W. Brian Arthur

Arthur picture

External Professor, Santa Fe Institute and Visiting Researcher, Intelligent Systems Lab, PARC

 

New Paper

"Complexity Economics: A New Framework for Economic Thought"

 

Speaker

W. Brian Arthur is a frequent keynote speaker at conferences and meetings. Some recent topics are: How is the digital revolution playing out in the economy? How exactly does innovation work and how can it be fostered? If manufacturing and services are heading overseas, how can the US and Europe retain their national competitiveness? In what way will the new technologies—IT, genomics, nanotech—unfold in the economy?

Booking agent: Tom Neilssen at Brightsight Group.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External Professor, Santa Fe Institute

and Visiting Researcher, Intelligent Systems Lab, PARC

 

Bio

W. Brian Arthur is a leading economist and technology thinker. He is best known for his pioneering work on positive feedbacks or increasing returns in the economy—what happens when products that gain market share find it easier to gain further market share—and their role in locking markets in to the domination of a single player.

Arthur is also one of the pioneers of the science of complexity—the science of how patterns and structures self-organize. He is a member of the Founders Society of the Santa Fe Institute and in 1988 ran its first research program. He has served on SFI's Science Board for 18 years and its Board of Trustees for 10 years. He is currently External Professor at SFI.

Arthur held the Morrison Chair of Economics and Population Studies at Stanford from 1983 to 1996. He holds degrees in operations research, economics, mathematics, and electrical engineering.

 

Awards

Arthur was awarded the inaugural Lagrange Prize in Complexity Science in 2008, and the Schumpeter Prize in Economics in 1990. He is a Guggenheim Fellow, 1987-88, Fellow of the Econometric Society, and IBM Faculty Fellow.

He holds honorary doctorates from the National Univ. of Ireland (Galway) 2000, and Lancaster University (UK) 2009.

 

Interests

Arthur's long-term fascination has been with constructing an economics that is more realistic. Standard economics has come under much criticism since the meltdown of 2008, it has long been based on the idea of hyper-rational actors operating in a static equilibrium world. Now other approaches are coming to the fore and economics is in the midst of a radical remaking. In the late-1980s, Arthur and his group at the Santa Fe Institute began developing an alternative view that's come to be called "complexity economics." This economics assumes that the economy is not a perfecty balanced machine, but an evolving complex system. Actors in the economy do not necessarily face well-defined problems or use super-human rationality in making their decisions. They explore, try to make sense, and react and re-react to the outcomes they together create. Viewed this way, the economy is not in stasis, but always forming, always evolving, always "discovering" fresh novelty. Bubbles and crashes happen, markets can be "gamed" or exploited, and history and institutions matter. The result is a rigorous but realistic picture of the economy.

In the mid-1990s, Arthur became intrigued with questions about technology. Where do new technologies come from—and how exactly does invention work? What constitutes innovation and how is it achieved? Why are certain regions–Silicon Valley for example–hotbeds of innovation, while others languish? Does technology, like biological life, evolve from earlier forms? And how does the economy itself emerge from its technologies? The book Arthur published in 2009, The Nature of Technology: What it Is and How it Evolves, (below) attempts to answer these questions. It argues that all technologies share certain principles; these determine the character of technology and how novel technologies come into being —and hence how innovation works. 

In the 1980s Arthur developed a theoretical framework for economics under increasing returns, in particular studying the dynamics of lock-in to one of many possible outcomes under the influence of small, random events. (Several of his papers are collected in his 1994 book Increasing Returns and Path Dependence in the Economy. ) High tech operates under increasing returns, and so here network effects and lock-in are important. 

 

Recent Book

The Free Press (Simon & Schuster) in the US, Penguin Books in the UK, 2009.

 

"Multifaceted, enlightening, and stimulating. Invites comparisons with work by Thomas Kuhn and Joseph Schumpeter. Economists, social scientists, engineers, and scientists all may come to regard it as a landmark."  -- Science

"The most important book on technology and the economy since Schumpeter. A work of deep and lasting importance." --Eric Beinhocker  

 

 

Two Other Books

The Economy as an Evolving Complex System II, edited with Steven Durlauf and David Lane, Addison-Wesley, Reading, Mass., Series in the Sciences of Complexity, 1997 

Increasing Returns and Path Dependence in the Economy, Ann Arbor, University of Michigan Press, 1994