Giovanni Bonifati

‘More is different’, exaptation and uncertainty: three foundational concepts for a complexity theory of innovation

Increasingly, economists concur that innovation processes are far from equilibrium phenomena. Indeed, these processes are characterized by complex qualitative changes in the relations between producers, sellers and users, from which new products and new markets emerge. In order to understand such processes, many economists have begun to draw on ideas and methods from ‘the sciences of complex systems’ literature. In this paper, I examine in detail three concepts from this literature, and I show how, taken together, these concepts provide a foundation for a complexity theory of innovation. I briefly characterize these concepts as follows: (1) The ‘more is different’ principle. The need to reach new potential consumers in the face of increased production capacity induces qualitative changes in artifact functionality, agent interaction patterns, and the relations between production and consumption. (2) Exaptation. New patterns of interaction among agents around the use of new kinds of artifacts lead to the emergence of new functionality, which in turn induces new kinds of relationships among production, technology, and consumption. (3) Ontological uncertainty. New artifacts, new patterns of interaction around their production and use, and new attributions of functionality generate perpetual novelty in innovation contexts, which makes prediction impossible: not only because agents are unable to decide which among some set of well-defined consequences will happen as a result of actions they contemplate taking, but also because some of the very subjects, objects, and criteria of value with which these consequences of their possible actions would have to be expressed simply do not exist at the historical moment in which agents must act. The paper argues that a theory of innovation capable of providing deep insight into the way in which innovation processes unfold in historical time must begin by embedding these three concepts in its foundation.

Exaptation and emerging degeneracy in innovation processes

In socio-economic innovation processes, exaptations emerge from processes through which an initial attribution of new functionalities to existing artifacts or organizations leads to new artifacts and eventually to new markets. In this paper, I argue that exaptation may generate degeneracy, defined as the property according to which structurally different elements provide overlapping functionalities. I propose a theoretical framework to analyze exaptation–degeneracy processes and use two case studies to show that exaptation can generate new artifacts providing functionalities similar to those provided by existing structurally different ones. This paper is intended to provide a contribution to an exaptation–degeneracy perspective in innovation theory.

Progresso tecnico, concorrenza e decisioni di investimento

In this paper investment decisions are analysed separating the motivations for investment from the criterion adopted for assessing their profitability. Firstly, the motivations behind the investments are retraced to the innovative activity of the firms and to the competition interpreted as a process whereby firms retain their competitive position versus existing other firms and potential newcomers. The longterm determinants that appears important for understanding the investment process are, on the one hand, innovations and the creation of new markets and, on the other, the expectations of demand. A second plane of analysis concerns the relation between investments and expected profitability, which cannot be less than the real rate of interest plus a risk premium. After examining the possible effects on investments of a variation, taken as permanent, of the interest rate, it is argued that no systematic relation can be derived between variations of the real interest rate and investments. In the theoretical context of this analysis, indeed, while a change, taken as permanent, in the rate of interest does not affect the basic determinants of the investment, it does alter the condition of minimum profitability for all firms and sets off a mechanism of competition on the market for the products, through which the rate of profit adjusts to the real rate of interest plus a risk premium.