They show R&D is effective and R&D spending is up, and conclude obsolescence must be the reason this is not reflected in productivity pretty much by process of elimination. However there is an alternative - that for reasons unrelated to R&D, productivity is actually being driven down, and ever increasing R&D output is necessary just to maintain current levels of productivity.

In particular, they are looking at US manufacturing. While this is a diverse industry, it's clear that in many subfields there is quite a bit of saturation. When everyone has a car, and cars last longer and longer, the need for new cars goes down. Once you get to a point where your industrial capacity can provide enough to satisfy demand, further R&D only reduces the costs of satisfying that demand, not increased output, and in some cases improvements to product quality may even further reduce demand. In the US, light vehicle sales peaked in 2000, and while the numbers dipped during various market downturns, they keep coming back to roughly the same asymptote. The numbers are even more striking if you break it down further - the annual demand for personal vehicles has fallen by a factor of 4 since 1965, and by a factor of 3 since 2000, the difference being made up by increased commercial vehicle demand. Looking at other industries like steel paints a similar picture.

This would only decrease productivity if there was no other demands for people to do something; if this was a simultaneous saturation across everything that a company could do with their current resources.

> if this was a simultaneous saturation across everything that a company could do with their current resources.

That's exactly what I am describing. It's not that a particular style of vehicle is no longer in demand due to a shift in preferences and factories would need to be retooled to create a different type of vehicle, demand for all vehicles has fallen. Yes, the people who once worked on those auto assembly lines will generally go on to do something else, but it won't count as an increase in productivity in car production.

More generally, demand for pretty much all US domestic manufactured goods has flatlined or fallen. Production capacity is not the limiting factor in almost anything mass produced nowadays. Even dramatic reductions in manufacturing cost aren't going to induce any demand. Throw in demographic changes where there are fewer people who have needs to be satisfied, and better products which don't need to be replaced as often, and we ought to expect falling demand across the board.

What happens if the prices of cars are depressed by the increasing efficiency, competition and product longevity, and the people displaced through efficiency are taking lower paid jobs.

If you measure output as GDP - wouldn't GDP have gone down - even if actual production of goods and services has gone up?

Not sure how they measure productivity here.

if you think it's bad now for reasons of increased reliability and efficiency throughout -- wait till the population starts dropping as boomers die and zoomers don't have kids

Not sure I follow. Sure output would drop if the population dropped - but then so would demand - so unless you have demographic imbalance I'm not sure it's a problem.

Perhaps if you are at the apex skimming off a fraction of a percentage of total output then the size of the output matters.

Or perhaps if you are holding debt and expecting the repayments with interest to be made.

If the OECD is to be believed, the elephant in the room is that China negated the value of western R&D by about $500B per year since 2010.

That’s why being a fast follower is so valuable, you get everyone else to waste money on the wrong ways to build things. It also causes R&D to show much worse returns.

I think the solution is to knock them down to a point that they are like India or Russia.

Just big countries but stuck.

I wouldn’t mind if we could make some plays to revamp Japan and some EU, and maybe grow India while boxing China and Russia together.

As long as those countries have governments that aren’t on our side or at least sympathetic to our vision, they should be kept in check hard. Like manufacturing stuff for us but not really being able to use any of it. Sounds harsh but that’s reality. Nothing personal lol

All they’ve done is steal anyway and extracting knowledge from us after we showed them how to make a factory (reductionist but idc), so it’s not like we would be “morally” wrong.

I often browse Hacker News and like it here. As a young Chinese entrepreneur, comments like these make me feel frustrated. China has a large wealth gap, and we have many people with lower education levels who earn meager wages through manual labor to support their families, highly dependent on manufacturing for income. In a sense, they are somewhat like the American Rust Belt before the loss of manufacturing (though they probably don't live as well as Americans, as they can afford neither homes nor cars). The setbacks manufacturing faces in international trade are making their lives even worse. I can roughly understand why you made such a comment, because many friendly and kind people around you are, or have been, worse off due to the competition between our countries. The people around me are also friendly and kind, and I think the best outcome should be for all of us to live better, rather than one side getting better at the expense of the other. I think we should find ways to develop that benefit everyone, because we are all human, and those who are awake when you are sleeping are not bad people.

I would agree with you, if I didn't hear many times about Chinese government repressing other nations just for being near China and not being fully Chinese. Maybe people near you are kind and friendly and I would like to help them, but I'm afraid that some Chinese people with guns will also come to me. How would you solve that problem?

This same argument you laid out here also works if you replace "Chinese" with "US".

