Nations and industries benefit from longer supply chains and deeper networks, which magnify the benefits of innovative improvements, according to research published in Proceedings of the National Academy of Sciences.
Although potentially counter-intuitive, the interdisciplinary research team, including experts from the University of Oxford and Harvard University, found there was more possibility of ideas-driven progress with a longer chain.
Doyne Farmer, Baillie Gifford Professor of Mathematics and Director of the Complexity Economics program at Oxford University’s Institute for New Economic Thinking, said, “The more steps in the process, the more opportunity there is for innovation. Industries with greater supply chains do better. We have been able to predict this over long periods. It does not explain everything that happens, but the principle can be seen operating.”