The document discusses cloud computing and modeling the business ecosystem in Albania using a multi-agent system approach. It provides background on Albania and defines cloud computing. It then reviews literature on using mathematical and agent-based modeling to understand economic phenomena and complex systems. The methodology used is to program an agent-based modeling environment to simulate the ICT business environment in Albania.
The document discusses cloud computing and modeling the business ecosystem in Albania using a multi-agent system approach. It provides background on Albania and defines cloud computing. It then reviews literature on using mathematical and agent-based modeling to understand economic phenomena and complex systems. The methodology used is to program an agent-based modeling environment to simulate the ICT business environment in Albania.
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Cloud Computing as a new medium for Artificial Intelligent simulation of Economy and also taken as a new resource in new economy, analysed in the case study of Economy of Albania
Original Title
Cloud Computing, A New Approach to Business Modeling
The document discusses cloud computing and modeling the business ecosystem in Albania using a multi-agent system approach. It provides background on Albania and defines cloud computing. It then reviews literature on using mathematical and agent-based modeling to understand economic phenomena and complex systems. The methodology used is to program an agent-based modeling environment to simulate the ICT business environment in Albania.
The document discusses cloud computing and modeling the business ecosystem in Albania using a multi-agent system approach. It provides background on Albania and defines cloud computing. It then reviews literature on using mathematical and agent-based modeling to understand economic phenomena and complex systems. The methodology used is to program an agent-based modeling environment to simulate the ICT business environment in Albania.
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A Conceptual Study on Cloud Computing and Modeling of Business Ecosystem in Albania
A Multiagent System Approach to Modeling Cloud Computing and Business Ecosystem in Albania
ABSTRACT Republic of Albania is a developing country as well as a candidate for accession towards future membership of European Union. For this reason Albania sees Information and Communication Technologies (ICT) as one of the main development areas for future. To be able to contribute the harmonization and sustainability of ICT strategy development and execution process, this paper covers the topic of Cloud Computing and Cloud Services within the perspective of the country. An agent based model for the business ecosystem in the scale of the country is proposed and used to outline possible scenarios for the ICT business emergence and presence in Albania. This paper aims to provide necessary guidelines for increasing depth and width of information technologies in all dimensions of the Albanian economy. INTRODUCTION To be able to explain complex economic behavior most modern economy theorists and other social scientists resort to mainly systems of mathematical equations which are Stochastic systems of nonlinear differential equations. The problem with this approach is that the value of describing the economic events does not always justify the effort put in developing these systems which are generally outdated until they mature. We can describe the situation as The economy changes faster than the theory The computational methods described in this paper aim to provide an alternative way to explain economical phenomena without attempting to find an ultimate rule leaving room for future evolution and adaptation to unforeseen conditions. The most important rapid change in the field of Economics is the change of paradigm in Information and Communication Technologies. If we focus more on the subject we observe that the definitions, delivery, consumption and deployment of all services within this context are changing. Business models, business environment as well as market conditions are also affected. Of all the changes taking place at the field of computers and information technologies, Cloud Computing is increasing its importance and dominance in technology and business world. The phrase originates from the cloud symbol used in flow charts and diagrams to symbolize the wide area network. The principle behind the cloud is that any computer connected to the network is connected to the same pool of computing power, applications, and files. The term Cloud Computing is defined by US National Institute for Standards and Technology (NIST) in their 2011 DRAFT Cloud Computing Synopsis and Recommendations as Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models [1] Methodology used in this paper is literature review for collection of data from National and International sources and use this information as a set of initial conditions for programming an agent based modeling environment for which only the basic outline and description is given. Actual implementation of the model by creating the initial software on provided infrastructure is left for further studies. In fact the user generated software model requires no other effort, but defining a rule for importing real life business models into an artificial economy. The resulting network will be self- organizing and self-developing (the word self is used in the sense that the network is an entity independent of its constituents) with real world entities imported and associated with the agents in the virtual environment described in this paper. LITERATURE