Think Bigger. Aim Higher. Go Further.

Tag: factors of production Page 1 of 2

An Analog To Digital Converter For Knowledge Assets

A-D ConverterCuriosumé is an analog to digital converter for knowledge assets.

The single most destructive characteristic of the Market Capitalism is the dependence on resources extracted from the Earth to fuel constant economic growth. Natural resources are finite while constant growth model is infinite.  There are several ways to manage this disparity; the first is to expire Capitalism, the second is to base that dependence on an infinite resource. Given the shortcomings of most viable alternatives to Capitalism, the latter is likely more plausible than the former.

Many perils to society that manifest today have their beginnings in the thesis by Adam Smith called “The Wealth of Nations”. In this document Mr. Smith outlines the conditions of Capitalism where a merchant class would arise to efficiently allocate land, labor, and capital in various combinations in order to produce all of the useful things that society needs. The working class would hold the system in balance; too much growth would result in a shortage of labor that would constrain capital through higher wages (supply and demand). Government would be hardly necessary in a self-balancing system. Ironically, A great deal of innovation has arisen from the prospect of eliminating labor, which allowed growth to continue beyond the natural constraint.

Karl Marx identified the inevitable situation of constant struggle between the working class and the merchant class. One group strived for greater wages while the other strived to lower wages. From this struggle arose a spectrum of adjustments ranging from labor unions and calculated government regulations (Socialism) all the way to full State allocation of public resources (Communism). Herein lies the dawn of geopolitics and competing ideology.

It is fairly easy to see from this short history where hierarchy, competition, politics, exploitation, environmental crisis, and monetary corruption are intimately related. Today, these elements are enshrined in our culture in B-schools, sports, warfare, education, 2-party representation, etc. The result is that people are forced to compete with each other for jobs, money, food, water, air, education, civil liberties, etc.

But it does not have to be this way. A relatively simple modification to the existing paradigm can realign the economic incentives, and therefore social priorities, from consumption to preservation of our planet without necessarily triggering a collapse and subsequent reboot.

Consider the proverbial “basket of goods” – an economic standard used in a variety of analyses including Relative Price Index, Forex, Gross Domestic Product, etc.  The basket of goods consists of unit quantities of tangibles such as food, housing, energy, transportation, etc.  Now consider the human knowledge required to produce that same basket of goods. One can easily imagine economic standards articulated as either the tangible basket of goods or the intangible basket of goods. Both have the same outcome.

Yet, knowledge is an infinite resource that can underwrite so many more dimensions of human existence than a select basket of goods.  The problem is that there is no accounting system for intangibles as there is for tangibles. There is a reason for this – it is called control. Therefore, to create an accounting system for knowledge assets is to take control of productivity and the currency that represents it.  That is the evolution we ought to focus on.

This is a much simpler challenge than trying to solve every problem that our civilization faces individually. This is a much easier problem to solve than trying to change the minds of entrenched ideologies. This is a much easier problem than changing all the laws and institutions that exist to make the old game as fair as it can ever possibly be.  In fact, the solutions for our most complex problems as a civilization are stunningly simple to create.

Did I mention that Curiosumé is an analog to digital converter for knowledge assets?

Is Curiosumé is a Bad Investment?

Burn MoneyOver the years we have identified several features of Curiosumé that every investor wants to change – but these are so fundamental to the operation of Curiosumé that to change them would make the application useless.

However, the follow-on applications could be so hugely profitable that we make the claim: “When hundreds of millions of entrepreneurs see the format of the data output from Curiosumé, they’ll know exactly what to do next”.  The hurdle is to build Curiosumé right while dodging the VC “gauntlet” of control.

Is Curiosumé a Bad Investment?

The following is a list of Curiosumé tenets that we hold critical to the development of the application and why each of these pass across the grain of traditional investment community to make the application difficult to fund:

A. The topmost ontology must belong to the Commons.  We specify Wikipedia, or other public databases for Curiosumé.  There will always be a strong tendency from investors to want to own the database or to define the ontology because there is a legacy ideal that this is where the value is. Private data, such as corporate wiki, can certainly be used to run Curiosumé, but MUST reconcile upward to the commons data base at higher order definitions. There will be a strong desire to own the ontology – we must resist this.

B. Non-competitive ranking system: This will be tough enough for the culture to accept – but we all must change ourselves at least as much as we expect others to change.  Our culture is steeped in tradition of competition; war, sports, even evolution (survival of the fittest), etc – all purport the necessity of competition. It was very difficult to find a suitable rating systems that did not invoke hierarchy and competition.  In reality, Nature exhibits many more examples of collaboration than competition, yet collaboration is not intuitive to the American psychology. We are not saying that competition is bad, it is just inefficient on a crowded planet because it manufactures more uncompensated losers than compensated winners.  There is always a strong tendency for investors to rank business components on a hierarchy – we must resist this.   There is a legitimate market for everyone.

