Ecosystem – Kuncoro Wastuwibowo

The US Trade Imbalance

The United States has long been concerned about its persistent trade imbalance, frequently attributing responsibility to its business-partner countries for the gap between imports and exports. However, it should be recognised that most of the imbalance originates internally, driven by American corporations’ strategic pursuit of short-term profits, often through aggressive offshore profit-shifting practices. American businesses with the highest capitalisation, such as Apple, Google, and Microsoft, significantly contribute to this imbalance by establishing subsidiaries in low-tax jurisdictions like Ireland or Bermuda, legally diverting profits and depriving the US Treasury of critical tax revenues.

Apple has routinely utilised offshore structures, holding over $200 billion overseas at one point, strategically positioning intellectual property (IP) subsidiaries in countries with more favourable tax policies. Similarly, Google’s “Double Irish with a Dutch Sandwich” facilitated the shifting of billions in global advertising revenue, resulting in minimal domestic taxation. These practices are typically legal yet ethically contentious, with annual corporate profit-shifting estimated between $300 and $350 billion, leading to approximately $100–$150 billion in lost US tax revenue each year, according to estimates from the Congressional Budget Office and economist Gabriel Zucman.

In addition to technology firms, professional service companies such as McKinsey, other consultancy firms, and numerous US law firms frequently establish regional offices overseas, ensuring substantial earnings remain offshore. Although these practices are mostly legal, they highlight the significant internal roots of the trade imbalance, reflecting structural issues in corporate governance and tax policy rather than external economic aggression.

To meaningfully address these challenges, the US should initiate comprehensive internal reforms, beginning with corporate governance. A decisive shift from shareholder capitalism—prioritising quarterly profits—to stakeholder capitalism, where companies equally value long-term investments in employees, communities, and sustainability, is essential. The 2019 Business Roundtable statement was a symbolic step in this direction, but substantial action has been limited. True reform necessitates redefining executive compensation to incentivise sustainable, long-term growth rather than stock price manipulation through buybacks.

On the policy front, the US government should strengthen anti-profit-shifting measures by enhancing transparency through mandatory country-by-country financial reporting and enforcing stringent economic substance requirements. Implementing the OECD-backed global minimum tax (15%) could curb excessive offshore tax arbitrage by ensuring multinationals pay fair taxes irrespective of where they report profits. Additionally, penalising superficial offshore structures while incentivising genuine domestic investments could significantly mitigate revenue losses.

Ethically, American corporate culture should evolve to reject aggressive tax avoidance as standard practice. Promoting ethical standards and responsible business conduct, supported by public advocacy, investor pressure through Environmental, Social, and Governance (ESG) criteria, and transparent financial disclosures, could substantially reshape corporate behaviour. Institutional investors, pension funds, and even individual consumers can wield considerable influence by rewarding ethical corporate actions and penalising short-termist, exploitative strategies.

Ultimately, resolving the US trade imbalance is not solely about external tariffs or punitive measures against other nations but requires confronting internal structural issues directly. By embracing rigorous regulatory reforms, incentivising ethical corporate governance, and committing to strategic long-term economic planning, America can effectively rebalance trade, recover significant lost revenues, and foster sustainable economic prosperity for future generations.

The Flawed Global Ecosystem Strategy

Last century, the US stood as the pinnacle of industrial power. With unmatched manufacturing capacity, cutting-edge innovation, and a dynamic domestic labour force, the US not only produced at scale, but also created a vast middle class through industrial employment. But since the early 21st century, this dominance had eroded. Despite the continued global success of Apple, Microsoft, etc, the US found its industrial core hollowed out. This paradox—where the strategy won, but the nation did not—is at the heart of this exploration.

The US led the global shift toward liberalisation and globalisation, embracing free trade, deregulation, and offshoring as strategies for economic growth and competitive advantage. These ideas crystallised during the Reagan-Thatcher era and were institutionalised in policies such as NAFTA and the support for China’s entry into the WTO. The logic was simple: relocate labor-intensive manufacturing to lower-cost countries, focus domestically on high-value services and innovation, and reap the benefits of global efficiency.

For US corps, this approach worked magnificently. Apple built one of the most valuable ecosystems in the world, with tightly integrated design, software, services, and hardware. But much of this hardware was manufactured and assembled overseas, particularly in China. Microsoft dominated software and enterprise services, but its global cloud and platform ecosystem increasingly depended on international data centers, developer networks, and supply chains that were vulnerable to political shifts.

