[bumby]

While I agree that R&D can be a major driver, it’s not the sole way to increase productivity. Making existing processes more efficiently is also a means to increase productivity, often with more immediate ROI and less risk than R&D. I have a feeling that may be the “inefficiencies” he was alluding to

[pas]

Well, of course, from a specific view point on short-term to reap the most profits of a mature sector, R&D is not needed. (Let's say for Boeing, just sell the same plane tweaked a bit, don't spend and bet big on a new design.) But then on long-term the company just gets disrupted (oh damn, no pun intended). And for McKinsey it doesn't matter which company they give advice to.

[rmrfstar]

Yeah, but you don't grow GDP 5% per year by shaving basis points off of vacuum tube manufacturing costs.

You grow 5% per year by putting physicists, chemists, and engineers under one roof and letting them invent transistors. Society at large will thank you, and the builders/makers/hackers doing dope shit will thank you.

[bumby]

R&D is definitely necessary for long term growth but I think you might be surprised how much process improvements can improve productivity.

In a previous role as an industrial/process engineer, it wasn’t unheard of to productivity increases approaching 20% for relatively little capital investment