Development, Implementation, Measurement and Management
Chapter 2: A Systems Approach
INTRODUCTION Chapter 1 raised issues that motivate the need for a better understanding of innovation, of innovation policy and of the use of statistical indicators in support of these activities. The challenge is dealing with, if not understanding, a global, complex, dynamic and non-linear system. This chapter lays out a systems approach to this with two objectives. The first is to provide a means of classifying the phenomena that are driving the issues discussed in the text. The second is to provide a basis for discussing dynamics and the importance of modelling the systems as a step towards understanding dynamics, and using this understanding to encourage policy learning through scenario analysis. A systems approach to economic and social systems has been part of the economic literature for a long time. Herbert Simon (1996) and Jay Forrester (1971) applied systems theory and dynamic analysis to many problems and shaped the thinking of generations of graduate students. Forrester used a dynamic systems model to support the work of the Club of Rome project, Limits to Growth (Meadows et al. 2004), which gave rise to subsequent systems analysis and policy debate. As models evolved, and more data were required to populate the variables in the models, attention was given to imposing physical constraints on the models so that they could not produce scenarios that required the consumption of more natural or human resources than were physically available. This was the subject of a UN Statistical Office project (Ayres 1978) and projects elsewhere (Gault...