What became apparent over time was that these ecosystem-based strategies—while brilliant in achieving scale, market control, and profitability—were fundamentally fragile. They were built on assumptions of a stable global environment, unrestricted cross-border flows of labour, capital, and data, and a geopolitical consensus that no longer exists. The COVID-19 pandemic, the US-China business war, and the rise of protectionist and nationalist policies globally exposed just how brittle these supply chains and platform dependencies were.

The heart of the flaw is in the over-optimisation for efficiency at the expense of resilience. By offshoring critical manufacturing, the US lost not only jobs but also industrial knowledge, logistics infrastructure, and the ability to rapidly pivot production domestically in times of crisis. This strategic vulnerability became clear when shortages of semiconductors, PPE, and other essentials during the pandemic brought entire industries to a standstill.

Moreover, the US model of capitalism encouraged short-termism. Public companies were driven to maximise quarterly earnings and shareholder returns, often by cutting labor costs or outsourcing rather than reinvesting in domestic capacity. Labor unions weakened significantly, and with them, the political and social infrastructure that once supported a strong working class. The cultural shift toward a “knowledge economy” reinforced the idea that physical production was less valuable than digital platforms, intellectual property, and financial engineering.

This ideology extended into the UK as well, which closely mirrored US strategies in economic liberalization. Under Thatcher in the 1980s, the UK privatized major industries, deregulated finance, crushed unions, and repositioned itself as a global hub for services—especially financial services. The “Big Bang” of 1986 opened up London’s financial markets, turning the City into a magnet for global capital. Much like the US, the U.K. allowed its manufacturing base to atrophy in favour of high-value services concentrated in the Southeast, particularly London.

However, the UK, unlike the US, lacked the scale, resource diversity, and global technological dominance to buffer the negative effects of this transition. The result was stark regional inequality, declining productivity, and chronic underinvestment in infrastructure and education in much of the country. Brexit, in many ways, was the political expression of this economic alienation—a rebellion against globalisation, centralisation, and the perception of being “left behind.”

In both countries, we see a core contradiction: while companies triumphed globally, the broader national economies suffered from fragility, inequality, and a loss of sovereignty in key strategic sectors. The ecosystem-based strategies of firms like Apple and Microsoft continue to generate massive returns, but they do so by depending on fragile geopolitical arrangements, low-cost labor overseas, and complex, just-in-time logistics networks that are increasingly prone to disruption.

The irony is that ecosystems, as conceptualised in nature, thrive on diversity, redundancy, and mutual support. Business ecosystems, as built by the tech giants, often lack these qualities. They tend toward centralisation, dominance, and efficiency, making them look more like monocultures than true ecosystems. When stress hits—in the form of sanctions, pandemics, or trade wars—these systems do not bend; they break.

So is the ecosystem model flawed? Not entirely. It remains one of the most powerful frameworks for value creation in a networked economy. But it needs to evolve. Firms must build ecosystems that are not just efficient, but resilient and adaptable. This means diversifying supply chains, investing in local capabilities, supporting the long-term health of partners, and accounting for political and environmental risks.

Nations, too, must rethink their approach. A return to protectionism is not the answer, but neither is blind faith in market liberalism. Strategic sectors must be rebuilt or supported domestically not only for economic competitiveness but for national resilience. Policies must incentivise long-term investment, regional regeneration, and industrial policy aligned with innovation.

Ultimately, the story of the past few decades is not that globalization and liberalization were inherently wrong. Rather, they were applied too narrowly, with too little foresight, and with insufficient regard for the long-term health of national economies. The US and the UK offer lessons—both cautionary and hopeful—for any country navigating the next era of global business, where resilience, sovereignty, and inclusive prosperity will be just as important as efficiency and innovation.

Signals and Boundaries

John Holland’s “Signals and Boundaries” has become a touchstone in the study of complex adaptive systems (CAS), offering an intuitive way to understand how local interactions give rise to emergent behavior. At its core, Holland’s framework posits that signals (=the carriers of information) and boundaries (=the limits that define and protect modules) play a pivotal role in the organisation, adaptation, and evolution of complex systems. His insights have helped shape our understanding of how simple, localised exchanges can lead to intricate global patterns.

