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. 2022 Sep 9;3(9):100585.
doi: 10.1016/j.patter.2022.100585.

Design for financial sustainability

John Thomas  1 , Pam Mantri  1
Affiliations

Design for financial sustainability

John Thomas et al. Patterns (N Y). .

Abstract

The 1987 United Nations Brundtland Report established the vision of sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs." How might we anticipate the requirements of future custodians of vast, continuously morphing socio-technical-ecological systems while addressing current pressing needs? An abstract, principled approach (such as axiomatic design) might help address such ambiguity. Such systems are composed of large numbers of information-processing agents/agencies that collectively form a complex adaptive system (CAS). The focus here is on financial sustainability: (1) what is a principled approach toward sustainable design? (2) What design insights might we obtain by studying financial crises forensically against sustainability successes in nature? (3) How to design for financial sustainability? This paper adopts the CAS framework alongside axiomatic design to help elicit design patterns and anti-patterns of sustainability. Inspired by nature, a promising inside-out design pattern emerges.

Keywords: Hume’s guillotine; axiomatic design; biodiversity; complex adaptive system; design for sustainability; financial crisis; inside-out design pattern; integration and division of labor; stigmergy.

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Conflict of interest statement

John Thomas is employed at AeroFarms (a vertical farming company) post the submission of this article. He is also a founder of Cognitive Tools Inc. LLC, which has provided consulting services in the financial sector. Pam Mantri is a founder of Cognitive Tools Inc. LLC.

Figures

None
Graphical abstract
Figure 1
Figure 1
Casos model Examples of crisis that transcend CASOS system boundaries.
Figure 2
Figure 2
Section summaries
Figure 3
Figure 3
Design and scientific research in the context of knowledge hierarchy (A) The scientific versus the engineering method. (B) Ockham’s razor.
Figure 4
Figure 4
The axiomatic design framework in the context of DFS (A) Design for sustainability ambiguities. (B) DFS elements. (C) Abstract design and knowledge hierarchy. (D) Design matrix patterns.
Figure 5
Figure 5
The inside-out, DFS pattern (A) Generic inside-out design. (B) Multi-scale system boundaries.
Figure 6
Figure 6
Temperature on Earth over the last 500 Ma, (adapted and licensed under CC BY-SA 4.0)
Figure 7
Figure 7
A tardigrade-inspired design pattern for sustainability (tardigrade image licensed under CC BY 4.0) (A) Tardigrade. (B) Tardigrade's inside-out design.
Figure 8
Figure 8
Regional threats to biodiversity
Figure 9
Figure 9
Stigmergic (pheromone) ant trails
Figure 10
Figure 10
Complex adaptive system (A) Basic. (B) Iterative. (C) Hierarchic. (D) Heterarchically hierarchical.
Figure 11
Figure 11
Bridging the Humean is-ought gap (A) Teleological Humean gap closure. (B) Deontological Humean gap closure.
Figure 12
Figure 12
Environmental ethics
Figure 13
Figure 13
The 466 financial crisis across high- and MLIEs (IMF database4)
Figure 14
Figure 14
The 198 countries by income (IMF database and world bank66)
Figure 15
Figure 15
Zero financial crises across select HIEs (IMF database4)
Figure 16
Figure 16
The 151 banking crises across HIE/MLIE economic groups (IMF database4)
Figure 17
Figure 17
The 239 currency crises across HIE/MLIE economic groups (IMF database4)
Figure 18
Figure 18
The 76 sovereign-debt crises across HIE/MLIE economic groups (IMF database4)
Figure 19
Figure 19
Yield-curve inversions and recessions; self-citing graph from Federal Reserve
Figure 20
Figure 20
Yield-curve inversion, December 2006
Figure 21
Figure 21
Financial failures in HIE/MLIE economies during the global financial crisis (IMF database4)
Figure 22
Figure 22
Connectedness in a sparse-design matrix versus contagion in a full-design matrix (A) Contagion across functional space. (B) Contagion across design space. (C) Eight-step sparse contagion. (D) Twelve-step sparse contagion. (E) Four-step sparse contagion. (F) Exponential fully-coupled contagion.
Figure 23
Figure 23
Average crises/country statistics (IMF database4)
Figure 24
Figure 24
Pro- versus anti-cyclical design
Figure 25
Figure 25
Inside-out DFS for financial systems (A) Inside-out design for financial systems. (B) Plant vs. banking FR-DP.
See this image and copyright information in PMC

References

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