Why Information Grows : The Evolution of Order, From Atoms to Economies

What is economic growth? And why, historically, has it occurred in only a few places? Previous efforts to answer these questions have focused on institutions, geography, finances, and psychology. But according to MIT's antidisciplinarian César Hidalgo, understanding the nature of economic growth demands transcending the social sciences and including the natural sciences of information, networks, and complexity. To understand the growth of economies, Hidalgo argues, we first need to understand the growth of order. At first glance, the universe seems hostile to order. Thermodynamics dictates that over time, order--or information--will disappear. Whispers vanish in the wind just like the beauty of swirling cigarette smoke collapses into disorderly clouds. But thermodynamics also has loopholes that promote the growth of information in pockets. Our cities are pockets where information grows, but they are not all the same. For every Silicon Valley, Tokyo, and Paris, there are dozens of places with economies that accomplish little more than pulling rocks off the ground. So, why does the US economy outstrip Brazil's, and Brazil's that of Chad? Why did the technology corridor along Boston's Route 128 languish while Silicon Valley blossomed? In each case, the key is how people, firms, and the networks they form make use of information. Seen from Hidalgo's vantage, economies become distributed computers, made of networks of people, and the problem of economic development becomes the problem of making these computers more powerful. By uncovering the mechanisms that enable the growth of information in nature and society, __Why Information Grows__ lays bear the origins of physical order and economic growth. Situated at the nexus of information theory, physics, sociology, and economics, this book propounds a new theory of how economies can do, not just more, but more interesting things. "Hidalgo has made a bold attempt to synthesize a large body of cutting-edge work into a readable, slender volume. This is the future of growth theory." — Financial Times What is economic growth? And why, historically, has it occurred in only a few places? Previous efforts to answer these questions have focused on institutions, geography, finances, and psychology. But according to MIT's antidisciplinarian Cér Hidalgo, understanding the nature of economic growth demands transcending the social sciences and including the natural sciences of information, networks, and complexity. To understand the growth of economies, Hidalgo argues, we first need to understand the growth of order. At first glance, the universe seems hostile to order. Thermodynamics dictates that over time, order-or information-disappears. Whispers vanish in the wind just like the beauty of swirling cigarette smoke collapses into disorderly clouds. But thermodynamics also has loopholes that promote the growth of information in pockets. Although cities are all pockets where information grows, they are not all the same. For every Silicon Valley, Tokyo, and Paris, there are dozens of places with economies that accomplish little more than pulling rocks out of the ground. So, why does the US economy outstrip Brazil's, and Brazil's that of Chad? Why did the technology corridor along Boston's Route 128 languish while Silicon Valley blossomed? In each case, the key is how people, firms, and the networks they form make use of information. Seen from Hidalgo's vantage, economies become distributed computers, made of networks of people, and the problem of economic development becomes the problem of making these computers more powerful. By uncovering the mechanisms that enable the growth of information in nature and society, Why Information Grows lays bear the origins of physical order and economic growth. Situated at the nexus of information theory, physics, sociology, and economics, this book propounds a new theory of how economies can do not just more things, but more interesting things. Why Do Some Nations Prosper While Others Do Not? Economists Usually Turn To Measures Such As Gross Domestic Product Or Per Capita Income To Answer This Question, But Interdisciplinary Theorist Cesar Hidalgo Argues That We Can Learn More By Measuring A Country's Ability To Make Complex Products. In Why Information Grows, Hidalgo Combines The Seemingly Disparate Fields Of Economic Development And Physics To Present This New Rubric For Economic Growth. He Believes That We Should Investigate What Makes Some Countries More Capable Than Others. Complex Products-from Films To Robots, Apps To Automobiles-are A Physical Distillation Of An Economy's Knowledge, A Measurable Embodiment Of Its Education, Infrastructure, And Capability. Economic Wealth Accrues When Applications Of This Knowledge Turn Ideas Into Tangible Products; The More Complex Its Products, The More Economic Growth A Country Will Experience. A Radical New Interpretation Of Global Economics, Why Information Grows Overturns Traditional Assumptions About The Development Of Economies And The Origins Of Wealth And Takes A Crucial Step Toward Making Economics Less The Dismal Science And More The Insightful One. -- Prologue: The Eternal War -- Introduction: From Atoms To People To Economies -- Part I: Bits In Atoms. The Secret To Time Travel -- The Body Of The Meaningless -- The Eternal Anomaly -- Part Ii: Crystallized Imagination. Out Of Our Heads! -- Amplifiers -- Part Iii: The Quantization Of Knowhow. This Time, It's Personal -- Links Are Not Free -- In Links We Trust -- Part Iv: The Complexity Of The Economy. The Evolution Of Economic Complexity -- The Sixth Substance -- The Marriage Of Knowledge, Knowhow, And Information -- Part V: Epilogue. The Evolution Of Physical Order, From Atoms To Economics. César Hidalgo. Includes Bibliographical References And Index. "Why do some nations prosper while others do not? While economists often turn to measures like GDP or per-capita income to answer this question, interdisciplinary theorist César Hidalgo argues that there is a better way to understand economic success. Instead of measuring the money a country makes, he proposes, we can learn more from measuring a country's ability to make complex products--in other words, the ability to turn an idea into an artifact and imagination into capital. In Why Information Grows, Hidalgo combines the seemingly disparate fields of economic development and physics to present this new rubric for economic growth. He argues that viewing development solely in terms of money and politics is too simplistic to provide a true understanding of national wealth. Rather, we should be investigating what makes some countries more capable than others. Complex products--from films to robots, apps to automobiles--are a physical distillation of an economy's knowledge, a measurable