Categories
Thinking out loud

2013 – Setting some direction

Perhaps I am taking a risk by publishing some of my resolutions for 2013 here. But this post will probably help me to connect my own learning with those of my close friends, partners and fellow adventurers that follow my blog.

During 2012 my focus shifted strongly into the manufacturing sector where I am working on improving innovation systems, building domestic  industries, strengthening the role of universities and research organizations to create new platforms from where to compete. This is stimulating work where I combine my interests in engineering and science, with soft issues such as networks in industry, market signals and systems and innovation. I also find that my ability to work both with business people, academics and researchers is handy. Take a look at my page Stimulating industrialization, science and innovation to see some of the activities I have been involved with in 2012 in this area.

In 2013 I want to increase my focus on the manufacturing sector. Key research questions for me are:

  • How does competencies learned by organizations such as firms become developmental platforms for industries?
  • How can I use the insights from complexity to accelerate the formation of new industries, new markets and deeper industrialization?
  • How can new technologies, questions, ideas be used to upgrade traditional industries?
  • What is the role of universities and research organizations to upgrade the industries around them?
  • How can learning and experiments in firms be disseminated to accelerate exploration and exploitation of ideas?

As much of my work in this area is focused on Southern Africa, I am also keen to see how some of the insights from here can be tried elsewhere.

As far as my academic research is concerned (I have a post doctoral research fellowship position with the Vaal University of Technology), I must concentrate more on my academic publications and feeding the insights gained in working with industry back into the formal university system. Here my work will be focused on understanding how technological competencies can be created or leveraged to create new markets and new competencies. In the image below

I show the technological choices that a particular group of enterprises that I am working with face.

Of course, the manufacturing sector is a clumsy way to draw a boundary around a system, so just to put some of your concerns to rest, I am still committed to the knowledge and service sectors, technological intermediaries and the local economies in developing countries. I have found that these are useful perspectives to look at manufacturing activities and how it evolves. Manufacturing to me is not only about making products, it is also about matching competence with opportunity within a given societal context. It connects wealthy people with poor people, clever dreamers with needy users, highly qualified people with poorly educated people, nerds with geeks, domestic ideas with international realities.

What makes my approach different is that I am working from demanding customers and markets back to the basic operations, and not from suppliers towards markets. I am not doing marketing promotion, I am developing supply side based on current and future needs. It means that I will help to better articulate demand criteria, and will then try to shape the institutional system and manufacturing capacities to work towards these needs. Central to all of this are developmentally minded organizations like universities, industry bodies and even consultancies that wants to develop a particular sub sector, technological competence or outcome.

In 2013 I undertake not to be a problem solver, but to be a better facilitator of deeper thinking, an adviser that assists my customers and counterparts to better recognize patterns, constraints and opportunities. I will assist my customers to become change agents within the systems that they work in.

Lastly, I want to work more with systemic thinking and complexity. Watch this space for some announces about a new podcast series and a new research field in collaboration with Marcus Jenal

Categories
Thinking out loud

Linking – Beyond Linear Development Trajectories: What if there were 5 clusters of quite different developing countries?

For my first post of 2013 I share a post from “Aid on the edge of Chaos” that I found challenged my thinking. The title and all the content relates directly to the site.

We humans are supposedly very good at recognizing patterns, with some evolutionary theorists even crediting our survival and evolution with this trait. However, we also tend to struggle to see beyond patterns that we have classified, almost like a needle on a old record. Some examples are the way we divide the world into developed and underdeveloped, industrial and emerging. Although we all know that these classifications are in conflict with our own experience of the world (think of the sophistication of the Indian Pharmaceutical sector) we still are trapped in our labels that we use.

Below is a link to a post on Aid on the Edge of Chaos, featuring the work of Andy Sumner and Sergio Tezanos Vázquez where they explore new approaches to classify developing countries.

Beyond Linear Development Trajectories: What if there were 5 clusters of quite different developing countries?.

The image below is from the original post on the Aid on the edge of chaos blog site. Take a look at their post and then think again how you label the countries that you work in.

