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Geography 3422A/B Study Guide - Diminishing Returns, Karl Benz


Department
Geography
Course Code
GEOG 3422A/B
Professor
Milford Green

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The Decline of Innovation and Economic Growth3/11/2013 10:47:00 AM
The Decline of Innovation and Economic Growth Robert J. Gordon
Between 1891 and 2007, the US achieved a robust 2% annual
growth rate of output per person
The growth of the past century resulted from a set of inventions
between 1875 and 1900
o These started with Edison's electric light bulb (1879) and
power station (1882)
o Karl Benz invented the first workable internal-combustion
engine the same year as Edison's light bulb
As the impact of the late-19th-century inventions faded away
around 1970, the computer revolution took over
o The bulk of these benefits came early in the Electronics Era:
1960s mainframe computers churned out bank
statements and telephone bills, reducing clerical labor
1970s memory typewriters replaced repetitive
retyping by armies of legal clerks
1980s PCs with word-wrap were introduced
1990s the climax was the marriage of
communications to the computer as the Internet
2002 most computer-related inventions have resulted
not in transformation but in miniaturization like hand-
held devices
We may have now left behind the era of truly important changes in
our standard of living
o Pharmaceutical research appears to be entering a phase of
diminishing returns
Developing new drugs is increasingly expensive, and
the potential pool of beneficiaries is ever smaller
o The fracking revolution and soaring oil and gas production
have also excited optimists
This isn't a source of future economic growth; it merely
holds off future economic decline
There's not a forecast for an end to innovation, just a decline in the
usefulness of future inventions in comparison with the great
inventions of the past
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