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The new wealth of nations: How STEM fields generate the prosperity and inequality of individuals, companies, and countries

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  • Podobnik, Boris
  • Christopher Crawford, G.
  • Lichtenstein, Benyamin
  • Lipic, Tomislav
  • Wild, Dorian
  • Zhang, Xin
  • Stanley, H. Eugene

Abstract

Fundamental research in physics has long been a prerequisite for computer scientists and engineers to design innovative products, such as laptops and cell phones. Technological innovations and fundamental research are both part of the so-called STEM fields (Science, Technology, Engineering, and Mathematics), which are known to substantially contribute to economic growth. However, the questions still remain: how much contribution do these fields make to both wealth accumulation and inequality at different levels of analysis? First, analyzing the lists of world’s wealthiest individuals, the Zipf plot analysis demonstrates that STEM billionaires contribute more to wealth inequality than their non-STEM counterparts. Analyzing the companies in the S&P500, we find that STEM firms contribute more to wealth inequality and have larger growth rates on average than the non-STEM firms. Finally, we show that the more STEM graduates in a country, the larger its GDP growth rate. In combination, we demonstrate that STEM is a fractal mechanism that drives wealth accumulation—and the wealth inequality— at different scales of economy—from individual wealth to firm valuation to country GDP.

Suggested Citation

  • Podobnik, Boris & Christopher Crawford, G. & Lichtenstein, Benyamin & Lipic, Tomislav & Wild, Dorian & Zhang, Xin & Stanley, H. Eugene, 2020. "The new wealth of nations: How STEM fields generate the prosperity and inequality of individuals, companies, and countries," Chaos, Solitons & Fractals, Elsevier, vol. 141(C).
    • Handle: RePEc:eee:chsofr:v:141:y:2020:i:c:s0960077920307189
    DOI: 10.1016/j.chaos.2020.110323
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    1. Bruna Bruno & Marisa Faggini, 2021. "To be a STEM or not to be a STEM: Why do countries differ?," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1535-1551, September.
    2. Podobnik, Boris & Dabić, Marina & Wild, Dorian & Di Matteo, Tiziana, 2023. "The impact of STEM on the growth of wealth at varying scales, ranging from individuals to firms and countries: The performance of STEM firms during the pandemic across different markets," Technology in Society, Elsevier, vol. 72(C).
    3. Fernandes, Leonardo H.S. & Silva, José W.L. & de Araujo, Fernando H.A., 2022. "Multifractal risk measures by Macroeconophysics perspective: The case of Brazilian inflation dynamics," Chaos, Solitons & Fractals, Elsevier, vol. 158(C).
    4. Crawford, G. Christopher & Joo, Harry & Aguinis, Herman, 2024. "Under the weight of heavy tails: A power law perspective on the emergence of outliers in entrepreneurship," Journal of Business Venturing Insights, Elsevier, vol. 21(C).

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