Chapter 9
Globalization and Systemic Impacts 1
“Now, more than ever, our societies need new models to address systemic, long-term challenges like the climate crisis, poverty, pandemics, water scarcity, and demographic shifts. This will involve more business and government innovation, social entrepreneurship, public-private partnerships, and more effective civil society participation.” Al Gore, 2007, foreword to “Capitalism at the Crossroads” by S.L. Hart.
9.1. Introduction
For a holiday get-away, and with a little money, visiting the most exotic places is the easiest thing in the world: even destinations which might seem out of reach – who would have thought, just half a century ago, that the Arctic regions or the deserts would be tourist hiking places! – are easily accessible via specialized travel agencies.
But exoticism can just as easily come to us: for example, to celebrate Chinese New Year or enjoy a nice Indian or Mexican dish, or a regional specialty, we need only go to the restaurant or the nearest supermarket. Of course, viruses and microbes travel just as easily via airports or commercial boats, and an Ebola epidemic in the African jungle throws the entire planet into a panic. Pandemics such as AIDS, or pandemic threats such as the swine influenza, no longer know geographic boundaries, and nobody, wherever they may be, can consider themselves out of reach.
The flows of information, travelers, goods, capitals, are ever more numerous and facilitated by technological progress. They create ever tighter links of dependence between individuals, cultures, nations, economic and financial systems, etc. If borders still exist, they are ever easier to cross and the world’s vastness decreases day by day. This phenomenon, commonly called globalization, will be studied in this chapter.
We will notably see what makes globalization a true “system of systems”, according to the definition given in this book, namely the result of the optimization of a set of systems’ value chain. The interest of this exercise lies in its engineering point of view on globalization, which might offer new interpretations on certain phenomena.
We will then somewhat reverse the addressed problem, by studying the way globalization, and its cultural aspects in particular, should be taken into account within systems of systems engineering.
For it may have an impact on the product of the engineering process, as well as the process itself, insofar as, on the one hand, the studied object, the system of systems, is potentially aimed at an international and therefore multicultural community, and on the other hand the teams which participate in the engineering of system of systems are also potentially international and therefore multicultural.
9.2. System of systems “globalization”
9.2.1. Globalization: a concept with many meanings
The notion of globalization pertains foremost to economy, as the consequence of economic flows, commercial as well as financial, in terms of raw or processed materials but also virtual holdings, the latter taking on an exponential importance with the development of digital society. However, nowadays, the term is broadened to encompass notions of culture, ecology, etc., just as those notions are reaching a global scale, due to the spatial (ever faster travel to any part of the globe) and temporal contraction (quasi-instantaneousness of data transfers).
If we consult the Wikipedia encyclopedia, which has become one of the symbols of this globalization through its universality, sought for as much because of the knowledge spectrum as because of the targeted international audience, we find the following definition:
“the term globalization refers to the developing of interdependence links between men, human activities and political systems on a worldwide scale. This phenomenon touches most fields, each with its own effects and temporality. It sometimes also evokes international transfers of workforce or knowledge.”
Globalization therefore covers all the phenomena resulting from the increasing opening up of the economy to foreign goods and capitals; and as such, it describes the increase of goods, services, workforce, technology and capital flows on an international scale.
In that way, it attests to a world without boundaries, with exchanges freed from all constraints but natural ones. To quote Joseph Stiglitz [STI 02]:
“[it] has reduced the sense of isolation felt in much of the developing world and has given many people in the developing countries access to knowledge well beyond the reach of even the wealthiest in any country a century ago.”
It should be noted that French people are a priori the only ones using the term “mondialisation” in the place of globalization. However, the term “globalization” is also used in French, with a slightly different meaning: if “mondialisation” calls on the notion of flow a priori without restrictions on the intrinsic nature of these flows but an acknowledgment of their diversity, “globalization” focuses on the global/local opposition, putting forward a holistic approach of the various issues. A symbol of this vision is the concept of a “global village”: coined in 1971 by the Canadian sociologist H.M. McLuhan, it highlights the interdependence stemming mainly from the acceleration of media and data exchanges from one corner of the globe to the other. It sketches out a world without borders, whether they are geographic, ideological, or economic, where interpenetration speeds up and becomes an integration within a single, common model.
9.2.2. A long story
Globalization, as a widespread exchange between the various parts of the planet, is a thousand-year-old phenomenon: besides the progressive migration of Homo Sapiens who progressively domesticated the environment for their own benefit, we cannot help but think about the armies of Alexander the Great, in the 3rd century B.C., and the Roman legions, which led to the mixing of cultures and economies from the Far East to the shores of the Atlantic, from Northern Africa to the deepest corners of Scandinavia.
From that time on, cultural and monetary flows and exchanges developed: Greek and Latin were the vehicular languages for centuries; silver and gold started circulating from the birth of the first civilizations, from Persia to the occidental extremity of the Mediterranean Sea; goods were exchanged as far as Asia, as attested by the discovery of Greek vases in China, and the creation of statues representing Buddha by Greeks living in India, statues which were then sent to Japan. For centuries, the main architects of globalization were, on the one hand, the conquering armies, and on the other hand the merchants, sailors, ship-owners, naval carpenters and bankers. In the Middle Ages, around the year 1000 and for nearly eight centuries, the independent Venice was the perfect illustration of this economic dimension, as the financial and commercial hub of a globalization centered on Eurasia, reaching its climax during the 14th and 15th century: as a matter of fact, the Venetian ducat was the “world dollar” from 1284 to 1797.
Between the 15th and 19th century, the geographical space stretched from America to Africa and the whole of Asia, and its metaphorical width promptly shrunk with each new invention, in the lapse of a century and a half: steam engines on earth and on water, railways, telegraph, telephone, planes, Internet, etc. A historical consequence of these advances, colonization during the 19th century resulted in flows of raw materials from the colonies towards Europe and was behind important population flows which deeply modified the distribution of the workforce on a worldwide scale, as well as the political balance.
The reduction of traveling times, for people and for goods, and the quasi-instantaneousness with which information and commercial transactions circulate, are the vectors of a globalization inscribed within an inescapable historical perspective which spans over several centuries. It should however be noted that the rhythm of globalization has not been steady: in the 20th century, for example, the process gained speed till World War I, followed by an important slow down till World War II, after which the process sped up once more. It is estimated that, around 1970, goods exchanges once again reached the relative share of the global gross domestic product that they had achieved around 1910, and have been increasing ever since.
As a consequence of the reduction of distances and the exponential growth of exchanges, said exchanges had to be standardized in order to regulate the commercial and financial flows. Those standards take the form of trade agreements (for example, the Hanseatic League, an alliance of trading European cities, in the Middle Ages, or the free exchange treaty between France and England in 1786, which, because of the width of those two powers’ colonies at the time, concerned a majority of the globe) but also of standardization of certain goods: in this way, the universal postal Union, created in the second half of the 19th century, gave vast possibilities of exchange to international messages and a guaranteed confidentiality, by making sure the various postal services would accept postage of letters issued by the other services of the treaty’s signing states.