  • What happens if you classify the countries differently?
  • What are the implications of just changing the classification?
  • How does their classification scheme challenge your own way of classifying regions?
Clusters proposed by Andy Sumner and Sergio Tezanos Vázquez
Categories
Thinking out loud

2 links to make you think

The first is an article by Iliana Olivié (The Guardian) about the importance of looking at rising inequality as the end of the MDGs draws near. Interestingly, you don’t (just) curb inequality by trying to cap the income of the rich, this seems to lead to capital flight or even brain drains. A broad range of interventions are recommended, ranging from investments in education, health, research and development, banking regulation, industrial policy and monetary policy (to cite Iliana).

The second is a recent post by Marcus Jenal. We’ve been working together on trying to understand the implications of the recent developments in complexity theory and systems thinking on economic development. In this post, Marcus explains some of the challenges that we face as development practitioners, especially with regards to the need of development projects to have clearly defined goals while complexity and systems theories all advocate against this approach. I commented on his post, so also take a look at that.

 

Categories
Addressing persistent market failure Private Sector Development Process and Change Facilitation Sustainable Economic Development

The MaFI-festo: changing the rules of the international development “game” to unleash the power of markets to end poverty

I am supporting great initiative of the Market Facilitation Initiative. Lucho submitted the online debate we’ve been having since 2008 into the annual Harvard Business Review/McKinsey M-Prize for Management Innovation (called MIX). I am a member of the MaFI discussions.

Lucho provides the following short summary “Bilateral and multilateral donors and NGOs re-write the rules of the International Development Cooperation System to unleash the real potential of markets and the private sector to end poverty at a large scale… easier, faster and cheaper. How? Through trust-based partnerships, complexity science, effective organisational learning, systemic M&E and co-evolutionary experimentation.”

The solution offered by Lucho (based on the MaFI dialogue) is:

A series of national and international conferences, seminars and workshops to bring donors, NGOs and leading firms to identify the rules of the development “game” that need to change to make market development initiatives more inclusive, accountable, responsive, innovative, holistic and cost-effective.
MaFI (The Market Facilitation Initiative) started in 2008 and has more than 240 experts from all over the world working in NGOs, donor agencies, private firms and academic institutions. The aim of MaFI is to advance policies and practices based on facilitation and systems thinking to make markets work better for the poor and the environment. MaFI is a working group of The SEEP Network with the technical support of Practical Action.

After almost two years of of discussions, MaFI members produced a manifesto (The MaFI-festo) which has three main objectives:

  •  To focus the attention of key stakeholders on a set of strategic changes that are urgently needed if the international development system is to effectively harness the full potential of markets to reduce poverty at scale and protect the environment
  • To promote convergence and collaboration between bilateral and multilateral donors, practitioners and academic researchers working in the fields of “aid effectiveness” and inclusive markets.
  • To inspire NGO leaders to promote the adoption of systems thinking and facilitation approaches in their own organizations and networks to increase their ability to interact with the private sector and leverage the full potential of inclusive market development programs.

The MaFI-festo focuses on four areas (in no particular order of importance):

  1. Changing how we work in the field
  2. Balancing flexibility and accountability
  3. Building the capacity of facilitators
  4. Changing what and how we measure change

The MaFI-festo will give content and focus to the series of conferences, seminars and workshops mentioned above. These are called the MaFI-festo Dialogues.

What must you do?

To see the application go to http://www.managementexchange.com/node/62551

Find out more about the M-Prize go to: http://www.managementexchange.com/m-prize/long-term-capitalism-challenge

We need you to:

Comment, vote and throw in your ideas!

With each comment, like, or Tweet our submission goes up in the rankings!

Categories
Complexity and Evolutionary Thinking Thinking out loud

What do we mean with systemic?

There are hundreds of ways of describing the word systemic. Yet in development it is important that we at least narrow down the definitions as to not cause confusion.

Richard Hummelbrunner describes three emergent features of methods and approaches from systems thinking:

  • An understanding of interrelationships
  • A commitment to multiple perspectives
  • An awareness of boundaries

Richard then explains that each of these features focused in the development of the systems thinking field in the last fifty years. Up to the 60s, the focus was interrelationships. This was followed by an increasing awareness of the different perspectives as a critical issue. This affected the way people recognized interrelationships. In the 1980s the focus shifted towards the boundaries of the system, as practitioners realized that they system had to be bounded in some way to allow for diagnosis. This raised the ethical question of who decides what is part of the system and what is not, as the shifting of these boundaries has great influence on what is revealed and understood when the system is diagnosed.

