Abstract: This paper presents a simple R\&D-driven endogenous growth model to shed light on some puzzling economic trends. The model can account for why patent statistics have been roughly constant even though R\&D employment has risen sharply over the last 30 years. The model also illuminates why steadily increasing R\&D effort has not led to any upward trend in economic growth rates, as is predicted by earlier R\&D-driven endogenous growth models with the “scale effect” property.