CEPR & VideoVox Economics 66d ago

Government-funded patents are just 2% of the total — yet they account for 20% of US productivity growth. How? Paolo Surico (London Business School & CEPR) joins Tim Phillips to discuss his ambitious new study tracing the macroeconomic impact of publicly funded innovation across the post-war United States. Drawing on granular patent data, Surico and his co-authors find that NIH and NSF — not the Pentagon — are the agencies most closely associated with productivity-boosting breakthroughs. The key, he argues, isn't whether innovation is military, medical, or educational in origin. It's whether it is rooted in basic research. The conversation covers: Why 2% of patents can drive 20% of productivity growth The Vannevar Bush blueprint and its lasting influence Why public R&D "crowds in" private investment rather than displacing it Why government-backed startups outperform both incumbents and privately funded startups The risks of the US science funding cuts of 2025 What Europe can learn — and why the Draghi report could be its Vannevar Bush moment The discussion paper is The Public Origins of American Innovation (CEPR Discussion Paper 20788). Authors: Andrea Gazzani, Joseba Martinez, Filippo Natoli, and Paolo Surico.