  Controllability and observability have long been recognized as fundamental
structural properties of dynamical systems, but have recently seen renewed
interest in the context of large, complex networks of dynamical systems. A
basic problem is sensor and actuator placement: choose a subset from a finite
set of possible placements to optimize some real-valued controllability and
observability metrics of the network. Surprisingly little is known about the
structure of such combinatorial optimization problems. In this paper, we show
that several important classes of metrics based on the controllability and
observability Gramians have a strong structural property that allows for either
efficient global optimization or an approximation guarantee by using a simple
greedy heuristic for their maximization. In particular, the mapping from
possible placements to several scalar functions of the associated Gramian is
either a modular or submodular set function. The results are illustrated on
randomly generated systems and on a problem of power electronic actuator
placement in a model of the European power grid.
