May 2, 2018 | Alumni, Economics, IIASA Network, Science and Policy
W. Brian Arthur from the Santa Fe Institute (SFI), and a former IIASA researcher, talks about increasing returns and the magic formula to get really great science.
Recently, Brian stopped in at the Complexity Science Hub Vienna, of which IIASA is a member institution, and spoke to Verena Ahne about his work.
Brian Arthur (© Complexity Science Hub)
Brian, now 71, is one of the most influential early thinkers of the SFI, a place that without exaggeration could be called the cradle of complexity science.
Brian became famous with his theory of increasing returns. An idea that has been developed in Vienna, by the way, where Brian was part of a theoretical group at the IIASA in the early days of his career: from 1978 to 1982.
“I was very lucky,” he recalls. “I was allowed to work on what I wanted, so I worked on increasing returns.”
The paper he wrote at that time introduced the concept of positive feedbacks into economy.
The concept of “increasing returns”
Increasing returns are the tendency for that which is ahead to get further ahead, for that which loses advantage to lose further advantage. They are mechanisms of positive feedback that operate—within markets, businesses, and industries—to reinforce that which gains success or aggravate that which suffers loss. Increasing returns generate not equilibrium but instability: If a product or a company or a technology—one of many competing in a market—gets ahead by chance or clever strategy, increasing returns can magnify this advantage, and the product or company or technology can go on to lock in the market.”
(W Brian Arthur, Harvard Business Review 1996)
This was a slap in the face of orthodox theories which saw–and some still see–economy in a state of equilibrium. “Kind of like a spiders web,” Brian explains me in our short conversation last Friday, “each part of the economy holding the others in an equalization of forces.”
The answer to heresy in science is that it does not get published. Brian’s article was turned down for six years. Today it counts more than 10.000 citations.
At the latest it was the development and triumphant advance of Silicon Valley’s tech firms that proved the concept true. “In fact, that’s now the way how Silicon Valley runs,” Brian says.
The youngest man on a Stanford chair
William Brian Arthur is Irish. He was born and raised in Belfast and first studied in England. But soon he moved to the US. After the PhD and his five years in Vienna he returned to California where he became the youngest chair holder in Stanford with 37 years.
Five years later he changed again – to Santa Fe, to an institute that had been set up around 1983 but had been quite quiet so far.
Q: From one of the most prestigious universities in the world to an unknown little place in the desert. Why did you do that?
A: In 1987 Kenneth Arrow, an economics Nobel Prize winner and mentor of mine, said to me at Stanford: We’re holding a small conference in September in a place in the Rockies, in Santa Fe, would you go?
When a Nobel Prize winner asks you such a question, you say yes of course. So I went to Santa Fe.
We were about ten scientists and ten economists at that conference, all chosen by Nobel Prize winners. We talked about the economy as an evolving complex system.
Veni, vidi, vici
Brian came – and stayed: The unorthodox ideas discussed at the meeting and the “wild” and free atmosphere of thinking at “the Institute”, as he calls the Santa Fe Institute (SFI), thrilled him right away.
In 1988 Brian dared to leave Stanford and started to set up the first research program at Santa Fe. Subject was the economy treated as a complex system.
Q: What was so special about SF?
A: The idea of complexity was quite new at that time. But people began to see certain patterns in all sorts of fields, whether it was chemistry or the economy or parts of physics, that interacting elements would together create these patterns…To investigate this in universities with their particular disciplines, with their fixed theories, fixed orthodoxies–where it is all fixed how to do things–turned out to be difficult.
Take the economy for example. Until then people thought it was in an equilibrium. And there we came and proved, no, economics is no equilibrium! The Stanford department would immediately say: You can’t do that! Don’t do that! Or they would consider you to be very eccentric…
So a bunch of senior fellows at Los Alamos in the 1980s thought it would be a good idea if there was an independent institute to research these common questions that came to be called complexity.
At Santa Fe you could talk about any science and any basic assumptions you wanted without anybody saying you couldn’t or shouldn’t do that.
Our group as the first there set a lot of this wild style of research. There were lots of discussions, lots of open questions, without particular disciplines… In the beginning there were no students, there was no teaching. It was all very free.
This wild style became more or less the pattern that has been followed ever since. I think the Hub is following this model too.