The internationalization of the national economies and capitals is not a recent phenomenon. The United Provinces (today’s Netherlands) were the center of the world’s economy for the second half of the 16th century and the 17th century. They were then relayed by France and England, those two countries controlling about a quarter of the world’s trade on the eve of the French revolution. Internationalization quickly developed and was already strong at the beginning of the 20th century: in 1914, Great Britain owned almost 41% of international assets, and France owned 20%. Beyond these numbers, another proof lies in one of its negative aspects: the 1929 crisis, which stemmed from the interdependence of investments and capitals.
The negative reactions to globalization are just as old: already the Stoic philosopher Seneca lamented it in his tragedy Medea in 60 AC:
“Pure were the ages our fathers saw, crime being far removed. Each person inactive, keeping to his own shore, grew old in his ancestral fields […] Every boundary has been removed; cities have set their walls in new lands, and the world, now open to travel throughout, has left nothing in its earlier seat.”
Of course, other reactions are inversely enthusiastic, from the marvelous travels of Marco Polo to Asia, to the tribulations of Ibn Battuta through Africa and the East. Some negative effects globalization has on local economies, such as are sometimes described today, are not new either: in the 12th century and for 20 years, gold lost most of its value on the shores of the Mediterranean Sea, for the emperor of Ghana had distributed the enormous quantity of that metal which he had brought with him on his pilgrimage to the Mecca.
Globalization, and this will conclude this longitudinal panorama, is a phenomenon inscribed within a historical perspective, and has always had deep repercussions on economic, financial, cultural and social dimensions.
9.2.3. The facilitating factors of globalization
Thomas Friedman’s bestseller, The World is Flat, defines three major globalization stages:
– 1492-1800, the era of the world’s discovery – beyond the sporadic Scandinavian expeditions in Northern America, or Chinese expeditions in Africa, which did not have any lasting consequence – reduced the spatial dimensions;
– 1800-2000, the industrial era, reduced the economic space with the development of multinational companies;
– 2000-today, the era in which the individual becomes an agent on a global scale.
Moreover, he lists 10 factors which have facilitated the development of the last stage: the collapse of Berlin’s wall, Netscape and the Web, work flow software, uploading, outsourcing, offshoring, supply-chaining, insourcing, informing, and collaborative working environments. Let us briefly revise these chronological factors.
The fall of Berlin’s wall gave way to new exchange grounds (geographical spaces, economic and political structures, populations) for the development of globalization, and put into serious question the unsteady geostrategic balance of the previous decades. In parallel, the information technology quickly developed, with the emergence of web search engines: beyond the physical reticular structure which had been around for years, the availability of simple tools to find information led to the development of a community of non-specialists using the Internet as a place of exchange. Then, following the standardization of protocols and software, increasingly complex software platforms were built, encapsulating middlewares, business software and specific software developments that were shared by the developers’ community.
In turn, this helped the implementation of all kinds of data exchange platforms, through which anyone can download the information they seek, which in turn led to the emergence of new services providing specialized information, and a new so-called content business. A true industry of information search was born with the Google giant, and the goal became not only to provide information, but to provide the best information with the shortest delays. Beyond data exchange platforms, true collaborative platforms have appeared, allowing for the joint collaboration of varied skills in the digital world, far from geographical borders.
Thus, new services are provided, offering functional optimizations which were until then only performed within enterprises, and are now available worldwide, which leads to a restructuring of enterprises and a renewed acceleration of globalization.
Indeed, if geography may be partially erased from the end-to-end pooling of services via virtual collaborative platforms, value analysis suggests we go from vertical integration models, in which the enterprise seeks to control all the trades necessary to the manufacturing of its products, to horizontal integration models, in which the enterprise will focus on its core business by seeking partners who will optimize its value chain. This may naturally require other partners to be entrusted with trades for which the enterprise used to have sole responsiblility: this favors globalization even more since those partners may well be located in highly remote geographical zones.
Beyond these factors, it is interesting to see that the general attitude of users, but also of suppliers, seems to have gone from a hierarchic and relatively centralized “command and control” mode to a distributed “collaborate and connect” mode. however, if we look more closely hasn’t this movement been part of the globalization process for centuries? It only seems more evident today, maybe because spatial boundaries – at least on the scale of the earth – are closing in on us, unlike centuries when there were always new territories to explore and therefore the hope for endless growth.
9.2.4. The necessity of a systemic standpoint
In order to really understand some of the levers of globalization, and define some room for maneuver, we must look at it from a systemic standpoint. First, some factors must be identified: the various agents and the relationships between them, the different value chains that are established, the critical parameters within those value chains, and their qualitative influence on a local if not global scale.
Since the 1980s, part of the geographical community, among them Olivier Dollfus, interprets the world both as a geographic object that can be isolated and possesses a certain uniqueness, in short a system, and as a combination of interlinked socio-economic systems of inferior levels, that is to say a system of systems in its combinatorial aspect. This gives us two complementary interpretations:
– the “system earth”, with the planet as a global environment, which aims to develop a view of universality which goes beyond the various scales of observation which may conceal this search;
– the “system world”, built on a set of interacting components, going beyond simple juxtaposition, where the decisions taken by a government or a company may have remote repercussions: “in systemic terms, it is a set of sets (nations, human societies, cultural spaces, companies, markets, etc.) interacting one above the other, entangled, self-organizing within constant evolution” (O. Dollfus, in l’Information Géographique, 1990).
In reality, this systemic vision is part of the current intuitive approach, if only through the systematic use of the world “outsourcing” as soon as a task if entrusted to an agent deemed to be an “outsider” to our own system. But everything depends on where we stand: entrusting part of the activity of a company’s department to another department is not outsourcing on that company’s scale; entrusting part of a company’s activity to another company on the same regional or national territory is not outsourcing in terms of the regional or national economic development, etc. The same thing applies on the scale of the economic community (European Community, Mercosur, NAFTA, ASEAN, etc.) which is actually often described as being regional! And on the scale of the planet, which is increasingly relevant in economics, the concept of outsourcing cannot exist and must be replaced by the concept of flows, either of raw materials, of processed products, of knowledge, etc.
This systemic perspective relies on the identification of the system’s components and the relationships between them, the nature of these relationships helping us understand the position of the components in relation to each other. It also highlights the global effects: political, economic, ecological, social. The simultaneous acknowledgement of these various dimensions constitutes the search for the optimization of the value chain at the basis of our definition of a system of systems.
9.2.5. The various dimensions of the “globalization” system of systems’ value chain
The various dimensions we must take into account are in direct association with the flows revealed in the globalization issue: migratory flows, financial flows, flows of raw material, goods and services. If the first flows mainly have an impact on the social and cultural dimensions, the second flows evidently pertain to the economic dimension, and the last flows concern the economic, cultural or even environmental dimensions.
