To: 'eevacation [email protected] Jeffrey [email protected]] From: Sent: Sat 11/5/2011 9:07:46 PM Subject: FW: universal exponent for cities and companies (Sante Fe thesis) From: Tren Griffin Sent: Saturda November 05, 2011 7:13 PM To:•• Steven Sinofsky Subject: universal exponent for cities and companies (Sante Fe thesis) Supportive of_ thesis that urban poverty work is super important. From: Tren Griffin Sent: Saturday, November 05, 2011 9:54 AM To: Bill Gates; Nathan Myhrvold; Michael Larson; Jerry St. Dennis; Alan Heuberger Cc: Lowell Wood; Edward Jung; Larry Cohen; Boris Nikolic (b9C3) Subject: universal exponent for cities and companies (Sante Fe thesis) My edited version of a talk by Geoffrey West of Sante Fe: hup://edge.orz/conversation/geoffrey- west ...[Cities scale] in what we called a super linear fashion. Instead of being, exponent less than one, indicating economies of scale, the exponent was bigger than one, indicating what economists call increasing returns to scale. What does that say? That says that systematically, the bigger the city, the more wages you can expect, the more educational institutions in principle, more cultural events, more patents are produced, it's more innovative and so on. Remarkably, all to the same degree. There was a universal exponent which turned out to be approximately 1.15 which translated to English says something like the following: If you double the size of a city from 50,000 to a hundred thousand, a million to two million, five million to ten million, it doesn't matter what, systematically, you get a roughly 15 percent increase in productivity, patents, the number of research institutions, wages and so on, and you get systematically a 15 percent saving in length of roads and general infrastructure. There are systematic benefits that come from increasing city size, both in terms of the individual getting something — which attracts people to the city, and in term