Agenda for a workshop held in Menlo Park, CA, on February 28th, 2017 titled "Updating the Production Function for the Algorithmic Economy". The workshop was organized with support from the National Science Foundation’s program on the Science of Science and Innovation Policy.¨ It was hosted by the Schar School of Policy and Government, George Mason University, in collaboration with the Innovation for Jobs Network (I4J) and the Arizona State University-Santa Fe Institute Center for Biosocial Complex Systems. It builds upon prior workshops held at the Santa Fe Institute in August 2013, October 2014, and October 2015.

1. Updating the Production Function for the
Algorithmic Economy
A WORKSHOP TO EXPLORE POLICY IMPLICATIONS
Date/Time
February 28th
, 2017
8:15 am – 4:30 pm
Location
SRI International
333 Ravenswood Ave, Menlo Park, CA 94025
This workshop is organized with support from the National Science Foundation’s program on the Science of Science
and Innovation Policy.¨
It is hosted by the Schar School of Policy and Government, George Mason University, in
collaboration with the Innovation for Jobs Network (I4J) and the Arizona State University-Santa Fe Institute Center
for Biosocial Complex Systems. It builds upon prior workshops held at the Santa Fe Institute in August 20131
,
October 2014,2
and October 2015.3
ALL SPEAKERS ARE CONFIRMED, UNLESS OTHERWISE NOTED
A welcome reception will take place on February 27, 6:00-8:30 pm, at the Stanford Park Hotel
(100 El Camino Real, Menlo Park, CA 94025).
¨
Any opinions, findings, and conclusions or recommendations expressed in this material are those of the
organizers.
1
“Getting Inside the Black Box: Technological Evolution and Economic Growth,” August 7-30, 2013, supported by
the Santa Fe Institute, the Institute for New Economic Thinking, and the U.S. Department of Energy.
http://tuvalu.santafe.edu/events/workshops/index.php/Getting_Inside_the_Black_Box:_Technological_Evolution_a
nd_Economic_Growth
2
“Origins of Novelty in Biological, Social, and Technological Systems: Towards a Theory of Innovation,” October
13-17. 2014, http://www.santafe.edu/gevent/detail/science/1574/
3
“Innovation as Search on a Landscape of Possibilities: Constructed or Discovered? Metaphorical Device or
Analytical Construct?” sponsored by the Arizona State University-SFI Center for Biosocial Complex Systems and
funded by the National Science Foundation. http://www.santafe.edu/gevent/detail/science/2024/.

2. Updating the Production Function for the Algorithmic Economy
A Workshop to Explore Policy Implications
AGENDA
2
AGENDA
8:15 am - 8:30 am Welcome
Philip Auerswald
Maryann Feldman
8:30 am - 9:30 am Session 1: Why update the production function?
Context: Cobb-Douglas; growth accounting; Cambridge Capital Controversy; TFP measurement
The service and non-manufacturing sectors comprise the majority of employment and value-add
in today’s economy, a trend that is likely to continue. How we work has also changed, as
evidenced by the rise of the “gig” economy, the increasing share of intangibles as a fraction of the
market capitalization of public firms, and the rapid advance of cognitive computing. Yet, our
policies continue to be informed disproportionately by models developed when manufacturing
still dominated the economy. Is the theoretical foundation laid in the 1930s adequate to support
the development of 21st
-century public policy?
Questions: What are the decisive 21st
-century economic trends and how well or badly adapted
are conventional micro models in dealing with those trends? Does the production function
require updating?
Moderator: Dane Stangler
Panelist: Sidney Winter
Panelist: Hal Varian
Discussion: Jim Bessen
9:30 am - 9:45 am Coffee break
9:45 am - 10:45 am Session 2: How can an updated production function help us
better understand the evolution of work?
Context: Routines and capabilities; occupation space; evolution and layering of capabilities
Recent trends in labor market studies have documented the relationship between the advance of
the algorithmic frontier and changes in the structure of work. Entrepreneurship and innovation
have evolved to become more modular, collaborative, and interconnected. Information and
communication technologies have become so ubiquitous that 21st century economies will likely
be characterized by a move toward decentralized and dispersed forms of economic
organization—though ones potentially operating on a small set of dominant digital platforms.
Within this structural shift, the basic units of economic activity—in particular, “jobs”—are
adapting to a new world. The impact of algorithmic advance on the nature of production is
directly reflected in the evolution of occupations. This panel will focus on the evolution of new
types of work.