The framework’s influence is widespread, resonating strongly within academic circles including the SFI. Scholars have incorporated Holland’s ideas into broader discussions on network theory and modularity, using them as a bridge between traditional adaptation models and more modern computational approaches. By emphasising the dual roles of communication through signals and compartmentalisation via boundaries, Holland provided researchers with a practical toolkit for analysing the dynamics of ecosystems, technological platforms, and social networks.

Holland’s Signals and Boundaries, read at the Soekarno Hatta International Airport

A significant strength of Holland’s theory lies in its capacity to illustrate how local interactions can generate emergent complexity. When agents within a system interact, they exchange signals that serve as feedback loops—adjusting behavior and influencing neighboring agents. Meanwhile, boundaries help maintain structure by isolating specific interactions from external noise, allowing subsystems to develop independently yet remain interconnected. This delicate balance between isolation and connectivity is what drives the self-organisation and adaptation observed in complex systems.

However, the notion that complexity is solely the product of local interactions has its critics. Some argue that focusing exclusively on bottom-up processes might neglect the role of global influences and top-down causation. In many systems, overarching constraints, environmental factors, and collective dynamics impose patterns and behaviors that local interactions alone cannot fully explain. This perspective contends that emergent phenomena may also be shaped by these global forces, suggesting a need for models that integrate both micro-level interactions and macro-level structures.

One contrasting perspective within the complexity paradigms is the idea of strong emergence. Proponents of strong emergence assert that certain higher-level properties of a system are fundamentally irreducible to the interactions of its constituent parts. In this view, while local interactions are essential, they cannot entirely account for phenomena that manifest at the macro scale. The emergent behaviors observed in complex systems may require explanations that go beyond the sum of local interactions, implying that there are holistic properties at play that necessitate a different conceptual approach.

There is also a growing consensus among some researchers that a dual approach—one that synthesises both local and global perspectives—is necessary for a complete understanding of complexity. Network theorists and systems dynamicists, for example, have highlighted the importance of long-range correlations and global feedback loops that complement local interactions. This integrated approach recognises that while signals and boundaries are crucial, the interplay with broader systemic forces can drive self-organisation and adaptation in ways that are not captured by local dynamics alone.

Holland’s signals and boundaries framework remains a seminal contribution to complexity science, celebrated for its clarity and applicability across diverse domains. It has provided a powerful lens for examining how decentralised, local interactions can lead to emergent behavior—a notion that has profoundly influenced our understanding of ecosystems, technological platforms, and social networks. Yet, as our grasp of complex systems deepens, it is equally important to acknowledge and incorporate contrasting views, such as the roles of strong emergence and global influences, to capture the full richness of complexity. This ongoing dialogue not only enriches the theoretical landscape but also drives innovation in how we model and manage complex systems in practice.

Cities Development as CAS

The research titled “Inter-City Firm Connections and the Scaling of Urban Economic Indicators” by Yang, Jackson, and Kempes, published in PNAS Nexus (Nov 2024), presents a fresh perspective on how cities generate economic output. While traditional urban scaling theories focus on how local, intra-city interactions drive economic productivity, this study argues that inter-city connections — especially through multinational firms — play an equally, if not more, significant role. By analysing GDP data from cities in the US, EU, and PRC, alongside the Global Network Connectivity (GNC) of multinational firms, the study reveals that cities with higher inter-city connectivity exhibit higher-than-expected GDP, even after accounting for population size. This finding challenges the conventional idea that urban scaling is driven solely by local social interactions, offering a new lens for understanding complexity in urban systems.

This study is an example of how complexity science can be applied to real-world systems like cities. Cities, as complex adaptive systems (CAS), exhibit emergent behaviours, such as superlinear scaling of GDP, where larger cities tend to be disproportionately more productive. Traditionally, this emergent property was attributed to denser local social interactions. However, the authors introduce a new dimension of complexity by demonstrating how inter-city firm connections serve as an additional mechanism for economic emergence. Using the concept of networked systems, cities are modelled as nodes connected by firms, and the GNC score quantifies the strength of these connections. The research shows that GDP is influenced not just by a city’s local population but also by its position within this global network. This insight extends the complexity science framework by highlighting the role of cross-city organisational linkages in shaping global economic output.

