machinery requiring less maintenance or longer- 

 lasting automobile tires) may not be represented 

 adequately in common economic indices. In fact, 

 innovations of this kind may contribute less to 

 economic growth as commonly measured than 

 was contributed by the unimproved products. 

 Finally, in present economic accounting, goods 

 and services provided to the public sector 

 through nonmarket channels are valued at cost, 

 rather than at market prices. Thus, benefits 

 from R&D and innovation in areas such as public 

 education and national defense may be un- 

 derestimated by a considerable margin in 

 conventional economic indices. 



While the benefits from innovation are only 

 partially accounted for by economic indicators, 

 little if any of the associated societal costs are 

 reflected. These costs in human and social terms, 

 as discussed earlier in this chapter, may be 

 substantial, especially when the full range of 

 adverse effects such as loss of jobs and potential 

 health hazards are considered. 



References 



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6. Griliches, Z., "Research Costs and Social 

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Ill 



