1 00:00:08,210 --> 00:00:12,530 Welcome Back! Last time we talked about Unbundling, 2 00:00:12,530 --> 00:00:17,490 Competition, Privatization and Trans-national networks. 3 00:00:17,490 --> 00:00:23,790 What do all of these transitions mean for the complexity of infrasystems? 4 00:00:23,790 --> 00:00:30,790 In the video on complexity you saw that complex behaviour arises from interaction and thus 5 00:00:31,169 --> 00:00:36,590 that complexity theory focuses on relationships. 6 00:00:36,590 --> 00:00:42,469 All of the changes mentioned have made the network of actors far more complex. 7 00:00:42,469 --> 00:00:48,100 There are now many more actors, with a greater diversity in backgrounds, 8 00:00:48,100 --> 00:00:49,890 and in interests. 9 00:00:49,890 --> 00:00:54,190 But to truly understand the complexity of a system, 10 00:00:54,190 --> 00:01:01,190 we must focus on the relationships between actors and the interactions between them. 11 00:01:01,960 --> 00:01:07,750 And these interactions are indeed extremely complex. 12 00:01:07,750 --> 00:01:14,750 What happens in these relationships, and what types of interaction take place? 13 00:01:14,860 --> 00:01:16,990 Many different types. 14 00:01:16,990 --> 00:01:20,880 All actors undertake actions. 15 00:01:20,880 --> 00:01:27,729 Actions that influence other actors, who in turn take anticipatory and reactive 16 00:01:27,729 --> 00:01:29,600 actions themselves. 17 00:01:29,600 --> 00:01:35,079 Let us start with the public organizations concerned. 18 00:01:35,079 --> 00:01:43,000 What do they do? As well as making laws, ministries do far more: they issue policy 19 00:01:43,000 --> 00:01:47,329 documents, draw up subsidy rules, 20 00:01:47,329 --> 00:01:54,030 change the conditions and withdraw them again, top officials and administrators give speeches, etc. 21 00:01:54,500 --> 00:02:00,829 Administrators and civil servants speak to industry and consumer representatives and 22 00:02:00,829 --> 00:02:07,829 send out certain signals in these conversations, which can be significant for those involved. 23 00:02:09,000 --> 00:02:15,100 Regulators are also active, for example setting rates and approving or 24 00:02:15,120 --> 00:02:19,050 rejecting investment plans. 25 00:02:19,050 --> 00:02:23,390 Companies put new products and services on the market, 26 00:02:23,390 --> 00:02:31,200 tap into new markets, decide to discontinue certain products and markets etc. 27 00:02:31,400 --> 00:02:37,600 Companies adopt an aggressive approach towards some competitors, 28 00:02:37,600 --> 00:02:42,940 while entering into joint ventures with others. 29 00:02:42,940 --> 00:02:47,250 Companies move upstream or downstream in the value chain. 30 00:02:47,250 --> 00:02:53,480 Companies tap into new markets or withdraw to their home market etc., 31 00:02:54,270 --> 00:03:00,060 All in all this is only a very limited selection of activities, 32 00:03:00,060 --> 00:03:06,850 yet even this selection is enough to show the abundance of actions that take place in 33 00:03:06,850 --> 00:03:10,540 such an infrasystem. 34 00:03:10,540 --> 00:03:16,120 While this is already a large amount and complex, there is more. 35 00:03:16,120 --> 00:03:20,590 Some of these actions are relatively straightforward. 36 00:03:20,590 --> 00:03:27,310 It is clear what the actor intends with his action and what the action entails. 37 00:03:27,310 --> 00:03:31,290 But for some of the actions this isn't very clear at all. 38 00:03:31,290 --> 00:03:34,950 These are the actions with a hidden agenda. 39 00:03:34,950 --> 00:03:39,340 For example, a company can put a new product on the market, 40 00:03:39,340 --> 00:03:44,560 which at first sight meets the needs of a group of customers. 41 00:03:44,560 --> 00:03:49,400 But, let's say this purchase virtually forces the 42 00:03:49,400 --> 00:03:55,650 consumer to continue to buy products from the same company in the future, 43 00:03:55,650 --> 00:04:00,030 without the customer being fully aware of this. 44 00:04:00,030 --> 00:04:07,030 That would be a hidden agenda, and not everyone considers this fair play. 45 00:04:07,540 --> 00:04:11,020 This could be strategic behaviour. 46 00:04:11,020 --> 00:04:15,480 Companies exhibit all kinds of strategic behaviour. 47 00:04:15,480 --> 00:04:20,800 However, government bodies are no stranger to this either. 48 00:04:20,800 --> 00:04:23,500 A law, for example, 49 00:04:23,500 --> 00:04:29,349 may appear sound, with a clear and respected objective. 50 00:04:29,349 --> 00:04:35,289 But the law can also be based on a hidden agenda. 51 00:04:35,289 --> 00:04:41,400 One example of a possible hidden agenda of a law in the world of infrasystems is: 52 00:04:41,400 --> 00:04:44,560 'the protection of national industry'. 