Social Bubbles as Levers of Innovation

Understanding the role of innovation for economic development and the role of scientific and technological activities therein is still a fiercely discussed topic – notwithstanding the history of innovation studies reaching far back in the past. Key questions of the on-going debate include: what are the favorable environments for innovations, and what catalyzes innovation to flourish?

Innovations as learning processes extend over many years and include technical, industrial and commercial steps that lead to the promotion of new products or services and their commercial use. Innovation systems are highly decentralized, embracing overlapping elements. Furthermore, innovations require external and multidisciplinary resources (both material and immaterial), building on various roots, as many technologies and processes have become extremely complex. Our interest is to ask how to initiate and fund what is later to become an innovation process; our focus is on initiators of all kinds as well as the essential environment that is needed to stimulate such processes.

The questions of what vision and what environment are needed to stimulate innovation processes and what dynamics are to be associated with innovation has led us to introduce the “social bubble” hypothesis (Sornette 2008; Gisler and Sornette 2009, 2010; Gisler et al. 2011; Gisler et al forthcoming). The social bubble hypothesis claims that strong social interactions between enthusiastic supporters weave a network of reinforcing feedbacks that lead to widespread endorsement and extraordinary commitment by those involved, beyond what would be rationalized by a standard cost-benefit analysis. It does not cast any value system however, notwithstanding the use of the term bubble. Bubbles have come to be seen as complex yet not necessarily evil, fostering and catalyzing new ideas / concepts / projects. The term “bubble” is related to its use in financial economics, from which the “social bubble” hypothesis borrows. A general framework was developed [in Sornette, D., Why stock markets crash, Princeton University Press, 2003] to characterize, quantify, model and predict bubbles and their aftermath. The main concepts explained and illustrated in details are imitation, herding, self-organized cooperation and positive feedback, leading to the development of endogenous instabilities.

Collective over-enthusiasm similar to those developing during financial bubbles seems a necessary and unavoidable process to foster collective attitude towards risk taking, breaking the stalemate of society that is restrained in a tendency towards risk avoidance. Our understanding of (social) bubbles on the contrary identifies different types of dynamics that shape new endeavors. In other words, we suggest that major projects often proceed via a social bubble mechanism.

In contrast, an absence of exuberant bubble attitude would lead to stagnation and conservatism as no large risks to explore the frontiers are taken and – as a consequence – no original advance, discoveries and gains can be accrued. Novel ideas that are progressively espoused and adopted through a wave of positive feedback loops building enthusiasm, without much concern for risks, qualify them as social bubbles.

Sumit Kumar Ram, Shyam Nandan, Sami Boulebnane, and Didier Sornette, Synchronized bursts of productivity and success in individual careers, Scientific Reports 12 (7637), pp. 1-7 (2022) external pagehttps://doi.org/10.1038/s41598-022-10837-1

Peter Cauwels and Didier Sornette, Are `Flow of Ideas' and `Research Productivity' in secular decline? Technological Forecasting & Social Change 174, 121267, pp. 1-16 (2022) (external pagehttp://ssrn.com/abstract=3716939)

Monika Gisler and Didier Sornette, Testing the social bubble hypothesis on the early dynamics of a scientific project: The FET Flagship candidate FuturICT (2010 – 2013), Entropy 23, 1279, external pagehttps://doi.org/10.3390/e23101279 (2021)

external pageInnovative Exuberance, How Tech Bubbles Accelerate Innovation, Tobias A. Huber, Innovation. Technology. Venture Capital. Philosophy, July 3, 2017

Sandro Lera and Didier Sornette, Evidence of a bimodal US GDP growth rate distribution: A wavelet approach, Quantitative Finance and Economics 1(1): 26-43 (2017) (DOI:10.3934/QFE.2017.1.26)
(external pagehttp://ssrn.com/abstract=2703882)

Monika Gisler, Didier Sornette and Gudela Grote (forthcoming). Early dynamics of a major scientific project: Testing the social bubble hypothesis. Science Technology and Innovation Studies, available at SSRN:
external page(http://ssrn.com/abstract=2289226)

Monika Gisler and Didier Sornette, Bubbles Everywhere in Human Affairs, chapter in book entitled "Modern RISC-Societies. Towards a New Framework for Societal Evolution", L. Kajfez Bogataj, K.H. Mueller, I. Svetlik, N. Tos (eds.), Wien, edition echoraum: 137-153 (2010)
external page(http://ssrn.com/abstract=1590816)

Monika Gisler, Didier Sornette and Ryan Woodard, Innovation as a Social Bubble: The Example of the Human Genome Project, Research Policy 40, 1412-1425 (2011)
(external pagehttp://arxiv.org/abs/1003.2882

Monika Gisler and Didier Sornette, Exuberant Innovations: The Apollo Program, Society 46, 55-68 (2009), DOI: 10.1007/s12115-008-9163-8
(external pagehttp://arxiv.org/abs/0806.0273 and external pagehttp://ssrn.com/abstract=1139807)

D. Sornette, Nurturing Breakthroughs; Lessons from Complexity Theory, Journal of Economic Interaction and Coordination 3, 165-181 (2008), DOI: 10.1007/s11403-008-0040-8
external page(http://arxiv.org/abs/0706.1839)