Migratory flows are the main vector of the globalization process, regardless of the chosen dimension. From the dawn of time, driven either by survival instincts (search for food or spaces to cultivate and farm; environmental pressures caused by climatic evolutions; overpopulation in regions where the subsistence of all is not guaranteed anymore), either by the thirst for conquest, or the quest for knowledge, populations have moved from one territory to the next, one continent to the next, beyond natural obstacles, following the quirks of nature – glaciations, droughts, floods – which facilitated certain passages, or new inventions, in order to cross, ever more safely, increasing distances within (a priori) hostile environments. These flows were the basis of the cultural melting pots, the expansion of certain languages and scripts, of certain diseases and therefore the development of the immune inheritance of the various populations that were affected. However, for the last centuries, migratory flows have mostly had socio-economic causes: admittedly, they are today’s manifestation of yesterday’s survival instinct, but more than that they are the idealistic search for an environment more favorable to the thriving of the individual or his family, sometimes provoked by political persecutions, but more frequently by the different economic situations of both territories (the migratory flows from country to city are as much a product of these flows as migrations from Europe to the United States during the 20th century). These flows translate into two major effects which can be crudely qualified as brain drain and flexible workforce.
The first is mainly the result of the flow of students who study abroad, favoring various parts of the world, and do not come back to the country they were born in, or on the contrary study in their home country, and later go to work in another part of the world. In both cases, the flow has an immediate impact: if the student is trained in another country and settles there, the first country suffers a loss of potential expertise, and we can imagine the imbalance it could result in if the movement increases. The example of the exodus of part of the intellectual elite from Germany to the United States before World War II, notably in the field of physics, is striking, even if the movement was mostly driven by the desire to escape political persecution. But an important flow of students coming back to their home country after having been trained abroad is also a potential source of imbalance, for these students will in a way have taken the place of other students in the country they studied in, students who will therefore not have followed that training. The economic effects are easily grasped, insofar as the production of goods and services differ depending on the training level of the agents of the production chains: we need only take the example of South Korea, where the proportion of PhDs is one of the highest, PhDs which were mainly acquired in the United States and helped South Korea reach the top of the competition in some high-tech sectors. For the last few years, the same trend can be observed in India in the service industry, and in particular IT services.
As for the availability of the workforce, as a consequence of certain migratory flows, it has multiple consequences on a short term basis as well as a long term basis. On a short term basis, this workforce is economicly interesting, since it is generally composed of populations without high qualification, suffering from a greater lack of job security than the native population, and therefore less inclined to negotiate their work conditions. These two factors a priori explain why this workforce can receive smaller wages, which allows companies to cut production costs and therefore both stimulate investment on the premises – which can curb offshoring – and increase supply. But migratory flows concern the person, who can immediately step in as part of the workforce, as much as their family. The allowances and services provided for the whole family can eventually put a strain on the finances of social services. On a strictly economic level, beyond any political or ethical consideration, we are clearly facing several combined effects, and there is no easy or systematic way to measure their influence on the global value chain, in its social as much as its economic dimension. We should neither neglect the cultural dimension of these movements of population which, without any judgment of value, have impacts on many levels, whether it be linguistics (slang is found in many languages, from French and American, to the various Creole tongues), music, culinary arts (see the “Indian” cuisine in England and South Africa, but also the so-called Southern American cuisine of Mexican inspiration, or the Cajun-Creole cuisine of Caribean inspiration).
The financial flows concern the flows of capitals invested in speculation as much as the various international investments. The latter are a source of employment, but also offshoring, depending on the adopted standpoint as to the source and destination of the investment. An essential component of financial globalization for centuries, the financial flows, concerns the optimum allocation at a given time of worldwide resources (or at least on the scale of the currently known world, if we go back to a historical perspective).
We recognize here a familiar approach in the context of system of systems, which is not surprising insofar as the phrase “financial system”, or rather “financial systems”, is commonly used. Since the optimization happens at a given time, it is clearly possible for the reached optimum to only be local and not necessarily stable, such as what happens in some nonlinear systems: this is typically the case with speculative bubbles, and experience has shown the fragility of such optima, with the disastrous consequences that the bursting of such bubbles can have on a capitalistic level.
The analogy which has just been made with nonlinear systems can be used in the explanation of certain phenomena, and will be brought up again in later sections. As an example, let us note the rapid propagation of local effects, which is characteristic of some nonlinear systems due to diffusion mechanisms (this is what happens when heat quickly spreads within a sheet of metal exposed to a heat source): we find it in the propagation of some financial crisis, such as the Asian Financial Crisis in 1997-98, which had worldwide repercussions due to the tight imbrication of the various financial systems. Many economic experts actually underline the way globalization can provoke what can be called systemic crisis: they build on the importance taken by the financial markets, and inevitably imperfect or deficient information on the part of the financial actors. The latter is known in nonlinear systems theory as the impossibility to exhaustively know the initial terms, and leads to phenomena of so-called deterministic chaos, popularized with the image of the “butterfly effect”. The crisis can be triggered by mimetic behaviors: do we not frequently hear that the stock exchanges in one part of the world will plummet because the stock exchanges in another part of the world closed at their lowest? From the standpoint of systemics, such reactions heighten instability and behaviors such as divergent spirals, calling for strong regulation measures to curb the crisis. Which leads, in the long run, to quasi-cyclic evolutions, a succession of stages of expansion, debt, rising interest rates, speculation, bubble bursting, deflation, regulation, etc.
Let us now look at the last type of flows, which concern the raw materials, the finished goods and services. It has always been a crucial vector of globalization, from the Silk Road to the spice road, the latter being one of the factors of geographic expansion which led to the discovery of the New World. More dramatically, it has been a factor of the development of slavery on several continents and over several eras, stemming from the need for cheap workers who could work in hard conditions and meet high production demands, whether in the extraction of various rocks, or the exploitation of agricultural resources. Slavery itself brought about major social, cultural and economic changes on the long run.
Today the flows of raw materials are more important and critical than ever in the globalization process, insofar as they happen on a global scale and are factors of political instability, sources of conflict but also of financial revenue (the “black gold rent” for example) which change the political balance and the zones of regional power, with international repercussions (such as demonstrated by the crisis situation in the Middle East these last few decades). These flows of raw materials are counterbalanced by flows of finished goods, which go in opposite directions and themselves result in financial flows, with economic and social consequences: the search for the financial optimization of these various flows leads to a search for lower production costs and therefore a cheaper workforce. This being said, we should also take into account, within the value chain, the ethical and now ecological factors, as seen in Chapter 1: we no longer accept buying cheaper products when they are manufactured by children, just like we now accept to pay more for products when they are environmentally friendly. Therefore, the product must be at the same time economically, socially, and ethically acceptable.
The same thing applies to services: which is why in English-speaking call centers, many of which are located in India, and more recently in Indonesia, the employees learn to speak with a British or American accent (this is why India subcontracts in Indonesia, for the workforce there is even cheaper, and because of the events of the second half of the 20th century, the Indonesian population has had many more contacts with Americans and therefore possesses better empathy towards American callers) depending on the geographical zone they are working for. In French-speaking call centers, often located in North Africa, employees give out names which do not reveal their origins. These tricks contribute, on the one hand, to establish a relation of proximity between the call center and the caller, and on the other hand, to avoid a potential rejection towards the offshoring of the service in another part of the world.
