Award Abstract # 1035225
EAGER: Innovation and Growth of Human Social Organizations from Cities to Corporations

NSF Org: SMA
SBE Office of Multidisciplinary Activities
Recipient: SANTA FE INSTITUTE OF SCIENCE
Initial Amendment Date: April 22, 2010
Latest Amendment Date: April 22, 2010
Award Number: 1035225
Award Instrument: Standard Grant
Program Manager: maryann feldman
SMA
 SBE Office of Multidisciplinary Activities
SBE
 Directorate for Social, Behavioral and Economic Sciences
Start Date: May 1, 2010
End Date: April 30, 2012 (Estimated)
Total Intended Award Amount: $95,622.00
Total Awarded Amount to Date: $95,622.00
Funds Obligated to Date: FY 2010 = $95,622.00
History of Investigator:
  • Geoffrey West (Principal Investigator)
    gbw@santafe.edu
  • Luis Bettencourt (Co-Principal Investigator)
Recipient Sponsored Research Office: Santa Fe Institute
1399 HYDE PARK RD
SANTA FE
NM  US  87501-8943
(505)946-2727
Sponsor Congressional District: 03
Primary Place of Performance: Santa Fe Institute
1399 HYDE PARK RD
SANTA FE
NM  US  87501-8943
Primary Place of Performance
Congressional District:
03
Unique Entity Identifier (UEI): M8SBQ7NVNAH4
Parent UEI:
NSF Program(s): SciSIP-Sci of Sci Innov Policy
Primary Program Source: 01001011DB NSF RESEARCH & RELATED ACTIVIT
Program Reference Code(s): 7752, 7969, 9150
Program Element Code(s): 762600
Award Agency Code: 4900
Fund Agency Code: 4900
Assistance Listing Number(s): 47.075

ABSTRACT

This research examines the social, organizational and infrastructural factors that promote innovation and lead to economic growth. It has three main goals. The first is to establish metrics of innovation, economic growth and size of social organizations across scales using datasets from urban systems and corporations around the world and across times scales. The second is to establish the quantitative connection between the dynamics of innovation and growth, through in-depth studies of cities and firms, with a specific study of the temporal evolution of Boeing's Commercial Aircraft Division. The third is to discover and model mathematically the micro-scale processes and network structures resulting in scaling of economic productivity and innovation, including those leading to economies of scale and learning in production and increasing returns in innovation, with a specific study of the component processes within Boeing Commercial Aircraft Division. The project draws on a variety of academic disciplines and features a close collaboration with industry. Concepts and hypotheses from the social sciences will be tested via analytical techniques from physics and statistical theory applied to large and comprehensive databases of cities and firms.

Intellectual merit: The research is based on a comprehensive, data-driven, quantitative study of innovation and discovery processes in social organizations that has the potential to generate transformative new insights on the general factors that affect the rate of innovation and growth. This project develops and tests theories of economic growth at the micro scale, relying on empirical data analysis, and in-depth case studies of a major corporation. The focus on the history and growth of Boeing and its processes of innovation, particularly on its technological and organizational breakthroughs, aging and scaling, and learning curves, is particularly unusual because of the access to detailed firm data.

Broader Impacts: Although this research is inherently risky, it offers the potential to develop a predictive theory of the growth of social organizations applicable across scales. As such, it could provide new insights into the conceptual basis for organizational theory, economics, social sciences and complex systems. This, in turn, would have a substantial impact on training, education and R&D programs in the public and private sector.

