1. Ingenuity Theory: Adapting to Complexity

2. H.G. Wells “Hard imaginative thinking has not increased so as to keep pace with the expansion and complications of human societies and organizations.” This is “the darkest shadow upon the hopes of mankind.”

3. Are the problems we’re confronting becoming harder? Two Questions If so, can we solve them? Most definitely Too often not

4. Are there ultimate constraints on human development? Larger Question It depends on how we define “development.” But, by the current definition, yes.

5. Economic paradigm Human beings are: “Rational Consumers “Rational Consumers” Key concepts: Consumption/production;Investment/saving Factors of production (or system inputs): Capital and labor Sometimes land and ideas

6. Ingenuity paradigm Human beings are: “Pragmatic Problem-Solvers” Key concepts: Ingenuity requirement and supply Factors of problem-solving (or system inputs): Matter, energy (work), and ingenuity

7. Sets of instructions (SOIs) that tell us how to arrange the constituent parts of our physical and social worlds in ways that help us achieve our goals. Ingenuity

8. Length of SOIs or, more specifically Algorithmic complexity (with if/then gates) Measure of Ingenuity

9. Human beings use ingenuity To guide the application of energy To arrange the matter around them (including materials and people) In ways that they hope will solve their problems

10. Two types of ingenuity TechnicalSocial

11. IngenuityGap Time Supply Requirement

12. Value added of Ingenuity Theory: Gives us a metric to operationalize the “difficulty” of a problem. This allows us to: Compare the difficulty of diverse problems across spaceCompare the difficulty of diverse problems across space Track the change in difficulty of a single problem across timeTrack the change in difficulty of a single problem across time Separate the issue of rising problem difficulty from the issue of our capacity to “keep up” (the two sides of the ingenuity gap).Separate the issue of rising problem difficulty from the issue of our capacity to “keep up” (the two sides of the ingenuity gap).

13. Once we separate the two sides of the gap, we can: Analyze the factors making our problems more difficultAnalyze the factors making our problems more difficult Analyze the factors determining whether we can keep up.Analyze the factors determining whether we can keep up.

14. Is our requirement for ingenuity rising?

15. Six Factors Driving up our Ingenuity Requirement 1.Changing values 2.Extended time horizon 3.Decreasing resources 4.Rising complexity 5.Increasing pace 6.More surprises

16. 1.Changing values 2.Extended time horizon 3.Decreasing resources 4.Rising complexity 5.Increasing pace 6.More surprises Factor: Relates to: Assumes: Affects: Definitionofproblem Inputs to problemsolving Intrinsicfeaturesofproblem ConstrainedSubstitutability Law of requisitevariety Maintenancerequirement Extraordinaryrequirement

17. Can we always supply the ingenuity we need?

18. The ingenuity supply chain Brains Science Politics Markets

19. In this new world, what should we do?

20. Four things to do in this new world 1.Recognize complexity of problems and solutions and solutions 3. Focus on increasing resilience 3. Focus on increasing resilience 2. Use decentralized experimentation to search for possible solutions to search for possible solutions 4. Front load ingenuity supply 4. Front load ingenuity supply

21. Four-Fold Recommendation: 1.Complex problems require complex solutions Helps to think in terms of “fitness landscapes” Need to be aware of “law of requisite variety

24. Engaged in constant experimentation And willing to learn from failure Four-Fold Recommendation: 2. Decentralized Response Multiple “agents” with diverse strategies

25. Problem Types Problem Solution Locus of Problem Solution Locus of Definition Problem- Definition Problem- Solving Solving Type I Type II Type III Clear Clear Unclear Clear Unclear Unclear Centralized Mixed Mixed Decentralized

26. Allow them to search for solutions with as much autonomy as possible Link them together within a loose information network Create multiple problem-solving “entities” Iteratively reward successes; penalize failures A pragmatic approach

27. Loosen coupling Increase buffering Increase redundancy Install circuit breakers Four-Fold Recommendation: 3. Increase system resilience

28. Time Ingenuity Requirement Distant time-horizon, Sustainable policies Proximate time-horizon, Unsustainable policies 4. Front-load ingenuity supply