This is the second installment of a blog series called “Startups, Entrepreneurial Ecosystems and Economic Development” introduced by CO.LAB Executive Director Mike Bradshaw. This series raises the questions of how can we understand the value of startups and startups communities’ impact on economic growth. Understanding a current entrepreneurial ecosystem like Chattanooga and how it was formed can ultimately help develop and drive the ecosystem forward in the future.

Mike raises this discussion as a converging of two of his major career experiences: academic and entrepreneur. He studied Complex Adaptive Systems (also known as complexity science) at Georgetown University, where he graduated first of his class. He is also a veteran entrepreneur, with experience ranging from restaurant owner in D.C. to being an early producer of CD-ROMs in the early 90s. Mike came to Chattanooga in 2003, began volunteering with CO.LAB in 2011 and joined as Executive Director in 2013.

READ PART ONE

. . .

Dr. Phil Roundy recently arrived in Chattanooga from the startup juggernaut Austin, Texas to teach at the UTC College of Business. Dr. Roundy’s research is in social entrepreneurship, and he was interested in entrepreneurial ecosystems. I had a number of thoughts about how complex adaptive systems, which I had studied closely in a previous chapter of my life, applied to the questions we were asking about Chattanooga’s startup community. Dr. Roundy and I began a collaboration to figure out how to value, in economic terms, Chattanooga’s startup community, using evolutionary economics as our academic framework.

Evolutionary economics applies the principles governing complex adaptive systems to economics. Complex adaptive systems are entities that can spontaneously generate sustained intricate structures from the uncontrolled interaction of the systems’ components and its environment. Everyday occurrences that were previously impenetrable to rigorous analysis were opened up to study. Dr. Ilya Prigogine, the intellectual father of complexity science, was awarded the Nobel Prize for Chemistry in 1977 for these discoveries, and he spent the latter part of his life extending his research into other fields, including economics. Dr. Roundy and I are now working to determine how the emerging discipline of evolutionary economics might apply to the study of Chattanooga’s entrepreneurial ecosystem and to the emergence of startup communities generally.

Complex adaptive systems are entities that can spontaneously generate sustained intricate structures from the uncontrolled interaction of the systems’ components and its environment. Everyday occurrences that were previously impenetrable to rigorous analysis were opened up to study.

Examples of complex adaptive systems are everywhere in daily life. For example, how do the patterns in a pot of boiling water suddenly emerge? Believe it or not, until Dr. Prigogine proposed his theories, there really wasn’t a scientific answer to this seemingly simple question. Now there is.

Chattanooga is rapidly approaching a metaphorical boiling point and complexity science can help us understand not only what has happened, but what might happen in the future. It allows us to study systems characterized by rapid, unpredictable change. It’s not uncommon for us to use language like “and then the magic happened” when talking about our startup community to our visitors. But, as wonderful as it is to think that pixie dust blew over the city and caused some accidental magic, it’s fortunate that there are, potentially, tools to help us understand the rare and powerful emergence of Chattanooga’s startup community.

Once we had eyes capable of seeing such things, emergent systems were suddenly visible everywhere, even and perhaps especially in our daily lives. A scientific discipline’s jargon became part of popular discussion and the words chaos and self-organization entered our language.

As we set out on this investigation, it quickly became clear that Chattanooga’s culture of collaboration is the real story after all. There are empirical reasons based on modern scientific thinking that will help us understand how to grow and maintain our entrepreneurial ecosystem and the culture that supports it. To get started, one needs to strip down some pretty heavy mental gears, abandoning a strictly mechanistic worldview for one that is more fluid and organic.

While the tectonic forces shaping the philosophy of modern science are far beyond the scope of our present purpose, the study of complex systems shows us the natural world is creative at its core.

As we set out on this investigation, it quickly became clear that Chattanooga’s culture of collaboration is the real story after all. There are empirical reasons based on modern scientific thinking that will help us understand how to grow and maintain our entrepreneurial ecosystem and the culture that supports it.

This simple statement is revelatory. Autonomous entities spontaneously engage in concerted, creative and purposeful activities without any direction from an external source. That is, the development of a complex adaptive system’s structure does not depend on an externally imposed design. Many of us have seen the striking computer-generated models of physical, chemical and social systems built from these new insights. Julia and Mandelbrot sets, Lorenz’s butterflies and many other examples show how stunningly beautiful structures emerge over time from the interplay of large numbers of independent agents. In these models, with the elements interacting both with each other and with their environment, remarkable structures emerge. Prigogine et al’s work was the first to describe the dynamics behind these kinds of structures. Once we had eyes capable of seeing such things, emergent systems were suddenly visible everywhere, even and perhaps especially in our daily lives. A scientific discipline’s jargon became part of popular discussion and the words chaos and self-organization entered our language. These newly discovered natural principles were applied to the study of human social systems in the early 1980s. A research center was, coincidentally, established at Dr. Roundy’s alma mater, the University of Texas at Austin, along with one in Europe. Researchers dedicated to pursuing Dr. Prigogine’s legacy have since been rethinking economics in this new light.

There are several features of complex adaptive systems that are applicable to startup communities and entrepreneurial ecosystems. The next blog in this series will discuss complex adaptive systems in some detail, leading to an overview of areas where this kind of systems thinking can be applied.

. . .