For much of the globe, the US is the bad guy/bully, and not the "world policeman" - epecially in countries they bombed (like my country).

With recent US administration changes, this attitude is also becoming more prominent in countries which used to consider the US to be an ally!

All big countries do that, look at the US meddling with the while of South America and the Middle East. China does the same.

Does that mean I can help Americans and Chinese (and maybe Russians too), because everyone is doing bad things? Like IBM provided equipment to nazis during WW2? Business is business, right?

You can help whomever, but I suggest doing things to push powers to do less harm. I don’t think we should argue against more international cooperation with the argument that any party is or has committed atrocities, otherwise the only international collaboration that will takr place will be between states too small to be useful.

Although the Putin regime can enter the sea and never return.

> You can help whomever, but I suggest doing things to push powers to do less harm.

I'm so comically bad at pushing powers to do anything that even my wife doesn't listen to me. From what I've seen, most people making things are bad at demanding things from others. Those who are good at demanding things from others don't really need to make things themselves.

What precisely do you mean in regards to South America? Or are you referencing 19th century policies?

1954 - The USA overthrew a democratic government in Guatemala and replaced it with a violent dictatorship so that we could keep getting cheap bananas.

You took the bait.

The person you're replying to would much rather have a discussion about the well-documented atrocities of a waning American empire than the far less documented atrocities of a waxing Chinese Empire that has no democratic institutions to keep it in check.

You act like our democratic instutions keep us in check. Note how most of our disruption in central america came from actions by clandestine intelligence agencies that are unaccountable to the democratic american government. Yes, there are two governments in the U.S: the one the public elects and then the one that the public is never to fully learn about.

Bro they intervened in Guatemala because in almost every case where communism was preferred over capitalism that country went to shit and became a backwater.

Commi didn’t work as an experiment after all those death camps and purges anyway. And anyone “communist” today is basically authoritarian capitalist with mini purges and dictators. They take Jack Ma to a “camp” and factory reset him or put all the Muslims out west in a prison city.

America has to play the way it does sometimes because the lobby is dominated by cheaters and toxic scumbags who don’t want to actually score points and win.

Guatemala and El Salvador, famously thriving countries today. Glad we stirred the pot and shipped weapons into the conflict zone that are still there.

They would have been worse off. There are like 200 or so countries. I don’t know more than the top 10 or so because unfortunately it’s not relevant.

Yup, human progress is positive-sum in the long run. It only looks zero-sum because of short-term politics.

Positive-sum yes, but win-win not so reliably.

Positive-sum doesn't necessarily mean everyone wins. Just that in aggregate things improve.

In fact, for any significant policy change, there will be losers.

And lots of very long term systemic dysfunction, with powerful interests reinforcing that dysfunction, tilting positive returns toward themselves, and negative returns onto others.

I feel for you, there is no easy solution:

“ China has a large wealth gap, and we have many people with lower education levels who earn meager wages through manual labor to support their families.”

This is the crux of the issue, people too close to extreme poverty couldn’t care less about the IP institutions that led to mass technological development that they or their child will benefit from.

To me, it’s analogous to how very poor people treat the environment very poorly because they have no mental bandwidth to care. The best way to help in that case is to raise wages.

People are frustrated with the CCP because devaluing the currency is intentional massive wage theft which keeps the population near poverty with the negative aftereffects.

If this goes on long enough (which it might have), humanity at large suffers if people refuse to invest in technology of the future or everyone starts putting up trade barriers because the lost investments are too painful.

> The best way to help in that case is to raise wages.

How to raise those wages without enough money? I think money are created from making products. If you just increase wages without changing anything other (like making more products or more expensive products), it means you increase inflation, which is essentially redistribution of money from everyone to those poorer people.

I think the solution is investment into more high and practical education, so that people actually can work more productively and make more money that way. But current accounting practices seem to not see this way, so money are not allocated for such education.

Increasing wages spurs consumers which generates wealth due to money velocity.

Yes, this goes back to that fundamental and long-debated question: How do we eliminate poverty?

I've studied some sociological and economic theories, and I generally understand that this problem is very difficult to solve.

From my perspective, China's biggest problem right now is actually unequal distribution (especially between different regions), and it's sad to see such a problem in a socialist country.

I really hope our government can truly commit to solving such inter-regional distribution problems, instead of just shouting slogans and doing nothing (which they often do).

I have many classmates from underdeveloped regions who come to Beijing for university and then never return to their hometowns because there are simply no opportunities there. Major resources are concentrated in a few large cities.

I don't know if this is a common characteristic of East Asian countries (Tokyo is also very large, and small cities in Japan are also declining). However, Japan's Gini coefficient is very low, and I think we should learn from Japan in this regard.

