Tuesday, April 03, 2012

A conceptual model for borrowing among societies

Societies change. One of the major sources of change is the importation of things and ideas from other societies. Some some such changes are quite modest, some are larger and more important:
  • Individual rock and roll records made their way through the Iron Curtain and gained an audience, then local bands began to play their own rock and roll, and eventually the Communist society was changed more generally by those who saw rock and roll as a vehicle to political liberalization.
  • Asian nations began to assemble simple electronic devices under contract from Northern companies (competing on their low labor costs), moved up the value chain, and now some have relatively mature electronics industries capable of manufacturing complex products and inventing new ones.
  • Some African nations had essentially no college educated citizens at independence. They began to send students abroad for college educations, to obtain aid from abroad to create colleges, and eventually developed their own higher educational systems with several colleges, cadres of college teachers, large numbers of their own college students, etc.
Of course, not all imported things lead to systemic change. Sometimes a movie fails to find a local audience, or does find such an audience but fails to lead to a market for further movies. So too, inventions occur within societies. sometimes leading to major social changes -- the Internet developed in the United States leading to ecommerce and egovernment. However, I want to focus on the flow of things and ideas among societies.

The idea is similar to the idea of "meme" from Anthropology -- "an idea, behavior or style that spreads from person to person within a culture. However, I want to broaden the concept to include things and institutions that involve more than one person.

Product Spaces

There has been some work in this mode, analyzing how product space of a society changes over time. I quote the abstract of "The Product Space Conditions the Development of Nations" by C. A. Hidalgo1, B. Klinger, A.-L. Barabási1 and R. Hausmann published in Science magazine in 2007:
Economies grow by upgrading the products they produce and export. The technology, capital, institutions, and skills needed to make newer products are more easily adapted from some products than from others. Here, we study this network of relatedness between products, or “product space,” finding that more-sophisticated products are located in a densely connected core whereas less-sophisticated products occupy a less-connected periphery. Empirically, countries move through the product space by developing goods close to those they currently produce. Most countries can reach the core only by traversing empirically infrequent distances, which may help explain why poor countries have trouble developing more competitive exports and fail to converge to the income levels of rich countries.

While some of the new products that are developed and manufactured are internally invented, I would guess that in the large majority of cases those products, the technology for their manufacture, and the techniques for their marketing are obtained through transfer from abroad.

In this case we have sources of new industries from abroad, which are obviously societies that already have those technologies in place. We can also think of a communication process in which there is a source, a receiver and a channel. I would propose that:

  • the source would be described by a number of characteristics such as the magnitude and quality of the source industry, the magnitude of the effort to transfer out industrial activities, and the degree of cultural "fit" with the receiver;
  • the receiver would also be described by a number of characteristics such as the readiness to accept and utilize the new industry, the magnitude of the effort of transfer in new industrial activities, and the cultural "fit" with the source; and
  • the channel would also be described by characteristics such as the transaction cost, the availability of intermediaries, and the "fit" with both source and receiver.
For any one industrial product I can conceive of a global network of competing channels, and an evolutionary process by which the industrial product spaces add and grow product nodes in some countries while those in other countries shrink and disappear.

Here are a couple of resources for such analyses:
Extensions to other things

As I suggested earlier, the concepts developed for product specific industries and product cluster industries can also be applied to many other, perhaps all other, areas in which societies borrow from one another. 

If you think of the location of a shop or restaurant, a key issue is the expected number of customers that the business could attract. There are a lot of models that have been developed to make such estimates, based on the distribution of population around the proposed site, the difficulty of the route from each house to the proposed shop, the likelihood that householders will use such a facility, and the likely attractiveness of the facility to local customers. While the models suggested in this post might be much more complicated, there is a conceptual similarity with the business location models.

Perhaps indeed, the model is only a conceptual one in general, although perhaps possible for implementation in specific situations such as the product space model described above.

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