REVIEW Using mathematical systems to understand economy goes back to the 17th century when German Universities started studying public administration data calling the new field as Statistics. However development of explicit and abstract models for behavior to apply mathematical toos appeared first in Johann Heinrich von Thnens book named: The Isolated State. As a farmer and an amateur economist, Von Thunen proposed a model to describe the use of agricultural land development of cities assuming city is located centrally within an Isolated State which is self-sufficient and has no external influences, surrounded by an unoccupied wilderness. Also completely flat land without wide rivers and mountains to interrupt as well as consistent soil quality and climate conditions are assumed. He hypothesized that patterns of rings around the city would develop, with dairying and intensive farming being the first ring around the city, timber and firewood production in the second ring, extensive field crops for grains and bread in the third, and animal farming in the fourth. Although Thunens predictions which were made before the invention of refrigeration, industry, efficient fuel sources, transportation and electricity, were different from the actual city formations of today, his model is still considered as an important one in Economics and Geography to illustrate the balance between the cost of land and transportation.[2] Later in 20th century Mathematicians like John von Neumann and John F. Nash contributed to the Economic Theory by their studies on a newly theorized field of mathematics called Game Theory [3] Although some developments occurred before it, the field of game theory came into being with the 1944 book Theory of Games and Economic Behavior by John von Neumann and Oskar Morgenstern. [4] Von Neumann is widely considered as the father of computers, due to his propsed Von Neumann architecture Von Neumann was also working on a theoretical machine capable of producing a copy of itself, but due to technical difficulties in 1940s he was having very limited progress. His friend Stanislaw Ulam improved the concept by replacing the actual machine by a collection of cells in a grid on paper. Intrigued by this idea Von Neumann drew it to create the first Cellular Automaton and thus become the father of Agent Based Modeling since Cellular automata were the first examples of state machines which are defined as abstract machines with behaviour composed of states, transitions and actions which are essential to the definition of agent based models. One of the most important papers on the application of artificial agents to study Economic Theory belongs to John H. Holland and John H. Miller, in their 1991 paper the authors discussed how artificial adaptive agents, as they call them, can be defined and be tested in a wide variety of artificial worlds. In their work, Holland and Miller, defined Genetic Algorithms and Classifier Systems as basic components of agent based model of a complex adaptive system.
This has been widely accepted and used in 1990s, for modeling of cognition, team working, logistics, consumer behavior, workforce management, and portfolio management. They have also been used to analyze traffic congestion. However these applications of this new form of modeling method have been for specific cases for a limited period of time which limit their validity by specific model and duration. For the academic world to assess the scientific value of these researches we had to wait for 21st century. Especially in the last decade we have seen a rapid increase in the number and extent of studies. In a 2003 paper Leigh Tesfatsion from Department of Economics, Iowa State University has studied the concept of Agent-Based Computational Economics (ACE), describing how economic studies can be modeled using multi-agent systems (another term used as a synonym for agent based modeling) According to Tesfatsion, computational economy evolves over time as its constituent agents repeatedly interact with each other and learn from these interactions. These local interactions give rise to macroeconomic regularities and the result is a complex system of recurrent causal chains connecting agent behaviors, interaction networks, and social welfare outcomes. The agents of the system are parallel models for which evolutionary forces resulting from rule based interactions replace the rational decisions of real life entities. The key concern for Agent Base Modeling is that its not possible to calculate the extent to which these rule based evolutionary forces might substitute for the rationality assumed in standard economic theories [5] In their 2006 study Holcombe, Coakley and Smallwood attempted to develop a general framework for agent based modeling of Complex Systems. They have pointed out the importance of a common communication language and built a collection of tools in Extensible Markup Language (XML) which allow efficient simulation and visualization of complex systems in biology and medicine. [6]. In a more recent paper on normative agent based systems, Christopher D. Hollander and Annie S. Wu (2011) has proposed that social norms as the slow changing (if not static) rules for configuring multi- agent systems for simulation of Social and Economic Behaviour. They provide an introduction to and present a holistic viewpoint of the state of normative computing (computational solutions that employ ideas based on social norms.) by: introducing social norms and their application to agent-based systems; identify and describe a normative process abstracted from the existing research; discuss future directions for research in normative multi-agent computing.
