The Idea Equation

Share this & earn $10
Marginal Revolution University
Published at : 05 Dec 2020
57025 views
319
22

Alex Tabarrok’s TED talk showed you that ideas can trump nearly every crisis. Now, since ideas are so important, we have to ask: is the future of ideas a bright one?

To answer that, we’ll look at something we call the Idea Equation.

It goes like this: Ideas = Population x Incentives x Ideas/per hour.

This equation is a useful way to lay out the factors affecting idea production. When we understand the factors behind production, then we can better predict how the future will go.

Now, the first factor in the equation, is population.

Population determines how many possible idea creators we can have. The good news is, not only is world population growing, but a larger percentage of that population is becoming part of the researcher pool. For instance, China now has 1 researcher per thousand people. This seems low, until you remember they had about half a researcher per thousand in the year 2000. This means they’ve doubled their researcher pool, in just about 10 years.

So, on the population front, we’re seeing progress.

But how about the incentives that encourage idea creation? What’s the state of those?

That’s factor 2 in the equation, and again, we have good news here.

See, for the most part, countries are now choosing better institutions. On balance, the world now has more dependable legal systems, and more honest governments. Previously closed-off nations are now opening their markets to competition and trade. Aside from that, the world is generally becoming more politically stable, and property rights are strengthening as well.

As a result of these better institutions, there are now more incentives to produce ideas. Not to mention, we’re still continuing to globalize world markets. Remember what the TED talk said? Larger markets incentivize more R&D, and we’re certainly seeing higher activity in this area.

For example, in 1990, only seven nations accounted for 92% of world research spending. Today, those same 7 countries only account for 56%. Countries like China, Korea, and Brazil have already joined the fray, sharing the burden of idea creation, which benefits us all.

That said, we do still have the third part of the Idea Equation. This is where things get hairy.

You see, the factor “ideas/per hour” is the most mysterious one. Yes, it measures the productivity of idea creators, but we’re still unsure how productive the future will be. For one, there’s evidence that idea creation is becoming more expensive in certain fields. But on the other hand, we’re also seeing new technology that makes idea creation easier—things like the Internet, AI, and online education.

As long as we continue to globalize markets, provide better incentives for idea production, and keep developing technology that makes idea creation easier, then there’s no reason to think that the future can’t be bright. The brightness may not be guaranteed, but at least there’s hope, which is what matters.

Subscribe for new videos every Tuesday! http://bit.ly/1Rib5V8

Macroeconomics Course: http://bit.ly/1R1PL5x

Next video: http://bit.ly/25wHJey

Help us caption & translate this video!

http://amara.org/v/Jqiu/
macroeconomicseconomic growthideas

ABDULAZIZ JEWELRY & DIAMONDS EXTENDED ANG OFFER FOR 10DAYS MORE♥️ 199 SR RINGS? 🤩

ABDULAZIZ JEWELRY & DIAMONDS EXTENDED ANG OFFER FOR 10DAYS MORE♥️ 199 SR RINGS? 🤩

Happy Birthday Song | Cake Song | Nursery Rhymes & Kids Songs

Happy Birthday Song | Cake Song | Nursery Rhymes & Kids Songs

Chapter 1, pg. 10 - Rhythmic Duet with Accompaniment

Chapter 1, pg. 10 - Rhythmic Duet with Accompaniment

AZALEAS, DRIPLEAF, MOSS, GLOWBERRY, AND MORE! | Minecraft 1.17 Caves and Cliffs Snapshot 21w05a

AZALEAS, DRIPLEAF, MOSS, GLOWBERRY, AND MORE! | Minecraft 1.17 Caves and Cliffs Snapshot 21w05a

GOLFING WITH A LPGA PRO!/GUYS 🏌🏻‍♂️ 🏌🏻‍♂️ VS GIRLS 🏌️‍♀️ 🏌️‍♀️ FROM THE CROSBY CLUB

GOLFING WITH A LPGA PRO!/GUYS 🏌🏻‍♂️ 🏌🏻‍♂️ VS GIRLS 🏌️‍♀️ 🏌️‍♀️ FROM THE CROSBY CLUB

Creating a Terraform Provider for Just About Anything

Creating a Terraform Provider for Just About Anything

#15 Les systèmes de réglage (boucles de régulation)

#15 Les systèmes de réglage (boucles de régulation)

1. Foundations of Educational Psychology

1. Foundations of Educational Psychology

Improving Your Cursive Handwriting

Improving Your Cursive Handwriting

HUGE HOLE in the side of American Magic after capsize

HUGE HOLE in the side of American Magic after capsize

Green Day - 21 Guns Official Music Video - HD

Green Day - 21 Guns Official Music Video - HD

Our Nonordinary Faculties | The Undiscovered Country

Our Nonordinary Faculties | The Undiscovered Country

Movements - Skin To Skin (Official Music Video)

Movements - Skin To Skin (Official Music Video)

A secret trick keyboard Sustain's effect without sustain

A secret trick keyboard Sustain's effect without sustain

Hispanics are NOT where they could be by now in the USA

Hispanics are NOT where they could be by now in the USA

Mahasona 👹  | Sri Lankan Multiplayer Game

Mahasona 👹 | Sri Lankan Multiplayer Game

Towson Town Center | a posh mall and its metamorphoses from a strip plaza | ExLog 72

