The Landscape of Innovation in Bacteria, Battleships, and Beyond

Document Type

Article

Publication Date

6-29-2021

Abstract

We draw lessons from microbial experimental evolution and naval warfare to improve the understanding of innovation in financial markets. Major financial innovations often arise without explicit societal planning because novel approaches can be favored by markets, in a manner strikingly parallel to natural selection. We utilize the concept of an adaptive landscape to characterize environments that increase the speed and magnitude of innovation. We apply this adaptive landscape framework to innovation in portfolio management. We create a general taxonomy for understanding and nurturing innovation.

Comments

This article was originally published in Proceedings of the National Academy of Sciences of the United States of America, volume 118, issue 26, in 2021. https://doi.org/10.1073/pnas.2015565118

Peer Reviewed

1

Copyright

National Academy of Sciences

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