I have no problem with anyone individually. I'm sure we'd all get along just fine on that level.

The issue is your gov. Same as Russia or anyone else. People are the same individually, but collectively we are not. The Lakers don’t invite the Celtics to a BBQ instead of competing on the court just because they both love shooting hoops.

You are an entrepreneur? You should come to America if you love free-r markets and entrepreneurship. You do know that you can far more easily start a company in America as a Chinese national, than I could in China as an American citizen right? We are all the same people if we go grab a bite or show each other our favorite music videos, but on a global stage we are not the same as NATIONS. That is the key distinction.

As an American, I believe that our way of life, our Constitution, and our proven ability to take all sorts of people and make our nation greater because of it is the epitome of human civilization so far. Others have had thousands of years, still failed to do much. We've only been around since 1776 and been through our own very hard lessons (Civil War, civil rights, Vietnam), though I would argue on a objective scale nowhere close to CCP or Russians..

A quick peek at recent CCP history (hey, we all have skeletons in the closet like I already conceded) shows 10s of millions of their own people murdered in purges (we can argue if it was 10 million or 40 million or 80 million, and it would be totally absurd), Tiananmen Square Massacre, Jack Ma's treatment, drowning Filipino fishermen and other S. China Sea free trade disruptions, and most recently a possible invasion of Taiwan. The possibility of a PLA invasion of Taiwan is why America has invested billions into building chip factories on-shore. As soon as the PLA launches, Taiwan is forced to destroy its own chip factories and other critical infrastructure.

I have zero faith that a CCP dominated world would be a net benefit. It is an exclusionary repressive government, it likes to purge its people randomly, and in general is just not easy to get along with. It also has a boardroom despot that's a dictator. Same thing with Russians, they have been under the rule of some truly awful people and that's just how it is at the end of the day, nothing personal.

I don't need to go on a VPN and be afraid to speak my mind here because being honest about our shortcomings and past is how we forge an actually better tomorrow.

The US also exports culture. I've been around the world, and I see people wearing NBA jerseys or going crazy in the theater watching Marvel movies with subtitles. Even the media in other countries is so heavily derivative of American culture, like pop idol bands or any TV show literally looks like American media from 10-20 years ago but in a different language that I enjoy with subtitles because it is nice to hear a different language and see the scenery there. (Really brings to light what I meant about copy/pasting or stealing from us, in literally every regard though)

They love being American, and acting like it too sometimes. That’s the beauty of America, that anyone can join (legally if physically, otherwise just vibing), and it only makes us stronger. I don’t see anyone lining up to "be Chinese" or "be Russian" in the same way, almost always the other way around. Even our biggest haters are rocking American fashion with their fighter kits lol.

> I don't need to go on a VPN and be afraid to speak my mind here

Well, so long as they don't crack down on VPNs here, like the UK is discussing.

For a non-Westerner, the issue is always the American gov, not the average American (or maybe since the American gov is actually voted for by Americans, the issue is with them after all?). At least the Chinese and Russians are not willfully voting for a government hell-bent on global dominance and destabilizing other countries.

The America of yesteryears? Sure. Today's America? Definitely not.

The Chinese can’t vote…

Precisely.

They aren’t voting because they are under dictators and sham pretend structures lol. They are sort of just pawns I guess? None of them will ever become self made. Tencent/Huawei or anyone else needs to stay in line with CCP and whatever decisions they make. In America businessmen are free to criticize anyone. Look what happens to Chinese entrepreneurs who get a little too successful and forget the CCP. They go to a camp and then come out with a factory reset lmao! Russians fall out of windows weekly it seems.

I mean Russia invaded Ukraine. China has literal concentration camps for Muslims and plans to invade Taiwan.

The USA invaded Iraq and Afghanistan, both of which don't have the faintest connection to the US mainland in any form, either culturally or otherwise.

The US has also launched bombing runs in Syria and Libya, again both of which have the faintest connection to the average American's daily life, all in the pursuit of some boogieman War on Terror.

The US has engaged in military coups to overthrow democratic governments in nearly every Latin American country.

And to crown its Opus, the US has now begun building concentration camps (once again), both on its own soil and in foreign territory.

> They are sort of just pawns I guess? None of them will ever become self made. Look what happens to Chinese entrepreneurs who get a little too successful and forget the CCP. They go to a camp and then come out with a factory reset lmao! Russians fall out of windows weekly it seems.

