It was December 28th of 1904 when the retiring president of the American Association for the Advancement of Science, Carroll D. Wright, addressed the Association with a talk aptly titled "Science and Economics". In his lecture - published two days later in Science Journal - Mr. Wright compellingly advocated for a stronger scientific treatment of political economy problems such as labor and industrial productivity, and on how they influenced industrial activity in such areas as transportation and agriculture.
He keenly observed that "Economists have not yet adequately dealt with the great projections of modern times in relation to their influence upon economic development and the conditions of the people at large."1 and recommended to the economist of the time that "Political economy, (...) must change with the thought of the age; it must change as industrial and social conditions change; it must seek to ally itself with all the great sciences in every line of work, and to reach conclusions that shall be of vital importance to the working masses of the world."
More than a hundred years have passed, and there is no doubt that both science and economics have progressed tremendously in the last century, and that our understanding of both the physical and economic realms is vast, albeit incomplete. Our societies have been challenged over and over to innovate, to add value, to thrive on knowledge.
Science has risen to the challenge, aiding in what is perhaps the most impressive transformation in human productivity in all of history. A simple, yet powerful example of how science has changed labor productivity is the ever-increasing computational power. A supercomputer today can perform in one day as many calculations as it would take all inhabitants in the world (roughly 6 billion) making one sum a second for 46 years straight.2
The field of economics has also progressed in understanding how the application of such science, i.e. technology, transforms societies and generates a continuous chain of wealth and progress. Both the fields of Microeconomics and Macroeconomics have long recognized the importance of technological developments in economic systems. In particular in the field of Macroeconomics, the idea of explaining how technology creates economic growth has been extensively explored, starting with the works of Lucas and Solow and followed by the works of Arrow, Romer and Howitt among many others.3
Nevertheless, Wright's observations and recommendations are as compelling and adequate as they were in 1904. In the last quarter of a century the world has had such a rapid technological pace that many of the current industrial activities seem to be far more complex than what our current economic theory is able to explain. To add to the complexity, the technological change seems to be accelerating further and further. We are currently challenged by a new industrial revolution, the one brought about by our newly found ability to manipulate matter at the atomic level: nanotechnology. This new "great projection of modern times" is the one that is challenging economics to go beyond the traditional models and research tools. At the CNSE, this challenge is now being met with the creation of a new field that we call Nanoeconomics.
Nanoeconomics is the alliance of nanoscience and economics to accelerate the pace of technological change. It is not the application of one field to study other field. It is (following the spirit of Wright's words) the recognition that science, technology and economics cannot be perfectly separated, nor understood by the traditional "siloed" approach. Creating an environment where knowledge can be gained from academic, private and public institutions is allowing us to tackle complex questions, such as what is the role of nanotechnology research in economic growth, or what is the mechanism by which collaboration drives innovation and competitiveness.
From those basic questions other subjects can stem, such as the role of high-tech entrepreneurship in regional economic growth, the policy implications of multi-institutional collaboration and the development of the right metrics to understand the process of innovation. Tracking nanotechnology as it grows has been a fertile and challenging experience, and has demonstrated how innovation can spur economic growth in a very fast timeframe.
One of the major challenges of this interdisciplinary approach is the development of the right human capital. NanoEconomics calls for a new kind of professional, one that will be capable of dealing with accelerating technological change, one that can understand the role of all of the actors surrounding science, engineering, research and development. Professionals with these skills will be best suited to lead universities, companies and countries in a global economy. They will become leaders of new nanotech businesses, will define global strategies, and will drive alliances, consortia and joint ventures involving new public, private and academic partnerships.
The final objective is to accelerate technological growth and wealth creation not just for one economic actor, but also for society as a whole. Nanotechnology and economics will continue to converge and to challenge our current perceptions on how innovation works. The end product of this convergence will be a new set of minds that can ask the right questions to accelerate the pace of technological change, to structure innovation models that can make regional and national economies flourish.
I would like to thank my graduate assistant Fernando Gomez-Baquero for his contribution to this article.
1. Wright, C.D., Science and Economics. Science, 1904. 20(522): p. 897-909.
2. Sample, I., Technology: Fastest supercomputer in the world proves one in a million billion. The Guardian, UK., 2008.
3. Sala-i-Martin, X., Fifteen Years OF New Growth Economics: What Have We Learned? Economic Growth: Sources, Trends, and Cycles, 2002: p. 41.
Copyright AZoNano.com, Professor Edward M. Cupol (University at Albany - State University of New York)
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