YouSaid · the spoken record

Nicholas Bloom

lines on the record: 71
first: 2020-08-12
most recent: 2020-08-12
sittings or episodes: 1
sources: podcast

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“So, just to be clear, the email, you know, internet and email cheap personal computers and video calls have all been around since the late 2000s. So the last piece Skype came out in 2003, but it isn't until the pandemic that we actually massively embraced working from home. Why is that? I think it's just social norms and firm organizational practices were slow to change. So I think something holding back the impact of ICT is firms and society doesn't change that rapidly. And a good example, Paul David mentions about electricity, that when electricity came in, which I believe is like the 1910, 1920s, factories were slow to adopt it. And the reason was in the older factories where you had a big steam engine or even water wheel, it made sense to have the building very vertical. So you'd have four stories around this one central shaft which belts would connect to, which drove all your mechanical power. With electricity, instead you can have lots of little...”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, so you know this was the another kind of age old debate goes back to Robert Solo's quip about in the New York Times he wrote it, I think in 86. You see computers everywhere except in the productivity figures. So you're right, you know, Paul David and Tim Bresnan at Stanford, my colleagues have had various, again, as an old literature about general purpose technologies, these technologies that change society and at least two previous ones with the steam engine, the electric motor. And the big question is, why haven't computers done that? They seem as transformational as the previous two. But as we discussed, productivity growth rates in the US have been declining since the 50s and don't seem to have picked up much anyway with computers. I think the primary reason people make, you know, argue for this is you need to change society in order to exploit this. And in fact, in an odd way, COVID, the pandemic and working from home is one example of this. So all the technology necessary for working from home.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Negative balance of trade, but positive balance on investments abroad. American companies seem to make huge profits abroad. And one big explanation is they're just exploiting lots of this intangible capital, which we think of as good management. So American multinationals around the world are well managed and they make a lot of profits where they're located in the UK, in France, in Ghana, you know, in Thailand, wherever they are. And that's helping keep the US economy afloat, that return profits. I don't see that as being related to transfer pricing in offshore tax manipulation. That is a factor, but I think American firms are primarily driven actually by veteran and better management.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“I never really thought a huge amount of it was that. In my personal view, I guess this is, again, biased by my research is American firms in particular just fantastically well managed. So I've done a lot of work for many years looking at management practices, trying to collect data in cross-country surveys. And to explain what I mean, management practices, you know, the basics are around you collect information and use it to improve yourself. So think of lean, collecting information all the time and having improvement processes. And secondly, do you train and promote employees trying to promote the best people trying to avoid things like promoting family, friends or long-serving employees? So meritocratic HR systems. And I don't want to say American firms are perfect. They're definitely not perfect. There are many management scandals. But on average, American firms are much better managed. And they take that with them abroad. And there's this whole literature. There's been sometimes called dark matter or, you know, explaining why we seem to have this end.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, the more money seems the most obvious part of it. There's obviously secondly how you distribute it. And, you know, again, I remember seeing a couple of papers on how exactly you evaluate research proposals, and it's hard. And do you get insiders within the field to evaluate it who tend to be more informed but tend to be more bars towards their own field or outsiders? I think the broad issue is, I mean, I'm not aware of any huge criticisms of how the research agencies hand out their money. I'm sure there's lots of quibbling around the edges. I've been involved in refereeing for the NSF, for example. I've always been very impressed the way they've run it. Elite US research universities. So they are stepping into some extent to fill the gap left by”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Security focus, which I suspect has lower trade offs. And the nice thing about the US and things like the National Science Foundation, the NIH National Institute for Health is they would put huge amounts of funding on very basic research that had broad value. I mean, MIT research goes to the NSF, gets funding for research. They tend to be focused on very basic things that are of interest to broad science, and that has, I suspect, the largest value added.