This set of flows therefore has an impact on various dimensions, dimensions which should be taken into account if we wish to benefit from globalization rather than suffer from its downsides. Moreover, the flows are dependent and their various effects are built in a non-trivial manner. Optimizing the value chain is therefore a difficult exercise, and, in light of the current world situation, we are allowed to think the job is unfinished. Since we consider globalization as a system of systems, this means we do not yet control it, which is not surprising considering the complexity of its architecture, as has been partially demonstrated in the previous sections. Beyond those rather negative observations, in which the systemic vision puts forward the problem’s complexity and the high difficulty in apprehending it, let us now try and look at the more positive answers it can bring to certain problems.
9.2.6. The utopia of a standardizing globalization
The aforementioned analogy to nonlinear systems is a reassuring factor against the fear of a standardization imposed by globalization. For example, not only is cultural standardization not unavoidable, but it is unlikely, since cultural assimilation and adaptation is almost always followed by counter-movements, in various ways: in Chaucer’s time, the English fought against excessive Frenchifying, and today the French are fighting against the reverse, but some American purists are also hunting for French expressions, and using them is all the rage in some circles; in France, the reactions against the hamburgers were rather radical, and some people complain about being invaded by American pizza chains, when in fact hamburgers are a consequence of a strong German immigration and pizzas come from the Italian Diaspora, both of whom have conquered America before conquering Europe.
The standardization of the national forms of capitalism is just as utopian, as pointed out by many economists. Indeed, in the punctual search for local optimization, a standard solution is not the best global solution, that is to say a solution stable in time: what is aimed at is a locally optimal solution which can leave room for important reaction abilities if necessary. As a slogan, we could say that resilience wins the fight against standardization in the optimization process. From the standpoint of economics, therefore, there cannot be just one solution, either total submission to a market, or economic interventionism denying all virtue to the market mechanisms. This analysis is overly simple, and excessively linearizes the system of systems; on the contrary, there are many intermediate options, whose terms vary depending on the time and place.
Even if globalization is progressing, the image of a world completely flat and devoid of borders is only utopian: as a matter of fact, the ratio between capitals invested by companies outside of their national borders and the total amount of capitals invested throughout the world is, on average, only of about 10%, and even the waves of acquisition did not raise it higher than 20%. Comparing the flows of tourists going abroad in relation to the total touristic flows, we find the same 10% average.
The implementation of a company such as Coca Cola in international markets is still 10 times less than in the American market; the various strategies for a borderless globalization, whether it be centralized management unified from one geographical zone to the next, or the standardization of products, have all failed to make the company grow. As a matter of fact, more than 400 different brands of Coca Cola exist today, compared to the handful in the 1960s. Among the companies listed in Fortune 500, Coca Cola is featured alongside a dozen companies which manage to reach at least 20% of their turnover in each of the three regions: North America, Europe, Asia-Pacific. This clearly demonstrates the effective limits of globalization today.
Even the Internet, so often presented as a borderless territory, is not really so: we need only look at the various national laws which each country’s subscribers must abide to, whether it be France forbidding the sale of Nazi objects on Yahoo! in 2000, or the USA government putting a ban on online gambling in 2006. The global network is therefore more akin to a collection of networks on the scale of Nation-states than a global unified network.
The realization that the purpose of globalization, whether it be today or in the foreseeable future, is not the search for uniformity and the erasing of all borders, is the best proof that we are faced with a system of systems, and not with a system, which would be evidenced through a unity devoid of the separations which we have previously described.
9.2.7. The use of new systemic interpretations to understand the mechanisms of globalization
The systemic vision offers a grid of interpretation of globalization all the more interesting because it can be operational, if not explicative: indeed, by doing the exegesis of the system of systems’ definition and exploiting the systemic analogies as much as possible, some actions for globalization become accessible – for example relating to the efficiency, or lack thereof, of its regulation under certain terms –, actions which would be offered for a system in the same conditions. The purpose of the following paragraphs is to exploit this interpretation, and in some cases offer leads on the understanding of certain situations.
9.2.7.1. Control parameters
In a systemic approach, the differences between the various dimensions must be taken into account as much as the similarities. If geography, and the distance dimension in particular, is a crucial factor in the success or failure of globalization, starting from the simple need to access a particular geographical zone (with the presence and the quality of the harbors, roads and railways), it is closely related to the cultural, administrative, and economic aspects, which turn out to be either aids or hindrances.
The cultural aspects obviously regroup the language, but also the traditions, tastes and habits and the consumer standards. The administrative aspects concern the regulations aimed at foreign companies, the principles of national or regional preferences, the protectionist reflexes (towards raw materials or finished goods), but also the exchange facilities between the members of some communities. The economic aspects mainly concern the cost of workforce or management, as well as the possibility of cutting some expenses.
The value chain’s performance can be improved by playing on the following elements, while keeping in mind the previous aspects:
– acquire larger market shares by covering as much and as well as possible the range of needs through the differentiation of products and services according to customer specificities (examples: personal preferences, constraints, geography, will to pay, etc.) and through the improvement of the perceived value (examples: perceived benefits, brand image, etc.) not by selling them cut-rate but by a tailor-made price strategy, so as to achieve the maximum amount of value and possibly increase the scale of production;
– break down the acquisition, manufacturing and use costs, and search for various optimization levers (depending on the economic aspect but also the administrative one, possibly by taking advantage of administrative disparities: taxes, etc.);
– reduce, or at least optimize, the risks, in particular financial and economic, to try and achieve profits.
To understand how these elements contribute to the value chain, we must remember that from a strictly economic standpoint, value can be defined as the product of volume and margin, with the margin being the sum of the competitive advantage (that is to say the investment in comparison with the competition’s, minus the costs, still in comparison with the competition’s) and the industrial margin. The previous elements have an influence on that value which is neither linear nor trivial.
9.2.7.2. Regulation
The systemic interpretation brings us to consider globalization as an open system of systems: indeed, even if globalization implies a worldwide scale, it has not yet reached that scale and there still exists an “outside” to the perimeter directly concerned by the globalization process, a perimeter moving with the geostrategic evolutions and some political changes.
However, flows link the outside to the inside, even if they do not have the same intensity and are not in the same category as the flows which exist within the globalization’s perimeter. These flows can either be seen as exchanges between the system of systems, which represents the perimeter of globalization, and an exosystem, or as disturbances to which said system of systems would be subjected. In both cases, regulation is needed to force the system of systems into the desired working condition.
