Rising R&D Intensity And Economic Growth
Over the past decades, private R&D spending in the US and other developed countries has been growing faster than GDP. In the United States, for example, R&D expenditures (excluding those funded by the federal government) have grown from 0.63% of GDP in 1953 to 1.95% of GDP in 2007, i.e. R&D intensity has increased by more than a factor of three in half a century. At the same time, the growth rates of per capita and aggregate output have been rather stable, possibly declining slightly. Standard models of endogenous growth and R&D cannot easily reproduce or explain this observation, not even along a transition path.