Cloud Computing as a model of service delivery and consumption has been increasingly researched and analyzed as part of ICT field, but as the weight of information and ICT in the social life increases this field has started to become part of the Economic field of study. In this paper Cloud Computing is proposed as a strategic choice for Albania and defined as the main resource (and deliverable) for the model proposed for the country. As part of the definition by NIST Draft Synopsis and Recommendations [1], the essential characteristics, service models and deployment models for Cloud Computing are given as below: Essential Characteristics include: On-demand self-service: user can unilaterally provision and configure the service without need for human intervention from the service provider Broad network access: Capabilities are available over the network through the use of thin or thick clients (i.e. by using laptops, PDAs etc.) Resource pooling: computing resources are pooled to serve multiple consumers using a multi- tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. Rapid elasticity: Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale up and rapidly released to quickly scale down Measured Service: Cloud systems automatically control and optimize resource use by leveraging a metering capability Service Models include: Cloud Software as a Service: Software Services are delivered through applications running on a Cloud Infrastructure with the essential characteristics given above Cloud Platform as a Service: Cloud service provider (CSP) provides capability to consumer to run applications and services on the Cloud. Infrastructure is managed by CSP but Software and applications managed by consumer Cloud Infrastructure as a Service: Both Infrastructure and Platforms are managed by consumer; CSP only provides the physical, scalable infrastructure composed of ICT resources with essential characteristics given above. Finally Deployment Models include: Private Cloud : Cloud infrastructure is solely for one organization, may be managed by the organization or third party, may be on or off premises Community Cloud: Limited to several organizations forming a community, again may be managed by one or more organizations within community or 3rd party Public cloud: The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services. Hybrid Cloud: The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology Although different definitions and classifications appear, these definitions are valid in most of the literature. The question of why Cloud Computing is important for Albania? can be answered through a set of review and observations. From ITU report on ICT Development Index published in 2009 (covering years between 2002-2007) Albania ranks 85 th in ICT Development Index, 78 th in ICT use and skills sub-indices. Also the country is in top ten countries in gains in the skills sub-index. [7] The popularity of mobile and broadband communication is increasing according to the Authority of Electronic Communication and Postage (AKEP) sources. In June 16, 2010 Report No. 54188-AL by World Bank, Albania is counted as one of the few countries with net positive growth in last 10 years in Europe [8] As can be seen from this data the country is ranking below average in ICT penetration but this rank is increasing. For the maintenance of economic growth, ICT capital investments should be kept limited to infrastructure and carrier network, where as human capital and service capabilities should be promoted. In this paper a simulation platform and environment is proposed for this purpose. ICT BASED BUSINESS DEVELOPMENT MODEL FOR ALBANIA The approach used in this paper is to use Agent Based Modeling to model the actual society in parallel in a simulation environment with the environmental conditions and rules continuously determined by the system agents. Agents responsible from regulation of these resources have special rules determined by the sponsors of the network, others like the designers of the network (including the author of this paper) look for the resources provided by the sponsors or supplied by the supplier agents who compete for the resources produced according to the rules of the system or provided directly from the environment. Agent-based Computational Economics (ACE) is defined as computational study of economies, modeled as evolving systems of interacting Agents starting from initial conditions specified by the modeler. Computational economy evolves over time as its agents repeatedly interact with each other and learn from these interactions. ACE is therefore a bottom-up approach to the study of economic systems [5] The main elements of our model can be listed as individuals, businesses, institutions, which are further categorized as information and communication technology (ICT) professionals, ICT