Systems, Volume 6, Issue 2 (June 2018) – 18 articles

The paper provides empirical analysis of interactions between monetary and fiscal policy in the Czech Republic and document changes in policy conduct across the time. To this end, we build and estimate a six-variable Bayesian VAR and propose some refinements to the modelling framework. These improvements make it possible to better capture the main features of the economic system populated by both macroeconomic policy authorities. The results point to the lack of complementarity between policy actions adopted by the authorities and suggest that there is still enough room for enhancing the effectiveness of economic policies. Full article

This article presents comprehensive typology of all possible relationships among inputs of an economic system, their productivity, and output. Each situation is given an exact name explaining how intensive and extensive factors contributes to the system development. The exact contributions of the factors can be counted by so-called dynamic intensity and extensity parameters. The article describes logic of the parameters, discusses their advantages and problems and assigns their values to the presented nomenclature of the developments. The parameters are further compared with growth accounting methods and their use is demonstrated on the development of macroeconomic system on the national economy level when it is counted how intensive and extensive parameters contribute to the Czech and German GDP development in the period 1991–2017. The analysis confirms that the parameters can be used as an alternative methods to growth accounting and that managers of any economic system should pay attention whether a system achieves positive value of the dynamic intensive parameters in long run. Full article

Recent decades have seen a rapid increase in the complexity of goods, products, and services that society has come to demand. This has necessitated a corresponding growth in the requirements demanded of organizational systems and the people who work in them. The competence a person requires to be effective in working in such systems has become an area of increased interest to scholars and practitioners in many disciplines. How can we assess the degree to which a person is executing the competencies required to do good systems work? Several industries now utilize maturity models in the attempt to evaluate and cultivate people’s ability to effectively execute complex tasks. This paper will examine current thought regarding the value and pitfalls of maturity models. It will identify principles and exemplars that could guide the development of a Maturity Model of Systems Thinking Competence (MMSTC) for the varied roles people inhabit in systems contexts. Full article

Cloud-based enterprise resource planning (ERP) systems emerged around the new millennium, and since then there has been a lack of research regarding the evolution and update processes of these systems. From the users’ perspective, updates in a traditional on-premise ERP system are carried at their own request; while cloud-based ERPs are compulsory updated. Through an established ERP lifecycle framework, this study investigates how the process of updates is conducted in a cloud ERP context, from both the users’ and vendors’ perspectives. A multiple case study was conducted in Norway at 10 client organizations, as well as a cloud ERP vendor. Our main findings suggest that the vendor and the users view the process of updates differently. The main challenges with the process of updates from the users’ perspective are the size and date of the updates, lack of information and communication during the process, and extinction of certain functionalities. Yet, the main advantages are that all system users will always have the same version of the system, users do not need to spend time on updating the system and paying attention to the ERP market, which leads to more focus on their core competences instead. Full article

Resilience in a critical infrastructure system can be viewed as a quality that reduces vulnerability, minimizes the consequences of threats, accelerates response and recovery, and facilitates adaptation to a disruptive event. In this context, comprehensive knowledge of the environment and of the main factors whereby resilience is determined, limited, and affected can be said to represent the fundamental precondition for strengthening the resilience of critical infrastructure elements. Based on this idea, the article defines the initial and functional conditions for building and strengthening the resilience of critical infrastructure elements, i.e., the resilience concept in a critical infrastructure system. Subsequently, factors determining the resilience of these elements are identified, both in terms of technical resilience (i.e., robustness and recoverability) and organizational resilience (i.e., adaptability). In the final part of the article, these factors are presented in greater detail in the context of case studies focused on the electricity, gas, information and communications technology, and road transport sectors. Determination of these factors is examined with regard to the intensity of a disruptive event and the performance of the respective critical infrastructure element. Full article

