New lessons from biology for economics and business: a systems approach to non-market environments.

Abstract

Drawing on recent advances in biology, this paper describes a systems approach, 'Systems Public Affairs' (SPA), to integrate non-market strategies in corporate purposes and strategies. Just as the environment of organisms affects and is affected by their development and evolution, so individuals and businesses adjust to and can shape their non-market environment, which we define as 'a historically formed national and social sphere, including laws, regulations, and policies, which supports, maintains and restrains the operation and preservation of markets'. The paper uses cases from South Korea to illustrate this approach. Emergent ideas in biology have great relevance for micro-foundations of business. Traditionally, economic activities are outcomes of individualistic decision-makers, each promoting their distinct objectives within economic markets. In the SPA approach, decision makers in the domains of business, policy and civil society collaborate in shaping non-market environments to align business objectives with public interest. This requires agency to rise to higher levels than that of businesses, policymakers and civil society through collaboration and experimentation in the presence of stochasticity and radical uncertainty. Analogous to the advancement of organism evolution through emergence of nervous systems and learning, so alignment of organizations with their non-market environments accelerates economic and social development.