Youngjin Yoo, from LSE, will present his research, 

The Runtime Revolution: Rethinking Value, Technology, and the Firm

Modern social science was built for a world of scarcity. Its theories of value assume diminishing marginal utility, its theories of technology assume replication of predetermined outputs, and its theories of the firm assume organizations exist to economize on the frictions of exchange. Generative computational systems challenge each of these foundations. They create value through abundance and contextual generation; they instantiate unique outputs at runtime rather than replicating fixed designs; and they produce surplus value from unanticipated recombination that existing organizational forms cannot fully capture. This lecture develops new theoretical foundations for understanding economic order in the age of generative machines, arguing that the runtime revolution — the shift toward systems that generate value through contextual instantiation — requires fundamental reconceptualization across three domains. First, I introduce the Three Flips as the technological transformation underlying this revolution. The Digital Flip shifts the logic of technology from scarcity to ubiquity. The Organic Flip introduces indeterminacy by deferring value determination until runtime, creating vast combinatorial spaces of heterogeneous resources. The Semantic Flip enables recombination at the level of meaning rather than syntax, so that components combine in unanticipated yet coherent ways. Second, I develop a theory of computational value that addresses a possibility absent from existing demand theory: individual-level increasing marginal utility. Because generative systems adapt, learn, and contextualize, successive interactions become progressively more valuable — not because the user changes, but because the good itself evolves. This is not automatic; it must be actively produced through deliberate design. Third, I argue that generative externalities necessitate a new theory of the firm. Transaction costs gave rise to hierarchies; network externalities gave rise to platforms. In the generative economy, the firm exists to produce the increasing marginal utility that the three flips make possible but do not guarantee — and to capture the surplus value from semantic recombination that no designer anticipated and no contract specified. Together, these reconceptualizations open a broad theoretical and empirical agenda for understanding how generative machines transform value, technology, and the firm.