Sure, while the US extends the favor to foreign nationals and kidnaps them to torture them at Guantanamo, often supplied to them willingly by their British vassals. There's a poignant recorded letter in the Guardian of a young child's letter to Tony Blair asking to return his father from Guantanamo.

I like how you repeat talking points instead of conceding anything like I did.

It’s why America and her people (whether they were born here or immigrated here to become American) are greater than anyone else. We accept our faults, and yet we still strive to build a better world.

And when dealing with such scenarios, whether in business or geopolitics, I’m always partial to the genuine winner who gave an actual shit.

> We accept our faults, and yet we still strive to build a better world.

Or do you? There's a significant fraction of America that is clear-cut evidence of the contrary. Your statement alone is a blatant display of misplaced American exceptionalism.

> I’m always partial to the genuine winner who gave an actual shit.

Might want to broaden your scope a bit outside your country then. Check out the following map fyi: https://brilliantmaps.com/threat-to-peace/ Most foreign citizens actively disagree with your assumptions. And since that map is now a bit dated, we ought to add Canada and Denmark to the list too.

Again, I'm nowhere asserting that China and Russia are models to aspire to. But calling today's America as the shining beacon of democracy and capitalism that every nation should aspire to is a bit of a farce. Especially given that your richest and best are secretly seeking citizenship in European nations.

Buddy, we vote here every 4 years for a new figurehead. America has been through way more tumultuous shit in the past (1860 civil war? hello like 700k Americans died in that) and got out of it way stronger.

Go talk doo-doo about Xi (if you can even do that), you'll get camped or your family might get rm -rf'd. Same with Putin, Kim Dong or whoever else from a authoritarian regime.

People are free to criticize in America. I know that's a luxury belief that most people won't ever know, but that's also why things are luxuries. Once you have them, it is hard to go back to Target or whatever.

If America was to go mask off and cheat by become Authoritarian like Xi or Putin, we'd wipe the floor in like 20 years tops and everyone will unite under our beautiful flag.

We're better than that though. Hell, we fought ourselves and came out BETTER for it, instead of becoming commies or other losers. We even held ourselves accountable for actions we took in the past, something our authoritarian "rivals" would never concede because they know they're wack.

Yes, there's no doubt I envy these advantages of your country.

By the way, I'm replying to your comment via a proxy server in Los Angeles, HN is also not directly accessible in China. I think this is why I didn't truly understand many things until my twenties, which is a pity.

I also hope we can have a democratic government, at least one that allows free access to information and freedom of political expression.

But this conflicts with the interests of those with vested interests, who fear that giving people a little freedom will cause them to lose the wealth they gained through illicit means. I think this is unjust, but I don't know what to do.

Even Jack Ma was punished for saying the wrong thing and disappeared from public view for several years. He's the one who created Taobao and Alipay; an entrepreneur like that would be respected in the US and would have the opportunity to tell young people in the public eye: you shouldn't sigh, there are many opportunities in this world. But the truth is, the mainstream voice only teaches everyone to obey, and successful and visionary people are gradually leaving this country.

However, I see that the United States seems very chaotic, and for my personal safety, I probably won't consider going there. I really like American culture, especially Silicon Valley culture, but I might consider Singapore or Australia as better immigration destinations. Perhaps the situation in Silicon Valley is different from those chaotic neighborhoods? I'm not in the US, so I don't know much about it. I wish someone could tell me, haha.

It’s hard to know what to believe about any country. In the US, the media only makes money if they exaggerate threats and focus on the one burning trashcan during a city wide protest.

So you think the USA should interfere in a sovereign nation to intentionally and drastically damage their economy, industry, and quality of life?

Because the US can't get their collective heads out of their asses to build a competitive industry?

The USA is losing this imagined fight with China, and the solution is not to destroy an entire nation, but to actually become competitive.

Sure, let's just fucking nuke every country that's more successful than us. That'll show them!

Americans are absolutely fucking insane.

It was because they backstabbed us. We showed them how factories work and helped them set up manufacturing back in the day so we could be cooperation partners.

Instead we were backstabbed by the CCP through IP theft and other corporate espionage. Yes America wanted a cheaper manufacturing partner and China at the time when “real communism” was fading seemed like a good partner to onboard for the new century ahead.

I don’t think Americans are insane. It’s that Americans have to live in a world dominated by warlords, weirdos (Kim Jon Un and others like him), shithead dictators and religious zealots.

We aspire to achieve greatness and manifest destiny. Meanwhile we are blocked by literally everyone else who can’t get their shit together.

So yes, it’s necessary for our end goals. I don’t think it’s as bad as what others were already doing to each other before our intervention (hey nothing is perfect and punching up is easy af). It’s not like others don’t benefit. I’m sure for the majority where it worked out they like the GDP boost and using American tech and services. Or they can also copy what we tried and worked and try implementing it there.

