14 June 2018

Q&A: Systems thinking is central to addressing global challenges

Options Summer 2018: In March, Secretary-General Angel Gurría of the Organization for Economic Cooperation and Development (OECD) visited IIASA to agree a strategic partnership between the two institutions.

© Mathias Silveri | IIASA

© Mathias Silveri | IIASA

Q What are the most pressing economic challenges facing OECD member countries? 

A One of the main economic challenges that OECD member countries are facing today, is how to consolidate the economic recovery process, while making it inclusive, resilient, and sustainable–both in terms of environmental issues and making the recovery last. Perhaps the most pressing challenge for our generation is how to achieve productivity and inclusivity simultaneously. We need to make these aspects work together to avoid the increasing backlash that will occur if governments only focus on economic growth, which typically leaves many people behind. Similarly, if governments only focus on redistribution, there will not be enough impetus for economies to grow. Finding approaches that achieve both productivity and inclusivity is key to ensuring our sustainable future.

Q Why do countries need to incorporate systems thinking when setting their economic policies?

A The global economy now has an unprecedented number of links. For example, we live in a world where workers in Kenya lose their jobs when a volcano erupts in Iceland, because planes cannot fly the flowers they grow to the Netherlands for distribution to other countries. Therefore, I would argue that unless we adopt a systems approach, unless we employ systems thinking, we will fail to understand the complex world we are living in.

Q How can countries adopt a systems approach to policymaking? 

A At the OECD, we promote evidence-based decision making, but of course there is no evidence about the future. We also know from experience that simply extrapolating from the past can be misguided. In the 1970s for instance, Ken Olsen, the President of Digital Equipment Corporation, famously stated that he could see no reason why anybody would ever want a computer in their home. A systems or complexity approach helps us to avoid such errors. A complex world is nonlinear–anticipation is not extrapolation. We are dealing with a world characterized by nonlinearities, tipping points, and asymmetrical relations where a small cause can have a big effect. To be able to tackle these issues, governments must change the ways in which they make and implement policies. An acceptance of complexity shifts governments from a top-down, siloed culture, to an enabling culture where evidence, experimentation, and modeling help to inform and develop stakeholder engagement and buy-in.

Q What does the new OECD-IIASA strategic partnership entail, and what do you hope it will achieve? 

A The OECD and IIASA have been working together for many years, but it is now time to strengthen this partnership as both organizations can benefit from the others’ expertise. The economy is not just about growth. It does not exist in a bubble isolated from the hopes, stories, desires, and frustrations of the people it is supposed to serve. The economy is political. It is social, historical, and cultural. That is why we need systems thinking to understand the issues, anticipate the consequences of our decisions, and build resilience. Together we can shape a brighter future, for our economies, our societies, and all of our citizens.

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Last edited: 30 August 2018

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