A Simple Combinatorial Model of World Economic History

Recent progress in artificial intelligence (AI) marks a pivotal moment in human history. It presents the opportunity for machines to learn, adapt, and perform tasks that have the potential to assist people, from everyday activities to their most creative and ambitious projects. It also has the potential to help businesses and organizations harness knowledge, increase productivity, innovate, transform, and power shared prosperity. This tremendous potential raises two fundament...

Optimization and expansion are two modes of staged evolution of complex systems where macroscopic observables change at a decreasing, respectively increasing, rate. A prime example of evolutionary expansion, Gross Domestic Product (GDP) time series gauge economic activities in changing societal structures,} and the accelerating trend of their growth probably reflects a manyfold increase of the human interactions that drive change. We show how optimization and expansion can ...

Advanced economies exhibit a high degree of sophistication in the creation of various products. While critical to such sophistication, the nature and underlying structure of the interactions taking place inside production processes remain opaque when studying large systems such as industries or entire economies. Using partial information decomposition, we quantify the nature of these interactions, allowing us to infer how much innovation stems form specific input interactions...

Contrary to conventional economic growth theory, which reduces a country's output to one aggregate variable (GDP), product diversity is central to economic development, as recent 'economic complexity' research suggests. A country's product diversity reflects its diversity of knowhow or 'capabilities'. Researchers proposed the Economic Complexity Index (ECI) and the country Fitness index to estimate a country's number of capabilities from international export data; these measu...

We investigate solutions to the TAP equation, a phenomenological implementation of the Theory of the Adjacent Possible. Several implementations of TAP are studied, with potential applications in a range of topics including economics, social sciences, environmental change, evolutionary biological systems, and the nature of physical laws. The generic behaviour is an extended plateau followed by a sharp explosive divergence. We find accurate analytic approximations for the blow-...

The following note contains a computer simulation concerning the struggle between two companies: the first one is "the biggest zaibatsu of all", while the second one is "small, fast, ruthless". The model is based on a neo-Schumpeterian framework operating in a Darwinian evolutionary environment. After running the program a large number of times, two characteristics stand out: -- There is always a winner which takes it all, while the loser disappears. -- The key to success is ...

We provide a theoretical framework to understand when firms may benefit from exploiting previously abandoned technologies and brands. We model for the long run process of innovation, allowing for sustainable diversity and comebacks of old brands and technologies. We present two extensions to the logistic and Lotka-Volterra equations, which describe the diffusion of an innovation. First, we extend the short-term competition to a long-term process characterized by a sequence of...

Novelties are part of our daily lives. We constantly adopt new technologies, conceive new ideas, meet new people, experiment with new situations. Occasionally, we as individuals, in a complicated cognitive and sometimes fortuitous process, come up with something that is not only new to us, but to our entire society so that what is a personal novelty can turn into an innovation at a global level. Innovations occur throughout social, biological and technological systems and, th...

We study whether specific combinations of technological advancements can signal the presence of local capabilities allowing for a given industrial production. To this end, we generate a multi-layer network using country-level patent and trade data, and perform a motif-based analysis on this network using a statistical validation approach derived from maximum entropy arguments. We show that in many cases the signal far exceeds the noise, providing robust evidence of synergies ...

Diversity is a fundamental feature of ecosystems, even when the concept of ecosystem is extended to sociology or economics. Diversity can be intended as the count of different items, animals, or, more generally, interactions. There are two classes of stylized facts that emerge when diversity is taken into account. The first are Diversity explosions: evolutionary radiations in biology, or the process of escaping 'Poverty Traps' in economics are two well known examples. The sec...