To further the analogy with dynamic systems and their control, regulating globalization is akin to defining a policy of command-and-control, first estimating the state then implementing governing laws. If we translate these concepts within the context of globalization, this means the first requirement is to monitor globalization so as to evaluate, as exhaustively as possible, the dimensioning factors and their mutual dependence, and act on them if necessary. Monitoring is actually implemented on several globalizing dimensions: for example, the World Health Organization (WHO) in the field of public health, the International Atomic Energy Agency (IAEA) which monitors the use of nuclear energy, the World Trade Organization (WTO) which supervises trade on a worldwide scale, etc. These monitoring organizations are also responsible for defining and enforcing the principles of worldwide governance: whether it be in the control of nuclear, biologic and chemical proliferation, or in the field of healthcare (see the worldwide warnings about risks of an avian flu epidemics), the field of security (by sharing and exchanging information within the fight against terrorism or more generally for the control of borders within regulated zones such as the Schengen Area), etc.
All governance principles aim at regulating the flows, whether they are physical flows of raw materials and finished goods, or immaterial flows, flows of energy or information. Regulation has a precise purpose: to avoid the creation of permanent imbalance which would set off divergent spirals such as can be observed in unstable dynamic systems. The geopolitical consequences would then threaten to go beyond limits deemed reasonable or at least tolerable, and local crisis might evade control and evolve into global crisis.
This is why even in fields which are a priori subjected to free trade, such as finance, and in order not to re-experience international crisis such as those leading to the dramatic historical events in the first half of the 20th century, some organizations act as lenders of last resort so as to curb a crisis’s growth: central banks on the level of States and the International Monetary Fund (IMF) on an international level. Governance and regulation are actually enforced via permanent actions on the system, just as the controller in a dynamic system must draw its energy from somewhere: thus the Tobin tax regulates the flows of capitals and enables the implementation of new rules.
These few examples have no purpose other than to illustrate the validity of the analogy drawn between the various concepts, but they also attest to its benefits. Moreover, in reply to those who might fear that those governance organizations are in fact constraints limiting all action and enslaving local authorities, we only need recall that a complex dynamic system shall not be so easily controlled in any situation without a supervising law that can locally adapt to the system’s particular state.
9.2.7.3. System interfaces
As a system of systems, globalization features some interface requirements. Those demands can vary in nature: technical, linguistic and cultural, administrative and legal, or even environmental.
Technical interface requirements are usually featured within documents of technical specification. They express the system’s prerequisite ability to interoperate with others, keeping in mind that it is sometimes necessary to take into account the compatibility of standards on either side. A common example concerns electrical appliances in which the voltage and plug can differ from one country to the next.
Beyond technical requirements, taking the human factor into account in the definition of system interfaces has become crucial, since the human being is an integral part of the “globalization” system of systems. Besides the need for system interfaces to integrate linguistic and cultural specificities, the human being himself can act as an interface. Such an interface, far from being new, has always been part of the globalization phenomenon, with roles such as interpreter, emissary, ambassador, etc. These roles were formed a posteriori as an answer to a need for communication between countries and people. However, migratory flows have led to individuals naturally gifted with multilingual and multicultural skills, thus forming a new kind of “interface” within globalization.
Locally speaking, the administrative and legal environment could sufficiently curb the use of flows of raw materials, of workforce, as well as the financial flows, etc. Dedicated interfaces must be planned in order to conciliate and align the administrative and legal requirements of the involved parties. An example representative of this kind of interface would be an agreement between states on the taxation of their respective expatriated citizens. The articles of law featured in such an agreement would then correspond to both administrative and legal interface requirements.
As for environmental interfaces, one of the most popular examples is ecodesign, which takes into account the requirements on sustainable development in product and service engineering1. Going with a worldwide desire to protect the environment and natural resources, and notwithstanding its possible political, scientific, economic, ethical justifications, ecodesign enforces architectural choices as well as constraints as to the maintenance and the disposal process. The “pastille verte” in France (a green road-tax-disk indicating that a car meets certain environmental requirements), the organic certification, logos featuring the Earth, are some of its symbols.
9.2.7.4. Control on the edge of chaos
In a general manner, nonlinear systems do not follow the regulation principles of linear systems, where the local and global can be identified. It is therefore necessary, in relation to what has been previously demonstrated, for businesses to learn how to co-invent and co-evolve products and services, in order for them to fit the ecosystem and local culture. Local solutions are then sought in order to trigger global behaviors.
The paradigmatic example, crowned by the Nobel Prize given to Muhammad Yunus in 2006, concerns microfinance. Via this mechanism of bank loans, which cannot exceed a few hundred, or even a few dozens dollars, individuals can build small trades or businesses on a scale of one or several people, in countries belonging to what is called the bottom of the pyramid (better known by the acronym BOP), which means the billion of human beings living with less than a dollar per day, or even the few billions living with less than four dollars per day. These microcredits, which might look derisory to us because of the loaned sums, actually promote local entrepreneurship on an individual scale, and these seemingly small-scaled actions contribute to the economic development of a part of the population usually left out of such initiatives. It is actually expected that, via those local initiatives, the targeted populations will not only find a revenue source, but also the feeling of pride they do not enjoy when surviving only through international help. These initiatives would therefore help fight terrorism, insofar as the poor and neglected populations might otherwise be an easy recruiting pool for terrorism organizations.
Such initiatives demand a total rethinking of the cost structures, and in particular a drastic diminution of the investment costs, for the existing infrastructures are completely different from the infrastructures of the so-called Western World (the density of road and telephonic systems is utterly different). The institutional infrastructures are also completely different (the notion of property is radically different in some parts of the globe, depending on local cultures and religious beliefs), as are the cultures of local populations (they do not share the same individual and social aspirations). This leads to a revision of the whole value chain, mostly of its economic and sociocultural dimensions: for example, a bank granting microcredits cannot function perennially like the banks we know in the occidental countries. Indeed, “standard” opening hours, reception centers with counters and heavy infrastructures, self-service ATMs in random places, all of this comes with prohibitive costs in environments where security is not on the same level and the cost for the transfer of population is enormous compared with their daily activity. This is the way new financial services should be created, so that they can be at the disposal of the destitute client in the right place, at the right time; providers must be located in safe areas, such as police buildings or post offices. We therefore see how globalization, as an ideal granting every part of humanity, no matter how destitute under our standards of economic comparison, access to services deemed elementary under the same standards, demands an approach both creative and working on a case by case basis, far away from any standardization of practices under the pretense that they have been tried and tested for certain parts of the population.
Other examples of such “creative capitalism”, sometimes promoted by governments, exist in the healthcare field. In the speech he gave in Davos in January of 2008, Bill Gates, as the founder of the Bill and Melinda Gates Association, quoted a law passed in the United States in 2007 which guarantees priority review of a company’s product (in this case via the Food and Drug Administration) if it is also developing a new treatment for diseases such as malaria or tuberculosis, which strike the developing world. Therefore, the development of a new treatment for malaria by a pharmaceutical company can help it have one of its cholesterol drugs put on the market a year early, which represents an increase in profit equal to tens or hundreds of billions of dollars.
The previous examples seek global effects through local actions, which we could in-short describe as “micro-decisions for macro-effects”. If we carry on the analogy with nonlinear systems, this would be akin to the famous butterfly effect which has been largely mediatized on the subject of dynamic systems, illustrating the fact that a butterfly flapping its wings on one side of the planet would lead to a tempest on the other side.
