MOOC provider FutureLearn has an interesting course starting on 15 September: Decision Making in a Complex and Uncertain World. We asked course leader and economist Lex Hoogduin, (professor at the University of Groningen and past advisor to the first president of the European Central Bank) if creativity is important when it comes to dealing with complexity:
Creativity is very important, more important than data analysis. Creativity is what drives change, progress and breeds the surprises, positive and negative ones. Social/economic systems are open-ended without clear end point or equilibrium. That is caused by and makes creativity of paramount importance.
At the end of last week, just over 7,000 people had registered for the free course, which lasts 6 weeks and involves approximately 6 hours or work per week. We asked Professor Hoogduin to explain a bit more:
Why is the world becoming more complex?
The world has become more complex because the number of interconnections has grown and is growing. Interconnections in societies/economies have grown through the Internet and social media, but also because of liberalisation in many countries, also of capital movements.
Are most companies equipped to deal with complexity and uncertainty, or is this a serious deficiency in most?
I believe many companies/governments can improve the way they deal with complexity and uncertainty. Dealing with complexity is not easy. You have to take a more overall (holistic) view and analytically it is more difficult. Also it is difficult to accept that full control is impossible and that you have to adapt to surprises all the time.
Can you define a point / event when complexity and uncertainty first became a significant issue?
Very difficult to define a specific data or event, but emergence of the internet and globalisation were very important factors.
What is the difference between complex and complicated?
Complexity has to do with interacting agents/elements/particles without full central control. Adaptation is key. This is different from complicated where interaction/adaptation does not play a role.
If everything today is complex, does that mean everything before was simple and straightforward?
No, the economy has at least since the 18th Century been complex and what to think about our brains, the weather, the biosystem, etc?
Some of the terms and theories, like ‘cellular automata’, sound pretty advanced. Do you need to be a maths genius or economist to take this course?
You do not have to be an economist or mathematician to follow this course. The course is really introductory and targeted at early bachelor level. There are some additions in which you are invited to simulate simple models in Netlogo or to run simple stress tests, but these are simple and also not obligatory.
Can you give some more detail on the two main case studies?
The case studies are really applications of complexity theory and the theory of uncertainty to the financial crisis of 2007/2008 and to the development of cities. Learners have to write a short essay on how what they have learned can be applied to one of these topics which are introduced by two different teachers in a number of lectures. There will be lectures introducing these topics and students have to right an essay about one of the two topics in which they apply a number of the techniques they have learnt earlier in the course.
Who would benefit most from this course?
People who have heard about complexity and uncertainty but know little about it. Business men, leaders, supervisors and policy makers who have not studied these topics before.
Finally, a bit about you – when did you first become interested in this? Tell us more about your background.
I am an economist and became aware of these topics when writing my PhD (Some aspects of uncertainty and the theory of a monetary economy) in the nineteen eighties. When studying uncertainty, I “stumbled” on the concept of complexity. My experience in writing my PhD has determined strongly the way I look at and analyse real world problems. I have spent several periods at the Dutch Central Bank and among others have been head or research, head of the monetary and economics department and executive director. Since 1995 I have been professor of monetary economics in Groningen and Amsterdam. Since last year I have also been appointed professor of complexity and uncertainty in financial markets and financial institutions at Groningen University. From 1997-2001 I was personal advisor to Wim Duisenberg, the first president of the European Central Bank.I have also been Chief Economist at Robeco (an asset management company, at the time a full subsidiary of Rabobank) and head of IRIS (the joint research company of Robeco and Rabobank). At the moment, I am also guest professor at the Duisenberg School of Finance and I am also holding several Board positions, among others at LCH.Clearnet and Statistics Netherlands.