Excerpt:  Strategy and Physics, addendum

The topic of physics, and how it informs strategy, continues to fascinate us.  We’d like to highlight four areas of insight worth further exploration:  the power of broad thinking (as personified by 2021 Nobel laureate Giorgio Parisi), the promise of quantum physics, the application of neuroscience to physics (neuromorphic computing), and the human dimension (the history of physics and physicists).

We earlier wrote about Parisi’s research into complex systems in the 1980’s, in particular his spin glass discoveries.  At first glance, you may have shrugged on reading about spin glass versus structured glass, maybe making the connection between this one complex system in materials science and others in economics, ecology, and evolution.  Or maybe not.  Maybe you just took our word for it.

We also referenced earlier the type of broad thinking during the two great turning points in modern science (the Enlightenment, the early 20th century), and examples of the type of minds that excelled at truly novel physics thought (Newton and Descartes in the former, von Neumann and Einstein in the latter).  We would argue that Parisi is one such broad thinker.  After all, finding order in seemingly disordered complex systems is not trivial.

“Parisi’s work on spin glasses and replica-symmetry breaking has contributed to the understanding of complex and disordered systems in a range of fields. But, says (Sorbonne professor Leticia) Cugliandolo, “He has worked in so many different branches of physics and made important contributions to all of them, so I think this was also very important in the award.”

“With researchers pursuing more siloed and specialised problems, it’s increasingly rare to hear about physicists making such broad contributions. But as a field theorist, Parisi has found wide-ranging applications for his skills…

“Parisi first made a name for himself in quantum chromodynamics, the study of interactions between quarks and gluons. He and Guido Altarelli developed a quantitative description of inelastic scattering among quarks and gluons; their 1977 paper on that work is Parisi’s most cited.

“Perhaps the clearest connection between Parisi’s contributions and the other half of the Nobel Prize recognizing climate modelling…  is his work on stochastic resonance and turbulence.  He and his collaborators found that, in nonlinear systems, just the right amount of noise combined with periodic forcing can generate a positive feedback loop and unexpected behaviour. In particular, solar radiation and noise from oceanic and atmospheric dynamics cause large, seemingly paradoxical periodic temperature variations on the order of 10°C.

“Parisi’s willingness to tackle complex problems has led him to make many fundamental contributions, and his Nobel Prize celebrates that type of work. “These are ideas that come from physicists working in the way that physicists do,” says (Oxford professor David) Sherrington. “If he hadn’t been working on very basic things, asking these very interesting questions, you wouldn’t have gotten to the other places that have been so useful.””*

* Middleton, C., “Parisi shares Nobel Prize for breakthroughs in understanding disordered systems,” Physics Today (December 2021): 17-9;  https://physicstoday.scitation.org/doi/full/10.1063/PT.3.4896

Parisi himself admits to having no interest in disciplines such as economics or financial markets* but many financial strategists looked at his work and saw gold.  After all, much progress had been made in applying quantum methods to asset valuation under uncertainty.  Less progress had been made into what actual investors might do with such information...