System Value Expansion

Definition

The phenomenon where total system value grows faster than deployed capital due to the combined effects of recycling and capability returns. REA formalises how R and γ interact to create non-linear value growth.

Formula

Example

Traditional $100K grant creates $100K-170K of value once. The same $100K in a regenerative system with R=0.9, γ=1.5 creates $2.67M of system value over 30 cycles—a 26× multiplier.

Source

REA Section 4.2