To remain competitive in the current market, an enterprise must differentiate itself based on higher value propositions. For this purpose, since improving the product or service performance can reach some limits, one potential solution is to move towards new combinations of products and services. This evolution, called servitization, leads to the generation of Product Service Systems (PSS). Servitization requires not only a clear understanding of enterprise core business, but also a clear vision of the prevailing trends and challenges of PSS development from both the business and technological points of view. In addition, the evolution path should be aligned with the enterprise strategy. This paper first highlights the notion of symbiotic PSS where product systems and service systems, and their stakeholders, interoperate seamlessly based on a win-win approach. Then, it proposes a PSS Conceptual Framework (PSS-CF), which can be applied in the early stages of servitization to increase the understating of PSS dimensions and to facilitate the prioritization of the servitization investments. The framework dimensions were discussed in several iterations, from both the academic and industrial points of view, in the frame of a European research project. Moreover, the applicability of the framework was studied in four different industrial use-cases. Full article

Broadly speaking, natural systems thinking is defined as a way of thinking that endeavors to conceptualize the functioning of living organisms as dependent on predictable forces at work within and around them. Systems concepts help to bring the function of those variables and life forces into better view. Psychiatrist Murray Bowen over the course of several years and a major research project at the National Institute of Mental Health (NIMH) developed a theory of the family as a system. He considered his theory a natural systems theory, “... designed to fit precisely with the principles of evolution and the human as an evolutionary being” The human family system, a network of relationships, linking each family member to every other, responds dynamically to its environment and the conditions to which all members must adapt. Each family member’s behavior influences that of every other to some degree. Although ideas of a general system theory and cybernetics were developing at the same time, Bowen reported that he knew nothing about those ideas at the time he developed his thinking. He believed that his systems orientation derived from his study of systems in nature and not from the “systems thinking” of the period. An emerging systems paradigm in biology and evolutionary thinking focuses on collective behavior and appears consistent in principle with Bowen’s thinking about the family. The collective behavior of the family unit cannot be understood by looking at the characteristics of the individuals who comprise it. The human family presents a highly integrated, interactive system of adaptation. Its roots extend along the path of hominid evolution and share common elements with other evolved collectivities. The complex development of the human brain appears to have co-evolved with the interactional processes of the family. The Bowen theory provides the potential for an integrative theory of human behavior reaching beyond the focus on the physiology and psychology of the individual to the operation and influence of the family system. Such an integrative theory can offer broader explanatory and investigative pathways for understanding physical, emotional, and social problems as they emerge in human activity. Full article

This article describes preliminary research (a proof of concept test) on the potential value of formalizing Isomorphic Systems Processes (ISPs) based on systems science research using the Monterey Phoenix (MP) language, approach and tool. MP is a Navy-developed framework for behavior modeling of system, process, and software behaviors, and has a demonstrated ability to expose emergent behaviors in engineered, complex systems. In this article, we introduce the related lines of research and discuss and demonstrate use of MP in modeling ISPs. We accomplish the demonstration through a small example of the Cycles ISP and discuss several possible variations generated from an MP model of this single ISP. Among these variations, we found patterns of oscillation, lifecycle, recycling, positive reinforcement, negative reinforcement, and combinations thereof, all derived from a common model of a cycle comprising six lines of MP code. Although the detection of three of these patterns (oscillations, lifecycles, and recycling) was anticipated, the involvement of the other two patterns (positive and negative reinforcement) were not anticipated in pre-model analyses and provided evidence to resolve a dispute over the application of ISPs in systems engineering. From conducting this initial experimentation at the intersection of different research domains, we found that using MP to formalize relationships within and among presently non-formally-described ISPs yielded new insights into system processes. Full article

