The ‘death of innovation’ paradox, R&D and the scientific potential of crowdsourcing

Abstract

Certain scholars have highlighted decreasing returns to investment in research, or research and development (R&D), as well as a lack of growth in patent numbers, in that these do not match increased research employment over time. Certain theories that contest these declining returns to R&D, or the ‘death of innovation’ hypothesis, such as endogenous growth theory, suffer from the fact that their related frameworks also allow for models with no scale effects. The purpose of this conceptual paper is to provide a critical review of literature that explains why scale effects in R&D are possible, and to present an argument that crowdsourcing may be key to achieving these scale effects in R&D. This conceptual review article takes a theory building approach, seeking to incorporate Weitzman’s theory of recombinant innovation into a broad framework of theoretical literature that explains ‘why’ crowdsourced and open R&D are achieving improved economies of scope and scale. Conceptual findings provide useful insights into how time and cost constraints to the R&D process might be reduced through the use of crowdsourcing as a scientific method. This paper provides important insights for those seeking to keep abreast of novel developments in theory which explain how to capture potential cost savings and quality enhancements in the research process.