The success or failure of a particular policy initiative or strategic plan is largely dependent on whether the decision maker truly understands the interaction and complexity of the system he or she is trying to influence. Considering the size and complexity of systems that public and private sector decision makers must manage, it is not surprising that the "intuitive" or "common sense" approach to policy design often falls short, or is counter-productive, to desired outcomes. This online book was written to introduce the concepts and "language" that make a systems-based study of such complex problems possible. Our intent is to provide the reader with a broad overview of the field of system dynamics, acquaint him or her with the fundamental stock-flow-feedback structures that determine the dynamic behavior in systems, and motivate the reader to begin analyzing problems dynamically and holistically. Knowing how to speak and think in terms of systems and interconnections is a critical step in effective policy design, policy implementation, and consensus building.
In Chapter 1, Introduction, we provide some context for system dynamics by presenting a brief history of the field, beginning with Professor Jay W. Forrester's work at the Massachusetts Institute of Technology in the 1950's, through the present day. In addition, work related to energy policy is presented in some detail to provide the reader with examples of the type of issues that can be studied using system dynamics principles. In Chapter 2, Why Model?, we continue this discussion by exploring the question: "Why model at all?"
Chapter 3, Building Blocks, presents the basic concepts behind the study of complex systems by first examining the patterns of behavior that real-world systems exhibit, and then discussing the structure that causes such patterns to emerge. This chapter can be thought of as the "language chapter" because it is here that the reader learns the concepts and terms required to construct the "theories" or "models" of their particular issues.
With the concepts and language of system dynamics in hand, Chapter 4, Simple Structures, examines system behavioral types such as exponential growth or oscillation in greater detail. In this chapter, the reader is introduced to the concept of computer simulation. Current computer simulation technology allows decision-makers to easily construct models of a system's structure (including mathematical equations) to use in conducting policy experiments.
In chapter 5, Basic Modeling Process, we share some thoughts and ideas about the process of constructing system dynamics models, from conceptual causal diagrams through detailed computer simulation models.
Chapter 6, Natural Gas Discovery, reinforces the concepts introduced in the first five chapters by presenting a case-study based on a well-known system dynamics model of the U.S. natural gas industry. For this discussion, we recreate the model's structure incrementally by presenting a series of model versions - each version increasing in complexity as additional structure is added. Throughout the chapter, the reader is invited to "run" a computer simulation of the particular structure being discussed to observe the dynamic behavior first hand.
Finally in Chapter 7, Next Steps, we conclude with a brief discussion of the resources available to the reader interested in further study of system dynamics.
Layout of Introduction to System Dynamics
The figure below shows the basic layout of Introduction to System Dynamics. Although we present the material in what we feel is the most logical learning progression, you are free to move to any section that interests you by using the chapter and section menus along the top and left-hand side of the screen, respectively.