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15th Workshop on International Stability, Technology, and Culture

The International Federation of Automatic Control


June 6-8, 2013. Prishtina, Kosovo

A Geometric Approach for the Sustainable Economic Growth of a Country:


The Equilateral Triangular Model
Peter P. Groumpos*
* Department of Electrical and Computer Engineering, Laboratory for Automation and Robotics, University of Patras, Patras
GREECE (Tel: +30-2610-996449; e-mail: groumpos@ece.upatras.gr).

Abstract: Strategic perspectives of sustainable development are considered and discussed. The concept
of environmental sustainability is addressed and its relation to sustainable development is discussed. By
undertaking mathematical calculations and geometrical axioms, this study shows a different approach in
regional development based on various settings between three fundamental concepts: Education +
Research- Innovation + Entrepreneurship. The Triangle of Knowledge (ToK) is defined using the above
three fundamental concepts. The Triangle of Knowledge refers to the interaction between education,
research-innovation and entrepreneurship, which are key drivers for the Knowledge-Based-Society
(KBS). This concept relates to the need to pay attention on an equal basis to the three factors on a
systemic and continuous way. Particular contribution to the Triangle of Knowledge is attempted, through
the introduction of Excellence within the proposed Equilateral Triangular Model Approach (ETMA). A
new performance index is defined, the Excellence Performance Indicator (EPI) and used on this new
proposed methodology of ETMA. A number of simulation runs using ETMA and the Triangle of
Knowledge(ToK) is performed and a number of interesting results are obtained and discussed.
Keywords: sustainable development, economic models, triangle of knowledge (ToK)

1. INTRODUCTION
Nowadays it is recognized that we are immersed in a Collaboration between companies and public research and
Knowledge- Based Society (KBS) in which the knowledge academic institutions, through the formation of regional and
generation is becoming an added value to the economy and intra-regional clusters of excellence
the society of a country. It is not strange to say that the Support and enhancement of research and innovation within
greater the capacity of a country has in generating new SMEs and access to research and technology outcomes of
knowledge the more advantageous its economic and social public institutions
respect for other competitors. In fact a country’s economic Regional, trans-national or inter-regional forms of co-
growth is largely been driven by the pursuit of scientific operation that aim to introduce partnerships within research
understanding and continuous technological innovation. fields of high priority
As technological and new industries are becoming more Support of research capabilities, such as research
sophisticated, universities, research centers and scientific – infrastructure, human capital, IT and Telecommunications
technological parks are playing an ever more important role and others within scientific areas that boost development
in the processes of research, invention, innovation and This paper will begin its elaboration by examining the field
commercialization. A major part of a strategy for all of economic development and mentioning its some important
countries, regardless of geographic borders must be the models. By addressing some key concepts and considerations
development of regions, through initiatives which will regarding economic growth and development, it will also
eliminate inequalities in the periphery and will provide identify the trends within regional policy and its main
citizens and communities with a satisfactory level of welfare. directions. Further on, sustainable development will be
To mention a few strategic perspectives: investigated, in terms of social, economic and environmental
sustainability. A geometric approach to sustainable economic
The development of effective Strategic Business Networks growth will be proposed and the reader will be introduced to
(not individual Strategic Business units) the concept of the Equilateral Triangular Method Approach
(ETMA). Particular emphasis will be given onto the driving
Encourage collaborative advantage (not competitive).
Competitive strategies create win-lose scenarios, often forces of research-innovation, knowledge-education and
competing for a share of the same pie. Collaborative entrepreneurship and their inter-relationships within a
geometric developmental perspective. The ETMA approach
Strategies encourage win-win situations through symbiotic
will be then linked with the concept of Excellence (Aristia, in
relationships. Knowledge grows and the pie gets bigger for
Greek), where specific examples will be analyzed and
all.
presented through geometrical axioms and mathematical
calculations. The concept of the Triangle of Knowledge

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(ToK) having excellence as the main ingredient is defined.


Finally, simulation runs demonstrate the usefulness of the
proposed method.

