The Cybernetics of Innovation and Knowledge: The Viable Systems Model Applied to the Silicon Valley Index and China

This paper begins to introduce the General Systems Theory and ‘Cybernetics' concept. Then, it sets out to integrate these two theories to gain insight into the processes driving the distinct processes of open, user driven innovation and closed producer driven innovation. By using the simplest model of control the modulation of the relationship between a fast expansive dynamic and a slow constraining one, and then by construction, this paper demonstrates that by bundling three such systems together in overlapping bundles of three, one can create a viable self-sustaining more general system with five levels. After that, this paper demonstrates how such system is made manifest in the Silicon Valley Index of innovation. Some arguments have been given, like open innovation is characterized by volumes of venture capital generated and closed innovation by the number of patents produced. This integrated new model is applied to China, in order to create a more innovative society. The end of this paper provides some suggestions to Chinese government policy maker.