Does Anyone in Government Care About Productivity Growth?
Oct 30, 2024
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Ben Jones, an economist specializing in economic growth and a former Senior Economist at the White House, dives into the critical role of federal spending on science and its link to productivity growth. He discusses how government structure affects economic outcomes and the impacts of private sector R&D. The conversation addresses challenges young scientists face in securing funding, the promise of AI in innovation, and the necessity for greater federal investment in research to drive long-term progress. A thought-provoking look at the intersection of economics and scientific enterprise!
Ben Jones highlights the critical role of federal spending on science in stimulating productivity growth through targeted public R&D funding.
His experience at the Treasury reveals the importance of incorporating diverse expert perspectives to navigate complex economic policy challenges effectively.
Jones emphasizes the necessity of interdisciplinary collaboration among scientists to overcome the 'burden of knowledge' and drive innovation in modern research.
Deep dives
Transition from Engineering to Economics
The interviewee, Ben Jones, initially pursued a career in aerospace engineering, driven by his interests in science and technology. However, during his academic journey at Oxford, he realized the narrow focus of his chosen field and opted to broaden his scope by studying economics instead. This shift was influenced by his growing awareness of the intersection between technology and various policy challenges, particularly in clean energy. As a result, he transitioned into economics, a decision that has defined his professional trajectory and contributions to the field.
The Importance of Expertise in Policymaking
Ben Jones reflects on his early career experience at the U.S. Treasury, particularly when he shadowed Larry Summers during a tumultuous financial crisis. He learned that true expertise is often scarce in policymaking, as many intelligent individuals lack the deep understanding required to navigate complex issues. This realization emphasized to him that successful policy solutions necessitate the incorporation of diverse expert perspectives rather than relying solely on conventional wisdom. Consequently, he highlights the need to draw from both internal and external sources of knowledge to address policy challenges effectively.
The Role of Leaders in Economic Outcomes
Exploring the impact of leadership on national economic growth, Jones argues against the traditional view that social forces dominate historical events. His observations at the Treasury led him to conclude that national leaders can significantly influence policy outcomes, especially in authoritarian regimes. Throughout his research, he investigated cases resulting in sudden leadership changes, finding that such transitions have noticeable effects on economic performance in these regimes. Conversely, he noted no substantial macroeconomic changes in democratic settings, indicating a crucial distinction in leadership influence.
Challenges in U.S. Science and Innovation Funding
In discussing science and innovation, Jones identifies a significant structural problem in the U.S. government regarding productivity growth. He notes that even though agencies like the NIH and NSF contribute to vital scientific advancements, there is a lack of a centralized commitment to long-term economic investment in technological advancement. This underinvestment leads to an overall stagnation in innovative potential, particularly evident in the decreasing levels of public funding for research and development. To counter this trend, he advocates for an elevation of voices in the policy conversation around science and tech to secure more substantial funding.
The Burden of Knowledge and Collaborative Research
Jones discusses the concept of the 'burden of knowledge,' which posits that as scientific disciplines become more specialized, it takes longer for individuals to become experts and contribute to significant advancements. This narrowing of expertise necessitates increased collaboration among scientists across various fields to facilitate groundbreaking discoveries. He observes a notable shift in research teams becoming essential for generating impactful work, where interdisciplinary collaboration outperforms solo efforts. Ultimately, he argues that fostering teamwork and interdisciplinary initiatives is vital for coping with the complexities of modern science and innovation.
Today’s episode is an interview with a colleague of mine at the Institute for Progress. Ben Jones is an economist who focuses on the sources of economic growth in advanced economies, and he’s a Non-Resident Senior Fellow at IFP.
Jones has served in more than one executive branch role, including as the Senior Economist for Macroeconomics for the White House Council of Economic Advisors (CEA), during the first Obama administration. But what we spent most of our time talking about here was a broader question: What role does federal spending on science play in productivity growth?
Timestamps:
(00:00) Introduction
(2:03) Shadowing Larry Summers at Treasury
(3:46) Do national leaders actually affect economic growth?
(9:22) Whose job is it in the federal government to think about productivity?
(14:12) What market failure is solved by public R&D funding?
(19:45) What does the rise of team science mean for young scientists?
(32:47) Should we be bearish about the entire scientific enterprise?
(51:50) What levers can we pull to increase productivity growth?
(43:53) Audience questions
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