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's it. And so the puzzle gets even more extreme if you look globally, because of course now, you know, it's tricky because Europe has become slightly less of a powerhouse, but obviously Asia has completely taken off. And the amount of R&D being spent in, say, India and China has exploded. Has that offset the reduction in US publicly funded R&D? Certainly it's a share of GDP. It's not obvious. One reason is there's plenty of evidence on knowledge spillover as being localized. So there's a lot of evidence, for example, that you're more likely to co-authored with your colleagues in your own university or in the same, I mean, I guess the same firms are more obvious, but if that was true, you may think the transmission of ideas from China to the US is less effective than within the US. I also don't know if the increase in Chinese and Indian R&D by their government sectors is enough to offset the reduction by the US, whether it's in the right areas. It may be that a lot of developing countries R&D is more, say, defense and national...”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a good question. It's certainly true. Our paper only focused on the US. The puzzle gets much harder if you include global R&D. So you see that productivity per researcher or research dollar is falling in the sense of the rate of progress per dollar we're spending. I mean, you've looked at it. I mean, just to be clear, this is not a new thesis. You know, you have your book The Great Stagnation. Patrick Collison, for example, has work on this more recently. And Jesus, is that book, The Death of Science, I'm embarrassed, I've forgotten who the author was, but.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Mainly private firms, and that's because post war, it was the big driver, and the government's pulled back from RD and private firms have taken over. And the reason that's, you know, the fourth possible driver of the decline in productivity, as you point out, is government R&D tends to be more focused on the are the research and private R&D more on the D, the development. And the R you may think has more spillovers, longer run benefits, and is what's going to drive long-term growth. So yes, that would be another role for policy. In fact, I'm embarrassed, I left it out, but a big drive would be, I mean, it feels hard to be saying this, being in a university, but the government should fund more public R&D. I can come back and answer the Santa's wages question if you want, but I can see you have a question because we're looking at each other on Zoom.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so great question. There are two responses before I lose track in it. So, first is, you know, I'm about to say, I forgot the fourth reason. So you're right, a fourth factor on this could be just as a simple empirical fact, the share of R&D in the US and Europe, which we have best figures on that's funded by the government, has been declining over time. So in fact, in the US, When our data, when you go back to the 60s, roughly two-thirds of it is funded by the government and one-third by private firms. And now it's the reverse. In fact, it always made me wonder when I first pulled out this data six, seven years ago, it made me wonder about the story of Stanford because when I arrived at Stanford, I was told that Stanford pre-war really was like a finishing university. It wasn't really a big deal. And post-war, Stanford got its big break because of lots of research from NASA dollars. And I was kind of thinking, well, you know, government R&D is not such a big factor anymore.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“And safety, for example, is probably a good idea, but in the same way that is almost certainly making it more expensive to run labs. And in fact, COVID is a huge pushback from talking, you know, I was talking just before the shutdown to a good friend of mine and she said, she has a big lab that has a number of animals and longer running experiments going on. And in fact, the shutdown has been extremely expensive. And when we reopen with social distancing, of course, the costs are going to go up again. So these are all factors pushing on your point of regulation at just expense of running research.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Research is getting more complicated. So I remember I sat down with a former CEO of SRI, Stanford Research Institute, which is a big research lab out here that's done many things. For example, Siri came out of SRI and he said increasingly it's like interdisciplinary teams now. So it used to be you'd have one or two scientists could come up with great ideas and now you're having to combine, I can't remember what he said for Siri, but he said, you know, there are three or four different research groups and SRI that were being pulled together to do it. And that, of course, makes it more expensive. What you think of biogenetics, you're kind of combining biology or genetics or bioengineering. There's many more cross-field areas. And then finally, as you say, I suspect regulation costs, various other factors are making it harder to undertake research. A lot of that's probably good. So it's less, I mean, I'd have to look at individual regulations, but health.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“COVID aside, you know, I don't, yeah, it's hard to tell your own productivity. I mean, right, it always feels like, I mean, oddly enough, you know, I always feel like, ah, you know, the stuff that I did before was better research ideas. And then, you know, something comes along. I'd say personally, it's a bit, it's very stochastic. I find it very hard to predict it. It increasingly comes from working with basically great and often younger co-authors. Why is it happening at the aggregate level? I think there are three reasons going on.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“That rate of fall, it's five percent roughly, it would have fallen if we'd held inputs constant. But the one thing that's been offsetting that fall in the rate of progress is we've put more and more resources into it. So again, if you think of the US, the number of research universities has exploded, the number of firms having research labs. Now, Thomas Edison, for example, is the first lab about 100 years ago, but post-World War II, most large American companies have been pushing huge amounts of cash into R&D. But despite all of that increase in input, actually productivity growth has been slowing over the last 50 years. So that's the sense in which it's harder and harder to define ideas. We're putting more inputs into labs, but actually productivity growth is falling.