Towson Town Center | a posh mall and its metamorphoses from a strip plaza | ExLog 72

Snoop Dogg, Eminem, Dr. Dre - The Heat ft. Xzibit

Snoop Dogg, Eminem, Dr. Dre - The Heat ft. Xzibit

G Herbo Is Inspired by Jay-Z's '4:44' Album

G Herbo Is Inspired by Jay-Z's '4:44' Album

【無双】1位/102331の全国模試大公開

【無双】1位/102331の全国模試大公開

Attainable Dream Car Road Trip - Ford Raptor, Plymouth Prowler, @ChrisFix  Hummer H1

Attainable Dream Car Road Trip - Ford Raptor, Plymouth Prowler, @ChrisFix Hummer H1

REUSE MAKEUP PRODUCTS || COOL MAKEUP HACKS AND BEAUTY TRICKS THAT MIGHT BE HELPFUL

REUSE MAKEUP PRODUCTS || COOL MAKEUP HACKS AND BEAUTY TRICKS THAT MIGHT BE HELPFUL

Georgopol is located in India? #georgopol

Georgopol is located in India? #georgopol

Carry On  Loving

Carry On Loving

Two Former Chicago Singers Reunite For An Excellent New Song "Show Me"

Two Former Chicago Singers Reunite For An Excellent New Song "Show Me"

Sharing Actions Using Ember Services and Decorators

Sharing Actions Using Ember Services and Decorators

Yellow Peach | 为了得到金黄色的桃子,我跋山涉水来到高原山顶

Yellow Peach | 为了得到金黄色的桃子,我跋山涉水来到高原山顶

Fix Android Obtaining WiFi Address, Cant Connect to Internet

Fix Android Obtaining WiFi Address, Cant Connect to Internet

Homeowners fight HOA over in-home businesses

Homeowners fight HOA over in-home businesses

How Are New Medications Developed?

How Are New Medications Developed?

Everything Before Us | Chapter 1

Everything Before Us | Chapter 1

Qounfuzed - 9ine (OFFICIAL VIDEO)

Qounfuzed - 9ine (OFFICIAL VIDEO)

"Chances Are" - Spencers

"Chances Are" - Spencers

🔥 PART TIME Online DATA ENTRYJOBS Without Investment🔥 💯 Genuine GOOGLE ONLINE WORK FROM HOME JOBS 🔥

🔥 PART TIME Online DATA ENTRYJOBS Without Investment🔥 💯 Genuine GOOGLE ONLINE WORK FROM HOME JOBS 🔥

LIVE: Turkeys to be pardoned by Trump are introduced

LIVE: Turkeys to be pardoned by Trump are introduced

ມັນຄົງຈະດີ ( มันคงจะดี ) - LEAD TO" Feat. AiwAiw [ Official Audio ]

ມັນຄົງຈະດີ ( มันคงจะดี ) - LEAD TO" Feat. AiwAiw [ Official Audio ]

8 blocks of fluffy crunchy ader and colourful pigment • CONGRATULATIONS @FazmeeriasaraASMR!! | ASMR

8 blocks of fluffy crunchy ader and colourful pigment • CONGRATULATIONS @FazmeeriasaraASMR!! | ASMR

This is an invitation video for individuals who are looking for good opportunity to best life

This is an invitation video for individuals who are looking for good opportunity to best life

WATCH OUT[REMIX] - THRE4T, BABY LOKO, JOEDY JOE, AND CAPONE

WATCH OUT[REMIX] - THRE4T, BABY LOKO, JOEDY JOE, AND CAPONE

Ren - 1990s

Ren - 1990s

You're Correct Horse

You're Correct Horse

Разбор работ подписчиков с  Юрием Ключевским.  Проверка верстки. 27 ноября  2020

Разбор работ подписчиков с Юрием Ключевским. Проверка верстки. 27 ноября 2020

[SFM BALDI] Baldi's Basic In Learning KICK THE BUDDY RETURNS ! Vs ORANGE MAN From Baldi In LEARNING

[SFM BALDI] Baldi's Basic In Learning KICK THE BUDDY RETURNS ! Vs ORANGE MAN From Baldi In LEARNING

DIY hot tub of wood, made with FELDER® woodworking machines

DIY hot tub of wood, made with FELDER® woodworking machines

Undecided - Chris Brown / May J Lee X Austin Pak Choreography

Undecided - Chris Brown / May J Lee X Austin Pak Choreography

Top 5 Things You Need to Know When Building a Home

Top 5 Things You Need to Know When Building a Home

Warmth - Parallel

Warmth - Parallel

BRUTAL TMJ-D Treatment. Jaw Pain Relief With Chiropractic Adjustments. Deleted Scenes.

BRUTAL TMJ-D Treatment. Jaw Pain Relief With Chiropractic Adjustments. Deleted Scenes.

SLANDER - Love Is Gone ft. Dylan Matthew (Acoustic) - Lyrics

SLANDER - Love Is Gone ft. Dylan Matthew (Acoustic) - Lyrics