The Cybernetics of Innovation and Knowledge: The Viable Systems Model Applied to the Silicon Valley Index and China

The Cybernetics of Innovation and Knowledge: The Viable Systems Model Applied to the Silicon Valley Index and China

Brian Hilton (Business School, Nottingham University Business School, Ningbo, China), Maris Farquaharson (Business School, Nottingham University Business School, Ningbo, China), George Kuk (Business School, Nottingham University Business School, Nottingham, UK) and Miao Wang (Business School, Nottingham University Business School, Ningbo, China)
Copyright: © 2014 |Pages: 13
DOI: 10.4018/ijkss.2014010102
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Abstract

This paper begins to introduce the General Systems Theory and ‘Cybernetics' concept. Then, it sets out to integrate these two theories to gain insight into the processes driving the distinct processes of open, user driven innovation and closed producer driven innovation. By using the simplest model of control the modulation of the relationship between a fast expansive dynamic and a slow constraining one, and then by construction, this paper demonstrates that by bundling three such systems together in overlapping bundles of three, one can create a viable self-sustaining more general system with five levels. After that, this paper demonstrates how such system is made manifest in the Silicon Valley Index of innovation. Some arguments have been given, like open innovation is characterized by volumes of venture capital generated and closed innovation by the number of patents produced. This integrated new model is applied to China, in order to create a more innovative society. The end of this paper provides some suggestions to Chinese government policy maker.
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Literature Review

Cybernetics: Elemental Control Theory

At its simplest cybernetics have three elements: one energetically fast the other slow plus an “oarsmen” who uses his steering oar to modulate the relationship between them. His ferry moves as does the river he sails on. An idealized “experimental scientist” has one cause, isolated from others, and its effect controlled by a third party the scientist. Similarly the economist has a thought experiment with a single causal variable, for example price, ceteris paribus, and two consequences, a change in the quantity consumed and the quantity supplied. Such three-ness is universal in cybernetics. However Beer’s Viable Systems Model (VSM) (Beer, 1985) has five elements, Miller’s (1978) “Living Systems Theory” 21 plus and Rosen (2000) has as a living thing software effecting hardware and vice versa. These seem inconsistent with cybernetic’s three-ness.

One could simply say that this difference represents complexity. The ferryman has passengers and crew to contend with. The scientist knows his experiment is a simplification. In reality many variables change simultaneously. Any reasonable economist knows there is a complexity of factors simultaneously operating in the situations he analyzes. Complexity contrasts with the simplicity of the models used to analyze it.

The simplest control system has three elements. Cook and von Zedtwitz (2004) use the atom as archetype. It has three elements protons, electrons and neutrons. The neutrons are the oar. They modulate the interactions between the fast moving electrons and the static protons. The latter repel each other and the neutrons stabilize their interaction. The result of this modulated dynamic interaction is matter.

This is the rule of three at its simplest: The mass of the nucleus, neutrons plus protons, balances out the electro-magnetic forces of the electrons which are repelled by the positively charged protons.

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