In my recent review of Paul Ormerod’s Why Most Things Fail, I asked if Ormerod’s comparison between the extinction of species and the death of firms was the right analogy. One reason for my question was that species are typically defined due to their reproductive isolation, preventing gene transfer between species. In contrast, the unit of selection for firms, business plan modules (the name used by Eric Beinhocker), can spread freely spread between firms.
Interestingly, I have just picked up Kevin Kelly’s What Technology Wants, 18 months after my post speculating on Kelly’s approach, where he raises a similar issue. Kelly notes that whereas the passage of biological traits is limited to the passing of traits to offspring, technology transmission can occur horizontally. He writes:
[N]ature can’t plan ahead. It does not hoard innovations for later use. If a variation in nature does not provide an immediate survival advantage, it is too costly to maintain and so over time it disappears. But sometimes a trait advantageous for one problem will turn out to be advantageous for a second, unanticipated problem. … These inadvertent anticipatory inventions are called exaptations in biology. We don’t know how common exaptations are in nature, but they are routine in the technium. The technium is nothing but exaptations, since innovations can be easily borrowed across lines of origin or moved across time and repurposed.
Niles Eldredge is the cofounder (with Stephen Jay Gould) of the theory of punctuated, stepwise evolution. … Once Eldredge applied his professional taxonomic methods to his collection of 500 cornets, some dating back to 1825. He selected 17 traits that varied among his instruments—the shape of their horns, the placement of the valves, the length and diameter of their tubes—very similar to the kinds of metrics he applies to trilobites. When he mapped the evolution of cornets using techniques similar to those he applies to ancient arthropods, he found that the pattern of the lineages were very similar in many ways to those of living organisms. As one example, the evolution of cornets showed a stepwise progress, much like trilobites. But the evolution of musical instruments was also very distinctive. The key difference between the evolution of multicellular life and the evolution of the technium is that in life most blending of traits happens “vertically” in time. Innovations are passed from living parents down (vertically) through offspring. In the technium, on the other hand, most blending of traits happens laterally across time—even from “extinct” species and across lineages from nonparents. Eldredge discovered that the pattern of evolution in the technium is not the repeated forking of branches we associate with the tree of life, but rather a spreading, recursive network of pathways that often double back to “dead” ideas and resurrect “lost” traits.
Kelly goes as far as suggesting that no species of technology ever goes extinct. I’m not sure that calling a technology a species is the right approach – is the species the horn and the feature of the horn the unit of selection? – but the general point has some significant consequences for the biology-technology analogy. Similarly, the firm-species analogy is not a perfect fit due to this horizontal transfer of business plan modules, and possibility that individual modules never go extinct. In the case of Ormerod’s analysis however, I’m not yet sure what the consequences of that difference is.