Innovation Policy and the Economy, Volume 19

The nineteenth volume of the National Bureau of Economic Research’s Innovation Policy and the Economy highlights the interaction between public policy and innovation. The first chapter documents the dramatic globalization of R&D, and how this development has affected the efforts of US multinationals to operate on the global technology frontier. The next chapter synthesizes research on the impact of trade shocks on innovation, and explains how these shocks’ effects depend on the firms, industries, and countries affected. The third chapter examines the Advanced Research Projects Agency (ARPA) model of research management, an approach to funding and managing high-risk R&D, and offers a method for diagnosing which research efforts are “ARPA-able.” Next is a study of the Orphan Drug Act and the key changes in the U.S. healthcare landscape and in drug discovery and development since its passage in 1983. Artificial intelligence (AI) is the subject of the next two chapters. One describes how AI may diffuse through the economy and discusses implications for economic inequality, antitrust,
and intellectual property. The other investigates issues surrounding firm competition and labor force participation, such as data portability and a Universal Basic Income, and evaluates ways to address these issues.