HOW IMPORTANT IS ACADEMIA TO GROWTH? Less than advertised, probably:

In a 1991 study, University of Pennsylvania economist Edwin Mansfield, whose specialty was studying technology, reported the results of a survey he conducted on seventy-six firms in seven manufacturing industries. His goal, wrote Niskanen, was to “determine the share of the firms’ new products and processes that could not have been developed without academic research conducted within the prior fifteen years.” Only 11 percent of new products and 9 percent of new processes, Mansfield found, “could not have been developed, without substantial delay, in the absence of recent academic research.” Moreover, the products and processes that depended on academic research, pointed out Niskanen, “accounted for only 3 percent of sales and 1 percent of the industry savings attributable to technological innovation.”

In short, strong evidence should make one doubt the claim that basic research is crucial for advances in technology.

Nassim Taleb has argued that higher education doesn’t produce rich societies — it’s a luxury good purchased by societies after they become rich. So the causal arrow runs in the opposite direction most people assume when they notice that rich societies have big academic sectors.