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Systematic Approach
Structure of National Economy
National Planning
20 November 2012
Demographic System
Production System
System of Services
Noosphere
Intent Focus
Systems
Perspective
Strategic
Thinking
Intelligent
Opportunism
Thinking in
Time
Hypothesis
Driven
Hypothesis driven
Hypothesis generation poses the creative question
What if. . .?
Hypothesis testing follows up with the critical question
If . . . then.
A system
Systems perspective
"From a very early age, we are taught to break problems apart,
to fragment the world. This apparently makes complex tasks and
subjects more manageable, but we pay a hidden price. We can
no longer see the consequences of our actions; we lose our
intrinsic sense of connection to a larger whole. When we then try
to "see the big picture," we try to reassemble the fragments in
our minds, to list and organize all the pieces. But, as physicist
David Bohm says, the task is futilesimilar to trying to
reassemble the fragments of a broken mirror to see a true
reflection. Thus, after a while we give up trying to see the whole
altogether.
5
A system - definition
Properties of a System
10
System Thinking
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Information processing
Programming
Decision
Communication (reciprocal)
12
Programming in Cybernetics
A program is coded or prearranged
information that controls a process (or a
behaviour) leading it toward a given end
Four levels of programming
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Inputs
White Box
Outputs
Grey Box
Black Box
16
Degrees of Internal
Understanding
Basic Terms
National Economic
System
Demographic
System
System of
Services
Noosphere
Production System
Nature
17
18
Hierarchical Structure of
Demographic System
Demographic System
Sufficient condition:
mutual casuallity
between them
Environment
Organizations
Families, clans,
households
Necessary condition:
presence of elements
Groups
Individuals
Elements
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Sociological Implications in
Demographic System
life expectancy,
literacy,
educational attainment, and
GDP per capita for countries worldwide
X index
21
LE 25
85 25
2
Education Index (EI) EI 3 ALI 13 GEI
ALR 0
Adult Literacy Index (ALI) ALI
100 0
CGER 0
Gross Enrolment
GEI
100 0
Index (GEI)
log GDPpc log 100
GDP Index
GDPI
log 40000 log 100
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LEI
22
HDI Statistics
HDI - methodology
Life expectancy Index
x xmin
xmax xmin
Rank
Country
HDI 2006
Iceland
0.968
Norway
0.968
Canada
0.967
Australia
0.965
Ireland
0.960
Netherlands
0.958
Sweden
0.958
Japan
0.956
Luxembourg
0.956
10
Switzerland
0.955
56
Bulgaria
0.834
179
Siera Leone
0.329
Group
Countrys rank
HDI 2006
High
1 75
0.968 0.802
Middle
76 153
0.798 0.502
Low
153 179
0.499 0.329
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Production System
All the activities to exchange substances between
human beings and nature
0.7000.749
0.6500.699
0.6000.649
0.5500.599
0.5000.549
0.4500.499
0.4000.449
0.3500.399
under 0.350
not available
25
ISIC 4.0
Manufacture of textiles
Manufacture of wearing
apparel
Manufacture of leather and
related products
Cotton, iron;
fabric, steel;
cloth, machine
Macro
Characteristics
Industries
Subindustries
Products
Environment
Organizations
Groups
Elements
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27
http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=27
28
ISIC 4.0
Accommodation
Food and beverage
service activities
Filling of a tooth,
surgery, legal
advice, performance
in a theater
29
Macro
Characteristics
Industries
Subindustries
Services
30
4 Is of Services
4 Is of Services
Intangibility the service cannot be touched or
viewed, so it is difficult for clients to tell in
advance what they will be getting.
31
32
Typology of Services
Types of
Attributes
Examples
services
The
client
participates
Education
People
in process
oriented
Health care
Require capacity,
physical evidence
Transport
Hotels
Material effect
Cars repairing
Objects
oriented
The object is availabl Installation of
but not the owner
equipment
Require local capacity Shipping
Laundry
Telecommunications
Information Gathering,
processing, transfer. banks, media,
Minimum tangibility
counseling, Internet
and custmer
participation
Noosphere
Standardization
possibilities
Low. Require
participation of
client and local
entity
Higher. The client
is not a participant.
Lower vulnerability
to cultural
differences
Excellent. Supply is
from single point,
virtually
33
Properties of knowledge
Pricing and value depends heavily on context. The same
information or knowledge can have vastly different value to
different people, or even to the same person at different
times.
Knowledge when locked into systems or processes has
higher inherent value than when it can "walk out of the
door" in people's heads.
Human capital competencies are a key component of
value in a knowledge-based company, yet few companies
report competency levels in annual reports.
Communication is increasingly being seen as fundamental
to knowledge flows. Social structures, cultural context and
other factors influencing social relations are therefore of
fundamental importance to knowledge economies.
35
Horizontal relationship
Products, services, scientific research
Copper, iron, lead ore
Industries Surface
Spatial Surface
Production of the same product in
different places
36
Management in Economy
Functions of Management
Planning
Organization
Motivation
Control
Innovation
Representation
37
Negative incentives
Positive motives
Competition - cooperation
Individualism.
From equality to competition
Planning Process in
Management
A planning is a process of establishing the
sequence of actions to lead the system to a
desired future state
We plan the exogenous factors, elements,
interrelations.
Planning could be defined as systematic and
longitudinal process of clarification the future
development of a system that involves: analysis of
the contemporary status and trends in
development of the environment, holistic
evaluation of its resources, setting up the goals
and how they could be achieved, aligning the
organization to realize the foreseen future and
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control of the achieved results
National Planning
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41
43
44
Demerits of Planning
45
46
Regulation Theories
The public interest theory (Pigou 1938 .)
Holds that unregulated markets exhibit frequent failures, ranging
from monopoly power to externalities.
A government that pursues social efficiency counters these failures
and protects the public through regulation: barriers of entry.
Effects of regulation
Relationships between regulators
Subordination of regulators separately and as a whole
to the goals of economic policy
47
Tollbooth theory
Regulation is pursued for the benefit of politicians and
bureaucrats
An important reason why many of these permits and regulations
exist is probably to give officials the power to deny them and to
collect bribes in return for providing the permits. (Shleifer and
Vishny, 1993)
49
A Budget
Budget Development
State Budget
A budget of the republic
Budget of independent judiciary system
Budget of independent authorities
Functional section
Departmental section
Territorial section
51
Summary
System thinking requires planning
procedure as a coordination activity
between elements of a complex economic
system
National economy consists of subsystems:
production, services, noosphere. They are
based on nature and connected with
demographic subsystem.
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