Schumpeterian economic dynamics as a quantifiable minimum model of evolution

We propose a simple quantitative model of Schumpeterian economic dynamics. New goods and services are endogenously produced through combinations of existing goods. As soon as new goods enter the market they may compete against already existing goods, in other words new products can have destructive effects on existing goods. As a result of this competition mechanism existing goods may be driven out from the market - often causing cascades of secondary defects (Schumpeterian gales of destruction). The model leads to a generic dynamics characterized by phases of relative economic stability followed by phases of massive restructuring of markets - which could be interpreted as Schumpeterian business `cycles'. Model timeseries of product diversity and productivity reproduce several stylized facts of economics timeseries on long timescales such as GDP or business failures, including non-Gaussian fat tailed distributions, volatility clustering etc. The model is phrased in an open, non-equilibrium setup which can be understood as a self organized critical system. Its diversity dynamics can be understood by the time-varying topology of the active production networks.Comment: 21 pages, 11 figure

The phase transition in random catalytic sets

The notion of (auto) catalytic networks has become a cornerstone in understanding the possibility of a sudden dramatic increase of diversity in biological evolution as well as in the evolution of social and economical systems. Here we study catalytic random networks with respect to the final outcome diversity of products. We show that an analytical treatment of this longstanding problem is possible by mapping the problem onto a set of non-linear recurrence equations. The solution of these equations show a crucial dependence of the final number of products on the initial number of products and the density of catalytic production rules. For a fixed density of rules we can demonstrate the existence of a phase transition from a practically unpopulated regime to a fully populated and diverse one. The order parameter is the number of final products. We are able to further understand the origin of this phase transition as a crossover from one set of solutions from a quadratic equation to the other.Comment: 7 pages, ugly eps files due to arxiv restriction

What makes for prize-winning television?

We investigate the determinants of success in four international television awards festivals between 1994 and 2012. We find that countries with larger markets and greater expenditure on public broadcasting tend to win more awards, but that the degree of concentration in the market for television and rates of penetration of pay-per-view television are unrelated to success. These findings are consistent with general industrial organisation literature on quality and market size, and with media policy literature on public service broadcasting acting as a force for quality. However, we also find that ‘home countries’ enjoy a strong advantage in these festivals, which is not consistent with festival success acting as a pure proxy for television quality

Assessment of Connections Between Knowledge- Based Economy Characteristics and Selected Macroeconomic Categories in the European Union's Countries by Means of Panel Models

The aim of the article is to analyze the impact of knowledge-based economy variables on the selected macroeconomic categories - the share of total investments in GDP and the employment rate- in European Union's countries in the years 2000-2007, conducted with application of panel models.Celem artykułu jest analiza wpływu zmiennych opisujących gospodarkę opartą na wiedzy na podstawowe kategorie makroekonomiczne - udział całkowitych inwestycji w PKB i stopę zatrudnienia - w krajach Unii Europejskiej (z podziałem na kraje UE-15 i nowe kraje członkowskie UE) w latach 2000-2007, przeprowadzona w oparciu o modele panelowe

Creating the future together: Toward a framework for research synthesis in entrepreneurship

To develop a body of evidence-based knowledge on entrepreneurship, findings and contributions from the positivist, narrative and design research traditions in this area need to be combined. Therefore, a framework for research synthesis in terms of social mechanisms, contextual conditions and outcome patterns is developed in this paper. Subsequently, a synthesis of the existing body of research findings on entrepreneurial opportunities serves to illustrate how this framework can be applied and provides results that inform entrepreneurial action. Finally, we discuss how this synthetic approach serves to systematically connect the fragmented landscape of entrepreneurship research, and thus gradually build a cumulative and evidence-based body of knowledge on entrepreneurship

Response Functions to Critical Shocks in Social Sciences: An Empirical and Numerical Study

We show that, provided one focuses on properly selected episodes, one can apply to the social sciences the same observational strategy that has proved successful in natural sciences such as astrophysics or geodynamics. For instance, in order to probe the cohesion of a policy, one can, in different countries, study the reactions to some huge and sudden exogenous shocks, which we call Dirac shocks. This approach naturally leads to the notion of structural (as opposed or complementary to temporal) forecast. Although structural predictions are by far the most common way to test theories in the natural sciences, they have been much less used in the social sciences. The Dirac shock approach opens the way to testing structural predictions in the social sciences. The examples reported here suggest that critical events are able to reveal pre-existing ``cracks'' because they probe the social cohesion which is an indicator and predictor of future evolution of the system, and in some cases foreshadows a bifurcation. We complement our empirical work with numerical simulations of the response function (``damage spreading'') to Dirac shocks in the Sznajd model of consensus build-up. We quantify the slow relaxation of the difference between perturbed and unperturbed systems, the conditions under which the consensus is modified by the shock and the large variability from one realization to another

