A Calculation of the Social Returns to Innovation

Benjamin Jones and Lawrence Summers

No 27863, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: O3 O4 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-hea
Note: EFG PR
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Citations: View citations in EconPapers (29)

Published as A Calculation of the Social Returns to Innovation , Benjamin F. Jones, Lawrence H. Summers. in Innovation and Public Policy , Goolsbee and Jones. 2022

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Chapter: A Calculation of the Social Returns to Innovation (2020)
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