A Calculation of the Social Returns to Innovation Article Swipe
Related Concepts
Spillover effect
Imitation
Productivity
Economics
Investment (military)
Returns to scale
Social capital
Financial economics
Microeconomics
Production (economics)
Macroeconomics
Social psychology
Law
Psychology
Political science
Sociology
Social science
Politics
This paper estimates the social returns to investments in innovation. The disparate spillovers associated with innovation, including imitation, business stealing, and intertemporal spillovers, have made calculations of the social returns difficult. Here we provide an economy-wide calculation that nets out the many spillover margins. We further assess the role of capital investment, diffusion delays, learning-by-doing, productivity mismeasurement, health outcomes, and international spillovers in assessing the average social returns. Overall, our estimates suggest that the social returns are very large. Even under conservative assumptions, innovation efforts produce social benefits that are many multiples of the investment costs.
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