meandering through an idea or two…

When Paul Krugman writes a blog post that is more academically oriented, he always labels it as ‘wonkish’ in an attempt to protect his general interest readers. So in that spirit, this post is ‘wonkish’. Very wonkish. Which is ironic given my exhortation for clarity yesterday, but that’s the way it goes…

I quite like the collaborations between Nicolai Foss and Teppo Felin, I think in part because they come at problems from different academic backgrounds in a way that ends up being productive. This difference in approaches leads to a bit of friendly rivalry between the two blogs to which they contribute. Foss & company on the Organizations & Markets blog have been on the warpath against fuzzy concepts in management studies – the latest target being the idea of routines. Teppo’s collaborators at responded to this by saying that all social science concepts are fuzzy, to some extent.

The debate is interesting to me because right now I’m working with two core constructs that are pretty fuzzy, and often used so inclusively that you could rightly ask whether they’re meaningful at all. The first is the micro-meso-macro framework developed by Kurt Dopfer, John Foster & Jason Potts. I’m writing a paper with Jason & Mark Dodgson right now using this idea to explain the evolution of Innovation Systems. When Mark asked me what a meso rule was and I tried to explain it, he replied ‘but then everything is a meso rule!’ Without going into huge detail, that is basically correct.


The second fuzzy concept is ‘network’ – which has been used to describe nearly everything. I’m working on a relatively broad theory of explaining all economic actions through a network lens, which again is a pretty broad task. Too broad, perhaps.

I was thinking about these two ideas over the weekend, when I realised why it’s maybe not a problem that in both cases the ideas are used to explain everything. I think that this broadness is a problem when we think that just explaining a category idea is sufficient. In other words, if we say ‘everything is a network’, that is fairly facile and doesn’t really explain anything at all. This is where we need to borrow research approaches from biology. I’ve had several people react negatively to the idea of ‘evolutionary economics’ because they don’t see the value in it as a metaphor, or because they get really hung up on questions like ‘what is the economic equivalent of a gene then?’ I’m thinking now that ‘evolutionary economics’ isn’t most useful as a metaphor though – but rather as a method. So these broad concepts like meso rules and networks are actually equivalent to biological classes, like species.

Biologists hardly ever write about ideas like species in the way that management scholars write about ideas like routines. Biologists take it as given that everything they study is a species of some sort – they are much more interested in figuring out how species are different (description), how they’re related (classification), and how they change over time (evolution). I think that these are the three questions we need to be asking about our economic ideas like routines, meso rules & networks.

Here’s an example, ever since Coase we’ve been talking about two main forms of organisation: markets and hierarchies. Recently, people have also started talking about ‘networks’ as a third form. Most of the discussion has bothered me because the ‘network’ form of organisation seems to be very poorly defined, and while I’m in favour of elevating the importance of the network concept, this approach seems pretty fuzzy to me. I think it would be more useful to define the different forms of organisation as networks, and then look at the three questions of description, classification and evolution. From this perspective, the three forms have different network structures through time, which leads to differences in classification. Markets have distributed control, and no persistent ties. Hierarchies have persistent ties, and local control. The things being described as network organisations are interesting because they have distributed control, but persistent ties. That is the paradox, and that’s what makes them interesting (this is also why the persistent market ties are interesting!).

I’m probably not explaining this well, but part of what I wanted to do was to try to figure out what I’m thinking about this by writing it out. Definitely a work in progress. And I’m sure someone has had this idea some time before I have. In any case, I think the takeaway message is that broad theoretical concepts are not automatically bad. It’s just that if we have these broad concepts we have to realise that just defining them is insufficient, and mostly uninteresting. We have to figure out how to research them like biologists – by figuring out how to distinguish between different examples of the class of things, showing how they’re related to each other, and, most importantly, studying how they evolve over time.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

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13 thoughts on “meandering through an idea or two…

  1. Tim,

    Perhaps making a distinction between the principle and practice of “borrowing” from biology (and elsewhere) could be used. So on the principle front, borrowing concepts from biology can be useful to a degree if we know what we are doing, otherwise we start doing hammer science (everything looks like a nail). All scientific theories have underpinning mathematical models and these mathematical models are certainly shared by many unrelated structures. The model can be useful for some things (namely structural, i.e. describing patterns) and useless for others (why and how it came to be like that).
    The problem, as I see it, lies in the practice. Some analogies or borrowing are suprious and/or fallacious. My favourite example: an organisation is like a plant; it needs to be constantly “watered” and “pruned” by an experienced “gardener.” Now, with sufficient lateral thinking, this analogy might be deemed correct, but it is also totally useless. (This, I suspect, is what you mean by facile analogies).
    Another problem with practice is a misapplication of the analogy. Most economists don’t know enough about biology to warrant their claims (and some of these claims, by the way, are wrong.)
    Misapplication is prevalent everywhere, not just in evolutionary economics, and things are bound to get worse. But this this does not mean we ought to avoid them altogether. On the contrary, I think that they encourage us to look at these analogies more seriously (is an organisation REALLY a plant?)
    This last point is possibly what the question ‘what is the economic equivalent of a gene then?’ is trying to clarify. It is a salubrious quest, but it is also not quite right. It seems to me that the analogy ought to be assessed at the level of the abstracta (i.e. the mathematical models) rather than at the level of the concreta (the genes and the rest of it).
    So, to summarise, Analogies are like medicine; you only use them when you need them.

