ph.d. in applied microeconomics, periodically thinking seriously about the impact of AI on employment and wages since move 78.
A lot of this likely comes from the conflation of ‘formalized R&D’ as it is currently practiced, and ‘generally figuring things out’ which goes well beyond formalized R&D and will be turbocharged across the board. Yes, only ~20% of productivity gains look like they come from ‘R&D’ but that’s because we’re only counting formal R&D, and plausibly ignoring compounding effects.
No, the way they model R&D is meant to be quite general, just any dedication of resources toward improving software or hardware. They abstract away details by measuring that "dedication of resources" in real dollars, but you should think of that as representing researcher time, compute resources devoted to improvements, etc. And compounding is built-in both indirectly via the fact that improvements in software and hardware increase the resources available to invest and directly via the \phi_S and \phi_H parameters.
I haven't yet dug into the ~20% result---decomposition can be complicated---but yours is not an accurate explanation of it.
Nevermind. I'm the inaccurate one here. What I said is true of the GATE model, but I now see that your paragraph was about a separate piece of Epoch commentary that was not based on the GATE model. And that separate piece definitely is talking specifically about formal R&D.
It's a separate question whether the Epoch commentary is accurately representing the papers it is citing---and whether your response applies---but I haven't delved into that.