Business: a City, not an Ecosystem

Geoffrey West’s work on scaling in cities provides ammunition for my critique of the “business ecosystem” analogy (Ecosystem alert, Eco mumbo jumbo). New Scientist reports on a recent paper by West and co-workers which found that some urbanization processes differ dramatically from biological ones (references below).

Describing the city as an organism is a much-loved metaphor; New Scientist quotes Frank Lloyd Wright waxing lyrical about “thousands of acres of cellular tissue . . . enmeshed by an intricate network of veins and arteries.”

We like to think that cities work like biological entities, just as we like to think that industries work like networks of organisms. But West & Co’s work indicates that the analogy is flawed. As animals get larger, their metabolism slows down. This is true in some respects for cities, but in others the opposite is true. Infrastructure metrics, like the numbers of gas stations and miles of paved roads scale like biological ones: the amount grows less slowly than the size of the city. But for the things that really count, things speed up. For example, measures of wealth creation and innovation - the number of patents, total wages, GDP - grow more rapidly with size. Bigger cities have a faster metabolism than smaller ones, unlike animals.

Industries resemble cities more than they resemble ecosystems. Increasing returns with size and non-zero sums are key characteristics that are found in both cities and industries, but not biological systems. “Business is Urbanism” is a more accurate and productive metaphor than “Business is an Ecosystem”.

P.S. While we’re talking about ecosystems... The very notion of ecosystem is, of course, itself a metaphor: Nature is a System. The American Heritage Dictionary defines a system as “A group of interacting, interrelated, or interdependent elements forming a complex whole.” It is presumed that there is an observable whole; that it can be broken down into elements; and that the elements interact. So when people use the Business is an Ecosystem metaphor, I think what they’re really doing is simply using Business is a System, and cloaking it with the numinous mantle of Nature (cf. Ecosystem alert).

References

Dana Mackenzie, Ideas: the lifeblood of cities, New Scientist, 23 May 2007 (subscription wall)

Bettencourt, Lobo, Helbing, Kuhnert & West, Growth, innovation, scaling, and the pace of life in cities, Proceedings of the National Academy of Sciences, vol 104, p 7301, 24 April 2007