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January 6, 2025

The R&D Puzzle in U.S. Manufacturing Productivity Growth

Danial Lashkari and Jeremy Pearce

Photo: image of a young woman dressed in white overalls, gloves and safety glasses looking down and working with high-tech equipment in a manufacturing environment.

In a previous post, we provided evidence for a broad-based slowdown in productivity growth across industries and firms in the U.S. manufacturing sector starting in 2010. Since firms’ investment in research and development (R&D) for new technologies constitutes a central driver of productivity growth, in this post we ask if the observed slowdown in productivity may be due to a decline in R&D. We find that “R&D intensity” has been increasing at both the firm and industry level, even as productivity growth declines. This points to a decline in the effectiveness of R&D in generating productivity growth in U.S. manufacturing.

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Posted at 7:00 am in Labor Market, Macroeconomics | Permalink | Comments (0)

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