Challenges of Complexity in the 21st Century

Abstract

The theory of nonlinear complex systems has become a proven problem-solving approach in the natural sciences from cosmic and quantum systems to cellular organisms and the brain. Even in modern engineering science self-organizing systems are developed to manage complex networks and processes. It is now recognized that many of our ecological, social, economic, and political problems are also of a global, complex, and nonlinear nature. Modern evolutionary economics can be modelled in the framework of complex systems and nonlinear dynamics. Historically, evolutionary economics was inspired by Schumpeterian concepts of business cycles and innovation dynamics. What are the laws of sociodynamics? What can we learn from nonlinear dynamics for complexity management in social, economic, financial and political systems? Is self-organization an acceptable strategy to handle the complexity in firms, institutions and organizations? The world-wide crisis of financial markets and economies is a challenge of complexity research. Misleading concepts of linear thinking and mild randomness (e.g. Gaussian distributions of Brownian motion) must be overcome by new approaches of nonlinear mathematics (e.g., non-Gaussian distribution), modelling the wild randomness of turbulence at the stock markets. Systemic crises need systemic answers. Nevertheless, human cognitive capabilities are often overwhelmed by the complexity of nonlinear systems they are forced to manage. Traditional mathematical decision theory assumed perfect rationality of economic agents (homo oeconomicus). Herbert Simon, Nobel Prize laureate of economics and one of the leading pioneers of systems science and cognitive science, introduced the principle of bounded rationality. Therefore, we need new insights in the factual microeconomic behavior of economic agents by methods of humanities, cognitive and social sciences, which are sometimes called “experimental economics”. In general, we need more insights in agent-based social systems by transdisciplinary and cross-cultural science. The educational challenge of global risk society demands for complexity management of global cooperation. Japanese research on agent-based social systems is embedded in the 21st Century Center of Excellence (COE) program formed by the Ministry of Education, Culture, Sports, Science and Technology. Complexity research at the Carl von Linde Academy is embedded in the excellence initiative of the Technical University of Munich which is one of the few German Universities of Excellence distinguished by the German Government.