Abstract: Social and economic systems consisting of real-world problems are complex. A system is called complex when it comprises multiple interconnected elements, parts, or subsystems, and their interactions and feedback loops determine the behavior of the system. Public systems, economy, and large organizations are examples of complex systems.
So far, the world has been dealing with certainty, orderliness, and stability in the social and economic systems, assuming them as a single homogeneous structure. These have defined the thoughts about the method of inquiry and policy and economic theories. In addition, the quantitative analyses, though important under specific assumptions and conditions, have practical limitations in conceptualizing socio-economic systems, given the presence of numerous elements and qualitative variables – behavioral and institutional. Moreover, there is a limitation of aggregate data as they cannot capture the diversity, segmented data, behavioral issues, and interactive effects. The approaches based on Newtonian thinking, scientific management, and classical theories of the economics of the 20th Century have fallen short of dealing with dynamic and complex systems.
Uncertainty, dynamic nature, nonlinearity, and evolution in the social and economic systems demand a new approach to inquiry. The business-as-usual practices, frameworks and paradigms require change. For over a Century, scholarly research about complexity has brought to the fore concepts that were not realized before. The systems theory and dynamic systems theory from the 1960s and, subsequently, the complexity science since the last decade of the 20th Century have shaped new thinking for dealing with complex problems. It is a clear departure from the approach of reductionism and determinism.
The complexity science relies on various phenomena like interactive effects and emergence, self-organizing property, evolution, adaptation, coevolutionary processes, and path dependency. It is the interaction between elements that matters. Understanding them assumes importance in exploring new approaches and strategies for better policymaking, managing the economy, and meeting the challenges of the 21st Century.
About the speaker: Shri. D.N. Gupta holds Engineering degree form IIT Roorkee and Ph.D. (Public Policy) from IIT Delhi. He has worked in senior positions in Government for program implementation and policymaking. His research areas include System Dynamics; Complexity Theory for Public Policy, Economy, and Business; Renewable Energy; and Innovation and Governance. He has contributed articles and books on development issues, public policy, and economy.