This paper considers the significance of biological diversity in relat
ion to large-scale processes in complex and dynamic ecological-economi
c systems. It focuses on functional diversity, and its relation to pro
duction and maintenance of ecological services that underpin human soc
ieties. Within functional groups of organisms two important categories
of species are identified: keystone process species and those essenti
al for ecosystem resilience. The latter group represents ''natural ins
urance capital.'' In addition to basic research on the interplay among
biological diversity, functional performance, and resilience in compl
ex self-organizing systems, we suggest that a functional approach has
two main implications for a strategy for biodiversity conservation: (1
) Biodiversity conservation to assure the resilience of ecosystems is
required for all systems, no matter how heavily impacted they are. It
should not be limited to protected areas. (2) The social, cultural, an
d economic driving forces in society that cause biodiversity loss need
to be addressed directly. Specifically, (a) differences between the v
alue of biological diversity to the private individual and its fundame
ntal value to society as a whole need to be removed; (b) social and ec
onomic policies that encourage biodiversity loss should be reformed, e
specially where there is a risk of irreversible damage to ecosystems a
nd diversity; and (c) institutions that are adaptive and work in syner
gy with ecosystem processes and functions are critical and should be c
reated at all levels.