PUBLICATIONS PRODUCED AS A RESULT OF THIS RESEARCH

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Geoffrey B. West "Can there be a Quantitative Theory for the History of Life and Society?" Cliodynamics , v.2 , 2011 , p.208
Gomez-Lievano A. , Youn H. , Bettencourt L. M. A. "The Statistics of Urban Scaling and Their Connection to Zipf's Law" PLoS ONE , v.7(7) , 2012 , p.e40393 10.1371/journal.pone.0040393
L. M. A. Bettencourt, J. Lobo, D. Strumsky and G. B. West. "Urban Scaling and Its Deviations: Revealing the Structure of Wealth, Innovation and Crime across Cities" PLoS ONE , v.5 (11) , 2010
L. M. A. Bettencourt, J. Lobo, D. Strumsky & G. B. West "Urban Scaling and Its Deviations: Revealing the Structure of Wealth, Innovation and Crime across Cities" PLoS ONE , v.5 (11) , 2010
Luis Bettencourt and Geoffrey West "A unified theory of urban living" Nature , v.467 , 2010 , p.913

PROJECT OUTCOMES REPORT

Disclaimer

This Project Outcomes Report for the General Public is displayed verbatim as submitted by the Principal Investigator (PI) for this award. Any opinions, findings, and conclusions or recommendations expressed in this Report are those of the PI and do not necessarily reflect the views of the National Science Foundation; NSF has not approved or endorsed its content.

The major thrust of this exploratory program was to investigate the possibility of developing a science of cities and companies based on underlying mathematizable principles for understanding their organization, dynamics, growth and mortality and which would lead to quantitative, testable predictions. Given the extraordinary complexity and diversity of cities and companies, which reflect individual historical and geographical uniqueness, it is not clear that a systematic general theory is possible rather than a more traditional qualitative approach. Does each city and company require its own model to understand its organization and growth, or are there general quantifiable principles constraining their dynamics and organization, independent of history and geography?

A major theme pervading our work is that of scaling, inspired by biology. An example is shown in Fig. 1A where the surprising regularity of metabolic rate (the energy needed per second to stay alive) is shown as a function of mass. This regularity is manifested across almost all physiological and life-history variables (lifespan, heart-rate, etc) for mammals, fish, birds and even cells and has its origins in generic mathematical properties of networks that sustain life at all scales. Likewise, cities and companies function at multiple scales and, remarkably, also show similar scaling in most economic, innovation and infrastructural metrics (Fig. 1B). Worldwide, socioeconomic metrics, such as wages, wealth, patents, AIDS cases, violent crime and educational institutions, all increase by about 15% with each doubling of city size (“superlinear” scaling), whereas infrastructural metrics, such as length of roads, electrical cables, and number of gas stations, decrease by about 15% (“sublinear” scaling). Superlinearity implies that, per capita, socioeconomic quantities, whether wages, crime or patents, systematically increase by the same degree as city size increases; similarly, to the same degree, there are increasing savings from economies of scale in all infrastructural quantities. The bigger the city, the more the average individual owns, produces and consumes, whether goods, resources or ideas but they can also expect an equivalent increase in crime and AIDS.

The approximate universality of these scaling laws across geography and seemingly independent urban metrics strongly suggests that there are underlying generic principles constraining cities and that a fundamental, mechanistic theory is possible. We hypothesize that this originates in the underlying dynamics of social network structures and group clustering of human interactions, manifested in the metropolitan buzz of productivity, speed, and ingenuity. The quantitative regularities expressed by scaling suggest that there are universal dynamics of agglomeration that are accelerated by bringing more people together. Cities provide natural mechanisms for reaping benefits of high social connectivity between very different people conceiving and solving problems in a diversity of ways.

Similar processes are at play in companies. Firms are dedicated to many different products, services, and markets, and their dynamics and organization reflect some of these contingencies and interdependencies. Our preliminary analyses establish scaling in publicly traded companies (Fig. 1C) for net income and total assets. A striking feature is how well these scale despite representing thousands of companies from diverse business sectors in different countries. In contrast to cities, companies scale sublinearly representing economies of scale, much like organisms.

Generically, sublinear scaling leads to finite growth, as in biology. Preliminary analyses confirm this (Figs. 2A,E,F), indicating that firms are more like organ...

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