The Ultimate Resource is Peaking

Abstract

Julian Simon argued that more people were associated with more prosperity: human talents were the “ultimate resource” and the force behind rising living standards. The last 30 years have been consistent with that view. But, globally, we are making fewer workers—and, more importantly, fewer potential innovators.

In rich countries, human capital is growing considerably more slowly than in the past. Meanwhile, innovation per researcher appears to be dropping as the population of researchers ages, while it takes longer to get to the knowledge frontier and more collaboration to expand it.

Combined with the fact we are increasingly intolerant of risk and increasingly desirous of innovations in sectors where it is particularly hard to increase productivity, it is little surprise that productivity growth is indeed declining. To extend our two-century era of comparatively rapid progress, we need radically reduced discrimination in the global opportunity to innovate.

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