Using a Systems Lens and Transaction Data to Visualize the Architecture of the Economy
DRUID15 Conference on the Relevance of Innovation
Margaret Dalziel, Xiangyang Yang, Simon Breslav, Azam Khan, Jianxi Luo
September 2015
40 pages.
We provide visualizations of the architecture of the economy that are informed by theory, empirically based, and meaningful at multiple levels of analysis. The systems-based view of industry architecture dis-aggregates the economy into demand-based vertical sectors in which firms collaborate and compete to collectively satisfy a set of similar demands. Within vertical sectors, inter-industry relations are hierarchically structured with firms in customer service industries depending on firms in upstream industries that perform a range of wholesale, manufacturing, supplier, and complementary roles. Our visualizations incorporate data on over 53,000 of the largest inter-firm transactions in the US economy between 1976 and 2010. They show the value of transactions within and between vertical sectors and sector roles and thereby enable an accessible, yet richly informed understanding of the nature of inter-industry relations that comprise the architecture of the economy.