Evolution: Complexity, uncertainty and innovation

Complexity science provides a general mathematical basis for evolutionary thinking. It makes us face the inherent, irreducible nature of uncertainty and the limits to knowledge and prediction. Complex, evolutionary systems work on the basis of on-going, continuous internal processes of exploration, experimentation and innovation at their underlying levels. This is acted upon by the level above, leading to a selection process on the lower levels and a probing of the stability of the level above. This could either be an organizational level above, or the potential market place. Models aimed at predicting system behaviour therefore consist of assumptions of constraints on the micro-level – and because of inertia or conformity may be approximately true for some unspecified time. However, systems without strong mechanisms of repression and conformity will evolve, innovate and change, creating new emergent structures, capabilities and characteristics. Systems with no individual freedom at their lower levels will have predictable behaviour in the short term – but will not survive in the long term. Creative, innovative, evolving systems, on the other hand, will more probably survive over longer times, but will not have predictable characteristics or behaviour. These minimal mechanisms are all that are required to explain (though not predict) the co-evolutionary processes occurring in markets, organizations, and indeed in emergent, evolutionary communities of practice. Some examples will be presented briefly

Bailouts in a common market: a strategic approach

Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an international asymmetric Cournot duopoly we study effects of such subsidies on market structure and welfare. We adopt a common market setting, where consumers from the two countries form one market. We show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional cost-reducing effort. When the exit is prevented, allocative and productive efficiencies are lower and the only gaining player is the rescued firm

Citizen Entrepreneurship: A Conceptual Picture of the Inclusion, Integration and Engagement of Citizens in the Entrepreneurial Process

This conceptual and exploratory article aims to present a rationale for the engagement of citizens with the process and practice of, and research on new civic forms of entrepreneurship. We argue that this form of citizen engagement could enable a better alignment of entrepreneurial initiatives with economic, social and community priorities, and to address issues of global significance of local interest in uncertain environments. To this end, we posit that engaging citizens in the entrepreneurial process could facilitate agency at the collective level of people with their rights, duties and responsibilities, to identify, participate in and govern with existing institutions, in meaningful economic and social activity in defined spatial environments. Our normative understanding of entrepreneurial process involves the creation of business, social and public enterprises, the formation of which is led by entrepreneurs. Entrepreneurs are of course citizens of specific nation states, but their endeavours do not necessarily warrant the participation of the wider community of citizens in the entrepreneurial process beyond their receiving function as users of goods and services. We consider whether pro-active engagement in a variety of ways, as nurtured in the practice of Citizen Science or Citizen Economics projects, could strengthen the profile and substance of entrepreneurship to resolve critical economic, social and environmental concerns of our times. We use the concept of the ‘commons’ and collective efficacy to argue for an understanding of entrepreneurship and innovation as a social good. We argue that Citizen Entrepreneurship (CE) is able to create new forms of collective organisation and governance, and derive economic and social value by addressing local issues arising from wide-spread phenomena such as climate change, ecological and environmental challenges, inequality, social polarisation, populism, migration and the gradual erosion of democratic institutions. To do so, citizens need to develop capabilities for engagement in the entrepreneurship process, especially when traditional public and market institutions fail to satisfy their existential needs. Indeed, active engagement could lead to the achievement of capabilities for well-being and fulfilling lives which go beyond the acquisition of skills and competencies necessary to pursue a vocation or a career. We refer to and interpret three examples of collective entrepreneurial activity in different urban environments in European countries as models of CE highlighting what we see as a growing trend in the entrepreneurial substance of the ‘urban commons’. We work towards the creation of a conceptual model with which to develop an understanding of a unique formulation of entrepreneurship

The theoretical bases of economic policy: the Schumpeterian perspective

The central role of economic policy in an evolutionary environment is stressed. Based on a Schumpeterian view the theoretical foundations of such a policy are discussed. This investigation leads to the result that not general rules satisfying and maintaining equilibrium are required but a constant watchfulness, reaction, and, if possible, anticipation of what happens in the economy.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/46109/1/191_2005_Article_BF01237909.pd