The document discusses a new paradigm called the "Rainforest" model for fostering innovation and economic growth. The Rainforest model focuses on cultivating human connectivity, trust, and collaboration across diverse groups through cultural transformation, rather than just describing economic systems. It proposes rules and tools to build innovation ecosystems where value comes from chaos and serendipitous interactions, such as breaking rules, open doors and listening, trusting others, experimenting together, seeking fairness, celebrating role models, and creating social feedback loops. The document argues this Rainforest approach nurtures what makes humans uniquely human in a way that can accelerate innovation and economic productivity.

1. Victor W. Hwang
RAINFOREST DYNAMICS
WHAT MAKES ECOSYSTEMS TICK?

3. Where are we today in history?

4. 1776
Classical economics
economic value from cost of raw inputs

5. 1871
Neoclassical economics
economic value from supply-demand equilibrium

6. 1990
Business cluster theory
economic productivity from geographic concentration

7. Today, it all seems unsatisfactory.
How do we cultivate systems,
not just describe them?

8. The world needs a new framework
to accelerate growth…
1776 1871 1990
?
2012

12. A new paradigm for innovation…
Plantation Rainforest

13. While plants are harvested most
efficiently on farms,
weeds sprout best in Rainforests.

14. Rainforests nurture serendipitous interactions...

15. A radical shift in perspective,
from this...

16. … to the real world.
Not gears, but human beings.
Landlord
Land Engineer
Labor
Output
Capital
Investor
Technology?
Scientist

17. And real human beings are separated
… by geography, culture, language, social networks, and
lack of trust.

18. This happens across entire systems.
Across an entire system

19. Elinor Ostrom, 1933-2012
Nobel Prize in Economics, 2009
Zero-sum games can indeed
become positive-sum

20. The Secret of Innovation Ecosystems
Economies thrive when culture
Across an entire system
overcomes social barriers and fosters
connectivity, trust, and collaboration
between diverse people…

21. But how do we design networks
where value comes from chaos?
Can we engineer serendipity?

22. It’s not just creative destruction.
Far more important—and harder—
is creative reassembly.

23. The culture of the American frontier
required strangers to trust fast, or die…

24. Rules of the Rainforest
Rule #1: Break rules and dream.
Rule #2: Open doors and listen.
Rule #3: Trust and be trusted.
Rule #4: Experiment and iterate together.
Rule #5: Seek fairness, not advantage.
Rule #6: Err, fail, and persist.
Rule #7: Pay it forward.

25. How do humans change behavior?
Across an entire system

26. Tools to Build Rainforests
Tool #1: Learn by Doing
Tool #2: Enhance Diversity
Tool #3: Celebrate Role Models and Peer Interaction
Tool #4: Build Tribes of Trust
Tool #5: Create Social Feedback Loops
Tool #6: Make Social Contracts Explicit

27. What does it mean?
OLD NEW
1. Factors of production 1. Cultural transformation
2. Clusters, technoparks, 2. Human connectivity, not just
and incubators physical proximity
3. Local first, then global 3. Wherever the value chain goes
4. Writing smaller checks = 4. Fund managers and their
venture capital human qualities matter
5. Hiring by skills and 5. Character, trust, respect, role
resume models matter
6. Plan specific outcomes 6. Experiment, adapt, iterate
7. Measure output 7. Measure environment

28. Rainforests thrive by nurturing
what makes us uniquely human.