While we are building cool stuff, we have to live in a mostly evil world with awful dictators and zealots of all sorts (commies, sky daddy, etc).

It took Europe 50 years to chill tf out and we had to bail them out each time they kicked off a world war. Most of the world is still not a desirable place to live (it’s why my parents moved from a hellhole to here for a better life).

If some people think we are crazy then I suggest they don’t come here for education (even if they plan to go back) or work. Save the room for someone else who actually wants to join the American journey.

> we showed.. > we aspire... > we were backstabbed... > we are blocked... > we are building... > we have to... > we had to... > we are crazy...

It's not 'we,' it's just your opinion, comrade. If the USA were actually run by people with views the same as yours, it'd be no different from Russia or China. But thankfully, there are still many who get that life is about collaboration and compromise, who don't live in fear nor have the dream of domination.

Of course I’m pro diplomacy.

I’m just stating my honest beliefs. Geopolitics or business is won through communication but it’s not “bruh we are all one dawg” because been there done that, most of the world would rather kill each other over dumb shit.

Since we believe in higher ideals, we have to do what’s necessary. Do you think the deals made are 1:1? Or does power imbalance play a huge role in getting a 3:1?

Come on dude.

How do you expect them to manufacture stuff but not learn from it in the process?

That’s not what I meant, sorry my sentence structure was bad and I meant that in return for giving them factories they only continued to push the boundaries. It was IP thefts and infiltrating our top secrets because America is a far more open society than PRC.

Fact: They are the ones who escalated into IP theft and espionage.

As for manufacturing but not learning from it…

Oligarchies stemming from massive but continued financial shocks will curb innovation because survival trumps ambition. They are rivals until they’re on our side, and as such if they’re kept financially insecure they will not have the appetite to steal I mean innovate anymore. People want just a job, food, and shelter. CCP already provides education and healthcare. But adversarial global ambitions need to be checked.

I can't think of any way you could effect this. They have more industrial capacity and increasingly more research than the US.

Heck I don't think India is going to be stuck for very long

> That’s why being a fast follower is so valuable, you get everyone else to waste money on the wrong ways to build things. It also causes R&D to show much worse returns.

Frankly I think this is the big cultural change in tech generally, isn't it? People come up with ideas and everyone goes "oh I want to do that", so they replicate it off the back of the work everyone else has done. Uncritical FOMO.

But actually it's better to be an even slower follower, generally, as a survivor strategy. Apple and Nintendo shows this. It's better to go "I see what they are all doing, and I see where they think consumers are, but I think they are wrong, and I think it's not just a question of them going about it wrong, but that all of this evidence suggests consumers actually wish they were getting this other thing, and that is what we should build".

This works for Apple & Nintendo because they built their brand image while being fast-followers – and even pioneers decades ago (the Apple ][ was among the trailblazers, just like the GameBoy or the (S)NES).

I would bet that a company trying to replicate that strategy without the previously established brand image would not go very far.

Wouldn't those two be the opposite of fast followers? Indeed, they trailblazed once upon a time. But they maintained that after being surpassed by focusing on being slow followers. Analyzing the market, polishing what worked to perfection, and making it super intuitive.

Or perhaps the time scale of "fast follower" is distorted in my head, compared to the scale of business.

I think as they're quite secretive so it seems they're slow followers but they're fairly fast in starting the project, keep it under wraps and take their time to get it right.

Younger readers might not know that before the iPad came out, Michael Arrington tried to make a tablet before tablets were a thing. So the problem back then was that touch screens were expensive and scaling up from a smart phone to a tablet had a lot of engineering problems. It didn't happen overnight. And Arrington started building TechCrunch’s "CrunchPad" in public, and people thought he might steal a march on tablets. It went a bit wrong with a falling out with a manufacturer, and the manufacturer released the JooJoo.

But obviously Apple had been working on the iPad the entire time, kept their mouths shut until they had perfected it and crushed the JooJoo a couple of months after the JooJoo's release date. The JooJoo was more expensive than expected, almost the same price as the iPad, but had performance issues, poor software, no app store and a short battery life.

You might argue that Apple's lost that 'skill' now. For example, the Apple Vision Pro, which didn't nail it.

The vision is interesting and encapsulates a bit of old and new apple. It's clearly well made and best in class so in some ways they did wait to bring out something, quality, rather than something during the hype.

