Concept

System dynamics

Summary
System dynamics (SD) is an approach to understanding the nonlinear behaviour of complex systems over time using stocks, flows, internal feedback loops, table functions and time delays. System dynamics is a methodology and mathematical modeling technique to frame, understand, and discuss complex issues and problems. Originally developed in the 1950s to help corporate managers improve their understanding of industrial processes, SD is currently being used throughout the public and private sector for policy analysis and design. Convenient graphical user interface (GUI) system dynamics software developed into user friendly versions by the 1990s and have been applied to diverse systems. SD models solve the problem of simultaneity (mutual causation) by updating all variables in small time increments with positive and negative feedbacks and time delays structuring the interactions and control. The best known SD model is probably the 1972 The Limits to Growth. This model forecast that exponential growth of population and capital, with finite resource sources and sinks and perception delays, would lead to economic collapse during the 21st century under a wide variety of growth scenarios. System dynamics is an aspect of systems theory as a method to understand the dynamic behavior of complex systems. The basis of the method is the recognition that the structure of any system, the many circular, interlocking, sometimes time-delayed relationships among its components, is often just as important in determining its behavior as the individual components themselves. Examples are chaos theory and social dynamics. It is also claimed that because there are often properties-of-the-whole which cannot be found among the properties-of-the-elements, in some cases the behavior of the whole cannot be explained in terms of the behavior of the parts. System dynamics was created during the mid-1950s by Professor Jay Forrester of the Massachusetts Institute of Technology. In 1956, Forrester accepted a professorship in the newly formed MIT Sloan School of Management.
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