Pondering Innovation with the Santa Fe Institute in Austin

By LAURA LOREK
Founder Silicon Hills News

The evolution of technology and the evolution of plants and animals share a lot in common.
And the genesis of big ideas might still be a mystery, but innovation, in the aggregate, can be broken down into a series of processes.
Those are a few of the big takeaways from the Santa Fe Institute’s first ever speakers event Monday night at HomeAway’s headquarters in downtown Austin.
Ross Buhrdorf, Chief Technology Officer with HomeAway, brought the nonprofit organization to Austin to talk about innovation to an invitation-only crowd made up of about 100 artists, musicians, technology and business executives, entrepreneurs, academics, investors, media and more.
The Santa Fe Institute, which has been called a modern-day Lyceum, brings together people from a wide variety of backgrounds and disciplines to address big issues like computer malware, cities and urbanization, how life began, innovation and so much more.
“No one really understands, in a deep sense, where ideas come from and how they are generated,” said Chris Wood, vice president with the Santa Fe Institute, during his introductory remarks. But the Santa Fe Institute attracts diverse, smart, curious, passionate people and they work on big transformative ideas. That’s something Austin is working to foster here, Buhrdorf said.

The Nature of Technology

The first speaker, W. Brian Arthur, a leading economist and external professor at the Santa Fe Institute, studied extensively the evolution of technology. He wrote “The Nature of Technology” which explains how technologies are made up of pieces of technology that already exist.
To explain how technologies become more complicated over time, Arthur used the example of Frank Whittle’s turbo jet engine, patented in 1930. The original model is “incredibly simple,” Arthur said. Yet 30 years later, that engine became incredibly complex.
“Individual technology is made up of building blocks,” Arthur said.
“At the start those building blocks are incredibly simple.’’

The process of adding new parts is called structural deepening and it’s at the heart of technology evolution, Arthur said.
So how does innovation work in the economy? The standard states that the economy adopts new technologies and becomes more productive, Arthur said.
“This is woefully deficient,” he said. “Technologies do not come along one by one. They come along in whole bodies of technology.’
He provided as examples: textile materials, railroads, electronics, digital telecommunications, genomic engineering and nanotechnology.
“They are not quite adopted by business,” Arthur said. “The economy doesn’t adopt the new body, it incorporates it. Each industry collides with the new technology.”
Business processes from the industry and from the new body combine to form new processes, Arthur said.
His examples included banking and derivatives, which started to evolve with the Black-Scholes Option Pricing Formula in 1973. Human processes from banking incorporated telecommunications and computing processes. And decades later, it’s still going on for better or for worse, Arthur said.
“There’s one trillion dollars worth of goods per day traded in a $15 trillion economy,” he said.
These technologies sweep right across the economy changing businesses, one after another, and they transform the industry, Arthur said.
When this body of technology collides with a new technology, the result is the economy wells up from its new bodies of technologies, Arthur said.
“It thereby forms and reforms itself,” he said. He called the process “tectonic” and resembling the shifting of the tectonic plates to create new landmasses.
“The economy is forming and reforming from the process of old technology reforming with new technology,” Arthur said.
And despite the rise of China and other nations to challenge the United States in eight primary areas of technology, the U.S. still leads the world, Arthur said.
In response to a question from the audience, Arthur defined technology “as a means to a human purpose.”
In response to another question about the abuse of technology by governments, Arthur declined to address the current National Security Agency’s PRISM program which accesses phone and computer transmissions in the U.S.
“We’re entering a Brave New World for good and for not so good,” Arthur said. “I would like for us to pause and think more about this. Just because something is possible doesn’t mean it’s desirable.”

The Cambrian Explosion

And then something related, but different, something the Santa Fe Institute defines as “Strange Bedfellows,” Doug Erwin, senior scientist and curator of Paleobiology at the National Museum of National History of the Smithsonian Institution in Washington, D.C., gave a talk on the history of life and evolution. He showed slides of the adaptive radiation in Galapagos finches.
He also recently published a book, with Jim Valentine, on “The Cambrian Explosion: The Construction of Animal Biodiversity.”
Erwin posed the question on one of his slides on what drives innovation, whether in biological, cultural or technological systems.
The conclusion is there are a lot of similarities between innovation in the animal and plant world and the human one and we can learn from the processes employed by each.

Austin’s Creative Class Spurs Innovation

In a short interview following the presentation, Buhrdorf said he has visited the Santa Fe Institute many times and is on its board of trustees. At the institute, he and his wife have had dinner with Pulitzer-Prize Winning Author Cormac McCarthy and Murray Gell-Mann, Nobel Prize winning physicist who discovered the Quark. HomeAway is also one of its business network members. He thought Austin’s creative class could benefit from interaction with the institute and its professors.
“I have a passion about innovation and about science,” Buhrdorf said. “And I love the institute because they have this concept of multivariate models and cross discipline interactions. I think it’s perfect for Austin, Texas because we have this creative class that these young guys know here.”
That mix of the creative class with the big data scientists and multivariate models will yield innovative results, Buhrdorf said.
Buhrdorf, an artist, musician and an innovator, teamed up with 3-Day Startup to create the first corporate 3-Day Startup held at HomeAway last year. He’s working with them to announce something soon related to the Santa Fe Innovation talk, he said.
Austin, because of its innovative nature, is a perfect place for the Santa Fe Institute, Wood said.
“It’s a good place for us to try to make some contributions and we benefit substantiality from being pushed and goaded by the business community,” Wood said.
And in September, Santa Fe Institute is offering a two-day short course on Complexity: Exploring Complex Networks in Austin that is open to anyone to apply.