BPEA | 1993: Microeconomics 2

Implementing a National Technology Strategy with Self-Organizing Industry Investment Boards

discussants: Zvi Griliches
Zvi Griliches Harvard University and National Bureau of Economic Research

Microeconomics 2, 1993

THE MOST IMPORTANT LESSON from the study of research and development, economic growth, and the history of technology is that there are more ways to arrange the objects of the physical world than humans can possibly imagine. Ultimately, all increases in standards of living can be traced to discoveries of more valuable arrangements for the things in the earth’s crust and atmosphere. The personal computer that I used to write this paper is made from almost exactly the same physical materials as the PC that I bought ten years ago-about thirty pounds of steel, copper, aluminum, plastic, and silicon, with bits of gold, iron oxide, and miscellaneous other elements mixed in. In my new PC these materials are arranged in a slightly different way that makes them about fifty times more useful than they were in the original configuration.