In the CNET article found here the author discusses how the recent boom in network research has led to startling revelations in the mathematics of network theory. Network mathematics, a field in the past studied primarily by physicists and mathematicians, is growing in complexity thanks to the collaborative efforts of sociologists, statisticians, and many other fields. The article argues that with continued research network mathematics may be as influential and robust as Newton’s Laws of Motion, and that those with the proper understanding of this field will be able to easily transfer that knowledge into profitable application in the “real world”.

One currently used application of network mathematics are the Nobel Prize-winning Black-Merton-Scholes option-pricing equations. The math used was a key component for creating options as well as a diagnostic tool for analyzing them. Some of the more clever analysts could use the equations to find “hidden options” in financial instruments and extract extra profits from them, or, alternatively, use the equations to customize innovative financial instruments for their clients. Because of the strength of these equations a significant number of companies are using real options as mathematical tools for pricing the risks associated with their own business investments.

Future applications of network mathematics could yield even greater results than with the option- pricing equations. Scientists and innovators will be able to search for “hidden networks” within complex systems to figure out whether those networks are being heavily burdened or incidentally underexploited (garnering excess profits). This type of analysis will drastically change how organizations handle their networks to manage value. In fact, individuals and institutions alike may be able to produce on the spot network activity to improve efficiency, reliability, and exploit opportunity, similarly to the way Black-Merton-Scholes equations empowered innovative traders to produce on the spot trading of options to better hedge or speculate. With the relative youth of on-line markets, it is the most fertile ground for developing new business models with network mathematics organizational principles in mind.