The magic formula for excellence
Q: Was this just a lucky concurrence: the right people and atmosphere at the right time? Or is there a pattern behind it that possibly could be repeated?
A: I am sure: If you want to do interdisciplinary science – which complexity is: It is a different way of looking at things! – you need an atmosphere where people aren’t reinforced into all the assumptions of the different disciplines.
This freedom is crucial to excellent science altogether. It worked out not only for Santa Fe. Take the Rand Corporation for instance, that invented a lot of things including the architecture of the internet, or the Bell Labs in the Fifties that invented the transistor. The Cavendish Lab in Cambridge is another one, with the DNA or nuclear astronomy…
The magic formula seems to be this:
- First get some first rate people. It must be absolutely top-notch people, maybe ten or twenty of them.
- Make sure they interact a lot.
- Allow them to do what they want – be confident that they will do something important.
- And then when you protect them and see that they are well funded, you are off and running.
Probably in seven cases out of ten that will not produce much. But quite a few times you will get something spectacular – game changing things like quantum theory or the internet.
Don’t choose programs, choose people
Q: This does not seem to be the way officials are funding science…
A: Yes, in many places you have officials telling people what they need to research. Or where people insist on performance and indices… especially in Europe, I have the impression, you have a tradition of funding science by insisting on all these things like indices and performance and publications or citation numbers. But that’s not a very good formula.
Excellence is not measurable by performance indicators. In fact that’s the opposite of doing science.
I notice at places where everybody emphasize all this they are not on the forefront. Maybe it works for standard science; and to get out the really bad science. But it doesn’t work if you want to push boundaries.
Many officials don’t understand that.
In Singapore the authorities once asked me: How did you decide on the research projects in Santa Fe? I said, I didn’t decide on the research projects. They repeated their question. I said again, I did not decide on the research projects. I only decided on people. I got absolutely first rate people, we discussed vaguely the direction we wanted things to be in, and they decided on their research projects.
That answer did not compute with them. They are the civil service, they are extraordinarily bright, they’ve got a lot of money. So they think they should decide what needs to be researched.
I should have told them – I regret I didn’t: This is fine if you want to find solutions for certain things, like getting the traffic running or fixing the health care system. Surely with taxpayer’s money you have to figure such things out. But you will never get great science with that. All you get is mediocrity.
Of course now they asked, how do we decide which people should be funded? And I said: “You don’t! Just allow top people to bring in top people. Give them funding and the task of being daring.”
Any other way of managing top science doesn’t seem to work.
I think the Hub could be such a place – all the ingredients are here. Just make sure to attract some more absolutely first rate people. If they are well funded the Hub will put itself on the map very quickly.
This interview was originally published on https://www.csh.ac.at/brian-arthurs-magic-formula-for-excellence/
Oct 29, 2015 | Energy & Climate
Interview with Naoko Ishii, CEO and Chairperson of the Global Environment Facility (GEF), an independent organization that provides grants for projects working towards sustainability. IIASA, the GEF, and the United Nations Industrial Development Organization (UNIDO) have recently partnered on a new project to explore integrated solutions for water, energy, and land.
Naoko Ishii ©Global Environment Facility
Q What is sustainable development and why is it important?
A As Brundtland put it, sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs.
If we do not achieve sustainable development, we will fail to provide even the barest essentials of life—food, water, and shelter—for the growing population. The extra two billion people that will inhabit the world in 2050 can only be accommodated if we are serious about sustainable development.
On a personal level I care about sustainable development because I care about the future, I care about young people, and I care about humanity. Achieving sustainable development is, in my opinion, the single most important issue we face today. Without it, all life on Earth is in jeopardy.
The Global Environment Facility (GEF) was created on the eve of the 1992 Earth Summit in Rio to assist in the protection of the global environment and promote sustainable development. The benefits of such an endeavor have only become clearer over time. It is no coincidence that in 2015 all nations of the world will adopt a set of sustainable development goals which place a strong emphasis on the “global commons,” and that in parallel we have a new global agreement on climate change within reach.
How do you see the world in 2050? What are your most optimistic and pessimistic visions?
I am an optimistic person so I will say that, by 2050, every government, every business, and every individual will take the environment into consideration in all their actions. By 2050, we will all be caring for the Earth, taking responsibility for the use of our planet’s resources, and building economies which will leave no one without dignity or necessary subsistence. We will live within safe planetary boundaries. Pessimism is not an option for me.
