and processes.

The Spatial Mismatch Between Innovation and Joblessness
Edward L. Glaeser, Harvard University and NBER
Naomi Hausman, Hebrew University

American technological creativity is geographically concentrated in areas that are generally distant from the country's most persistent pockets of joblessness. Should innovation policy attempt to engender more innovation is distressed areas? Glaeser and Hausman explore these questions. The primarily inventive parts of innovation policy, such as N.I.H. grants, can aid under-performing areas, possibly through health improvements that reduce the share of people on Disability Insurance, without any spatial reallocation. Moreover, since research funding is presumably already designed to maximize knowledge production, spatial reallocation may come at a considerable cost. The educational aspects of innovation policy, such as Pell Grants, work-study and Federal overhead reimbursement on grants, can reflect regional realities better and do more to encourage employment in distressed areas. Lifting the cap on H1B visas in poorer places can also enhance local human capital. Finally, there is particular scope for geographically targeted entrepreneurship policy, such as eliminating the barriers to new business formation near universities and in distressed places. Spatially targeted employment subsidies can also encourage more labor-intensive innovation in depressed areas.

Antitrust and Innovation: Welcoming and Protecting Disruption
Fiona Scott Morton, Yale University and NBER
Carl Shapiro, University of California, Berkeley and NBER
Giulio Federico, European Commission
The Gift of Global Talent
William R. Kerr, Harvard University and NBER

Talent is the most precious resource for today's knowledge-based economy, and a significant share of the U.S. skilled workforce in technology fields is foreign born. The United States has long held a leading position in attracting global talent, but the gap to other countries is weakening. Immigration policies like the H-1B visa program shape the admissions of foreign workers to the country and grant a particularly strong gatekeeping role to sponsoring firms and universities. Kerr explores the data around global talent flows and some of the economic implications of an employer-driven immigration approach.

The Alignment of Innovation Policy and Social Welfare: Evidence from Pharmaceuticals
Margaret Kyle, MINES ParisTech
Experimental Innovation Policy
Albert Bravo-Biosca, IGL - Nesta

Experimental approaches are increasingly being adopted across many policy fields, but innovation policy has been lagging. Bravo-Biosca reviews the case for policy experimentation in this field, describes the different types of experiments that can be undertaken, discusses some of the unique challenges to the use of experimental approaches in innovation policy, and summarizes some of the emerging lessons, with a focus on randomized experiments. The research concludes describing how at the Innovation Growth Lab we've been working with governments across the OECD to help them overcome the barriers to policy experimentation in order to make their policies more impactful.


This paper was distributed as Working Paper 26273, where an updated version may be available.


Jeffrey Alexander, SRI International
Gary W. Anderson, National Science Foundation
Mark Boroush, National Science Foundation
Tim Brennan, University of Maryland, Baltimore County
Stephen Campbell, National Institute of Standards and Technology
Elias Carayannis, George Washington University
Gail Cohen, The National Academies of Sciences
Daniel Correa, Stanford University
Carrie Dennis, Bureau of the Census
Charles Duan, Public Knowledge
Kevin Finneran, "Issues in Science & Technology"
Christina Freyamn, SRI International
Matteo Grazzi, Inter-American Development Bank
Kwabena Gyimah-Brempong, National Science Foundation
James Hansley, Hansley Associates, Inc.
Matt Hourihan, American Association for the Advancement of Science
Audrey Kindlon, National Science Foundation
James Lloyd, Arizona State University
Nancy Lutz, National Science Foundation
Suzanne Majewski, Department of Justice
Dia Martin, OPIC
David Mitch, University of Maryland, Baltimore County
Leonardo Ortega, Georgia Institute of Technology
Derek Ozkal, Ewing Marion Kauffman Foundation
Moon Parks, Government Accountability Office
Nicholas Rada, USPTO
Eric Ralph, Federal Communications Commission
Sally Rood, National Governors Association
Paroma Sanyal, Brattle Group
James A. Schuttinga, National Institutes of Health
Richard T. Schwinn, Small Business Administration
Stephanie S. Shipp, University of Virginia
Jonathan Silver, retired
Randolph Sim, Georgetown University
Mark Skinner, SSTI
Peter Stenberg, Department of Agriculture
Roland Stephen, SRI International
Miron Straf, Virginia Tech
Tom Struble, Federal Communications Commission
Joseph Teter, Naval Surface Warfare Center
Nico Thomas, National Institute for Standards and Technology
Walter Valdivia, Mercatus Center
Karen Villatoro, Small Business Administration
Cliff Waldman, Manufacturers Alliance for Productivity and Innovation
Caleb Watney, R Street
Karen E. White, National Science Foundation
Brad Wible, Science Magazine
Victoria Williams, Small Business Administration
Timothy Wojan, National Science Foundation
Susan Xu, U.S. International Trade Administration

More from NBER

In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Retirement and Disability, and the Bulletin on Health — as well as online conference reports, video lectures, and interviews.

Economics of Digitization Figure 1
  • Article
The NBER Economics of Digitization Project, established in 2010 with support from the Alfred P. Sloan Foundation, provides a forum for disseminating research...
  • Lecture
Claudia Goldin, the Henry Lee Professor of Economics at Harvard University and a past president of the American...
2020 Methods Lecture Promo Image
  • Lecture
The extent to which individual responses to household surveys are protected from discovery by outside parties depends...