2. ECONOMIC GROWTH AND SUSTAINABLE


DEVELOPMENT
Economic growth and sustainable development have been an
old issue [Stivers 1976],[Smith, Rees, Gareth 1998]. In the
academic literature, sustainable development is characterised
as development in which total “welfare” is not decreasing
over time. Just as economic development is sustainable
provided economic (man-made) capital is non-decreasing,
sustainable development requires total capital – that is,
economic capital, human and social capital and
environmental capital – to be non-decreasing. In this context,
capital is referring to both the stock and to the quality of the
resources (e.g. the skills, health and knowledge of the Fig. 1. Scheme of sustainable development: at the confluence
population or the quality of air and other natural resources). of three preoccupations.
There have been numerous studies on this challenging field Development on all levels, but more importantly,
[Hasna 2007],[Boulanger 2008], [Barbier 1987]. Some development on a regional basis that will accelerate national
studies connect sustainable development to renewable growth appears as the key to success. However most of
resources and environment [Ayong Le Kama 2001],[Endress, today’s development models are not capable in dealing with
Roumasset, Zhou 2005]. Sustainable development does not today’s global challenging problems. Many official in many
focus solely on environmental issues. Moreover, sustainable international Forums state clearly that “Old solutions no
development policies include three major areas: economic, longer fit the challenges of the twenty-first century”. It is
environmental and social sustainability. In support of this, therefore becoming apparent that the application of a
several United Nations texts, most recently the 2005 World developmental model, which will sustain economic self
Summit Outcome Document [2005 World Summit reliance, is a true necessity. The latest is ensured with the
Outcome], refer to the "interdependent and mutually “treatment” of the feeble business parts, the exploitation of
reinforcing pillars" of sustainable development as economic collaborations, the better utilization of knew knowledge,
development, social development, and environmental creating new and innovative transfer technology systems,
protection. exploiting open innovation, the increase of competitiveness,
and the cleansing of all the things that, in the past, created
One should also not forget the cultural dimension of and raised ineffectual systems. Thus the challenging question
sustainability as well. The Universal Declaration on Cultural here is which new and innovative models can be developed
Diversity [UNESCO, 2001] elaborates the concept by stating and used effectively to address the sustainable development
that "...cultural diversity is as necessary for humankind as problem of a country and/or a region keeping in mind Fig. 1.
biodiversity is for nature”. It becomes “one of the roots of
development understood not simply in terms of economic Such an approach could be the following mathematical
growth, but also as a means to achieve a more satisfactory geometric model.
intellectual, emotional, moral and spiritual existence". In the
light of the previous statement, cultural diversity is the fourth 3. THE TRIPTYCH-
policy area of sustainable development. KNOWLEDGE+RESEARCH+ENTREPRENEURSHIP
Some research activities start from this definition to argue Geometry is one of the oldest sciences, part of the major of
that the environment is a combination of nature and culture. Mathematics. Plato has said “Αγεωμέτρητος μηδείς Εισίτω”-
The Network of Excellence "Sustainable Development in a which means “Let no one ignorant of geometry enter”.
Diverse World", sponsored by the European Union, Tradition has it that this phrase was engraved at the door of
integrates multidisciplinary capacities and interprets cultural Plato’s Academy; the school was founded in Ancient Athens.
diversity as a key element of a new strategy for sustainable In addition, a civil engineer will tell you “the triangle is the
development. Still other researchers regard environmental strongest and most powerful shape of all”.
and social challenges as potential opportunities for
development action. This is particularly valid in the concept Depending of the model and of the economic conditions,
of sustainable enterprise that frames these global needs as most of the times different three factors are used to define
opportunities for private enterprise to provide innovative and mathematically an economic model. In this section, the
entrepreneurial solutions, Fig. 1. concept of (ETMA) for sustainable growth is mathematically
presented using also three factors: Knowledge-Education +

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Research - Innovation + Entrepreneurship (K-E+R-I+E). A


first approach of Equilateral Triangular Model Approach
(ETMA) for control theories was presented by the author of
this paper at an international Scientific – Technical workshop
in Russia, in 1999 [Groumpos,1999] and for sustainable
economic development in 2008 [Groumpos, 2008].

The triangle is been proposed as the basic concept for the


mathematical development of ETMA. Fig. 2 shows an
equilateral triangle, using the triptych E+R-I+E and linking it
to the Development. A number of significances (in other
words the key points, for the achievement of growth) arise
from Fig. 2 and are discussed further on. Fig. 4. The ETMA, emphasizing the Entrepreneurship
component
In Fig. 4, Entrepreneurship is the dominant factor, where
Research-Innovation is in a weak position. The weakness of
Research-Innovation cannot sustain Entrepreneurship in the
long-run, while of problematic character is also the
relationship with Education, channeling a lot of funds to
industries and companies without new knowledge and open
innovation the development of a country will be stagnated.
Let us see the three main factors of the triptych in more
details.

3.1 Knowledge-Education
Fig. 2. ETMA for Sustainable Development
Knowledge does not constitute luxury or property of the few.
What kind of knowledge should transfer the education? The
Knowledge of the 21stcentury is the combination of the rapid
development of science and technology, which will form the
basic component of the future society. Biotechnology,
Genetics, Information technology, Nanotechnology, Energy,
etc., are the obvious sources of the scientific knowledge
which are produced and will continue to be produced in
laboratories of the Universities and/or the Research Institutes.
These sources result in the conversion of this knowledge into
"product" and services disposal for transaction. Education is
a complex term that transfers the Science and the empirical
Knowledge that involves the questioning and the percolation
of cognitive data, the study of philosophy and the ideologies
and achievements of the art. In other words, Education
Fig. 3. The ETMA, emphasizing the Research-Innovation and encompasses the culture which "gives birth" to visions as
Entrepreneurship components. well as targets for achievement.

