Nurturing breakthroughs: lessons from complexity theory

A general theory of innovation and progress in human society is outlined, based on the combat between two opposite forces (conservatism/inertia and speculative herding “bubble” behavior). We contend that human affairs are characterized by ubiquitous “bubbles”, which involve huge risks which would not otherwise be taken using standard cost/benefit analysis. Bubbles result from self-reinforcing positive feedbacks. This leads to explore uncharted territories and niches whose rare successes lead to extraordinary discoveries and provide the base for the observed accelerating development of technology and of the economy. But the returns are very heterogeneous and very risky. In other words, bubbles, which are characteristic definitions of human activity, allow huge risks to get huge returns over large scales. We refer to and summarize a large bibliography covering our research efforts in the last decade, which present the relevant underlying mathematical tools and a few results involving positive feedbacks, emergence, heavy-tailed power laws, outliers/kings, the problem of predictability and the illusion of control.