On the other hand, you can argue that they didn't wait long enough because the tech to really pull off this vision simply wasn't there yet (or is there but is obscenely expensive, which is saying something given this headset was already lambasted for cost). It's marketing (after looking back at some commercials) for what it offers was half "oh this is pretty useful" (a workststion with very little footprint) and half "oh this is black mirror" (lying along on a couch watching movies, interacting with kids as you have a giant headset on you). Maybe it's the nature of thr medium, but Apple tended to do a good job is making it feel like their technology brought people closer. Here the socialization felt hollow.

Apple's acquistion of fingerworks was probably important here.

https://en.wikipedia.org/wiki/FingerWorks

> You might argue that Apple's lost that 'skill' now. For example, the Apple Vision Pro, which didn't nail it.

Apple has always liked to dabble with 'failures' too, though. For example, the Newton didn't nail it, but arguably was still an important step towards creating the iPad.

I'll give you the Gameboy but the NES and SNES were very much "see what the others did, now do it better".

> but the NES

The NES trailblazed the 3rd generation consoles and nearly single-handedly put a term to the NA videogames crash.

Granted, the SNES was nothing to call home about when it came out.

Eh... it was certainly massively impactful, but the device itself is not revolutionary in any way (the games are another story, e.g. Super Mario Bros).

If the crash hadn't happened and Mattel managed to drop the Intellivision 3, then graphically and aurally it would have been very close to the NES. Hardware wise the NES is just "like what came before, but better".

Even the gamepad was very similar to the Vectrex controller, which had the same shape but used a very small joystick instead of a D-pad. The use of a D-pad on a controller could be considered revolutionary I suppose (though the D-pad itself wasn't invented by Nintendo, they used it best).

But the same could be said of the SNES and the shoulder buttons then, the most revolutionary aspect was the controller.

Switch 2 to an extent too (it's basically a much improved Switch 1)

Your exemples are not very good.

Nintendo has always been an innovative company. They have gone against the rest of the industry time and time again. What they don’t do is follow. They don’t go for ever increasing performance. They don’t chase ports. The Wii with motion control, the switch merging handheld and tv based, both were very new idea.

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Respectfully, I think you missed the point of GP, as you are agreeing with them.

Being a technology follower is 100% compatible with being a user experience innovator.

Like you said, Nintendo saw that consumers didn’t really want more polygons/second, they wanted fun. Similarly, Apple saw Rio and other MP3 players and realized that consumers didn’t want a 800 128kbps mp3s in their pocket, they wanted a stylish way to listen to music on the go.

Sure, the Wii controllers and iPod clickwheel were novel and innovative user experiences and big hits, but they weren’t heavy lifting technically.

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> Being a technology follower is 100% compatible with being a user experience innovator.

I think you are making the same mistake that OP.

You think R&D in the video game industry is releasing more powerful systems. It’s not. R&D is proposing innovative value proposition. Nintendo does that all the time from the Switch to the weird game with cardboard. Nintendo does a lot of R&D in an industry where their competitors do very little and mostly just update their existing product. Calling them an exemple of a follower couldn’t be further from the truth.

Apple indeed used to do a lot of R&D. They do a lot less nowadays.

Apple and Nintendo have some of the strongest brand loyalty this side of macrobrewed beer and sports teams. They can afford to go against the current because they have extremely deep barrels of fanatics who will buy just about anything they make, regardless of whether it's cutting edge or not.

Nintendo in particular also has a different culture than the modern explosive shareholder mentality. They have a huge war chest can likely operate at a loss for over a decade, even if their stock crashed to zero tomorrow.

In other words: they have cultural skin in the game. A bad quarter or even year won't have them seeking out private equity funding.

Didn't they almost go broke after the Wii U? I vaguely remember that the Switch was do-or-die for them.

Yep, and it wasn't the first time the company nearly went bankrupt before miraculously recovering.

Yes, and the Wii U would have been 4-5 years of disappointing sales. But they still tried to invest hard into their hardware and software.

In comparison. How do we think Activision or Ubisoft would have reacted to those kinds of shortcomings?

That’s a pretty spectacular way to miss the point.

The implication that these “fanatics” are misguided because they fail to prioritize “cutting edge” over every other purchase criteria tells me you haven’t been around the block enough to realize that cutting edge is not a positive product attribute. Believe me, I have storage bins full of obsolete cutting edge products that I got less joy from than many boring old appliances I use every day.

"These findings suggest that R&D has become more effective at finding productivity-enhancing ideas, but these ideas may also render rivals’ technologies obsolete, making innovations more transient. Because of obsolescence, rising R&D does not necessarily mean rising aggregate productivity growth."