Our research builds upon a theory of emerging-state actors. We look to apply the theory in analyzing intervention and containment policies to use against emerging-state actors, using the Islamic State of Syria & Iraqi (ISIS) as the case study. We show utility across four military applications of simulation: understanding, forecasting and responding to adversary and societal behavior; understanding enemy command and control structures; and analyzing, forecasting and planning courses-of-action (COA). To do this, we created two baseline scenarios—one replicating the historical foreign intervention against ISIS and a counter-factual where no foreign intervention occurred. We then conducted a suite of experiments on contemporary military intervention policies in isolation, combination, at different timing windows and under hypothetical “best case” conditions as well as operationally constrained. Insights of these experiments’ tests include the influence of ethnographic envelopes, timing windows, the importance of actor legitimacy and the marginally diminishing returns of combat actions. Finally, we test a policy based on emerging-state actor theory incorporating these insights against the contemporary policies, historical baseline and two falsification policies. The emerging-state actor COA performs significantly better than others. Our research contributes a simulation, called the Emerging-State Actor Model (E-SAM). This simulation includes military, economic, political, social and information aspects (known asDIME-PMESII simulations) for both researchers and military planners concerned with irregular conflict. Full article

This paper proposes a new theory of non-state actors who engage in irregular warfare to seize territory and govern openly, called emerging-state actors. Emerging-state actors arise in periods of irregular conflict, such as the so-called Islamic State of Iraq and Syria (ISIS). The theory tries to answer “what is/was” the Islamic State because emerging-state actors differ notably from other non-state actors and insurgencies in irregular conflict. Causal diagrams as well as key propositions present the theory. Testing occurs against a system dynamics simulation called the “Emerging-State Actor Model” (E-SAM), loaded with the ISIS historical case in Syria and Iraq. Through experiments the simulation confirms evidence of emerging-state actor behavior as well as a range of contingencies showing their applicability. The novelty of E-SAM as a simulation for irregular conflict is its ability to handle multiple forms of conflict including political grievance, terrorism, insurgencies and emerging-state actors. E-SAM can also simulate multiple actors within each conflict: domestic and foreign state actors, local conflict actors, as well as different ethnographic groups. It can be parameterized with scenarios to simulate a variety of scenarios: ISIS in Libya, Boko Haram in Nigeria, Taliban in Afghanistan and even expatriated ISIS fighters returning to pursue new conflicts such as in Indonesia. Full article

Sustainability and climate change are massive global problems that stem from the industrial world’s relentless pursuit of growth. Transitioning to a sustainable world requires understanding citizen mental models and our addiction to short-term rewards. This paper uses causal loop diagramming (CLD) to describe the general, prevailing citizen viewpoint and to propose a wider mental model that takes the natural world and sustainability into account. The corporate profit model that depicts the wider view acknowledges and describes the important impacts and influences of political pressure on our social, economic, and ecological systems. Adopting the wider mental model can help the industrialized world design better policy to achieve both national and United Nations (UN) sustainable development goals. Full article

Increasingly digital communication, social media and computing networks put the end-users at the center of innovation processes, thus shifting the emphasis from technologies to people. In the private sector, this shift to user-centricity has been conceptualized under such approaches as Service-Dominant Logic and Open Innovation 2.0. Public sector conceptualizes the change through the New Public Governance and Open Government paradigms and suggest that the public value is no longer created by the governments alone but in collaboration between the public entities, private sector, civil society organizations and citizens. While traditional approaches to public engagement and governmental transformations remain relevant, this article focuses on the growing potential of networked urban communities to solve the social problems. It expands the co-creation research field and suggests a typology discerning co-creation patterns when enhancing the public spaces with a community-wide participation with the use of creative, innovative and cooperative Information and Communication Technologies’ applications. The sample for web-based monitoring consists of 10 digital applications linked with design and improvement of public spaces in Vilnius, Lithuania. The proposed typology framework gives an overview of the state-of-art in the interaction between people, places and technology. The research helps to discern how different technological, organizational and other social factors influence and shape the patterns of co-creative initiatives. Full article

The main argument of this work is that innovation flourishes and emerges in a creative environment where the actors interact freely, to the extent that this environment is a complex adaptive system. Public or institutional policies, trying to induce innovation, must be careful to not stifle or interrupt the emergence of novelties in the path from creation and conception to market involvement. Our proposed model argues that innovation emerges wherever evolution, learning, mutation, and competition between individuals and firms are permitted, without restrictions or pre-defined paths to the market. We describe two cases of innovation by way of example: the first case shows how several—and sometimes anonymous—elements interact and compete in a typical environment of innovation, while the second case shows how continuous policies to foment innovation may create results to the contrary. In addition, we show technology clusters as cases where the emergence of innovation can be fostered by policies that observe the complex adaptive system characteristics. Full article