The study also provides methodological advances that enrich the complexity science toolkit. It uses Scale-Adjusted Metropolitan Indicators (SAMI) to compare how cities “overperform” or “underperform” in GDP relative to expectations. This allows for a nuanced view of which cities benefit most from inter-city connections. Furthermore, the use of multilevel regression models that incorporate both local (population) and global (GNC) factors reveals the nonlinear dynamics at play. Such nonlinear scaling, where population alone cannot explain GDP growth, suggests the presence of feedback loops where better-connected cities become more prosperous, and prosperous cities become better connected. These insights underscore how complexity science can offer more accurate, multi-layered models of urban growth, moving beyond simplistic population-based approaches.

The implications of this research go beyond academic curiosity. For policymakers, it suggests that urban economic development strategies should prioritise enhancing global connectivity. Cities can benefit from strengthening ties with multinational firms, facilitating cross-city collaborations, and becoming key nodes in the global urban network. This is a shift from the classic focus on improving only local conditions, such as infrastructure or intra-city mobility. For complexity science, this study exemplifies how theories of self-organisation, emergence, and adaptive networks can be operationalised in practical, high-impact research. The work highlights the potential for developing a more comprehensive urban scaling model that integrates both local and global processes. By bridging concepts from complexity science with urban development, the study opens new possibilities for future research into how global interconnections influence local outcomes, from economic growth to social inequality.

Source: Vicky Chuqiao Yang, Jacob J Jackson, Christopher P Kempes, 2024, Inter-city firm connections and the scaling of urban economic indicators, PNAS Nexus 3:11, DOI: 10.1093/pnasnexus/pgae503

TEMSCON ASPAC 2024

IEEE TEMS (Technology and Engineering Management Society) adalah society dari IEEE yang berfokus pada bidang manajemen teknologi dan engineering. TEMS melayani para profesional yang lingkup kerjanya meliputi bidang teknologi dan menajemen, termasuk aspek inovasi, kepemimpinan, dan strategi dalam bisnis berbasis teknologi.

Pertama kali dalam sejarah, IEEE TEMS mengadakan flagship conference di Indonesia. IEEE TEMS Conference Asia-Pacific (TEMSCON ASPAC) diselenggarakan di Bali dari tanggal 25 hingga 26 September, bertempat di Prama Sanur Beach Hotel. Tema konferensi ini, “Achieving Competitiveness in the Age of AI,” mengupas peran transformasional AI dalam bisnis modern dan manajemen rekayasa. Para pemimpin IEEE TEMS, bersama akademisi, pemimpin industri, dan peneliti dari berbagai belahan dunia (bukan hanya kawasan Asia-Pasifik saja), berhimpun mengkaji inovasi terbaru terkait daya saing, manajemen rantai pasok yang berkelanjutan, kebijakan keamanan siber, inovasi kesehatan digital, dan kewirausahaan dalam ekosistem digital.

Konferensi dibuka dengan sambutan dari Conference Chair, Prof. Andy Chen (Former Presiden IEEE TEMS dan President-Elect IEEE Systems Council). Sesi pembukaan ini juga diisi dengan kata pengantar dari Prof. Andrea Balz (Presiden IEEE TEMS saat ini) dan Prof. Imam Baihaqi (Wakil Rektor ITS Surabaya).

Bersama Prof Benny Tjahjono dan Tim dari Coventry University di Upacara Pembukaan TEMSCON

Keynote speech dibawakan oleh para akademisi: Prof. Richard Dashwood (Vice-Provost for Research and Enterprise dan Deputy Vice-Chancellor for Research di Coventry University), Prof. Alexander Brem (Professor dan Vice Rector di University of Stuttgart), serta Prof. Anna Tyshetskaya (Vice Rector di Sankt Petersburg University, Rusia). Setelah pembukaan, konferensi dilanjutkan dengan sesi pemaparan paper-paper hasil riset.

Bersama Prof Richard Dashwood, Deputy Vice-Chancellor for Research dari Coventry University

Hari kedua konferensi diadakan berupa Industry Forum, yang menghadirkan para ahli untuk membahas tantangan dan peluang AI bagi daya saing global. Keynote speakers dalam forum ini, selain Dr. Ravikiran Annaswamy (Past President of IEEE TEMS) dan Dr. Sudeendra Koushik (President-Elect of IEEE TEMS), juga aku sendiri. Kehormatan tersendiri. Judul presentasiku adalah “Towards Complexity-Based Strategic Management.”