I Don't Unserstand that. Innovative should increase productivity. If i deploy a new technology i should see productivity gains. Does that Not mean we see should se productivity gains regardless of how fast a technology becomes obsolete? Maybe technologies do not get adopted that fast or the productivity gains do not justify the Investment?

I am writing a book about this topic. I started my career in 1978 at Bell Labs and worked in 3 different startups after that. After 45 years in R&D, I have recently retired. So many times, the inspiration for new inventions we worked on came from unexpected sources; the arts, culture, music, history and many other sources. And I said we on purpose because rarely did a new invention come from one person, it was almost always from collaboration on a team. My conclusion is that invention so often comes from a team of well rounded people with knowledge in many areas and the ability to work in a team. I wonder if the decline in the productivity in R&D comes from a decline in these attributes?

I would love to discuss with you on zoom about your career and your book.

In research on creativity in the arts and sciences, the importance of a supportive community is seen to be so important that some researchers deny the validity of the idea of the creative genius working in isolation.

Interested in your project. Can you point to any similar books and how you are expanding on them?

> some researchers deny the validity of the idea of the creative genius working in isolation.

Is it that they deny the entire possibility of a creative genius working in isolation, or deny that a creative genius working in isolation, without a supporting community to spread the good word, will still see his work make it out into the world?

I think it's more that creative genius requires both the time invested to attain mastery, and time to push the boundaries on paths that may or may not work out.

Ramanujan would have still been Ramanujan had he not worked with Littlewood and Hardy (though the world might not have witnessed both his genius and his contributions), but by all accounts he invested an enormous amount of time and effort in mathematics, to the point that his family urged him to do other things. Einstein worked a job that was so trivial for him that he spent most of his time thinking about other things. Newton invented calculus while his classes were halted because everyone was isolating from the plague. Bukowski famously quipped that his choices were to earn a wage, or to write and starve, and he'd chosen to starve.

In the same way that you probably don't get garage startups in a society where no one has a garage, you probably don't get many creative geniuses without good family structures and some level of slack in the system.

Einstein, Ramanujan, and Newton were boosted by existing networks of review and promotion. A lot of core engineering math was invented by aristocrats and government functionaries around the French Academy. Germany developed its own equivalent scene somewhat later.

All of these followed the model of a relatively small number of smart people bouncing ideas off each other, reviewing them, building on them, and promoting the good ones.

The difference between that and modern R&D is that modern R&D tries to be industrial rather than academic. Academia is trapped in a bullshit job make-work cycle, where quantity gets more rewards than quality and creativity. There isn't room for mavericks like Einstein. Even if they're out there having great ideas, there's no way for them to be discovered and promoted.

Industry focuses more on fill-in developments than game changer mathematical insights, which are the real drivers of scientific progress.

So there's a lot of R&D-like activity in CS, and occasionally something interesting falls out, like LLMs. But fundamental physics has stagnated.

One of the biggest reasons is that the smartest people don't work in research. They work in finance, developing gambling algorithms.

I'm not discounting the benefit of having additional networks in place, I just think they're a facilitating factor rather than a causative one. They're important for educational development and spreading ideas, but they can also result in homogeneity. The biggest two factors to me are time and interest. You yourself point out that most modern math and engineering was invented by aristocrats; the main reason for this was that they were the only ones with the luxury of being able to think about such abstract topics. They had the time to spend, so those with the interest and aptitude pushed the boundaries. You occasionally saw members of the working class do the same (Heaviside, for example), but they had a more difficult road.

I disagree that the smartest people work in finance. Some very smart people do. From what I've seen, the ones at the very farthest edge of human ability typically aren't motivated by money.

If for example you knew someone who has great idea, but doesn't have time to check it with a prototype because he has a lot of "normal" work, but he doesn't want to give it for free to everyone (so that he can finally have some more money and check his other ideas), what would you suggest to that person, or how would you support such person?

As a lifetime experimenter myself, I'm going to play the cards I'm dealt and I sure like slack in the system, but mainly to make up for my other weaknesses :)

One person's idea can be good enough to be the most revolutionary thing in a field, but it still may not be as well thought-out as if more than one worked on it together from the beginning.

One person's physical efforts can almost always be dwarfed by a team of some kind, and that might be the only way for an idea to become reality, but it's not going to help if there's not a proper team to join or resources to build staff from scratch.

Since most teams do not contain an absolute genius, at least they come up with products because they have a team. Excellent products sometimes, but not often genius level.

In some fields they really think brains are the most important thing, but it's too rare and everybody knows it.

So if they want to get to market any time soon they have to settle for what they have to work with until such a rare genius comes along.