The above Fig. 3 shows the base of the triangle -education – Education constitutes a major necessity for the 21st century’s
as the weak factor. It can be shown that the entire triangle society, concerning the development and the predominance
could easily become unstable. A neglected Knowledge and of a human-centered developmental model. An educational
Education component could not feed the factors of Research- system, which secures the transfer of knowledge and at the
Innovation and consequently Entrepreneurship with a vital same time, shows to students the necessity of research. It
level of human resources. It is also apparent that minor- also introduces people into the world of ideas, visions, and
levered Education could not be a robust base for values (freedom, justice, self-respect, respect for the others,
entrepreneurship in any level for any country. Therefore, it is altruism, charity) that leads them to the Platonic virtue and
clear that the situation described above, cannot be sustained provides the Education.
in the long run with many negative impacts on the economic
development of a country.

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3.2 Research-Innovation 4. THE EQUILATERAL TRIANGULAR MODEL


APPROACH (ETMA)
Traditionally, one of the major purposes of academic research
has been to add to the body of knowledge and understanding In our case here we should need to be aware of the following
in a particular domain. Increasingly, investment in research geometric axioms regarding triangles.
which can be commercially exploited, and in particular in Axiom 1
engineering and applied sciences, is also a key priority at
institutional and national/regional levels. Given the perimeter of a triangle p=a+b+c then the maximum
area of it,(E), is when the triangle is equilateral or when
The term science research refers to the organized and a=b=c.
systematic search for new science knowledge. Research is
traditionally distinguished into basic research, which aims at Axiom 2 (Theorem of Heron)
increasing the knowledge of science, applied research that is
executed by specific applications and finally, industrial The area (E) of a triangle, given its three sides a, b and c is
research that deals with the conversion of applied research given by the equation
into industrial products. Innovation, as a source of
competitive advantage for national economies, is setting the E    (  a )  (  b)  (  c) (1)
path for enhanced productivity, but is fundamentally
connected with research which appears as an integral part of where τ is the semi-perimeter or
entrepreneurship.
1
More precisely, innovation is today the edge of competition    (a  b  c) (2)
all over the world. The beauty of innovation is that it is in
2
Given the above axioms let us use an example to show the
reach on everyone on the planet. it is even to a big extent
importance of ETMA. Let the perimeter p, of a triangle be
independent or at least not restricted by access to resources
150 units. Varying the three sides of the triangle the results of
be it human, raw materials, energy and others. It is basically
an intellectual exercise shadowing all other competitive table 1 are obtained.
advantages that are in most cases only temporary. Table 1. Results of the Performance of ETMA
Innovation is a necessary condition for the application of new a b c Area Performance
technologies in the labor environment of enterprise, in the 2
import of new products and in the adoption of pioneer Case (base) (side (side (m ) (%)
methods concerning the administration and the promotion of 1) 2)
the enterprise. The scientific research and the technological
development lead to innovation, which is resulting in the 1 50 50 50 1082.532 100
increase of competitiveness as a matter of concern for optimal optimal
business and employment.
2 50 60 40 992.157 91.60
3.3 Entrepreneurship 3 50 70 30 649.519 60.00
4 50 74 26 303.109 28.00
In economic theory, entrepreneurship is the main element of
production, accompanied by land, labor and capital. The 5 50 65 35 866.025 80.00
term derives from the verb “attempt” that means “I make
6 60 45 45 1006.231 92.99
efforts for something new”. Therefore the term already
contains the significance of innovation. Thus, the conversion 7 60 40 50 992.157 91.65
of an idea into a commercial, new or improved product,
8 70 40 40 677.772 62.00
service, and method of production or distribution, constitute
the innovation in the grounds of the entrepreneurship. 9 70 30 50 649.519 60.00
Entrepreneurship and Innovation are not independent, but are 10 70 20 60 556.215 51.38
determined by specific factors, like the consumer demand for
11 74 38 38 320.429 29.60
new products, the availability of scientists and executives and
their ability to produce and to develop the innovation, the Analyzing the results of table 1, a number of interesting
availability of resources in the suitable conditions and the observations can be made. Assume that the development of
appropriateness of material and technical supplies to support an “organization” is connected with the total area E, of the
the needs of creation and of promotion of innovative triangle. As Axiom 1 says and the results show, the area E of
products. The competitive advantage of an economy lies the triangle and thus the development of the organization is
within its ability to innovate and feed the entrepreneurship maximum (optimal) when a=b=c , in other words when the
community with excellent results to be exploited.