Our firm, Mesopartner, is known for the “Systemic Competitiveness” framework that we use in our work. The framework originated within the German Development Institute in the mid 90s. One of the common misunderstandings about Systemic Competitiveness is that people confuse systemic with systematic. The latter in my mind would refer to a very detailed and exact way of understanding and doing things that may be very rigid. This may detract from the fact that to really understand a system we might have to embrace complexity, dilemmas and issues in a more dynamic way, something that a very recipe driven systematic approach may not allow.

Reference:

Williams, B and Hummelbrunner, R. 2010. Systems concepts in action: a practitioners toolkit. Stanford Business Books.

ESSER, K., HILLEBRAND, W., MESSNER, D. & MEYER-STAMER, J. 1995.  Systemic competitiveness. New patterns for industrial development. London: Frank Cas.

MEYER-STAMER, J. 2005.  Systemic competitiveness revisited. Conclusions for technical assistance in private sector development. Mesopartner

Categories
Complexity and Evolutionary Thinking

Linking to Complexity

If you are interested in the topic of complexity then surf over to Marcus Jenal’s page where he provides some insights on the topic. Marcus is a very good thinker and practitioner I always enjoy the questions he asks.

Also take a look at Aid at the Edge of Chaos and Owen Abroad blogsites for more insights on complex adaptive systems and development.

Categories
Bottom Up Development Complexity and Evolutionary Thinking Local Economic Development

More on bottom up development

I was reminded by a reader that Robert Chambers of the IDS is known to be a strong proponent of bottom up development, because it overcomes some of the issues of the complexity of development.

At the same time I found a recent blog post by Ben Ramalingam at the Aid on the edge of chaos blog about a meeting held earlier in May about Complexity and International Development. I am very jealous because Eric Beinhoecker, Robert Chambers and Ben Ramalingam (lead author of a fantastic paper  of a 2008 Overseas Development Institute working paper ‘Exploring the Science of Complexity: Ideas and Implications for International Development and Humanitarian Efforts’) were all in the same room talking about complexity and development. Can we have some of this in South Africa too? I have in previous posts mentioned some of the work these gurus are doing on complexity.

For some insights into the discussions at that meeting head over to the blogsite of Duncan Green (Oxfam) where he wrote a post titled “so the world is complex – what do we do differently“.

Perhaps what I neglected to say this explicitly on my previous post is that bottom-up development is about much more the Local Economic Development. You would have noticed that in my recent posts I have associated bottom up diagnosis with innovation systems, industrial development, advanced manufacturing, the service sector and many other topics. We have to strive to understand the system, and not get caught up with specific target groups. This will take us further from understanding and carefully intervening into the complex local system.

Also to clarify. You do not diagnose the complexity of the system by analysing data. You do this by engaging with people, and allowing them to reach a deeper understanding of the system that they are part of.

Let me know if I again forgot to say something!!

Categories
Complexity and Evolutionary Thinking Thinking out loud

Crossposting from Aid on the Edge of Chaos

I enjoy the Aid on the Edge of Chaos blog. Although I have listed them under “other blogs and podcasts I like”, I have decided to highlight two of their recent posts.

The first post, “From the Neoclassical Logic Piano to All That Jazz” is about a recent speech by Dr DeLisle Worrell, Governor of the Central Bank of Barbados. Worrell focused on the problems with economics today, with much of his talk given over to ‘complexity economics‘. If I said anymore here I would spoil a really good posting.

The second and more recent posting, “Complexity, crises and moving beyond recipes“, is about complexity in development. To quote from the posting directly “The argument that modern organisations have to deal with complexity on a daily basis is fast becoming one of the least controversial statements any analyst, policy maker or practitioner can make. But what this actually means in practice is up for debate.

I don’t get any commission!
Go there, read it.