How can science help the world achieve sustainable development?
Science plays a critical role. We need it to monitor the state of our resources, the impacts of our activities, and the progress being made. Science can also help identify solutions. It can help encourage businesses to make smart decisions, for example, about saving money though energy efficiency, risk mitigation, and new revenue opportunities driven by innovation and new business models.
Sustainable development is a truly cross-cutting endeavor: it spans many sectors, from agriculture to economics, and transcends national boundaries. Science can play an important role by producing research that is integrated, cross-sectoral and international. In this way, synergies, co-benefits, and trade-offs can be explored in order to identify the smartest paths to achieving multiple sustainable development goals at the same time
“Sustainable development is a truly cross-cutting endeavor: it spans many sectors, from agriculture to economics, and transcends national boundaries.” ©The GEF
How do you see the role of Global Environment Facility in implementing the Sustainable Development Goals?
The GEF is uniquely placed to support the global commons—the planet’s finite environmental resources that provide the stable conditions required for a sustainable, prosperous future for all. Our new strategy—GEF2020—lays out an ambitious vision for the GEF, aimed at addressing the underlying drivers of environmental degradation and delivering integrated, holistic, solutions. We are building on more than 20 years of experience providing support to over 165 countries. By working with national governments, local communities, the private sector, civil society organizations and indigenous peoples, we help find and implement integrated solutions to global challenges.
What are the advantages of a cross-sectoral and cross-border approach to identifying paths to sustainable development?
Many environmental challenges and threats to sustainable development do not respect borders. Moreover, they are often interdependent, or share common drivers. For example, biodiversity loss and climate change is partly driven by unsustainable forest management, which is in turn connected to production of globally traded commodities like palm oil or soy. Problems like this require an integrated, cross-cutting approach.
Given the importance of cross-sectoral interventions, at the GEF we will be implementing a program of integrated approach pilot projects. We believe that these will help countries and the global community in tackling underlying drivers of environmental degradation. I am also very excited about a research program we have recently launched in partnership with IIASA and the United Nations Industrial Development Organization, focusing on development and implementation of integrated solutions to tackle the water-food-energy nexus.
Note: This article gives the views of the interviewee, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Oct 14, 2015 | Systems Analysis
By Brian Fath, IIASA Advanced Systems Analysis Program and Towson University
Brian Fath. © Matthias Silveri | IIASA
The seminal book The Limits to Growth by Donella Meadows and colleagues was a first attempt to make a world model that integrated environment, economics, population, and industrial pollution. Without drastic changes to curb human population growth, consumption of non-renewable resources and industrial effluence, the model scenario projected a collapse of the world social-industrial system, because physically it is not possible to keep growing on a finite planet. This important message spurred many people in the environmental sciences, but was largely ignored, or worse ridiculed, by the dominant economic and political leaders. Perhaps their work was too pessimistic (although some could say realistic) and called for change for which society was not yet ready.
My co-authors and I feel their message was interpreted incorrectly. The restrictions imposed by The Limits to Growth do not entail stagnation and strife but rather give us an opportunity for new priorities, greater equity, and greater well-being. Living within the limits can offer agreeable, pleasant, even thriving and wonderful living conditions.
Therefore we have written a book, which shows that following nature provides guidance and pathways to Flourishing within Limits to Growth.
People today are confronted with a number of very serious problems: poverty, increased inequalities among countries and people, refugees, regional conflicts and civil wars, global climate change, accelerating exploitation of the global non-renewable and renewable resources, rapid land use change and urbanization, and increased emissions of harmful chemicals into the environment. History has shown us that we cannot solve these problems using traditional methods based on short-sighted economic growth.
Additionally, we know from natural laws that continuous growth in a finite environment is not possible. How can we ensure sustainable development for society on Earth? It would be possible by imitating the system that understands how to sustain long-term development: to learn from nature and follow nature’s way. Nature shifts from quantitative biomass growth when the resources become limiting to qualitative development by increasing resource use efficiency, in terms of both improved network connectivity and information on process regulation and feedbacks. The two main ecosystem functions, flow of energy and transfer of nutrients, are accomplished by renewable energy and complete recycling of the needed elements. Nature also originated and perfected the use the 3Rs: Reduce, Reuse, and Recycle.