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triangle is equilateral. The area decreases and depends on the defined as the Triangle of Knowledge (ToK) based on
actual sizes of each side. It becomes the smallest when one excellence. Furthermore, we provide the following geometric
side predominates: case 4 a=50, b=74, c=26 and in case 11 axioms.
a=74, b=c=38. In other words the development decreases by
more than 70% in both cases. Axiom 3 (Theorem of Archimedes)
Given the three sides of a triangle, a, b and c there always
5. PERFORMANCE INDICATORS OF COMPLEX
DYNAMIC INNOVATION SYSTEMS, BASED ON ETMA
E
exists a in-circle of radius r and is equal to r

Complex innovation systems are dynamic and many of their
properties emerge from the interactions among the entities in where E is the area of the triangle and τ the semi-perimeter
them. They also have a propensity to exhibit power law or
scaling correlations between primary measures used to Axiom 4
characterize them. A complex dynamic innovation system is
Given a triangle there always exist an in-circle which is
composed of individuals and organizations that directly and tangent to all the three sides and it always has its center at the
indirectly invest time and energy in the creation of new
intercept point of the angle bisectors.
scientific and technical knowledge. This “knowledge” flows
and recombines in complex ways. Axiom 5
Observers of complex dynamic innovation systems, for Given the three sides a, b and c of a triangle ABC, the area of
example, national systems of innovation, frequently make the in-circle (A=πr2) is maximum when the triangle is
comparisons. Invariably they aggregate individuals into equilateral, in other words when a=b=c.
groups or collective entities such as countries, institutions,
departments, and companies. They use quantitative and Axiom 6
qualitative measures of the inputs, outputs and processes of
Given the three sides a, b and c or a triangle the ratio of the
these “entities” to construct performance indicators that are
area (A) of the in-circle to the area E of the triangle is the
used to inform governments and/or decision makers.
largest, thus it has the maximum area E, only when the
For example, performance indicators such as national wealth triangle is equilateral, when a=b=c.
(GDP per capita), R&D intensity (GERD/GDP) and scientific
Axiom 7
impact (citations/paper) are used to compare innovation
systems. These indicators are derived from the ratio of Define a new performance indicator as follow
primary measures such as population, GDP, GERD and
pares. Frequently they are used to rank members of an EPI  A / E (3)
innovation system and to inform decision makers.
where EPI: Excellence Performance Indicator,
A: Area of incircle
E: Area of the triangle
Using the above axioms and the data for the triangle table 1,
the following results are obtained.
Table 2. Excellence Performance Indicator (EPI) based on the
concept of the In-circle of a triangle
Area of In- Area of in- Excellen
Case Triangle, circle circle ce
E (m2 ) Radius A (m2 ) Performa
(r) nce
Fig. 5. The Triangle of Knowledge based on Excellence Indicator
(EPI)
Considering as a performance indicator the area of a triangle, 1 1082.532 14.434 654.5205 1
we showed above both from a theoretical perspective as well optimal optimal
as through a simulation run, that the maximum benefit is 2 992.157 13.229 549.7989 0.84
obtained when the triplex (Education + Research – 3 649.519 8.66 235.6056 0.36
Innovation + Entrepreneurship) is formulated in an 4 303.109 4.041 51.3012 0.0784
equilateral triangle balance. Now, one more notion is added, 5 866.025 11.547 418.8786 0.64
that of Excellence (Aristia, in Greek) as an in-circle within 6 1006.4 13.416 565.4523 0.8639
the triangle presented on Fig. 5. This formulation has been

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7 992.157 13.229 549.79889 0.84 theoretical results clearly demonstrate that maximum
8 677.772 9.037 256.5656 0.392 performance of any organization, that uses the triptych E+R-
9 649.519 8.66 235.6056 0.36 I+E, is obtained when all sides of the triangle are equal. This
10 556.215 7.416 172.7783 0.264 is even more evident when using the Excellence Performance
11 320.429 4.272 57.334 0.0876 Indicator. These results demonstrate the need for a country to
adapt policies and steer mechanisms with the objective of
Based on axioms 4, 5 and 6 and the simulation results of
encouraging interaction between Universities, Research
table 2, a number of interesting observations can also be
Institutes, Innovation and Science Parks, Business and
made:
“Public Bodies” within the triangle of knowledge, as defined
 The Excellence Performance Indicator EPI=A/E is in this work, and having as back bone the concept of
maximum=1 when the triangle is equilateral (case Excellence (Aristia).
1: a = b = c = 50 units each)
In order to further analyze and explore the usefulness of the
 The Excellence Performance Indicator [EPI] is ETMA concept, more simulation studies must be performed
always less than 1 for all other cases. especially by employing sets of real data.

 The Excellence Performance Indicator [EPI] is REFERENCES


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