Setelah jeda siang, forum dilanjutkan dengan sesi panel bertajuk “Accelerating Innovation for a Sustainable Future.” Prof. Marc Schlichtner (Principal Key Expert of Siemens) menjadi pembicara utama, dengan Prof. Robert Bierwolf (anggota TEMS Board of Governors) sebagai moderator. Panel ini juga dihadiri para pemimpin ternama di bidang manajemen teknologi dan rekayasa: Prof. Alexander Brem (Professor dan Vice Rector di University of Stuttgart), Prof. Anna Tyshetskaya (Vice Rector di Sankt Petersburg University, Rusia), serta saya sendiri. Suatu kehormatan lagi buatku untuk bisa satu panggung dengan tokoh-tokoh terkemuka ini.

Konferensi ini ditutup dengan gala dinner yang diisi dengan sesi networking yang hangat dan penuh keakraban bagi seluruh peserta, termasuk anggota TEMS Executive Committee, Board of Governors, dan para pemimpin universitas. Acara ini memperkuat koneksi dan kebersamaan di antara komunitas akademik dan profesional yang hadir.

Quantum Methods in Researches

After attending a meeting with Pelindo yesterday, I attended a seminar hosted by FEB UI as part of a series themed “Conducting Impactful Business Research on an International Scale: Recent Trends, Methods, and Challenges.” Today’s session featured Agung Trisetyarso and Fithra Faisal Hariadi discussing “Research Methods: Quantum Approach to Coopetition Analysis and Disruptive Innovation.” This emerging approach leverages quantum states and mathematical formalisms like Dirac notation to model complex systems in social and economic research. By addressing uncertainty, interdependence, and multidimensional data, it opens pathways to innovative analyses of decision-making, preference patterns, and network dynamics.

Quantum methods uniquely represent probabilities through superposition (coexistence of multiple states) and entanglement (interdependencies between variables). In economics, they can model ambiguous preferences and market uncertainties, while in social sciences, they tackle paradoxical decision-making scenarios where traditional logic falls short. Additionally, entanglement provides insights into deep interdependencies, such as the impact of social ties or market ecosystems. The high-dimensional nature of quantum states allows for representing multifaceted variables, such as consumer preferences, and modeling dynamic changes over time—useful for exploring cultural shifts, policy impacts, or market evolution.

I found the discussion particularly compelling regarding its application to handling volatilities and uncertainties in economic systems and complexity-based strategies. The ability to accommodate multiple states and interdependent variables makes this approach well-suited to ecosystem-based strategies, addressing ambiguous preferences and paradoxical decision-making. I plan to delve deeper into these methods to explore their potential in advancing strategic insights.

Agree–Scala Pre-JV Agreement

Agricultural transformation is a great technological and business opportunities with huge challenges and risks, requiring strategic-level collaboration or alliance in aggregating the capabilities, resources, while sharing the business risks that may occur.

Scala, a Japanese digital enterprise aiming to enhance the prosperity of mankind through digital technology development, has requested since last year to be the strategic partner of Telkom Indonesia in developing digital platform-based agricultural business transformation. We have spent months — days and nights — to discuss the aspects of technology development, business arrangement, ecosystem empowerment, etc for this strategic alliance preparation. Today, 1 April 2024, the representative of Scala BOD has signed the Agreement with EVP of Telkom’s Digital Business & Technology.

After the signing, we will follow up the agreement with some piloting (also in Leadership Transformation called the quick-wins) as a foundation for the collaborative transformation framework. We’ll see in the next months.

IEEE Presidential Roundtable on Climate Change

It is not a regular occasion of any serving IEEE President to visit Indonesia. In our official note, the first serving IEEE President to visit Indonesia was Prof Peter Staecker in 2013 — he visited Bali for an IEEE Educational Program awareness while I was only days starting my service as the IEEE Indonesia Section Chair. This year, Prof Saiful Rahman, the current IEEE President, is visiting Indonesia for a couple days. The visit is related to the IEEE campaigns in climate change; so it is also the theme of his visit. He is visiting Indonesia accompanied by the current IEEE Indonesia Section Chair, Prof Gamantyo, and the IEEE Malaysia Chair-Elect, Bernard Lim.

