The Reiter Prize Lecture By Johann Peter Murmann January 26, 2005.
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Transcript of The Reiter Prize Lecture By Johann Peter Murmann January 26, 2005.
Stan Reiter: Some Early Papers
Hughes, Jonathan R. T. and Stanley Reiter (1958). "The First 1,945 British Steamships." Journal of the American Statistical Association 53(282): 360-381.
Davis, Lance E., Jonathan R. T. Hughes and Stanley Reiter (1960). "Aspects of Quantitative Research in Economic History." The Journal of Economic History 20(4): 539-547.
Key Idea 1: Evolution is a General Process
An evolutionary process has three essentials:
(a) Mechanism for introducing variation(b) Consistent selection processes and (c) Mechanism for preserving and/or
propagating the selected variants
Key Idea 2 & 3What a person cannot do he or she will not do no matter how strong the urge to do it. (p. 28).
In the face of real-world complexity, the business firm turns to procedures that find good enough answers whose best answers are unknowable. (p. 28).
Key Idea 2 & 3
What a firm cannot do it will not do no matter how strong the incentives to do it.
In the face of real-world complexity, the business firm develops standard operation procedures to deal with most decision making situations.
Key Idea 4: Collect Historical Data
[T]he evolution of firms and of economies does not lead to any easily predictable equilibrium, much less of an optimum, but is a complex process, probably continuing indefinitely, that is probably best understood through an examination of its history. (p. 48).
Hierarchy of Selection Processes
It is important to recognize: what are selection criteria at one level are but trials of the criteria at the next higher, more fundamental, more encompassing, less frequently invoked level (Campbell, 1974, p. 421).
Key Idea 6: Sources of Success
The […] variation-and-selection-retention model unequivocally implies that ceteris paribus, the greater the heterogeneity and volume of trials the greater the chance of a productive innovation. [...] unconventionality and no doubt numerosity [are] a necessary, if not sufficient condition of creativity. (Campbell, 1960, p. 395).
Market Share
U. S. Britain Germany Switzerland France Other
British and French Firms are theLeaders in Dye Industry in 1862
0
10
20
30
40
50
60
70
80
90
100
The Expert Predictions
A]t no distant date…[England will be] the greatest colour producing country in the world.
—August Wilhelm Hofmann (1863, p. 120) in his Report on the Chemical Section of the
International Exhibition of 1862
Market Share
U. S. Britain Germany Switzerland France Other
German Firms are Leaders in the Dye Industry in 1873
0
10
20
30
40
50
60
70
80
90
100
Market Share
U. S. Britain Germany Switzerland France Other
German Firms Dominate World Dye Industry in 1913
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Concentration in Each Country, 1913
Firm Country Domestic
Production
Share
Global
Market
Share
Sum of
Global
Share
Bayer Germany 22% 20.0% 20.0%
BASF Germany 22% 20.0% 40.0%
Hoechst Germany 22% 20.0% 60.0%
Levinstein U.K. 30% 2.0% 62.0%
Read Holliday U.K. 30% 2.0% 64.0%
Schoellkopf U.S. 50% 1.7% 65.7%
Heller Merz U.S. 21% 0.7% 66.4%
Number of Dye Firms by Country, 1857-1914
USA Britain Germany SwitzerlandSwitzerland France
1857 19141885
0
5
10
15
20
25
30
35
40
1857 1914
Industry Demography 1857-1914
Number of
Firm Entries
Number of
Firm Exits
Firm Failure
Rates
Germany 116 91 78%
France 63 55 87%
Britain 47 36 77%
United States 35 25 71%
Switzerland 23 19 83%
Dye Development at Bayer in 1906
New dye molecules marketed 36
Dye molecules tested on larger scale 60
New dye molecules synthesized 2656
Theoretically possible dye molecules Billions
The Global Economy
National Economy
Industry
Firm
Product
Global Share of Organic Chemistry Publications
1852 1862 1877 1907
Germany 29% 38% 50-67% 35-47%
France 35% 23% 15.2% 12.2%
Britain 24% 23% 5.9% 16.2%
United States 0.9% 3.6%
Switzerland 7.4-24% 5.0-17%
German Share of Aromatic Organic Chemistry Publications cited in France
Papers devoted to aromatics
German Share
1864 14% 35%
1867 38% 85%
1870 40% 96%
1874 35% 97%
Three Empirical Chapters
Chapter 2:
Country-Level Performance Differences and their Institutional Foundations
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
Typology of Academic-Industrial (A-I) Complexes
Quadrant I Quadrant II
Quadrant IVQuadrant III
Academic Laggard Power-Union
Union of the Weak Industrial Laggard
Explanation of Symbols Used in Illustration
Academic discipline in particular country
Industrial sector in particular country
Academic-industrial complexes
GermanyFrance Switzerland United StatesBritain
Organic Chemistry in Different Countries
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
1855
GermanyFrance Switzerland United StatesBritain
No synthetic dye industry existed before 1857
Co-Evolution in the Synthetic Dye Industry
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
1860
GermanyFrance Switzerland United StatesBritain
Co-Evolution in the Synthetic Dye Industry
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
1870
GermanyFrance Switzerland United StatesBritain
Co-Evolution in the Synthetic Dye Industry
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
1913
GermanyFrance Switzerland United StatesBritain
Co-Evolution Processes at the National Level
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
Time 1
Co-Evolution Processes at the National Level
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
Time 2
Co-Evolution Processes at the National Level
Weak Academic Discipline
Strong
Weak
IndustrialSector
Strong
Time 3