Technology ForecastingCausal - 1 Technology Forecasting Causal Models

Technology ForecastingCausal - 2 Causal Models u Causal models seek to forecast the future behavior of a system by portraying the dynamic, time- dependent behavior of the system. l Models of physical systems rely heavily on the laws of physics and chemistry l Models of socio-economic systems rely heavily on empirical data and postulated or observed cause/effect relationships.

Technology ForecastingCausal - 3 Jay Forrester u Jay Forrester claims that “feedback systems” are the basic structure of socio-economic systems l his approach is called System Dynamics l it is highly controversial l it is more art than science l it is misused (intentionally and unintentionally) by many people

Technology ForecastingCausal - 4 System Dynamics u System Dynamics is a beginning l better than “mental models” u ill defined u assumptions not clearly defined or stated u difficult to communicate to others u cannot be effectively experimented with l system dynamics models are a start at overcoming these deficiencies u supports “what-if” gaming u explore consequences of decisions

Technology ForecastingCausal - 5 Feedback Systems u Open System (no feedback) l not aware of its own performance l past action has no influence on future action l Examples u toaster - doesn’t know if it burns toast u watch - not self correcting l auto with no driver

Technology ForecastingCausal - 6 Feedback Systems u Closed Systems (feedback system) l Influenced by its own past behavior l Examples u heating system and thermostat u auto with driver

Technology ForecastingCausal - 7 Negative Feedback u Goal Seeking u Fluctuations and Instability u Continuously responding to performance against goal u Examples l Driver staying on the road l Rocket guidance l Government Policies

Technology ForecastingCausal - 8 Positive Feedback u Generates growth l more begets more u Examples l Chain reaction in a nuclear explosion l Multiplication of rats l Per capita consumption of energy and natural resources

Technology ForecastingCausal - 9 Fundamental Concept of a Feedback Loop u A decision, that controls u an action, which influences u a level of a variable, which yields u information, which influences the next decision u SD diagram to be shown in class

Technology ForecastingCausal - 10 World Dynamics u In 1972 as a part of a think tank known as the Club of Rome, Forrester (and others) created a world model and published results from his experimentation under the title Limits of Growth. u It was controversial to say the least!

Technology ForecastingCausal - 11 Other System Dynamics Models u Urban Dynamics u National Economy u Industrial Dynamics