embodiment of the education, infrastructure, and capability of an economy. Economic wealth is about applying this knowledge to turn ideas into tangible products, and the more complex these products, the more economic growth a country will experience. Just look at the East Asian countries, he argues, whose rapid rise can be attributed to their ability to manufacture products at all levels of complexity. A radical new interpretation of global economics, Why Information Grows overturns traditional assumptions about wealth and development. In a world where knowledge is quite literally power, Hidalgo shows how we can create societies that are limited by nothing more than their imagination"--Résumé de l'éditeur "Why do some nations prosper while others do not? While economists often turn to measures like GDP or per-capita income to answer this question, interdisciplinary theorist Cesar Hidalgo argues that there is a better way to understand economic success. Instead of measuring the money a country makes, he proposes, we can learn more from measuring a country's ability to make complex products--in other words, the ability to turn an idea into an artifact and imagination into capital. In Why Information Grows, Hidalgo combines the seemingly disparate fields of economic development and physics to present this new rubric for economic growth. He argues that viewing development solely in terms of money and politics is too simplistic to provide a true understanding of national wealth. Rather, we should be investigating what makes some countries more capable than others. Complex products--from films to robots, apps to automobiles--are a physical distillation of an economy's knowledge, a measurable embodiment of the education, infrastructure, and capability of an economy. Economic wealth is about applying this knowledge to turn ideas into tangible products, and the more complex these products, the more economic growth a country will experience. Just look at the East Asian countries, he argues, whose rapid rise can be attributed to their ability to manufacture products at all levels of complexity. A radical new interpretation of global economics, Why Information Grows overturns traditional assumptions about wealth and development. In a world where knowledge is quite literally power, Hidalgo shows how we can create societies that are limited by nothing more than their imagination"-- Provided by publisher "Why do some nations prosper while others do not? While economists often turn to measures like GDP or per-capita income to answer this question, interdisciplinary theorist César Hidalgo argues that there is a better way to understand economic success. Instead of measuring the money a country makes, he proposes, we can learn more from measuring a country's ability to make complex products--in other words, the ability to turn an idea into an artifact and imagination into capital. In Why Information Grows, Hidalgo combines the seemingly disparate fields of economic development and physics to present this new rubric for economic growth. He argues that viewing development solely in terms of money and politics is too simplistic to provide a true understanding of national wealth. Rather, we should be investigating what makes some countries more capable than others. Complex products--from films to robots, apps to automobiles--are a physical distillation of an economy's knowledge, a measurable embodiment of the education, infrastructure, and capability of an economy. Economic wealth is about applying this knowledge to turn ideas into tangible products, and the more complex these products, the more economic growth a country will experience. Just look at the East Asian countries, he argues, whose rapid rise can be attributed to their ability to manufacture products at all levels of complexity. A radical new interpretation of global economics, Why Information Grows overturns traditional assumptions about wealth and development. In a world where knowledge is quite literally power, Hidalgo shows how we can create societies that are limited by nothing more than their imagination"--Provided by publisher "Why do some nations prosper while others do not? Economists usually turn to measures such as gross domestic product or per capita income to answer this question, but interdisciplinary theorist Cesar Hidalgo argues that we can learn more by measuring a country's ability to make complex products. In Why Information Grows, Hidalgo combines the seemingly disparate fields of economic development and physics to present this new rubric for economic growth. He believes that we should investigate what makes some countries more capable than others. Complex products-from films to robots, apps to automobiles-are a physical distillation of an economy's knowledge, a measurable embodiment of its education, infrastructure, and capability. Economic wealth accrues when applications of this knowledge turn ideas into tangible products; the more complex its products, the more economic growth a country will experience. A radical new interpretation of global economics, Why Information Grows overturns traditional assumptions about the development of economies and the origins of wealth and takes a crucial step toward making economics less the dismal science and more the insightful one."-- Provided by publisher What is economic growth? And why, historically, has it occurred in only a few places? Previous efforts to answer these questions have focused on institutions, geography, finances, and psychology. But according to MIT's antidisciplinarian César Hidalgo, understanding the nature of economic growth demands transcending the social sciences and including the natural sciences of information, networks, and complexity. To understand the growth of economies, Hidalgo argues, we first need to understand the growth of order. At first glance, the universe seems hostile to order. Thermodynamics dictates that over time, order—or information—disappears. Whispers vanish in the wind just like the beauty of swirling cigarette smoke collapses into disorderly clouds. But thermodynamics also has loopholes that promote the growth of information in pockets. Although cities are all pockets where information grows, they are not all the same. For every Silicon Valley, Tokyo, and... Prologue; Introduction; PART I Bits in Atoms; 1 The Secret to Time Travel; 2 The Body of the Meaningless; 3 The Eternal Anomaly; PART II Crystallized Imagination; 4 Out of Our Heads!; 5 Amplifiers; PART III The Quantization of Knowhow; 6 This Time, It's Personal; 7 Links Are Not Free; 8 In Links We Trust; PART IV The Complexity of the Economy; 9 The Evolution of Economic Complexity; 10 The Sixth Substance; 11 The Marriage of Knowledge, Knowhow, and Information; PART V Epilogue; 12 The Evolution of Physical Order, from Atoms to Economies; Acknowledgments; Notes; Index