This paper contains the description of a successful system dynamics (SD) modeling approach used for almost a quarter-century in secondary schools, both in algebra classes and in a year-long SD modeling course. Secondary school students have demonstrated an ability to build original models from the news, write technical papers explaining their models, and present a newfound understanding of dynamic feedback behavior to an audience. The educational learning theory and instructional methods used for both the algebra and modeling courses are detailed, with examples. Successful student SD modeling experiences suggest the SD approach can expand the sophistication of topics that secondary school students can understand. Full article

Placing online academic networks in the framework of social, cultural and institutional “deterritorialization,” the current paper aims at investigating the functionality of these new forms of transnational and trans-organizational aggregations as knowledge brokers. The emphasis is laid on the influence of human collective intelligence and consistent knowledge flows on research innovation, considering the role of organizational support within higher education systems. In this respect, the research relied on a questionnaire-based survey with 140 academics from European emerging countries, the data collected being processed via a partial least squares structural equation modelling technique. Evidence was brought that, as knowledge brokers, online academic networks are systems aimed to support the access to human collective intelligence and consistent knowledge flows which exert a positive influence on research innovation, both directly and indirectly, by means of formal and informal organizational support. As facilitators of collaborative environments for individuals with specialized knowledge, competence, expertise and experience, online academic networks have set themselves up as an agora for academics worldwide and as an outlet for their acumen and literacy. Full article

This report describes the Integrated Assessment Model TIAM-MACRO, which is a Ramsey-type macroeconomic growth model linked with a technology-rich engineering model of the energy-system and with a stylized sub-model of climate change. TIAM-MACRO contributes to coherent and consistent policy analyses at both the world and regional level and correlates demand for energy services to macro-economic developments across regions and time until the end of the 21st century. With the help of this model, two contrasting scenarios are defined related to the reference development (BASE) case and the 2 °C (2DS) case that follow long-term policies on climatic change mitigation in the spirit of the Paris agreement. Finally, we define ex-post market and non-market damages together with the damages related to Local Atmospheric Pollutants (LAP). The stringency of the 2DS case requires the complete restructuring of the energy and transport systems to be relying on carbon-free technologies and fuels together with technologies of negative emissions, at high costs. The study concludes that carbon policies not only consist of an insurance against the risk of climate change but also improve the ambient air quality, as they have secondary benefits that compensate for part of the cost of carbon control. However, the stringency of the 2DS case is so demanding that the cost of climate policies is above benefits. Full article

Floodplains, as seen from the flood risk management perspective, are composed of co-evolving natural and human systems. Both flood processes (that is, the hazard) and the values at risk (that is, settlements and infrastructure built in hazardous areas) are dynamically changing over time and influence each other. These changes influence future risk pathways. The co-evolution of all of these drivers for changes in flood risk could lead to emergent behavior. Hence, complexity theory and systems science can provide a sound theoretical framework for flood risk management in the 21st century. This review aims at providing an entry point for modelers in flood risk research to consider floodplains as complex adaptive systems. For the systems science community, the actual problems and approaches in the flood risk research community are summarized. Finally, an outlook is given on potential future coupled component modeling approaches that aims at bringing together both disciplines. Full article

Modelling of economic systems is traditionally associated with a mathematical formalism that has its drawbacks and limitations. This study applies system dynamics as a specific modelling technique that enables us to modify and elaborate existing economic models and improve them both from a theoretical perspective and for practical applications. More specifically, the Solow-Swan growth model is enriched by feedback and non-linearity based on its extension by the energy sector. The influence and role of renewable resources are considered in this enhancement. The developed model is tested in two different scenarios and utilizes sensitivity analysis as the primary tool. Acquired outcomes offer a new perspective on the economy–energy nexus based on real data and demonstrate that system dynamics can be successfully used as a modelling tool even in the theoretical economics as a traditional discipline. Full article