R&D Capital, Artificial Intelligence and Economic Growth

Technological change due to R&D activities is widely acknowledged as a key driver of long-run growth in output per worker in developed countries. Due to the non-rivalrous character of technological ideas, they allow output to grow even when the use of inputs is constant over time. Therefore, the assessment of the long-run growth perspectives of advanced economies critically depends on the characteristics of the R&D process. In this regard, surprisingly, existing R&D-based economic growth literature almost unequivocally assumes that researchers’ labour is the only input in R&D.

The reality seems to be different, though: the productivity of R&D also increasingly depends on the services of R&D capital. Modern R&D capital may range from modest offices at university campuses or computers at researchers’ laps to such exquisite machinery as the Very Large Telescope (VLT), Large Hadron Collider (LHC) or artificial intelligence (AI) algorithms used in genome sequencing.

All this capital is clearly crucial for the pace of obtaining new R&D developments. In particular, the use of AI in R&D may revolutionise this process in the future by not just answering research questions but also asking new ones. In this research project, we aim to identify the role of R&D capital in generating technological change and, ultimately, long-run economic growth. This general research objective will be pursued with the use of macroeconometric analyses and formal economic growth models.