As one of the programs within his visit, the IEEE Indonesia Section co-organise with TVRI, an on-air discussion titled the IEEE ASEAN Roundtable on Climate Change. The event was carried out today in TVRI, with the IEEE President Prof Saifur Rahman as the main speaker, and teens of other speakers from the industry, universities, research centres, and government agencies as participants in round table discussion form — including yours truly, representing the IEEE Indonesia Section Advisory Committee, and the IEEE TEMS Regional Leadership Subcommittee. The organiser is TVRI, led by Dr Agnes Irwanti, a member of its Supervisory Board; and Mr Iman Brotoseno, the CEO.

I explored the opportunity of using currently available or currently developed technology to reduce and overcome the impact of the climate change. Climate change is always one of the motivations behind many collaborative innovations in the development of technology and technology-based business.

Since I work in telecommunications industry, I started by giving an example in mobile industry. The use of cognitive radio and dynamic spectrum access (CR/DSA) may optimise green technology by improving the efficiency and utilisation the spectrum by dynamic adaptation to changing network conditions and environmental factors. In urban areas with high network congestion, CR can switch to less crowded frequency bands, reducing power consumption and improving network performance; and it could also optimised to choose the most green-powered network infrastructure available. CR device can lower its power when communicating over shorter distances, conserving energy. CR also enables dynamic spectrum sharing among different technologies. For example, a cognitive radio network can share spectrum with existing cellular networks during peak traffic hours and switch to alternative bands during off-peak times. This optimises resource usage and reduces energy consumption in both networks. With the use of blockchain, spectrum may be shared among operators with easier accounting and cost-sharing.

In more applicative approach in the industry, the paradigm of of ecosystem-based business growth has motivated enterprises to share capabilities, resources, opportunities, so they can reduce the cost and risk, while also reduce the cost for the environment by many sharing methods used in business ecosystems, facilitated by massive digitalisation that enables process and capabilities to be modularised, reused, integrated, improved, and orchestrated among collaborative or event competitive businesses.

The use of technology like the AI and robotics play important roles in addressing climate change in various ways. Some examples:

The technology might be used for autonomous sensor-equipped robots, drones, and satellites to monitor and collect data on climate-related parameters such as temperature, humidity, carbon emissions, deforestation, and more. These technologies help in obtaining real-time and accurate data for climate analysis.
AI facilitates the analysis of huge amounts of climate data, helping researchers build more accurate climate models. These models are crucial for understanding climate change, its causes, and predicting future climate trends.
AI can optimize energy consumption in various sectors, including transportation, manufacturing, and buildings. Smart grids and energy management systems use AI to balance energy supply and demand, reduce wastage, and integrate renewable energy sources effectively.
AI-based integrated logistics management (4PL / 5PL) may orchestrate logistics services to share the logistics resources they have, with better supply chain model, supported by better demand and production prediction. It will also reduce the use of fuel and environmental cost to expand the transportation facilities.
AI can support agricultural practices, reducing greenhouse gas emissions and improving crop yields. Additionally, robots can assist in precision agriculture, reducing chemical usage and improving sustainability.

There are many more aspect of technology to be used to improve the environmental conditions, including the power management, traffic management, personalised education, etc. Other speakers also explored what we can do in the aspects of education, government policy, and others.

Even after the formal discussion, we still continue the discussion during the lunch session, after Friday-prayer session. I think it is also my first experience to accompany an IEEE President to a mosque to attend a Friday prayer session.

We closed the day with a more relaxing discussion during dinner at Plaza Senayan.

On Complexity

Computer Science Doctorate Program of Binus University invited me to provide an Industrial Talk for their PhD-level students. I offer them a talk on the evolution of economy and technology towards the era of complexity.

The day for the lecture was December 2nd. But since I was in Bandung that day, the lecture was carried out as a zoominar. The moderator was Dr Agung Trisetyarso; and the sponsor was surely Dr Ford Lumban Gaol, the Vice Chair of Binus University Doctorate Program in Computer Science.

I started the talk by introducing the IEEE TEMS — Technology & Engineering Management Society, where I am currently a member of its Regional Leadership Subcommittee. TEMS aims to help IEEE members to maintain essential engineering management skills, support the leadership career path of IEEE members, and foster active knowledge transfer between the academic and practicing communities.

