ssrn-id1311904

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Unformatted text preview: Electronic copy available at: http://ssrn.com/abstract=1311904 SEPTEMBER 2008 DRAFT Please do not quote or cite without permission. The New “Emergence Economics” of Innovation and Growth, And What It Means for Communications Policy September 2008 Richard S. Whitt and Stephen J. Schultze “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” ~ Charles Darwin, The Origin of Species ABSTRACT This paper introduces the rough formula for “Emergence Economics” – namely, that individual agents, acting through interconnected networks, engage in the evolutionary market processes of differentiating, selecting, and amplifying certain business plans and technologies, which in turn generates a host of positive emergent economic phenomena. This formula is fueled by the latest findings from physics, biology, psychology, cognitive neuroscience, and plain common sense. The Internet then will be discussed as a notable and perhaps unique product of market and non- market forces, as a modular infrastructure, and as a platform for broad-based innovation. Next the paper will turn to some key emergent phenomena, including ideas, innovation, economic growth, and what we call “Net effects” such as innovation spillovers. Finally, we will bring these economic and technological elements to bear in the world of communications policy, where a proposed new framework separates out the virtues of “tinkering” with market gaps and inputs, versus the vices of “tampering” with evolutionary processes and outcomes. Electronic copy available at: http://ssrn.com/abstract=1311904 The New “Emergence Economics” of Innovation and Growth Page i INTRODUCTION......................................................................................... 1 EMERGENT ECONOMY: OVERTHROWING THE OLD REGIME.................5 INTRODUCING EMERGENCE ECONOMICS ........................................................................................................ 5 The Nature of Markets: Complex Cascades........................................................................................... 6 The Nature of Competition: Imperfect Incentives.................................................................................8 The Nature of People: Behavioral Beings............................................................................................... 9 The Nature of Analysis: Mismatched Models ...................................................................................... 10 PRESENTING A ROUGH FORMULA FOR EMERGENCE....................................................................................... 11 Agents.....................................................................................................................................................12 Networks ................................................................................................................................................15 Networks ....
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This note was uploaded on 10/24/2011 for the course SCIENCE PHY 453 taught by Professor Barnard during the Winter '11 term at BYU.

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