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so the big picture, just to make sure everyone's on the same page is if you look in the US, productivity growth. In fact, I could go back a lot further. It's an interesting, you go much further and you kind of think of European and North American history. You know, in the UK, that has better data, there was very, very little productivity growth until the Industrial Revolution. So literally from the time the Romans left and whatever, you know, roughly kind of 100 AD until 1750, technological progress was very slow. So sure the British were more advanced at that point, but not dramatically. So the estimates are like 0.1% a year, so very low. And then suddenly the Industrial Revolution starts and it starts to speed up and speed up and speed up. And technological progress in terms of productivity growth peaks in the 1950s at something like three to four percent a year and then has been falling ever since. And then you ask, you know.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“It's possible if you want to ask what areas in you, I would practically look at say patents. So there's an enormous amount of debt or stock, you know, new companies floating on the stock market. Haytons are a very simple way to look at what technologies are new in the sense that they add new fields. And you look at patterns that don't seem to pattern or cite much that's gone before them. They're truly radical. And there's a huge research literature on exactly this.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Tesla's the electric motor. I mean, you're right, the electric motor, I think the first cars, again, it's not my expertise, but I think the first cars were in fact electric cars back in like 1900. Whether you call that a new fielder. I mean, a part of that is driven the progress is driven on batteries. So batteries, we looked at this. Actually, one of the, there are several areas we looked at in our paper. So I had a paper with Chad Jones, John Van Rin and Michael Webb looking at whether innovation and productivity is slowing down. And we looked at several sectors to try and evaluate this and some of them lacked complete data on either inputs or outputs. But one of them was batteries. And batteries have made slow but steady progress. And recently, for example, lithium-armed batteries are much more effective. But recently batteries have got to the stage where electric cars are feasible because you need to obviously store enough energy. So it's not so much the electric motor is a new idea. It's that batteries may”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“Progress is slowing down now. That all seems obvious that each field is slowing down. The question is, are there enough new fields that are coming into being to offset that? And it just appears that at least since the 1950s in the US, the answer is no, there are new fields coming on board, but just not fast enough to offset the decline.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, in some instances, they're new. It's just, it seems pretty obvious, you know, this is why it's useful to have economists to look seriously at the data. In the sense it seems pretty obvious that individual areas are going to slow down. So, you know, the wheel. The wheel was a fantastic innovation, but at some point, you know, progress slows down and, you know, the horse and cart and cornels. And you can just go through innovation after innovation. They were incredibly important, but at some point, of course, progress in those areas slows down. And you mentioned Moore's Law. number of transistors you can pack onto a silicon chip has been roughly doubling every two years and that was kind of moore's law and that's been roughly held constant actually for about 50 years it's just we've been pouring in way more scientists into that so we estimate since the 70s are 18 times more scientists just to hold that constant so in that sense if you're putting in a lot more scientists to generate the same increase in compute power you'd say”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“And 90s. It's just, it seems that field after field eventually starts a decline, and there aren't enough new fields that are growing to offset the bulk of the current fields that are declining.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a good that's a good question why that's not what I'm normally asked about. Where has it not slowed down? I mean, I guess in some senses, I mean, I'm not during any deep personal insight here, but just looking at the valuations of firms in exciting areas, but it's going to be things like AI. I mean, I guess social media, genetic medicine. I think of what's going on at Stanford. I know there's a huge explosion of work in Stanford. Several of my friends and colleagues on campus are working on genetic medicine. I mean, all kinds of amazing things there, actually. Wearables. So one of my friends here is actually working with Apple on getting devices like in the Apple watch that can check your heart rate and tell you in advance if there's complications in your heart and basically pre-warn you. So I don't want to be too super pessimistic that all science is dying. And you're right. You're exactly right. In the research, we looked at it, we showed, for example, progress on cancer had an acceleration in the 80s.”
2020-08-12 · Conversations with Tyler · Nicholas Bloom on Management, Productivity, and Scientific Progress · IDENTIFIED FROM THE TRANSCRIPT · source