consumers, ICT businesses, other businesses, governmental bodies. Subcategories of other businesses are limited to manufacturing, tourism, health, mining, energy and trade. The KPIs (Key Performance Indicators) related to the economy include the number of businesses, Gross Domestic Product, Individual incomes of ICT professionals and ICT consumers, return on assets (ROA) of ICT Businesses and non-ICT ones. This model has been used to devise scenarios for calculating the number of new or existing players in the ecosystem. The following algorithm can be used to initialize the platform to continue increasing its reference database as well as providing information to be used by parties involved to improve the efficiency of their actual business or tasks. 1- Determine rules for the given specific elements 2- Register generic elements as an artificial agents with predetermined rules 3- Start the classifier system with bucket brigade algorithm (BBA) for the rule classification 4- Implement the rule discovery algorithm (RDA) to generate and test new rules 5- Publicly announce the status of rules and virtual profit (loss) conditions of elements. 6- Associate real entities with artificial adaptive agents to form the information bridge between the actual economy and virtual economy 7- Share the predictions and reports with involved parties as benefit of their participation in the public simulation In bucket brigade algorithm, each rule is a producer in the complex economy. Each rule buys input messages and sells output messages. When a satisfied rule succeeds in competition to post its message it pays the rules that supplied the input messages satisfying the condition part. This amount is subtracted from the Rule Rs Strength. In the next cycle if other rules are satisfied by Rs message and win the competition in turn then R receives their payment and Rs strength is increased accordingly. Some rules also act directly on the environment in a way that produces direct pay off from the environment to the system. Their strength is increased in proportion to that pay off. As a result of BBA, a rules strength increases over time only if it earns profit on average. This happens only if rule produces direct pay off, or belongs to one or more causal chains leading to that pay off. Under appropriate conditions rule strengths in BBA converges to a useful measure of rules contributions to the system performance. [9] For rule discovery, a slightly modified genetic algorithm is proposed. For generic rules in competition the actual parties involved including the individuals and companies registered the Rule sets are collected to be applied to the agent associated with the real entity. Any rule set defined by real entities are taken as input for the rule discovery algorithm. Under the combined effects of BBA and RDA, rules become coupled in complex networks. Clusters and hierarchies of rules emerge. Over time, these substructures serve as building blocks for still more complex substructures [9]
ALBANIAN ECONOMY AND ICT STRATEGY Following figures are taken from Albanian Institute of Statistics (INSTAT) published in 2011. These figures can be used as initial input and correction data with which the simulation results of the system can be compared. [ 11] Active enterprises by legal form, 2010 Total New in 2010 Total 103,038 16,469 Increase rate, %
Public Enterprises 931 11 Public Administration 758 20 Non Profit Organizations 1,562 158 International Organizations 31 1 Total exluding Public Adm., NGO, Int.Org. 100,687 16,290
Active enterprises by year of creation and legal form, 2010 exluding Public Adm., NGO, Int.Org. Year of creation Total Physical Person Juridical Person Public Enterprises Limited Liability Companies Joint Stock Companies Others 2010 16,290 14,035 2,255 11 2,088 60 96 2009 12,158 9,933 2,225 30 2,019 49 127 2008 13,988 11,499 2,489 8 2,236 74 171 2007 8,636 6,891 1,745 232 1,435 40 38 2006 9,137 7,824 1,313 68 1,189 40 16 2005 40,478 30,681 9,797 582 8,675 462 78 Total 100,687 80,863 19,824 931 17,642 725 526
Active enterprises by year of creation and economic activity, 2010 exluding Public Adm., NGO, Int.Org. Year of creation Total Produc ers of goods Agricultu re & Fishing Industry Constru ction Produce rs of services Trade Hotels, Coffe, Restaura nts Transpor t & Communi cation Other Services 2010 16,290 2,437 676 1,242 519 13,853 6,788 3,157 1,745 2,163 2009 12,158 1,760 245 1,017 498 10,398 4,933 2,229 1,411 1,825 2008 13,988 2,250 315 1,389 546 11,738 6,169 2,166 1,364 2,039 2007 8,636 1,275 108 784 383 7,361 3,838 984 1,070 1,469 2006 9,137 1,310 71 844 395 7,827 4,391 1,648 589 1,199 2005 40,478 6,879 287 4,688 1,904 33,599 18,590 5,490 4,182 5,337 Total 100,687 15,911 1,702 9,964 4,245 84,776 44,709 15,674 10,361 14,032
