Nanoeconomics
Encyclopedia
Nanoeconomics is the formulation, study, and analysis of the economic and business principles underlying the development and deployment of nanoscale know how, products, and systems. Nanoeconomics is defined as the economic theory of single transactions. The term was proposed by Kenneth J. Arrow in 1987.
http://ideas.repec.org/a/nos/voprec/2004-12-5.html The term has also been used to describe a level of analysis below traditional microeconomics
http://epublish.utdallas.edu/dissertations/AAI3098535http://en.scientificcommons.org/9014180http://books.google.com/books?id=Ztgfs9IrEl8C&lpg=PP1&ots=vxoE4AYsgH&dq=Firms%2C%20Markets%2C%20and%20Hierarchies%3A%20The%20Transaction%20Cost%20Economics%20Perspective&pg=PR14#v=onepage&q&f=false, and to describe the economics
of nanotechnology
. http://www.azonano.com/details.asp?articleID=2545http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/nantechlb1&div=62&id=&page=
and prosperity
.
PROSPERITY depends on having a SERVICE or PRODUCT to sell;
-- A service or product must be desirable and affordable, hence the must be a demand and a supply and the viable cost is determined by supply and demand
;
-- Productive INNOVATION is always in short supply and can ask for a high price. It is too new to be commoditized;
-- Nanotechnology is almost inherently innovative; it will impact so many products and processes that its impact will cause churn amongst economic winners and losers;
-- The INNOVATOR has to be able to pay for the costs of invention
, prototyping and productization before competition has minimized the reward (see the lifecycle figure to the right);
-- Intellectual property
rights have to protect the inventing individual and his or her company so that the invention can "pay for itself;"
-- Innovation can be considered a strategic advantage that states or entire countries simulate by lowering the barriers to foundational research
(grants) and to business launch (as in the small business innovative research
programs- SBIR).
-- Sometimes, getting innovation to serve larger societal needs (e.g. environmental remediation) requires government (national or international) to replace missing free market
forces. What company would lower its own greenhouse gas emissions unless stimulated to do so?
The 10 Immutable Laws of Nanoeconomics
Each of these laws may be prefaced with the phrase: as the visibility of the social graph
tends to 100%. So these laws are in a sense asymptotic, evolutionary laws. Remember, we are talking about increasing perfectness of information, not perfect information. Even if the global visibility of the social graph does reach 100% (i.e. every one of the 6 billion people on the planet gets on Facebook
) we won’t be at perfect information. And by the way, I define 100% social graph visibility as “anyone can find out as much about anybody else that the other person wants them to know.”
As the visibility of the social graph tends to 100%…
The UAlbany CNSE
is the first college dedicated to research, development, education, and deployment in nanoeconomics.
http://ideas.repec.org/a/nos/voprec/2004-12-5.html The term has also been used to describe a level of analysis below traditional microeconomics
Microeconomics
Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...
http://epublish.utdallas.edu/dissertations/AAI3098535http://en.scientificcommons.org/9014180http://books.google.com/books?id=Ztgfs9IrEl8C&lpg=PP1&ots=vxoE4AYsgH&dq=Firms%2C%20Markets%2C%20and%20Hierarchies%3A%20The%20Transaction%20Cost%20Economics%20Perspective&pg=PR14#v=onepage&q&f=false, and to describe the economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
of nanotechnology
Nanotechnology
Nanotechnology is the study of manipulating matter on an atomic and molecular scale. Generally, nanotechnology deals with developing materials, devices, or other structures possessing at least one dimension sized from 1 to 100 nanometres...
. http://www.azonano.com/details.asp?articleID=2545http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/nantechlb1&div=62&id=&page=
Economics and Nanotechnology
The linkage between nanotechnology and economics is based on the relationship between innovationInnovation
Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society...
and prosperity
Prosperity
Prosperity is the state of flourishing, thriving, good fortune and/or successful social status. Prosperity often encompasses wealth but also includes others factors which are independent of wealth to varying degrees, such as happiness and health....
.
PROSPERITY depends on having a SERVICE or PRODUCT to sell;
-- A service or product must be desirable and affordable, hence the must be a demand and a supply and the viable cost is determined by supply and demand
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...
;
-- Productive INNOVATION is always in short supply and can ask for a high price. It is too new to be commoditized;
-- Nanotechnology is almost inherently innovative; it will impact so many products and processes that its impact will cause churn amongst economic winners and losers;
-- The INNOVATOR has to be able to pay for the costs of invention
Invention
An invention is a novel composition, device, or process. An invention may be derived from a pre-existing model or idea, or it could be independently conceived, in which case it may be a radical breakthrough. In addition, there is cultural invention, which is an innovative set of useful social...