Which may be never so no time to wait, but by the time some miracle-working wizard shows up it's too late because the team has no drop-in task for them to perform, and has not naturally been formed with the necessary structure to leverage anybody's wizardry by then. So never mind, they can't recognize it anyway.

There are at least three definitions of creativity in circulation. One, you are the first person in history to have that idea. (rare, but I've seen it) Two, you came up with an idea that was new to you. (most common) Three, you have a new idea that gains social acceptance. (Teresa Amabile argues for this one in Creativity in Context (1996))

I wasn't referring to that last definition, but to the view that intellectual environment is so important for supporting the exploration of ideas that true solitary creativity doesn't happen. For books arguing this view, try Robert Weisberg, Dean Keith Simonton, and Keith Sawyer. Study specifically on creativity in lab research was done by Kevin Dunbar, who also found the social aspect essential.

This would seem to be a direct corollary to the red queen hypothesis applied in the context corporations instead of species. That is, in a competitive environment you have to keep spending R&D dollars to stay in the same relative market position because everyone else around is spending as well. However the paper talks about productivity of the individual firm and aggregate productivity (presumably across the whole economy). Therefore I think that the red queen may not be whole story, because firms should still be getting more efficient (more productive) even if they can't capture that value due to competition, the production possibilities frontier should be growing because we need less capital to accomplish the same tasks, leaving more for other things. However it seems that this is not the case? So what the paper seems to mean by "increased rates of obsolescence" is that there is so much churn within organizations that they can't actually get something implemented in a way that actually allows them to capitalize on the potential increased productivity? That sounds like a complexity wall, but I feel like I'm feel like I'm missing something.

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> there is so much churn within organizations that they can't actually get something implemented in a way that actually allows them to capitalize on the potential increased productivity?

The churn is in market attention. While you are setting to capitalize on potential increases in productivity, the competition has already come out with something better and the customer has moved on.

Checking I understand this right: the paper’s contention is that more R&D, whilst still producing productivity gains, is invalidating gains made from other R@D? e.g. everyone developing their own LLM. It’s an interesting idea, but why would that be happening?

I think the problem might be how you measure productivity.

If you measure effort and output - then surely productivity has gone up - but if they measure it in another way - say capital to return - it might not have?

I do not, and have never, understood why absolute R&D investment is compared to relative growth rate in this literature. It would make sense to compare R&D spending as a percentage of GDP to relative growth, or to compare absolute R&D spending to absolute per-year growth, but I remain mystified by the comparison of absolute R&D spending with relative growth.

The comparison makes sense in endogenous growth theory where knowledge production has a Cobb-Douglas form - doubling researchers should double the absolute ideas produced, which translates to a constant growth rate under standard assumptions about how ideas affect production.

That sounds absolutely nonsensical.

So you're telling me if I have 10 researchers and an economy of 1 billion people, the growth rate should be constant? If I have 20 researchers the growth rate should double? Remember, growth is measured as a percentage increase, not a linear increase

Even if the concepts of what you're talking about make sense when they are being properly elaborated, the way you have elaborated them is extremely poor.

Is this another moore's law where we try to suggest that trends will not hit some ceiling and start to taper off in growth?

You can recycle any old idea into a brand-new-and-patentable idea by adding "with AI" to the end. For example, "assessing value for used cars" is an old idea, but "assessing value for used cars WITH AI" is a new idea

> Ideas are not getting harder to find

Evading patent minefields, however ...

Especially now that AI can continuously scan for infringement, ideas are getting harder to use.

R & D is about the only thing you have if you want to make something out of nothing.

Most other forms of value-added activity need to start with something of value to begin with.

The closer that that "nothing" can be brought to zero, the greater the leverage by comparison until it wipes the floor with everything else.

It wasn't so bad until all the MBA's came along, they have nothing like the equations that are needed to figure this out when the data is not numbers yet. Regular non-degreed business operators used to be so much more advanced in mathematical intuition regardless.

The researchers stayed as talented, plus got better technology, the founding giants of leadership lasted as long as they could but were replaced by midgets, and here we are.

They are specifically looking at R&D in Manufacturing. I think there you can make the case (as they do) that one new innovation can erase the productivity benefits of a prior innovation.

If anyone needs ideas I have about 10 per day

Got anywhere you're willing to write them down? I'm like your reverse twin - I never have ideas I think are commercially viable. But I think I'm a decent coder (30+ years of gainful employment in the Linux space).

There used to be the halfbakery. I guess there still is. https://www.halfbakery.com/

There's a blast from the past!

Their dataset only runs up to 2018?