Some variables for all agents are listed below: Customers: Other agents which buys the products of the agent Products: The services or goods produced by the agent Resources: Either outside resources or internal resources where outside resources are products of other agents) and internal resources are employees or subsidiaries Network: different entities which contain the agent in their network list. These entities are easily converted into customers or resources Business Model: Set of rules of an agent which define Customers, Networked entities, Resources and Products Each agent starts its artificial life with a generic network containing Cloud computing resources, a number of demanding agents (which will be randomly selected from the demanding list of the previous cycle) and a business model. Set of rules in the business model determines the changes in customers, resources and network according to the classifier system described before. Genetic algorithms of reproduction, crossover and mutation are applied for system-generated agents. Rest of the agents are entered with business models, customers resources and network of real life entities. One of the goals of the system is to replace business models and variables of agents with real life entities which are imported from real economy as much as possible. The correlation between the real life agents and the artificial agents creates a payoff for their business models to increase their BBA strength. Students in ICT and Economy branches of universities can be registered in the system as agents. They can do the data entry and analysis required by the system to achieve this goal. They can be actually paid (by sponsors) based on their level of achievement of this system goal. Although Albania considers ICT as the leading industry to carry the country to the future, a 2008 study on National Strategy states the condition of ICT strategy as follows: The process in its totality shows signs of lack of harmonization and sustainability. [10] Emerging fast, Albania needs IT resources and software needed for the vital sectors of tourism, trade, mining and logistics. Same sectors also require Human Capital for ICT services. Internet penetration is low (~30% in 2011 according to Authority of Electronic Communication and Postage - AKEP sources) but usage of social networking is greater than the internet penetration which indicates lack of purchase power which will be resolved as the economy grows. From this data it can be predicted that Cloud computing is a solution to the lack of IT infrastructure and human capital. To promote ICT service and Albanian economic growth the model given above can be used as part of the Government ICT Strategy. Actual implementation of the model by developing the initial software and platform is left for further study. CONCLUSIONS AND FURTHER STUDY The modeling methodology described in this paper can be used to implement an agent based simulation platform by Electronic Communication and Postage Authority (AKEP) in collaboration with other related governmental or non-governmental institutions. Actual implementation of the methods described in this paper can be further studied as a software development project. With the realization of this project, efficiency of technical education and corporate usage of ICT technologies can be increased which in turn can create a positive impact on the GDP and international service capacity of the country. Also this know-how and technology of such a system can be made available commercially or non-commercially in future studies to serve for strategy development in similar countries and markets.
References [1] DRAFT Cloud Computing Synopsis and Recommendations, Lee Badger,Tim Grance Robert Patt- Corner Jeff Voas, NIST special publication, May 2011 [2] Von Thunen Model, A Model for Agricultural Land Use, Matt Rosenberg, 2007 [3] Aumann, Robert J. (1987), "game theory,", The New Palgrave: A Dictionary of Economics, 2, pp. 46082 . [4] John von Neumann and Oskar Morgenstern: Theory of Games and Economic Behavior, Princeton University Press (1944). [5] Agent-Based Computational Economics, Leigh Tesfatsion, ISU Economics Working Paper No. 1, Revised August 24, 2003 [6] A General Framework for Agent-based Modelling of Complex Systems, Mike Holcombe, Simon Coakley and Rod Smallwood, 2006 [7] Measuring the Information Society, ICT Development Index, International Telecommunication Union, 2009 [8] World Bank Report, Country Partnership Strategy For Albania for the period FY11-FY14, June 16, 2010 [9] Artificial Adaptive Agents in Economic Theory, Holland, John H., Miller, John H., AEA Papers and Proceedings, Vol. 81 No. 2, May 1991 [10] Reflections on National ICT Strategies in Albania, Prof. Dr. Jorgaq Kacani, Prof. Dr. Gudar Beqiraj, Prof. Dr. Neki Frasheri, Polytechnic University of Tirana, Faculty of Information technology, 2008 [11] Albanian Institute of Statistics