, prototyping and productization before competition has minimized the reward (see the lifecycle figure to the right);
-- Intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
rights have to protect the inventing individual and his or her company so that the invention can "pay for itself;"
-- Innovation can be considered a strategic advantage that states or entire countries simulate by lowering the barriers to foundational research
Research
Research can be defined as the scientific search for knowledge, or as any systematic investigation, to establish novel facts, solve new or existing problems, prove new ideas, or develop new theories, usually using a scientific method...
(grants) and to business launch (as in the small business innovative research
Small Business Innovation Research
The Small Business Innovation Research program is a United States Government program, coordinated by the Small Business Administration, in which 2.5% of the total extramural research budgets of all federal agencies with extramural research budgets in excess of $100 million are reserved for...
programs- SBIR).
-- Sometimes, getting innovation to serve larger societal needs (e.g. environmental remediation) requires government (national or international) to replace missing free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
forces. What company would lower its own greenhouse gas emissions unless stimulated to do so?
The 10 Immutable Laws of Nanoeconomics
Each of these laws may be prefaced with the phrase: as the visibility of the social graph
Social graph
The social graph is a term coined by scientists working in the social areas of graph theory. It has been described as "the global mapping of everybody and how they're related"...
tends to 100%. So these laws are in a sense asymptotic, evolutionary laws. Remember, we are talking about increasing perfectness of information, not perfect information. Even if the global visibility of the social graph does reach 100% (i.e. every one of the 6 billion people on the planet gets on Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
) we won’t be at perfect information. And by the way, I define 100% social graph visibility as “anyone can find out as much about anybody else that the other person wants them to know.”
As the visibility of the social graph tends to 100%…
- The median size of a corporationCorporationA corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
in the economy tends to 1 - Transaction costs — search, negotiation and monitoring costs — drop to 0
- The median size of transactions tends to the smallest defined unit (1 cent in the United StatesUnited StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
). Evidence: consider the amount of money flowing through the economy in penny-sized amounts through Google AdSense/AdWords. - All forms of capital are unified in monetary capital, i.e. the money economy accurately captures and values social, relational and environmental capital as well. The money economy becomes the “real” economy.
- The economic survivability of an agent becomes directly proportionate to his/her accumulated relational capital in the social graph
- An agent will become a free agent when his/her accumulated relational capital exceeds the total capital he/she can access via affiliation with any firm. Complex idea, think about it.
- The society of firms tends to its evolutionary end state of a democracyDemocracyDemocracy is generally defined as a form of government in which all adult citizens have an equal say in the decisions that affect their lives. Ideally, this includes equal participation in the proposal, development and passage of legislation into law...
of firms. Traditional economics implicitly assumes that the social contract as it applies to firms is weak enough that the result is only slightly removed from an anarchic state-of-nature political arrangement among firms, even if the underlying social graph is democratic. This is why individual human citizens of democracies suspect that the influence of corporations on governance works in fundamentally undemocratic ways. Note though, that this influence is legitimate in a consent of the governedConsent of the governed"Consent of the governed" is a phrase synonymous with a political theory wherein a government's legitimacy and moral right to use state power is only justified and legal when derived from the people or society over which that political power is exercised...
sense. Corporations (unlike organized crimeOrganized crimeOrganized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
syndicates) are legal entities similar to human citizens, in that they have rights in return for the abilities they give up via the social contract. In theory, the CEOs of today are supposed to be more principled than the Robber BaronsRobber baron (industrialist)Robber baron is a pejorative term used for a powerful 19th century American businessman. By the 1890s the term was used to attack any businessman who used questionable practices to become wealthy...
of 100 years ago. These rights will eventually include the equivalent of legitimized voting rights in place of the ad hoc lobbying structures of today. - The society of nations tends to its evolutionary end state of a global inter-national democracy (note the hyphen). All comments made for the democracy of firms within a nation apply, mutatis mutandis. I don’t know how to analyze multi-national corporations, let alone the hybrid mish-mash of intra-national corporations, multi-national corporations and nations.
- The value-at-commoditization of all matured products and services tends to zero, and the organization of production of these economic goods switches to purely cooperative forms of organization of labor (including industry-standard bodies, open source and government-monopolized). Not that maturation may happen instantly at launch for many categories (the point of Chris Anderson’s Free arguments).
- All products and services within the competitive economy (pre-commoditization) derive all their (non-zero) market value from either data, or fashion. This principle is suggested by the idea that data (e.g. GoogleGoogleGoogle Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
’s data from search behavior or Amazon’sAmazon.comAmazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
data fueling its recommendation engine) is the only sustainable competitive advantage. I add fashion because that is the other true differentiator: purely arbitrary aesthetic elements of economic value.
The UAlbany CNSE
College of Nanoscale Science and Engineering
The College of Nanoscale Science and Engineering , on the campus of the University at Albany is a global education, research, development and technology deployment resource for students and researchers in nanotechnology...
is the first college dedicated to research, development, education, and deployment in nanoeconomics.