Podcast Summary
Large corporations hindering inventors' breakthroughs: Bureaucracy and inflexibility in large corporations can stifle inventors' groundbreaking discoveries, limiting innovation and economic growth
Large organizations, including pharmaceutical companies and carmakers, may be hindering inventors from making breakthrough discoveries due to bureaucratic red tape and a lack of flexibility. This was illustrated in the story of Joshua Boggs, a chemist from the 1980s who faced significant obstacles in getting a computer, a crucial tool for his research, plugged in at Merck. The anecdote is not specific to Merck, but rather a symptom of larger corporations that can stifle innovation. This issue could have broader implications for the economy as a whole. So, while inventors in large companies may earn higher salaries, they may not be producing as many groundbreaking inventions as they could in a more agile environment.
Challenges of innovating within large organizations: Large organizations can hinder innovation through bureaucracy and middle management resistance. Seeking alternative paths, like venture capital, or competitive pricing can help overcome these obstacles.
Innovation and progress can be hindered by organizational structures and bureaucracy, as seen in Joshua Boggia's experience at Merck. Middle management can often slow down the innovation engine with passive or active resistance. In the late 1980s, Boggia received an offer from a venture capitalist to bypass these obstacles and make progress faster outside of the company. However, he had never heard of venture capitalists before and was unsure of their role. Meanwhile, Mint Mobile currently offers unlimited talk, text, and data plans for $15 a month with a $45 upfront payment for a 3-month plan. This offer is available at mintmobile.com. However, the speed may be slower above 40 gigabytes on a limited plan, and additional taxes, fees, and restrictions apply. Boggia's story highlights the challenges of bringing new ideas to fruition within large organizations and the potential benefits of finding alternative paths to innovation. Similarly, Mint Mobile's offer demonstrates the value of seeking out competitive pricing and plans to meet one's communication needs.
Larger companies offer financial stability but hinder groundbreaking inventions: Economists found inventors earn more in larger firms but make fewer groundbreaking inventions, up to 11% decline based on patent citations. Established firms often hire inventors from startups and file defensive patents, limiting innovation.
While larger, older companies can offer inventors financial stability and resources, they may not foster the most groundbreaking inventions. Economists Ufuk Akschaget and Nathan Goldschlag, in their study of 760,000 inventors, found that inventors earn more money in larger companies but make fewer groundbreaking inventions. The decline in inventive output was up to 11% based on patent citations and independence of the breakthroughs. Established companies are more likely to hire promising inventors from startups and file for patents defensively to protect their market share, rather than creating new markets with innovative products. This shift towards defensive strategies as firms gain market power is a concern. Ultimately, the decision for inventors lies between the stability of a larger organization or the potential for greater innovation in a startup.
The shrinking number of inventors in small businesses may contribute to the decline in US productivity growth: The decline in productivity growth in the US economy could be due in part to the decreasing number of inventors working in young, innovative small businesses. Policymakers should consider initiatives to support and encourage inventors to work in these businesses to drive productivity growth.
The decline in productivity growth in the US economy could be due in part to the shrinking number of inventors working in young, innovative small businesses. According to Ufuk Bakir and Nathan Tepper's research, the fraction of inventors working for such businesses has been decreasing since the year 2000. Small businesses and startups, which often focus on groundbreaking discoveries rather than defending existing markets, are crucial for driving productivity growth. This trend could be one reason why the US economy, despite investing more in R&D, is not seeing the expected growth in productivity. Additionally, bureaucracy and other factors such as regulation, low investment, and an aging population may also contribute to this issue. The story of Joshua Boggia, a chemist who left Merck to start Vertex Pharmaceuticals, illustrates the importance of empowered and hungry scientists in small businesses. Vertex went on to make significant drug discoveries, including an HIV drug and a treatment for cystic fibrosis, which have had a profound impact on people's lives. The findings of Bakir and Tepper provide valuable insights into this complex issue and highlight the need for policies and initiatives that support young, innovative businesses and encourage inventors to work in them.
The power of unexpected challenges and the potential for lost innovation: Janet Yellen's story highlights the importance of overcoming bureaucratic hurdles to unlock potential for growth and innovation. Mint Mobile offers affordable wireless plans and Fundrise presents an opportunity to invest in real estate with potential discounts.
Learning from this episode of Wait Wait Don't Tell Me is the potential for untapped innovation and growth that can get lost in the middle management levels. US Treasury Secretary Janet Yellen shared a heartwarming story about a mother who was able to witness her daughters' college graduations after unexpected challenges. This anecdote serves as a reminder of the potential for great things that may never come to fruition due to bureaucratic hurdles. Meanwhile, the episode also featured sponsor messages from Mint Mobile and Fundrise. Mint Mobile offers unlimited wireless plans for an affordable price, making it an attractive option for those looking to simplify their bills. Fundrise, on the other hand, provides an opportunity to invest in real estate and potentially benefit from discounted assets due to high interest rates. Throughout the show, the guests, including Janet Yellen, were asked about unimportant topics in a lighthearted and entertaining manner. This format showcases the versatility and approachability of the NPR podcast. Overall, the episode offers a mix of inspiration, information, and humor.