Categories
Complexity and Evolutionary Thinking Local Economic Development Process and Change Facilitation

Local economic development as an evolutionary process

Modern evolutionary economics is about 20 years old now, and many research programmes continue to add to the content of the subject. I think that development practitioners have a lot to learn from this subject. When we work at the local level, with local stakeholders and local resources, we are often confronted by the failures of traditional economic models (for instance the obsession with supply and demand). For instance, traditional economics often focus on distribution or allocation of wealth, while in evolutionary economics the focus is more on wealth creation. Traditional economic models assume that you can use the data of the past to make reliable predictions about the future. Just this simple insight will already change many LED approaches that emphasize working with the youth and the marginalised (solving an allocation problem) towards understanding the systemic interaction of economic technologies, social technologies and physical technologies that co-evolve to create wealth.

To be more precise, an economy should be recognised as a complex adaptive system (Beinhocker, 2007; Ramalingham, Jones, Reba and Young, 2008). This means that the economy is a system of interacting agents that adapt to each other and their environment in a complex way. Complex adaptive systems are sub-systems of open systems. It recognises that change and advancement are forces within the system created by the agents, and that it takes energy to create and process information, and to create order.

Dosi and Nelson (1994) explains that “evolutionary” implies a class of theories that tries to explain the movement or change of something over time. It furthermore involves both random elements which generate or renew some variables, as well as mechanisms that systematically create variation. Central to these theories are the concepts of deductive and experimental learning and discovery.

Beinhocker explains a simple formula that is common to all evolutionary systems. Firstly, a system needs to create variety (for instance through many innovators trying new things), and then there must be some selection or fitness criteria (often this is provided by markets). Next there is a selection process, where the ‘best’ or rather most-suitable designs are selected, and thereafter these choices are amplified or repeated (also known as imitated).

So if you think of your local economy, then consider how certain businesses came about. The variety of businesses is a direct result of novelty or variety creation, and how they ‘fit’ to the criteria of local consumers,resulting in these business models being ‘chosen’. Every now and then, a business person with a new or different idea comes along, and this in many cases may even result in local consumers changing their fitness criteria. This describes a process where economic resources (as well as labour and technology) are continuously being allocated to those who are able to combine or create new ideas, new products, and new business models.

In the next few posts I will try to delve deeper into this topic, as I believe that it holds many important insights to why local economies grow in such an unpredictable and dynamic way, and why so few local governments or organised business in Southern Africa struggle to have any real positive and leveraged effect on local economies.

References and additional reading:

BEINHOCKER, E.D. 2007.  The origin of wealth. Evolution, complexity, and radical remaking of economics`. London: Random House.

DOSI, G. & NELSON, R.R. 1994.  An Introduction to Evolutionary Theories in Economics. Journal of Evolutionary Economics, Vol. 4(3).

NELSON, R.R. 1995.  Co-evolution of industry structure, technology and supporting Institutions, and the making of comparitive advantage. International Journal of the Economics of Busienss, Vol. 2(2) pp:171-184.

RAMALINGHAM, B., JONES, H., REBA, T. & YOUNG, J. 2008. Exploring the science of complexity. Ideas and implications for development and humanitarian efforts.  Working Paper 285, London: Overseas Development Institute.

Categories
Complexity and Evolutionary Thinking Thinking out loud

January lazy linking

Excuse me for being a bit slow….but I cannot shrug off the holiday feeling yet.  So to make up I provide you with links to some interesting articles in other blogs that I have read in the last few days:

Urbanisation,complexity and poverty – or why aid agencies should be reading Jane Jacobs

This is an excellent article about the famous Jane Jacobs and how she described cities as living ecosystems. The author describes several insights that development agencies should learn from Jane Jacobs and other complex systems authors.

The author of the “Aid on the edge of chaos“, Ben Ramalingam, is also the lead author of a fantastic paper  of a 2008 Overseas Development Institute working paper ‘Exploring the Science of Complexity: Ideas and Implications for International Development and Humanitarian Efforts’.  This is a publication worth reading!

By the way, you will see me post more on the topic of complexity, as my December reading list finally convinced me that traditional economics cannot provide the answers to the complex and adaptive economic system that we are part of.