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Best of the Month – Scale

Best of the Month –  Scale

| On 22, Apr 2018

Darrell Mann

If 2017 is our year of ‘first principle’s, here’s a terrific contribution to the story. The new book of Geoffrey West, a theoretical physicist, comes with a mouthful of a subtitle that suggests he has unlocked the secrets of human existence — ‘Scale: The Universal Laws of Growth, Innovation, Sustainability and the Pace of Life in Organisms, Cities, Economies, and Companies’.

Spoiler alert: He hasn’t. But don’t let this dissuade you from joining him on an inspiring intellectual odyssey. One for the pattern-finders. Or rather the people that have a nose for spotting the real patterns from the myriad convenient, seductive, or self-serving ones.

Mr. West’s core argument is that the basic mathematical laws of physics governing growth in the physical world apply equally to biological, political and corporate organisms. On its face, his book’s objective is to contribute to an overarching behavioral science of what it calls ‘highly complex systems’.

But the book is also a satisfying personal and professional memoir of a distinguished scientist whose life’s work came to be preoccupied with finding ways to break down traditional boundaries between disciplines to solve the long-term global challenges of sustainability.

The central observation of ‘Scale’ is that a wide variety of complex systems respond similarly to increases in size. Mr. West demonstrates that these similarities reflect the structural nature of the networks that undergird these systems. The book identifies three core common characteristics of the hierarchal networks that deliver energy to these organisms — whether the diverse circulatory systems that power all forms of animal life or the water and electrical networks that power cities.

First, the networks are “space filling” — that is, they service the entire organism. Second, the terminal units are largely identical, whether they are the capillaries in our bodies or the faucets and electrical outlets in our homes. Third, a kind of natural selection process operates within these networks so that they are optimized.

These shared network qualities explain why when an organism doubles in size, an astonishing range of characteristics, from food consumption to general metabolic rate, grow something less than twice as fast — they scale “sub-linearly.” What’s more, ‘Scale’ shows why the precise mathematical factor by which these efficiencies manifest themselves almost always relate to “the magic No. 4.”

Mr. West also provides an elegant explanation of why living organisms have a natural limit to growth and life span following a predictable curve, as an increasing proportion of energy consumed is required for maintenance and less is available to fuel further expansion (spoiler alert: get your S-Curve thinking hats on).

When he turns to cities, Mr. West shows that infrastructure growth scales in analogous sublinear fashion. Hence, the number of gas stations or length of roads needed when a city doubles its size reflects similar economies of scale. But relevant socioeconomic qualities actually scale super-linearly by the same factor. And while it is good news that large cities produce higher wages and more patents per inhabitant, they also generate relatively greater crime and disease. This conundrum is at the heart of Mr. West’s sustainability concerns. Theoretically, unbounded growth of cities generated by superlinear scaling “if left unchecked, potentially sow[s] the seeds of their inevitable collapse.” Unless, of course, we bring in TRIZ to help solve the conundrums. Mr West doesn’t get this part (why would he?), but this doesn’t stop the book being a great first-principle-conundrum identifier.

Despite his reliance on the analysis of huge troves of data to develop and support his theories, in the concluding chapters, Mr. West makes a compelling argument against the “arrogance and narcissism” reflected in the growing fetishization of “big data” in itself. “Data for data’s sake,” he argues, “or the mindless gathering of big data, without any conceptual framework for organizing and understanding it, may actually be bad or even dangerous.” i.e. per our PanSensic story, adding more hay to a haystack doesn’t make it any more likely we find the needles.

In presenting his own provocative and fascinating conceptual framework, Mr. West manages to deliver a lot of theory and history accessibly and entertainingly. Yet it is not clear whether that framework is robust enough to be applied productively to the business realm as he attempts to do. At least not without a healthy dose of TRIZ!

Mr. West concedes early on that the strength of mathematical correlations on which he relies decreases as he moves from the biological to the urban to the corporate. Until relatively recently, Mr. West was unable to get funding to access a database of historical corporate information. At one point during the book, he seems to blame this challenge for the particularly thin results in this domain. The problems with his analysis of the business sector, however, may be more systemic.

First, it is at least questionable whether the constantly shifting hierarchal network structures of corporate organizations are consistent with the three fundamental characteristics of networks upon which his framework is based. Notably, a wide range of behavioral economics research, grounded in the pioneering work of Daniel Kahneman and Amos Tversky, suggests that the optimization requirement is not likely to be met.

Furthermore, the consistent ‘decay rates of corporations identified by Mr. West — calculated by the longevity of independent public corporations over time — does not correspond to any consistent change in underlying activity analogous to “death” in living organisms. Even in the context of bankruptcy, which Mr. West looks at separately from corporate “death” from mergers and acquisitions, good businesses with bad capital structures often continue “life” under new corporate form. It is not evident how meaningful mathematical calculations could be that treat such situations the same as failed businesses that are simply liquidated in bankruptcy for scrap value. All theories are wrong, says the oft used aphorism, but some are useful. At the very least, the patterns Mr West reveals offer up a better start-point than anything else we can see in the literature. Add it to the S-Curve/contradiction solving story and we might just find a 1+1>>2 synergy. Only time will tell on that front.

Meanwhile, just because ‘Scale’ fails to realize the full promise of its title does not diminish the magnitude of its actual contribution and insight. In the 16th century, Francois Rabelais, a French scholar, admonished that “science without conscience is the ruin of the soul.”

Mr. West’s warning that big data without a theoretical framework is the ruin of science is an important contemporary corollary caution that ‘Scale’ will hopefully establish for the next generation of scholars. A great pair of shoulders to climb aboard.