  2. Thanks for all that Marco!

    I agree that a big part of the problem is that a lot of the people applying the analogies don’t know their biology very well (or at all!).

    I also think that you’re quite correct about the necessity of looking at the level of math rather than things

  3. hey Tim. Interesting post. I’ve followed the OrgTheory/Org.Markets debate on fuzzy concepts as well and found it very worthwhile. Funnily enough, while you were posting this last night I just so happened to be reading this:

    I tend to think that most interesting concepts are fuzzy. I remember having a similar discussion to the one you had about meso-rules with Lars about epistemic communities. i.e. everything’s a bloody epistemic community! Oh and, for good measure, everything’s also a bloody network!

    I don’t think this means that we should cease working with these concepts, because they’ve got significant potential as descriptive and explanatory devices (I think Markus Becker’s work on routines is a good example of this). My thoughts on this issue has led me to the conclusion that what is crucial (and not done nearly often enough) is clearly specifying the boundary of the system you’re hoping to say something useful about, why you’ve chosen to limit the boundaries to this area, and the potential implications for explanation and prediction. The first example that spring to mind here is Gay and Doussets (2005, 1459-1460):

    Gay, B., & Dousset, B. 2005. Innovation and Network Structural Dynamics: Study of the Alliance Network of a Major Sector of the Biotechnology Industry. Research Policy. Vol. 34. Iss. 10; p. 1457.

  4. Agreed all the way through Sam! And thanks for that link to the economic sociology blog – definitely an interesting post.

    I think you’re right on the issue of boundaries. I also think that in looking at these fuzzy concepts, the other useful thing is to think about what testable propositions come from whatever angle you’re taking (I’m not always such a Popperian, but I think that this part is at least useful). That goes a long way towards making the work useful…

  5. Marco’s relate directly to what I was discussing with Tim, John and Sam at UQ last month – misapplied analogies can be a form of category error, e.g. the fallacy of composition is a form of category error (“the aggregate is like an individual”). Could argue one way of looking at the phenomenon of emergence is that where it is applicable it is one way of avoiding reductionist category errors – but that’s for another blog.

    Taking the line that ‘everything is a network’ (which I know Tim set up as straw man, but bear with me), suppose we said “everything is a map” could we work back by analogy – bearing in mind Marco’s comments – from maps to networks (could ague that all networks are maps but not all maps are networks so is this really a proper analogy if we are dealing with a phenomenon that is just a subset? Again, good point Batman, but have to walk the dog in half an hour, so will move on).

    Suppose we want to develop a map with Brisbane as a focus (a) what it looks like depends on purpose – purpose-built map should be different for businesses, tourists, vehicles, cyclists etc (general purpose maps can show more than one purpose – and network) (b) what it looks like depends on scale – detailed scale would show cycle routes but not aircraft routes; zooming up with Brisbane reduced to a point, aircraft routes would appear and cycle routes disappear.

    Implications for networks? The network you see is not independent of purpose and what the observer puts into its construction. Example: work flow and value chain (or value network) in organizations can both/all be interpreted as networks but they are different in nature and in terms of their elements and relationships. And if pursuing Tim’s point about possibly going to use network as the basic principle for distinguishing different forms of economic governance (which I think is an interesting and promising approach) then it will depend on what constituents and principles are used to analyse networks here. Trick is to develop a network description fit for purpose not just to explain what the network is but, crucially, where and why its boundaries are, which I think is Sam’s point.

    Some clues to construction of the network for the purposes of discriminating between forms may lie in the nature of control and ties as Tim says, though if my analogy holds we might ask what kind of control and what kind of ties. Though of course the absolutely crucial thing to bear in mind is – sod it, got to walk the dog ….


    • Thanks for that Neil! I’m starting to think that the quality of the replies to this post is pretty substantially higher than the quality of the original post! 😀

  6. Perhaps this quote from Borges might shed another light on Neil’s comment (I do not think there is a single topic where reading Borges cannot be immensely helpful)

    . . . In that Empire, the Art of Cartography attained such Perfection that the map of a single Province occupied the entirety of a City, and the map of the Empire, the entirety of a Province. In time, those Unconscionable Maps no longer satisfied, and the Cartographers Guilds struck a Map of the Empire whose size was that of the Empire, and which coincided point for point with it. The following Generations, who were not so fond of the Study of Cartography as their Forebears had been, saw that that vast Map was Useless, and not without some Pitilessness was it, that they delivered it up to the Inclemencies of Sun and Winters. In the Deserts of the West, still today, there are Tattered Ruins of that Map, inhabited by Animals and Beggars; in all the Land there is no other Relic of the Disciplines of Geography.

  7. Strangely Marco, I was thinking of that exact story yesterday! And I agree, Borges is always useful.

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