“The restrictions imposed by The Limits to Growth do not entail stagnation and strife but rather give us an opportunity for new priorities, greater equity, and greater well-being” Photo: Innsbruck, Austria ©Nikolai Sorokin | Dollar Photo Club
Our book employs a global model to experiment with applying these properties of nature in society. Using global statistics, the model considers how the development will change if:
- A revenue-neutral, resource-based Pigovian tax is increased significantly and along with commensurate tax reduction to enhance recycling and application of renewable energy
- We increase investment in education, innovation, and research significantly to raise the level of understanding by the population and to develop new progressive ideas to address our global problems.
- We increase pollution abatement considerably to reduce its negative impacts on our health, nature, and production.
- We increase aid from the developed to the developing countries to 0.8% of GNP, which would enhance the cooperation among countries, reduce poverty and population growth and thereby also the number of refugees. In this context, it is important that the aid is given as support to education, health care, and family planning and not at all as military aid.
The model calculations show that it is possible to obtain a win-win situation, where both industrialized and developing nations can achieve a better standard of living – the developing countries mostly quantitatively and the developed countries mostly qualitatively. The calculations are compared with scenarios based on “business as usual” practices. The business as usual scenario shows a major collapse around the year 2060, which is in accordance to the Limits to Growth results from 1972 and the follow-up-publications from the Club of Rome.
Furthermore, the book demonstrates calculations of ecological footprints and sustainability by assessing our consumption and loss of work energy due to our use of resources and destruction of nature. These calculations lead to the following conclusions:
- Maintain natural areas and the ecosystem services they provide.
- Improve agricultural production by increasing efficiencies and technologies.
- Shift our thoughts and actions from quantitative growth to qualitative development, for instance by using the three R’s.
- Shift to renewable energy.
- Leave today’s policy focused entirely on short-sighted economic considerations and start to discuss how we can improve environmental management, increase the level of education and research, and achieve greater equality in society.
- Develop and promote alternative measures of welfare and well-being.
- Reduce, rather than reward, financial speculations, exorbitant profits, and stock market gambling.
More information: Listen to an interview with Brian Fath on WCBN Radio.
References
Jørgensen SE, Fath BD, Nielsen SN, Pulselli F, Fiscus D, Bastianoni S. 2015. Flourishing Within Limits to Growth: Following nature’s way. Earthscan Publisher.
Meadows, DH, Meadows, DL, Randers J., Behrens, W.H. III, (1972) Limits to Growth, New York: New American Library.
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Sep 21, 2015 | Eurasia, Systems Analysis
By Katherine Leitzell, IIASA Science Writer and Press Officer
The Trans-Siberian Railway is the longest railway in the world, connecting Moscow with Vladivostok and the Sea of Japan. Built at the turn of the 19th century, the railroad network connected remote Eastern Russia with the rest of the country, and created the first overland link between Europe and Asia.
In a meeting last week at IIASA, Russian researcher Yury Gromyko presented an equally ambitious transportation “megaproject” for the next century: the Trans-Eurasian Belt of Razvitie (Development in Russian), or the TEBR. The project, led by a group of leading Russian intellectual centers, would provide a new transportation network between markets in Europe and Asia, including high-speed rail, roads, as well as infrastructure such as pipelines and telecommunications networks.
Maglev trains, like this one in Shanghai, would be one component of the envisioned TEBR project. © 06photo | Dreamstime.com
Yet in Gromyko’s view the TEBR is also a development project that would bring new opportunities for trade and employment to the entire corridor of the construction. Gromyko described the project as a “New Future Zone,” which could revolutionize trade and economic development across Eurasia.
If the TEBR succeeds, Gromyko envisions new networks of smart cities in eastern Russia based on innovative technologies and new industries that would stem the tide of migration towards Moscow, instead pulling a new generation eastwards. “We need millions of young people to move to the Russian Far East. To attract them, there would need to be exciting jobs and affordable housing,” said Gromyko.
Gromyko presented the project at a workshop entitled, Development of Transport and Infrastructure in Eurasia. The meeting brought together transportation experts from across Eurasia to discuss visions for future development of the continent, and the key role of a multi-infrastructure approach in that development. Multi-infrastructure presupposes integration of different infrastructures from transportation to energy and telecommunications.
