Scaling rules outline how different characteristics of a system change as it gets bigger. Scaling laws explain how socioeconomic numbers in cities—like the number of petrol stations, the length of pipelines, the number of roadways, and the number of wires—increase as the city's population rises. Scale demonstrates growth and decay.
Businesses that grow in size in terms of sales, costs, and profits are subject to scaling rules. However, when businesses expand, they frequently tend to concentrate on short-term objectives and become less varied, which lowers their likelihood of long-term survival. Only a small fraction of businesses continue for a very long period; the majority fail within a few years.
As companies grow, they tend to add more rules and regulations, limiting their ability to innovate and diversify. This lack of diversity and R&D can lead to reduced resilience and eventual failure. The companies that survive the longest tend to be specialised and operate in niche markets, producing high-quality products for a small, dedicated clientele.
In contrast, cities tend to be more resilient and can recover from damage more easily.
The COVID-19 pandemic has highlighted the need to rethink the role of cities in urban planning and policy decisions. The use of patent data to monitor technological innovation is well established in the literature, and the Economic Fitness and Complexity approach is used to measure urban technological innovation and investigate its correlation with economic growth in cities.
The article "Urban economic fitness and complexity from patent data"
by Matteo Straccamore, Matteo Bruno, Bernardo Monechi, and Vittorio Loreto, published in Nature on 4 March 2023, focuses on the relationship between innovation, economic growth, and urbanisation. The authors use patent data to measure the level of economic fitness and complexity of different cities, and how these factors impact their economic growth.
The authors highlight cities' importance in driving economic growth, innovation, and technological progress. They argue that cities are not only places where ideas are generated, but also where they are tested, refined, and turned into commercial products. The authors begin by discussing the concept of economic fitness, which is the ability of an economic system to create and maintain a diverse set of products and services. They argue that cities with higher economic fitness are more likely to have sustained economic growth over time. They also introduce the concept of complexity, which is a measure of the interconnectedness and diversity of economic activities within a city.
The authors argue that urban areas that are economically fit and complex are more likely to generate innovations, as measured by the number of patents filed. They use patent data as a proxy for innovation, as patents are a measure of the originality and novelty of an idea or invention, and the ability to generate patents is closely related to the complexity of the economic environment in which they are generated. The authors use patent data to measure cities' economic fitness and complexity. Patents are a measure of innovation and are an important indicator of economic activity. The authors argue that the number of patents filed in a city is a good indicator of its economic fitness and the complexity of its economy.
The author outlines the research questions addressed in their study, which focus on understanding the technological production of metropolitan areas. They aim to use the Economic Fitness and Complexity framework to analyse the complexity and technological endowment of different cities and investigate whether they tend to specialise or diversify their production of patents. They also aim to identify clusters of cities with similar technological baskets. The paper is organised into sections describing the data used, the methodologies employed, the results obtained, and a discussion of the contributions and future work.