Systems Thinking / Systems Dynamic Modelling

In 1970 the Club of Rome commissioned a group of MIT physicists to answer the question of what the world would look like eighty to one hundred years into the future. This research enquiry culminated in the 1972 publication of a Systems Dynamic Model of the world and the international bestselling book “Limits-to-Growth”.Multidecadal back-testing of the model outputs have been undertaken by researchers independent of the original work. This analysis demonstrated the accuracy and usefulness of the model. In 2013, the Institute and Faculty of Actuaries published research Resource Constraints: Sharing a Finite World - Implications of limits to growth on the actuarial profession. The Global Resources Observatory Project (GRO) followed on from that project. In 2014 and 2015, GRO provided an open-source database and reports. Major news outlets around the world reported on its Country Resource Maps report which is estimated to have been viewed by over one billion people. Research continued after GRO and culminated in a conceptual World Model - Economic Risks, Resources and Environment (ERRE) published in 2020 and described in the book Resources, Financial Risk and the Dynamics of Growth.The presentation will provide a worked example - the Country Resource Maps report from the Global Resources Observatory Project (GRO) - to demonstrate how systems thinking / systems dynamic modelling can contribute to societal resilience understanding, scenario analysis and stress testing.The presentation will contextualise how knowledge and understanding of the different modelling families, the economic thought upon which they’re based and the applications of the modelling families are foundational knowledge for understanding financial sector climate-related scenario analyses. This paper contextualises systems dynamic modelling within the last two hundred and fifty years of economic thought, other modelling families and financial sector climate-related scenario analysis exercises. The presentation and paper are relevant across disciplines to actuaries working or interested in:
• public or financial sector policy • data • environmental and social sustainability • scenario analysis and stress testing • risk management
 
Find the Q&A here: Q&A on 'Modelling for Our Future World'