Other situations sharing the analogy to chaotic phenomena are possible: this is the case with local crisis, which bring to mind some turbulent phenomena in which tornados appear, move, vanish, modifying the flow around them. To pursue this analogy, control of local crisis would mean looking to dissipate them by assuring they did not reach too big a magnitude, rather than rushing to resolve them. In some works on management, this is called control on the edge of chaos. We can legitimately wonder whether this has an application in the issue of globalization, in particular with the regulation of some flows, and the reaction to some crisis.
We will conclude these sections on the systemic interpretations of globalization by pointing out that they bring out the importance of a thorough analysis of the performance of the globalization system of systems’ value chain, and to opt for the appropriate governing, neither overly centralizing nor overly simplifying, insofar as the general principle, already quoted in Chapter 1, of the required Ashby variety can be applied: the system’s complexity provokes, de facto, a complexity on the same scale as any regulating principle. The analogy with nonlinear systems teaches us that, with a higher freedom in regulation capacities, it becomes easier to maneuver towards local optima, and therefore gain partial command of the system of systems.
9.3. Beyond the concepts of systems
We have just grasped all the complexity of globalization by introducing the various dimensions around the major axis that is the value chain. This being said, beyond these concepts, we are taking into account a dimensioning characteristic of these systems. As a matter of fact, we are dealing with human-intensive systems. This crucial characteristic, associated with the properties of nonlinear dynamic systems, raises the question of perverse effects, and more globally of the paradoxical character of the behaviors which have appeared, behaviors which must be reported and which must be taken into account by the systems of systems’ governance to achieve the utmost pertinent regulation. These are the two points we are about to discuss.
9.3.1. Human-intensive systems
For a long time, theories on economic models were based on a strict postulate: the rationality of human agents. Practically echoing those theories and economic models, ethical value models were based on utilitarianism. Logically, with such concepts, it was possible to conceive artificial agents displaying isomorphic behaviors. It was the golden age of artificial intelligence, and later of distributed artificial intelligence. This remains the dominant dogma of people who defend a so-called liberal ideology – far from the foundations of the original liberalism, in 18th century Europe.
Herbert Simon’s Nobel Prize in 1978, and Daniel Kahneman’s in 2002, both won for their works on denouncing this postulate about the rationality of agents in aid of an economy which D. Kahneman called “experimental”, shows the distance which has been crossed in the past decades by researchers in the field of economics.
The economic agent is only one dimension among many of human beings, who cannot be reduced to homo oeconomicus.
The human being is part of social and cultural networks. Members of those networks form social groups, which delimit and regulate the behavior of and interactions between each member. The perimeter of those regulations is vast, from the monitoring of sexual partners in order to preserve and reproduce the original group, to the choice of legitimate professions, the mandatory revenues for each rank, the lifestyle, to give back, gift for gift, the proper social rituals in accordance to each given rank. All this creates a cultural heritage, both immaterial and material, which on one level is complementary and interdependent with the aforementioned chain of values. The second level of that heritage concerns the identity. The identity of the human being is linked to the group, which admits him as a member and therefore gratifies him or, on the contrary, rejects him and sanctions him. In this context, human beings seek admittance to the group, or rather groups, they belong to, and the associated gratifications. Sanctions can either be symbolic or physical. For example, a woman who, at one of her nephew’s wedding, is obliged to eat alone in the kitchen, cut off from the other guests, because she has converted to a different religion from her family.
Those elements frame and structure human daily life, from the rhythm of the day or week, in pace with prayers or religious holidays, dressing habits, prohibited foods.
This gives a meaning and a direction to life. This symbolic dimension, which structures the world, or even the worlds, within which human affairs and the links between humans and material goods play out, cannot be reduced to economic relationships, and yet structures and depends on those economic relationships. What has a symbolic value here has a commercial value there, and the two are not always interchangeable.
Whether it is the sudden flow of tourists, the worker migrating to a potential “El Dorado”, the pensioner retreating to a country where life is cheaper, each of them has his own values, his habits, his traditions, and his own way of interacting with other human beings. In this way, each of them is contributing, thanks to globalization, to a disruption of the current balance, which can in turn jeopardize their own projects.
9.3.2. Perverse effects and paradoxes
In a developing country, a tourist town is very popular among traveling Europeans. Hotels are multiplying. A nice residential area is built, welcoming sun seeking European pensioners. To them, the products on sale seem cheap, which encourages them to spend money. The first consequence is inflation. But in this developing country, the salaries are low. This rise in prices is immediately felt by the local population, for whom life suddenly becomes much more difficult. This situation is grounds for rancor and hostile movements, which can find the arguments leading to violence in a difficult background, be it real or imaginary.
This rhetoric can also deepen the divide between the lives of the European tourists and the lives of the local population gravitating around them, as well as between the lives of that population and the population not enjoying the benefits of tourism. Moreover, those people’s traditional living makes them the target of tour operators, which basically showcase them like animals in a zoo. This situation also nourishes tensions. The town, the tourists and the clubs, are seen as decadent, devoid of morality, divesting the local population of its traditional morals, values, practices, its territory, its identity.
We could imagine that these dynamics do not apply to humanitarian actions, which would therefore be immune to those perverse effects. But this is not so, as confirmed by the recent Arche de Zoé (Zoey’s Arch) scandal. The same desire for standardization drives the view of Occidental countries on the democratization of other countries, neglecting the fact that traditional societies already have their own modes of power and social regulation, which are, on many levels, just as democratic at their basis, even if their forms differ.
Everything which, in traditional society, would be natural, becomes problematic. Globalization disrupts the local balance of authority and power, on a financial and symbolic level. This situation generates crisis, conflicts, and nourishes the various current tensions. The mutual interdependences give a global dimension to local crisis.
Are we facing an irresolvable situation? The answer is not clear-cut. Risks can be opportunities, and vice versa. In the 1970s, the oil crisis trigged actions for the reduction of energy consumption. Paradoxically, it spurred research and development in the European motor industry. The same thing is happening today with the development of hybrid vehicles.
There is no “neutral” action, nothing devoid of consequences. There are no strictly positive or strictly negative effects, either. In a way, we are dealing with a paradoxical situation which is, therefore, indecipherable. And it is within this paradoxical logic that we must find new modes of regulation, to monitor crisis and curb unexpected effects.
9.4. Globalization’s impact on systems of systems engineering
As has been pointed out, analysis of the effects of globalization depends on the chosen standpoint. Thus, from a geostrategic and political standpoint, the bipolar world of the Cold War has become multipolar in our era. On societal and social levels, the contrast between rich and poor increases; the emergence of the Internet brings with it the notion of a digital divide. As for the industrial and economic dimensions, the emerging markets and the BRIC economies (Brazil, Russia, India and China) stand next to the industrialized countries within globalization.