3. Updating the Production Function for the Algorithmic Economy
A Workshop to Explore Policy Implications
AGENDA
3
Questions: How might an updated production function help us better understand the evolution
of work?
Moderator: Maryann Feldman
Panelist: Frank Neffke – Occupational Complexity
Panelist: Lokesh Dani – Industry/occupation Relatedness
Panelist: Hyejin Youn – Diversity, Productivity and Scale
Discussion: Eliana Garces-Tolon
11:00 am - 12:00 pm Session 3: What precedents exist for an update to the production
function?
Context: Combinatorial innovation; learning by doing; innovation adjacencies; trophic levels;
platforms; embeddedness
Representing production algorithmically—that is, as the execution of a production recipe—
makes the mapping between innovation and the structure of work a direct one. Specifically, the
space of “production algorithms in use” maps to the space of “existing goods and services.”
Innovation involves both changes to existing algorithms and the creation of new ones, comprised
of new combinations of tasks. In this manner, innovation can be naturally represented as a search
on a space of algorithmic possibilities (or, equivalently, on a space of production recipes). This
panel discusses advances in mapping the space of innovative possibilities in our economy.
Questions: How well or badly adapted are conventional micro models of production when it
comes to representing innovation and production-led changes in the economy?
Moderator: Philip Auerswald
Panelist: Jessika Trancik – The Role of Design Complexity in
Technology Improvement
Panelist: John Zysman – The Platform Economy
Panelist: Rob Axtell – A Model of the U.S. Private Sector
Discussion: John Hagel
12:00 pm - 1:00 pm Lunch Break
1:00 pm - 1:30 pm Session 4: Lightning talks (4 minutes each)
Rama Akkiraju – The Evolution of Service Composition
Gary Bolles – Defining Work
Pia Malaney – A New Gauge Theoretic Foundation for Welfare Economics
David Nordfors – I-Thou Economics
Mickey McManus
Will Eden

4. Updating the Production Function for the Algorithmic Economy
A Workshop to Explore Policy Implications
AGENDA
4
1:30 pm - 2:30 pm Session 5: Understanding the “Rise and Fall” of
American Growth
Context: Slow productivity growth; regional inequality; offshoring; “end of innovation”;
automation; upskilling
An ongoing debate arrays one group of academics and policy makers who are concerned about
the adverse impacts of overly rapid technological change against another group concerned about
slow productivity growth and an end to major innovation. While research over the decades on
the science of science and innovation policy has illuminated a good deal about the
macroeconomic benefits of science-based innovation—primarily via increased productivity and
the introduction into the economy of new goods and services—it has not contributed
comparably to the study of algorithmic advance in the economy and how that advance affects the
evolution of work.
Questions: What is the current trajectory of economic change in the U.S.? How can better
models help policy makers better prepare for what is to come?
Moderator: Will Eden
Panelist: Andres Gomez – Atlas of Complexity
Panelist: John Chisholm – Combinatorial Innovation
Panelist: Deborah Strumsky – Mapping Technological Innovation
Discussion: Martin Fleming
2:30 pm - 3:10 pm Session 6: Break-out sessions – How can an update to the production
function serve to inform 21st
-century policymaking more effectively?
3:10 pm - 3:25 pm Coffee break
3:25 pm - 3:50 pm Report back and open discussions
3:50 pm - 4:30 pm Concluding Session: What have we learned?
Overview: Brad DeLong [provisionally confirmed]
Discussion:
Philip Auerswald
Brad DeLong
Martin Fleming
Jessika Trancik
Hal Varian
Eric Weinstein [provisionally confirmed]