The lecture continued by exploring the digital transformation in the contexts of digital strategy, digital architecture, and its innovative business model, which inevitably drive global business into ecosystem-based collaborative business (Warner & Wäger 2019) with its platform-based value chain (Jacobides, Cennamo, Gawer 2018) and virtually-connected strategic collaborative network (Graça & Camarinha-Matos 2016). After discussing the methods in architecting business ecosystems, the lecture shifted to business ecosystem as paradigm shift (Cha 2020). I figured that it means that business ecosystems are considered as another inevitability in a more complex business environment — even for non-digital business.

Ecosystem players — i.e. business entities related to the ecosystems — may have different needs, goals, positions, and abilities. When interactions occur, members analyse, adapt, and form an evolutionary process. Adaptabilities within a business ecosystem shows that a business ecosystem is a system that has the characteristics of a complex adaptive system (CAS).

Adaptability in CAS occurs both to environmental changes and to changes in relation among players in the system (Arthur et al. 1997). Simultaneous and continuous adaptability among players in CAS will result in co-evolution (Gomes & Gubareva 2020). This co-evolution also allows changing roles in the business ecosystem. The result of this collective activity is adaptability that creates new things (emergence) with dynamic congruence.

But this is not a deep exploration on ecosystem business and CAS. Instead, this talk aims to provide some insights on the aspects of complexity, where CAS and ecosystem business are only some examples of its parts. I then restarted with a storytelling of the exploration of complexities, starting from Murray Gell-Mann, his book The Quark and The Jaguar, and the establishment of Santa Fe Institute.

The scientific method is the portmanteau of instruments, formalisms, and experimental practices that succeed in discovering basic mechanisms despite the limitations of individual intelligence. There are, however, on this planet, phenomena that are hidden in plain sight. These are the phenomena that we study as complex systems: the convoluted exhibitions of the adaptive world — from cells to societies. Examples of these complex systems include cities, economies, civilizations, the nervous system, the Internet, and ecosystems.

The nature of complexity would include the phenomena of non-linearity, dynamic interactions, adaptation, self-organisation, evolution, and emergence.

Its consequences in economy and business, is that economy is analysed not necessarily in equilibrium, its decision makers (or agents) are not superrational, the problems they face are not necessarily well-defined, and the economy is not as a perfectly humming machine but as an ever-changing ecology of beliefs, organising principles, and behaviours (Arthur 2021).

We continued from WB Arthur (2021): Complexity economics assumes that agents differ, that they have imperfect information about other agents and must, therefore, try to make sense of the situation they face. Agents explore, react and constantly change their actions and strategies in response to the outcome they mutually create. The resulting outcome may not be in equilibrium and may display patterns and emergent phenomena not visible to equilibrium analysis. The economy becomes something not given and existing but constantly forming from a developing set of actions, strategies and beliefs — something not mechanistic, static, timeless and perfect but organic, always creating itself, alive and full of messy vitality.

So my main message is that a competitive business should not avoid or overcome complexities. Instead, complexities are used or even created as a way to open new opportunities, design new capabilities, and conquering new markets.

For its implication in strategic management, I offer a view from the IEEE to use — in this era — a framework called strategic planning for exponential era (SPX). I explored this framework quite deeply. It is taken from an IEEE book authored by Espindola and Wright (2021), titled The Exponential Era: Strategies to Stay Ahead of the Curve in an Era of Chaotic Changes and Disruptive Forces.

My presentation was followed with a warm discussion with Binus’ lecturers and students on some technological and business aspects of complexity, complex adaptive system, and ecosystem-based business, including its current implementation in Telkom Indonesia. I also offered to continue the discussion using a collaborative framework of IEEE TEMS.

P3DN Business Matching & SME Expo

In Nusa Dua area of Bali Island, the GoI carried out a business matching event for three days (22-24 March 2022) between Ministries, Govt Institutions, and Local Government on one side, and national industries and SME on the other side. This event also exhibited some national industry associations (organised by Ministry of Industry) and SME (organised by Ministry of Coop & SME).

I will write about the business matching some other time. But the exhibition itself is interesting. Here we displayed nationwide technology-focused entrepreneurs, scoping from weaponry simulation, health facility instruments, tools for agroindustry, and many others.

The Minister of Coop & SME, Mr Teten Masduki, personally visited and talked to the local entrepreneurs. He emphasise the importance of the local industry to improve the quality and production capacity to match the market demand. Also, for the platforms like PADI UMKM, he addressed that such system should be used as a gateway for SMEs to be listed at national industry catalogue to be linked to the market where Ministries etc are targeted to spend 500 trillion rupiah this year.