Following the definition we gave at the beginning of this chapter, we are trying to present our analysis from the angle of the industrial and economic dimension, which still allows us to put forward the necessity of taking into account the various factors, whether cultural, administrative, or geographic, in the designing of systems.
9.4.1. New opportunities and new challenges
Numerous economists agree that the overall (macroscopic) effect of globalization benefits society. The antiglobalization and alter-globalization defenders are mostly denouncing the local effects (microscopic), which leave some people stranded. The difficulty lies in the management of such local effects through a better redistribution of resources. Without joining the politico-media debates, we are convinced that globalization offers new opportunities both to the industrialized countries and to the emerging markets and developing countries.
For some, globalization offers the possibility of concentrating and acquiring further value through integration (verticals, horizontals, conglomerates) of partnerships outside the nation’s borders. Despite the strengthening of the controls and the laws defining anti-competitive practices in the United States and in Europe, recent statistics show that the volume of mergers and acquisitions has reached a record high during the first quarter of 2007 ($1,130 billion, that is to say a 14% increase over a year, according to the Financial Times). There are strong odds that this tendency will continue, despite the morose environment of the financial sector following the explosion of the subprimes market. It should be noted that this type of strategy is not strictly reserved to industrial countries. Some BRIC countries are also gathering benefits from it, if you look at the recent attempts at mergers and acquisitions initialized by the Indians (e.g. MITTAL’s successful takeover bid on French ARCELOR) or the Chinese (e.g. CNOOC’s takeover bid on American UNOCAL).
The opening of borders has helped the distribution of consumer goods in industrialized countries but also in less developed countries, where the middle and upper classes are increasing in numbers, notably in India and China, with the impressive performances of their economy. Even the access to luxury products is becoming more democratic, as is made obvious by the evolution of the mass luxury market (masstige concept describing the alliance of luxury products and mass consumerism). In answer to the profusion of consumer products, businesses are tempted to offer products or services with better integration, as can already be witnessed in the telecommunication field, where the key objective is to achieve convergence of solutions and platforms while offering advanced mobility functionalities in order to gain the maximum value. Thus, the products and services are not only more sophisticated, they also have to answer the demands of cultural, geographical and environmental specificities. A good grasp of these specificities is then crucial for a system integrator seeking to optimize a value chain whose concentration is increasing, as well as heightened performance.
The economic performance is not only measured in terms of global revenue, which means that the concentration of value is not enough. Profitability also plays a part. Reduction of costs or increase of productivity can help reach that objective. A solution is to externalize the production in countries where the workforce is cheap: also known as offshoring. The group study [KAM 06] shows that governments shouldn’t interfere with offshoring and free exchange and that, in the long run, the process would both benefit the source and target countries. This conclusion is not surprising considering that offshoring consists of a division of labor to increase productivity, as suggested by the economist Adam Smith in his book The Wealth of Nations. This division of labor leads to a specialization of works, with the country receiving the offshoring having a competitive advantage over the company’s home country, notably enjoying a wealth of production factors associated with that advantage. In that way, the Heckscher-Ohlin model, used on the function of production, explains that the developing countries are competitive thanks to a massive and cheaper workforce, while developed countries have the advantage in terms of innovation and technologies.
From that observation, it is easy to establish that an opportunity for industrialized countries would be to focus on advanced technologies and innovations, or the integration of systems requiring qualified workforce in order to optimize the value chain. Therefore, it would be judicious to leave merging or developing countries focus on the production of parts and systems at the most, before they are in turn able to compete with the industrialized countries with products and services with a high added value. In the meantime, we must not forget that the splitting of work in the four corners of the world should go along with a stage of integration of the products and services which are being made externally. From that point of view, a certain number of factors must be considered within the analysis of the globalization’s direct impact on system design. The most challenging factors are cultural and administrative. They will be studied in detail in the following sections.
Other factors must also be taken into account: for example, the geographical factor naturally translates into climatic or seismic specifications, which instantly play on the products’ design and manufacturing; the economic factor influences system design through energy requirements, the latter being more or less pronounced depending on the country, etc.
9.4.2. Cultural factors
The influence of culture on design is already visible in domestic products. Let us take the example of refrigerators: Germans require a bigger space for meat than Americans; as for Italians, they prefer to have specific compartments to store vegetables. As for ovens, they are bigger in Great Britain, where people roast turkeys for Christmas, than in Germany, where poultry is cooked in a different way; likewise, Germans do not need auto-cleaning ovens as much as French people do, since they usually cook at lower temperatures.
Well-known examples in the food-processing industry demonstrate the importance of cultural differences in customer satisfaction. Following that reasoning, Mac Donald’s sells different specialties in different countries: McSpaghetti in the Philippines, Teriyaki McBurger in Japan, with two rice patties instead of the traditional burger bread, etc. Likewise, music producers adapt the musical contents (rhythm, melody) to the tastes of the marketed audience, for example with boy bands in the 1990s. The same thing happens when automobile designers adapt their products to their end-users’ cultural specificities: from the position of the wheel and the piloting components, which of course differs depending on traffic rules, to the country’s favored data communication modes and options.
Other cultural specificities which must be taken into account in system design can be the degree with which specifications are met. Many businessmen, wanting to manufacture some components in China, have had some nasty surprises. The manufactured components did not satisfy the requirements listed in the technical specifications! This can be explained by the way Chinese culture focuses more on the oral word than the written word. Moreover, the focus is mostly put on appearances. Therefore, a product whose looks conform to the specification might turn out to be of very poor quality when it is put into actual use.
The relationship with time also varies from one culture to the next. Some cultures are very scrupulous in meeting time delays, while others are less so. The perception of time can also greatly differ. In other words, the notion of emergency depends on that perception. Those nuances can be greatly penalizing if they have not been taken into account in the system design and the project management. Typically, you would need to control time, more precisely time zones, in a project involving teams scattered on different geographical sites.
This is all the more important since, with the growing complexity of systems of systems and the globalization triggered by the search for the proper skills, multinational teams of collaborative engineering are becoming common practice. However, those teams follow different modes of management depending on their original country: such is the case for the Boeing teams multilocalized in Seattle, United States, and in Russia, after the acquisition of their aeronautics manufacturers. The same goes with IT companies, in which work habits greatly differ between occidental Europe or the United States and India or Asia.
When Cultures Collide by R. Lewis illustrates such cultural diversity in activities as reunions and negotiations: from one culture to another, one nation to another, each person’s role inside the group differs greatly, especially towards the group’s leader. Relationships and hierarchy inside the group, whether they are predefined or settle in, are deeply related to the group members’ cultural background. It is therefore easy to understand how these processes and the tools that implement them can sometimes be difficult to use when the teams’ cultural reference is fundamentally different to the reference prevailing among the teams which designed these processes and tools.
Beyond the necessity to take the cultural differences within the engineering teams of a system of systems into account, there is therefore the matter of the implementation of the methods and tools destined for that engineering. The previous thoughts lean towards the existence of different ways of unrolling the engineering process according to the local culture, and reflect that imposing work and behavior models which are culturally foreign to some is not optimum; on the other hand, this means a higher integration level will have to be designed, through which the working models and exchange between the various teams will have to be organized. Engineering with multilocalized teams then takes on a capability dimension and the various engineering teams become the constitutive systems of a true system of systems, in its turn responsible for the engineering of the produced system of systems!