53 00:04:44,560 --> 00:04:52,500 Another example is: a government body that has already issued a subsidy scheme 54 00:04:52,500 --> 00:04:57,150 may be shocked by the unexpectedly high interest in the scheme, 55 00:04:57,150 --> 00:05:00,370 and therefore decide to discontinue it. 56 00:05:00,370 --> 00:05:07,240 But that same government body is aware that announcing the discontinuation of the scheme 57 00:05:07,240 --> 00:05:10,169 can lead to a run on it. 58 00:05:10,169 --> 00:05:16,419 So it is very possible that the government creates the impression that the scheme will 59 00:05:16,419 --> 00:05:24,400 continue to exist whereas it is unexpectedly discontinued overnight for the outside world. 60 00:05:25,400 --> 00:05:29,530 End users also play this game. 61 00:05:29,530 --> 00:05:33,340 They decide to make or delay a purchase. 62 00:05:33,340 --> 00:05:38,389 They may stop buying a brand they have been loyal to for years, 63 00:05:38,389 --> 00:05:43,009 or they may decide to stay with their trusted brand. 64 00:05:43,009 --> 00:05:50,800 They state that they prefer more sustainable products but don't always practice what they preach. 65 00:05:51,840 --> 00:05:57,030 In short, the number of actions of actors in an infrasystem 66 00:05:57,030 --> 00:06:02,800 is incalculable, and many of them are of a strategic nature. 67 00:06:02,800 --> 00:06:07,469 These actions are significant for other actors in the network, 68 00:06:07,469 --> 00:06:12,689 who either benefit from or are hindered by them. 69 00:06:12,689 --> 00:06:15,169 Because these actions are significant for them, 70 00:06:15,169 --> 00:06:20,939 they will respond to them or perhaps even anticipate them. 71 00:06:20,939 --> 00:06:27,189 And this happens with regard to a multitude of actions throughout the network. 72 00:06:27,189 --> 00:06:32,319 The result is a complex ongoing tangle of decisions. 73 00:06:32,319 --> 00:06:38,499 But how exactly does this dynamic occur? 74 00:06:38,499 --> 00:06:42,580 Let's say that an actor is preparing a decision. 75 00:06:42,580 --> 00:06:47,169 He knows which options are available to him. 76 00:06:47,169 --> 00:06:54,169 In considering which alternative to choose, he will try to imagine how other actors will 77 00:06:54,409 --> 00:06:57,349 respond to his alternative. 78 00:06:57,349 --> 00:07:03,129 If a company puts a certain product on the market for a certain price, 79 00:07:03,129 --> 00:07:08,200 which of the consumers will purchase it, and how will the regulator respond? 80 00:07:08,200 --> 00:07:11,710 And what about the competitors? 81 00:07:11,710 --> 00:07:16,199 Ultimately, he will make a decision and act. 82 00:07:16,199 --> 00:07:20,559 Some of the results of the decision, including the actions of other actors, 83 00:07:20,559 --> 00:07:26,559 will be as expected, while others will be unexpected. 84 00:07:26,559 --> 00:07:32,469 The reason for this is that the reactions of actors and systems could not be entirely 85 00:07:32,469 --> 00:07:39,469 predicted in advance and because not everyone provided the correct data. 86 00:07:39,599 --> 00:07:43,539 Many actors will work on such considerations at the same time, 87 00:07:43,539 --> 00:07:47,159 and all of them will be confronted with some unexpected, 88 00:07:47,159 --> 00:07:49,889 unfavorable effects. 89 00:07:49,889 --> 00:07:55,680 Although for some this is no reason to change their decision and course, 90 00:07:55,680 --> 00:07:57,680 for others it is. 91 00:07:57,680 --> 00:08:03,059 They will reverse their previous decision and make a different one. 92 00:08:03,059 --> 00:08:07,819 This means that other parties will be confronted with the negative effects, 93 00:08:07,819 --> 00:08:11,999 which will in turn prompt them to make another decision. 94 00:08:11,999 --> 00:08:17,050 And yet other actors will respond to and anticipate that. 95 00:08:17,050 --> 00:08:20,050 The dynamic can no longer be stopped. 96 00:08:20,050 --> 00:08:27,050 Nobody can see the whole picture any longer, never mind respond to it effectively. 97 00:08:27,180 --> 00:08:31,860 The interference of all these decisions is unpredictable. 98 00:08:31,860 --> 00:08:38,839 It is impossible to anticipate what the outcomes of all of these decisions will be. 99 00:08:38,839 --> 00:08:42,160 Clearly, the more actors there are, 100 00:08:42,160 --> 00:08:45,820 the more complex the interactions become. 101 00:08:45,820 --> 00:08:51,560 This shows the complex system on the social side of infrasystems. 102 00:08:51,560 --> 00:08:54,320 The technical side of infrasystems is already complex, 103 00:08:54,320 --> 00:08:56,980 as we have already seen. 104 00:08:56,980 --> 00:09:00,490 The social side now turns out to be complex itself. 105 00:09:00,490 --> 00:09:07,490 So, it goes without saying that the combination of the technical and social side of infrasystems 106 00:09:07,720 --> 00:09:10,830 is also complex. 107 00:09:10,830 --> 00:09:12,080 Thank you for your attention!