What are complex systems?
A complex system is a system that do not yield to compact forms of representation, it cannot be defined by a simple equation, it is dynamic and adaptive.
Complex systems have many interacting parts called agents or actors that adapt and respond to the environment in which they are in, they do not always follow simple rules. A complex system is more than the sum of its parts as a result it has emergent behaviour.
Natural and artificial system have a complicated internal casual architecture that stores and measures information. All the many active interactive components within a complex system are non trivial and have non linear interactions, they are learning or modifying their behaviour in some way.
Unlike man made engineered systems complex system are not only adaptive, it is always trying to get to a state of equilibrium. Business ecosystems are considered to be complex, adaptive systems.
The focal complexity aspects appearing in business ecosystems are presented; they are self-organization, emergence, co-evolution and adaptation.
However, the structure of ecosystem is not everything. As evolving systems, “ecosystems are dynamic, constantly remaking themselves, reacting to natural disturbances and to the competition among and between species.
Rothschild states that “a capitalist economy can best be comprehended as a living ecosystem. Key phenomena observed in nature – competition, specialization, co-operation, exploitation, learning, growth, and several other – are also central at business life.”
According to Rothschild the basic mechanisms of economic change are remarkably similar with those found in nature. The main difference is speed, which is quite a lot faster within economic change.
A business ecosystem as defined by Moore is “an economic community supported by a foundation of interacting organisations and individuals – the organisms of the business world.” According to Moore, a business ecosystem includes customers, lead producers, competitors, and other stakeholders. The key to a business ecosystem are leadership companies, “the keystone species”, who have a strong influence over the co-evolutionary processes.
Moore states that these are just metaphors which can clarify certain issues and help understanding them.
Moore suggests that the term ‘industry’ should be replaced with the term business ecosystem, since nowadays you cannot divide economic activities under specific industries. Business ecosystems are based on core capabilities, which are exploited in order to produce the core product. In addition to the core product, a customer receives “a total experience” which includes a variety of complementary offers.
understand the inner working of complex system is critical to business. It can no longer be ignored. If change is the only constant, adaptation and innovation is the only way forward.
Let me know your thoughts.
Robert Ikwue is an entrepreneur, founder and CEO @ The Quintrix Group.