9.4.3. Administrative factors
The administrative factor mainly translates through different standards: thirteen major standards for electrical outlets, as well as different voltages and frequencies. It also translates into design requirements, for example for the ratification of aeronautical systems (let us remember the troubles the Concorde went through to be ratified in the United States, back in its time).
Poor knowledge of local regulations can also be fatal. For example, in order to restructure an acquired French company, a Chinese corporation thought it could act the same way as in China and fire employees en masse without taking any precaution. However, the corporation was quickly confronted to the French work code and the working syndicates. Its restructuring plan, meant to optimize the performances of its production system, was therefore not implemented.
The aspects concerning intellectual property must also be taken into account, notably for systems which feature protection against piracy in their basic functionalities. A local legal system’s lack of maturity, which means it cannot protect copyrights, might impact the chosen solution for the systems’ design.
9.5. Conclusion
In Western Europe, the naves of so-called Christian cross churches are oriented East-West, and their transept is oriented North-South and locate on the East side. Houses in China are oriented North-South with the main door located on the South side, and public spaces are located South whereas private spaces are located North. None of this was left to chance. The symbolic and religious dimensions (geomancy for the Chinese world, picture of the cross and localization of the celestial Jerusalem for the Christian world) were part of these buildings’ architecture entry data. Whether in cities of God such as monasteries, or in plantations in Martinique, we find such an association of the symbolic, religious, economic and architectural dimensions.
Beyond the purely functional and utilitarian perspectives that guide the engineering of artificial systems, other dimensions are sometimes present, consciously or not: from the symbolic Hippodamus of Miletus’s ideal city, where the spatial and social organization are the reflection of an ideal republic’s political organization; Richelieu’s city; Speer’s architectural utopia; an architecture sometimes tinged with functional utilitarianism such as Stalinian buildings; to the historic-religious motives driving the Christian cities of the Middle Ages or the Muslim medinas, the spiritual dimension is more than underlying and demands as global a systemic perspective as possible, beyond the simple functional or logical analysis advocated by the current concepts of systems engineering.
Such is the multidimensional approach we have tried to justify in this chapter, using globalization as an excuse as much as a study case. And indeed, after studying how the standpoint of systems of systems could explain some of its characteristics, we went on to discuss its influence on systems of systems engineering. Without reaching definite conclusions, we can see in this global desire to take into account factors that are not only physical or easily standardizable, a step towards the building of a definition of the complex systems which surround us and which we actively belong to, as designers or users, with or without our knowledge.
9.6. Appendix: a summary of the properties of nonlinear dynamic systems
The goal of the following paragraphs is to summarize – without any mathematical formula or undue rigor – some of the basic properties of nonlinear dynamic systems, so the reader can fully grasp this chapter’s analogies, in particular about the way the systemic standpoint on globalization can be put to profitable use.
Let us restate that a dynamic system is characterized by the evolution of a set of parameters through time. These parameters are a priori separated into input and output variables: the input variables, also called state controls, can be manipulated – via controllers – to modify the system’s behavior; the output variables, also called state observers, can be measured – via sensors – to quantitatively evaluate the system’s behavior. In order to mathematically characterize the system’s behavior, it is common practice to introduce other so-called state variables, which are designed in order to help fully and precisely reconstitute the system’s history thanks to their accumulated knowledge. Depending on the system, or rather depending on the system’s adopted modeling, these state variables can be continuous, discrete, probability, etc.
The system is called linear when it satisfies the principle of superposition of states, which means that the sum of two state variables of the system is also a state variable. This property actually has important consequences on the level of the system’s dynamics: because of it, the local knowledge of the dynamics within a region of the state space is enough to know the dynamics in the whole of the state space. In other words, we can instantaneously go from the local to the global.
On the contrary, a nonlinear system can exhibit a multitude of behaviors in which locality prevails over totality: from one point of the state space to the next, the behavior can be drastically different, for example stable (the state is nearing zero), unstable (the state takes on arbitrarily high values), erratic, etc. Moreover, there also exist nonlinear systems in which behaviors can drastically differ in places arbitrarily close to the state space, a phenomenon which can be disconcerting, but which has gotten a large amount of press coverage via the vast literature on chaos theory.
On the subject of chaos, the term is a priori associated with random behavior and a high sensitivity to initial conditions: a simple example features a rectangular billiard table, with fixed circular obstacles and a ball rolling on the table; the ball goes through elastic collisions (which implies that the trajectory will be symmetrical from the point of collision) with the table’s edges and the obstacles. Two balls leaving in slightly different directions will eventually follow very different paths, through the amplification of the angle between those two directions. Another example of so-called deterministic chaos behavior is found in the atmospheric convection modeled by Lorenz in 1963 through three coupled ordinary differential equations.
Any general consideration on a nonlinear system’s dynamics must therefore be made with the utmost prudence insofar as nothing can guarantee that knowledge in a particular spot can give any kind of information on another functioning spot of the system.
This is all the more important when the problem of the system’s regulation arises, that is to say the right way of manipulating the input to obtain a certain behavior. Indeed, while linear systems are easily controlled through the use of relatively simple means, the situation is completely different with nonlinear systems. When getting closer to a desired behavior, we might easily enter a part of the state space in which the behavior is harmful.
This being said, let us not put too much of a damper on things: if systems with extremely pathological behaviors do exist, and we should keep them in mind before coming to hasty conclusions, they are not necessarily met in practice, etc., just as we do not always meet overly simple linear systems. Without going into particulars, the state space of some systems can be divided into regions, within which the behavior is quasi-linear and can therefore be easily regulated, the difficulty lying instead on the level of the borders between regions. Regulation then takes on the shape of a bi-leveled mechanism: the lower level is dedicated to the regulation of one particular region; the higher level supervises the whole, choosing the adequate regulation depending on the space region, and monitoring the crossing into the various regulation modes.
Finally, let us quote an important theorem in the study of nonlinear systems, the so-called stable and unstable manifolds: in substance, it declares that the state space of a nonlinear system can be broken down into two subspaces, one corresponding to stable modes, and the other to the unstable ones. The stable modes are easy to supervise, and the unstable modes are the modes giving important dynamics to the system, insofar as the trajectories undergo an exponential divergence of orbits. The skill of the supervision level previously quoted can reside in the intelligent use of those instabilities to reach more stable regions.
9.7. Bibliography
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1 Chapter written by Dominique Luzeaux, Jean-René Ruault and Lui Kam.
1. The notion of sustainable development was coined by the Brundtland Commission in 1987, following the Club of Rome’s 1972 report on the dangerous effects economic growth was having on the environment, and the United Nations’ 1972 conference on the human environment, which insisted on the contradictions that might arise between the development’s objective and the conservation of the ecological balance.