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Harvard Business Review: Marijuana Legalization Has Been Good For American Innovation

Zej Moczydlowski
Mar 26, 2018 12:48:49 PM

The minds at the Harvard Business Review, looking at how innovation is affected by socialization, chose to examine specifically how government social policies impact innovation. One policy they examined was the legalization of cannabis. Their finding?
States which legalized saw significant increases in innovation output...

This study looked at much more than just the legalization of cannabis. It was a broader study which examined how social policies impact innovation. Specifically they wanted to see how social liberalization had an effect, liberalization being defined in their words "as the easing of government restrictions." They compared two liberalization policies (legalization of same-sex civil unions and legalization of medical marijuana) and one anti-liberalization policy (passage of abortion restrictions).

Researchers found that states with social liberalization policies experienced considerable increases (5%-6%) in innovation output while states with anti-liberalization policies saw around a 1% decline.The article's authors go to great lengths to note their methodology and how they avoided mistakes in causation and causality.

The study believes that their findings were the results of two related factors. First, that social liberalization policies promote more diverse social interactions. As the authors note, "Works in political science have shown that social liberalization policies influence individuals’ attitudes towards openness and diversity, inspiring higher levels of social diversity, increasing general trust, and promoting interactions between individuals with more diverse views, life styles, and racial-ethnic backgrounds..." Researchers also noted how those more diverse interactions lead to more and higher quality ideas. They said that "Individuals with more diverse social interactions are exposed to a more diverse set of ideas, and thus have more opportunities to produce innovations from combining previously unconnected ideas."

As far as the specific numbers in the study, in states where cannabis was legalized they found an increase of 17% in inventors’ number of new collaborators. They also found "an increase in the knowledge diversity of inventive teams after social liberalization policies" and that "innovations that were produced after the implementation of social liberalization policies were on average more novel and impactful."

While we typically focus on the medical benefits of cannabis, it's also encouraging to see how it can also bring about other benefits to society.

Link to the Harvard Business Review Study

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