Uncovers a pervasive productivity slowdown in US manufacturing, despite increased R&D efforts, suggesting declining research effectiveness.
US manufacturing productivity growth grew rapidly in the 1987-2007 period but has been nearly zero since 2010. We decompose this productivity slowdown across industries and firms and find it to be pervasive. More specifically, it appears in the initially fastest growing industries (including Computer and Electronic Products) just as in initially lagging ones, and it affects both leading and following firms within industries. This broad-based decline occurred even as R&D intensity rose, suggesting declining research effectiveness rather than reduced innovation effort. Our firm-level analysis reveals this productivity paradox operates broadly rather than being concentrated among specific firm types or industries.
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Lashkari et al. (2026) studied this question.
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