Summary

The Centre for Operational Research & Applied Statistics at the University of Salford was  awarded a contract during 2003-2005 to offer a more scientific basis on which to formulate future economic and social policy in Sarawak, East Malaysia. The direct project clients were members of the State Planning Unit (SPU). The State, on the northern coast of Borneo, was a former British colony which joined the federated nation of Malaysia in 1963. The purpose of the model was to help government officials manage a change from a predominantly resource based economy to a knowledge based one.

What was done

After specifying clearly the project’s purpose with the clients, a team consisting of a project director, scientific director, development economist and two research assistants (one full-time, the other part-time) gradually secured the information needed to construct the model. Several trips were made to Sarawak, the early ones embracing tours of the State in order to appreciate the economy first hand. Many two-way briefings were conducted with senior government officials, other public servants, and employees of various agencies.

As is common in system dynamics, a prototype model derived from a high-level map was developed quickly at an early stage in the project in order to secure buy-in. Whilst ensuring the model gave a good fit to past data was one aspect of testing and acceptability, of more importance was the need to include appropriate model sectors; in other words to define an adequate model’s scope and boundaries.

The agreed model purpose implied a significant emphasis on all levels of education and the IT infrastructure, but important resource sectors were not ignored. Regular presentations were made as the model was developed, culminating in a special conference of senior State government officials and the modeling team when the final report was presented. The final model consisted of 15 sectors and around 450 equations and mappings. A microworld [a user-friendly interface for non-experts to explore] was constructed around the model to aid its use by non-technical officers. The project logistics were facilitated by two academics seconded from a local university, who were local ‘champions’ and played an important role.

Results

The primary aim was to elevate the standard of modeling used by State Government officials. Malaysia as a whole is a planned economy which needs a more scientific basis for constructing their 5-yearly plans. The terms of reference were to provide a planning tool rather than to tell the State government how to run their economy. But the need to improve, substantially, the education system, involving fewer school drop-outs and more significant progression to higher education, particularly in the sciences, were strong features of model runs. Also, there was emphasis on the State incubating R&D schemes which would absorb the increased numbers of scientifically skilled graduates. Perhaps an over-riding conclusion was that we had exposed and convinced government officials as to the merits of SD as a methodology in this sphere of application. An element of technology transfer was initiated in that certain officers were given intensive training in the methods of SD, to enable them to improve and extend the model to suit changing future conditions.

Value

Given the very broad scope and long-term consequences of the conclusions and recommendations from the project, it is difficult to place a monetary value on its impact. However, the potential benefits to the economy as a whole arising from enhancements to the education system and the incubation of successful enterprise are considerable. The project implanted an awareness and knowledge of SD in Sarawak and in Malaysia more widely – the Borneo Post carried a headline “Government to introduce System Dynamics model” explaining the project and its outcomes. Since the project finished, the University of Salford has received three doctoral candidates, one from the State government of Sarawak, but all insisting on completing a research degree in system dynamics.

Contact and further information

Professor Brian Dangerfield
email b.c.dangerfield (omitted ‘at’ to prevent spam) salford.ac.uk

BC Dangerfield “System Dynamics Advances Strategic Economic Transition Planning in a Developing Nation”. In Complex Decision-Making: Theory & Practice, H.Qudrat-Ullah, M Spector & P Davidsen (Eds.), Springer, NY. 2008. pp185-209. Click here.

Some of the material described had been made available already whilst the research was a work-in-progress. See BC Dangerfield: “Towards a transition to a knowledge economy: how system dynamics is helping Sarawak plan its economic & social evolution”. In: Procs of the International SD Conference, Boston, 2005, System Dynamics Society (click here) and BC Dangerfield “A system dynamics model for economic planning in Sarawak”. In: Procs of the International SD Conference, Nijmegen, 2006, System Dynamics Society (click here).