“Transportation and infrastructure are simply integral to economic development,” explains Michael Emerson, a senior researcher in the project who splits his time between the Centre for European Policy Studies (CEPS) and IIASA. “You cannot have one without the other.”
Credit: Russian Academy of Sciences
The event was the 5th in a series of scoping workshops arranged as part of the IIASA-coordinated project, Challenges and Opportunities of Economic Integration within a wider European and Eurasian Space, following previous workshops focused on research methodology, trade policy, non-tariff barriers, and energy. In addition to transportation and infrastructure projects, participants discussed investment and finance options for such major international efforts, as well as the challenges and opportunities of drawing private investment for long-term investments in infrastructure.
Several more scoping workshops are planned on different dimensions related to economic regional integration, explained project leader Elena Rovenskaya, the director of IIASA’s Advanced Systems Analysis Program. They create the foundation for the research phase involving researchers, business leaders, and policymakers from across Eurasia.
More information
Project: Challenges and Opportunities of Economic Integration within a Wider European and Eurasian Space
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
48.055043416.3526776
Sep 2, 2015 | Systems Analysis
By Matthias Wildemeersch, IIASA Advanced Systems Analysis and Ecosystems Services and Management Programs
FotoQuest Austria is a citizen science campaign initiated by the IIASA Ecosystems Services & Management Program that aims to involve the general public in mapping land use in Austria. Understanding the evolution of urban sprawl is important to estimate the risk of flooding, while the preservation of wetlands has important implications for climate change.
But how can we engage people in environmental monitoring, in particular when they are growing increasingly resistant to traditional forms of advertising? Viral marketing makes use of social networks to spread messages, and takes advantage of the trust that we have in the recommendation coming from a friend rather than from a stranger or a company.
Network science and the formal description of spreading phenomena can shed light on the propagation of messages through communities and can be applied to inform and design viral marketing campaigns.
Viral spreading © kittitee550 | Dollar Photo Club
Network science is a multi-disciplinary field of research that draws on graph theory, statistical mechanics, inference, and other theories to study the behavior of agents in various networks. The spreading phenomena in viral marketing show similarities with well-studied spreading processes over biological, social, physical, and financial networks. For instance, we can think about epidemics,which are well understood and allow for the design of optimal strategies to contain viruses. Another example is opinion dynamics, which received renewed research attention over the last years in the context of social media. In contrast to diseases or computer viruses, which we aim to contain and stop, the goal of viral marketing is to spread widely, reaching the largest possible fraction of a community.
What makes viral marketing unique?
But some aspects of viral marketing are very different from what we see in other spreading phenomena. First of all, there are many platforms that can be used to spread information at the same time, and the interaction between these platforms is not always transparent. Human psychology is a crucial factor in social networks, as repeated interaction and saturation can decrease the willingness to further spread viral content. Marketing campaigns have a limited budget, and therefore it is meaningful to understand how we can use incentives and how efficient they are. This also means that it is essential to find the group of most influential people that can be used as seeds for the viral campaign.
Network science has addressed to a great extent all these individual questions, mostly under the assumption of full knowledge of the connections between the agents and their influence. Currently, so-called multiplexes are an active research field that studies the behavior of multi-layer networks. This research unveils the relationships between the dynamics of viral marketing, the connection pattern, and strength between the network layers. Although viral spreading may be unachievable in a single layer, for example a social network like Facebook, the critical threshold may be exceeded by joining different platforms. Within a given platform, people alike can be clustered using community detection algorithms. Once the communities are identified, influence maximization algorithms have been established to select these persons that maximize the spread of viral content. Although this discrete optimization problem is computationally difficult—or NP-hard—mathematicians have proposed algorithms that can efficiently predict who to target to give a campaign the best chance of going viral. On top of that, optimal pricing strategies have been developed to reward recommenders.
The FotoQuest Austria app aims to engage citizen scientists in their campaign – network theory may help them go “viral.” © IIASA
Although the literature is extensive, the nature of the results is often theoretical and involves mathematically complex models and algorithms. Considering that only partial information on the network is usually available, it is not straightforward to bring this knowledge back to a practical marketing campaign. So researchers in this field are trying to bridge the gap between theoretical results and practical problems. The generic, powerful methods of network science are sufficiently versatile to capture the specifics of real-world applications. As such, network science can provide guidelines that can bring great value for the design of heuristic methods in marketing strategies.
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
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