Is an Educated Population Really Necessary for Innovation and Growth?
Lamentations that the waves of innovation are receding have engulfed policy circles. Distinguished economist Robert Gordon avers that the days of transformative innovations are over. Like Peter Thiel, he is disappointed at the incremental nature of modern-day inventions. The declinist thesis is predicated on the assumption that groundbreaking innovations like the steam engine, electricity, and the telephone are becoming exceedingly rare. Educing evidence to prove this observation has been quite easy, but we are less astute at understanding why innovation is declining.
In his 2012 paper titled “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” Gordon submits that dwindling rates of educational attainment complemented by reductions in labor force participation portends doom for the future of US innovation. Educational attainment supplements economic growth and innovative activities, so Gordon is right to express concern. Yet researchers find that during the Industrial Revolution, literacy and schooling failed to exert a significant impact on economic growth.
Increasing educational attainment ensures that workers are positioned to employ sophisticated technologies. Indeed, education can indirectly nurture innovation by exposing citizens to divergent ways of thinking, thereby resulting in new products and services. Currently, highly successful countries like Singapore, Finland, and Canada possess educated citizens, though there are outliers like Japan and Russia with unimpressive records. However, the slump exhibited by these countries does not undercut the theory that there is a link between educational attainment and economic growth. The sluggish conduct of Japan and Russia is att
Article from Mises Wire