C. Self-selecting: People must self-identify their participation in a community – a great deal of thinking, intention, and VALUE is created and deposited into the system through this extremely important process of self expression – this is where assurance is mined. The only way for it to work is to eliminate the incentive to cheat. The only way to eliminate the incentive to cheat is to eliminate the component of competition. If we eliminate the incentive to cheat then we can disaggregate hugely expensive vetting mechanisms that too often add crippling friction to a system.  There will be a strong desire by investors to rank other people in their own image and to sit on top of a hierarchy to control people – we must resist this.

D. “Learn-collaborate-teach” scale provides demand- production-supply metric. This is extremely important that the selection criteria provide these components that form factors of production for a proto-economy based on intangibles. Later we can design other non-competitive scales as they arise, likely as a smart contract application.  For now, there is so much baggage associated with competition in society that we should best stick with Learn-collaborate-teach scale for now.

E. Anonymity until the point of transaction: Big Data is valuable to the degree that it allows people to perform scenario testing with the community (commons) data. Anonymity allows for the benefits of big data to occur without any detriment of self-identifiable markers and associated moral hazards.  Like Craigslist – when two parties choose to interact with each other, they can then expose their identities in a P2P/block environment and communicate directly with each other equitably. There will always be a strong desire from investors to create a one-way communication channel (advertising, propaganda, control, etc) especially because Curiosumé data format will be near-perfect for targeted ads – we must resist this. However, advertisers can interact on a P2P basis with agents on a mutually agreed (economic) basis. This will be the interface to smart contracts.

F. Formation of the Asset: An asset can only be described as a [quantity] X {Quality} of /something/.  For example: . [100 gallons] X {potable} /water/ is an asset.  Likewise [2014] X {BMW} /SUV/ is an asset.  [2000 likes] X {Pepsi} /Facebook/ is an asset, etc.  Alone, “SUV”, “100 gallons”, “200 likes” are not assets and cannot be traded.  As such, from critical elements above, the ASSET must be defined as [A]X{B}/C/.

This is called a unit asset and represents a node in the network. A persona is then constructed from this node and its relatedness to the public database (wikipedia) Personas can be combined and all the nodes will remain attached and compared by degrees of separation. Degrees of separation will define relevance and VALUE. This formation must be indelible until the agent changes it – this makes it a good candidate for block articulation.

In summary, I have described at least 6 elements of Curiosumé that will always be rejected by traditional investors, yet are absolutely essential to the ability to set ourselves free from the oppression of market capitalism.  Is this a coincidence?

Is Curiosumé a Bad Investment?

How To Change Everything Without Changing Anything

Today, I am releasing an outline of the first of three sections of my upcoming book release called:

Hacking The Financial System; How To Change Everything Without Changing Anything.  

This book will be a step-by-step instruction manual for correcting the relatively tiny flaw in Market Capitalism that is driving civilization into an unsustainable future.  All the tools that we need to correct this flaw (and consequently most of our planet’s most pressing problems) exist today and are readily available to everyone.   Does it sound too good to be true?  There is a hitch:

It is easier done than said.

For example: it was not until human civilization was “ready” to realize that the Sun was the center of their universe, and not the Earth, were we able to access all of the science and technology that resulted from that profound knowledge.  Yet all the facts were clear and present to humanity for millions of years prior.

The same may be true for the next economic paradigm, as I will describe in this book.  All the fact are clear and present today, it is only our ability to shift a simple observation that will determine the advent of a sustainable future that seems so daunting today.  I am confident, with reservations, that we can do it.

I would appreciate your feedback

Please find the table of contents below for the first section of the book. Section 2 and 3 will be posted later.  The appendix will have case studies of how we are deploying The Value Game in the Construction, Aviation, software development, and Philanthropic industries.  I hope that these early demonstrations will help the entrepreneurs among us realize that there may be an alternate business method that is, in a very tangible way,  vastly profitable.

***

Find PDF link below:

Hacking The Financial System:

How to Change Everything Without Changing Anything

Table of Contents

 

Preface

Introduction

Factors of Production

Part 1: Hacking The Financial System

Part 2: The Accounting System Hack

Part 3: The Institution Hack

Part 4: The Wall Street Hack

Part 5: The Currency Hack

Part 6: Evading The Antigen

Conclusion

Next Whitepaper: How everything changes

Final Whitepaper: How Nothing Changes

Appendix: Progress to date

Ideas Are The New Currency

‘Tis the season for “The Year In Pictures” – the annual new year pictorial accounting of the events of the outgoing year.  Any rational collection for 2011 would include three events; Arab Spring, The Earthquake / Tsunami in Japan, and Occupy Wall Street. These three events eclipsed the Royal Wedding, Steve Jobs, the tenth anniversary of 9/11, the space shuttle retirement and even the end of the war in Iraq.

These three events tell a very interesting story of who we are and where we are going as a civilization.  

Classical economists such as David Ricardo and Adam Smith brought us the idea that a merchant class allocates land, labor, and capital in various combinations as “the factors of production” that match supply and demand for all that societies need via the invisible hand of market capitalism.

Yet, in a single hour, land, labor, and billions of units of Capital were wiped off the surface of the Earth by in Japan.   While we see the images of total destruction, there are hundreds of square miles that were untouched and where all seems quite normal – except for that invisible hand of radioactive cesium.  Land, labor, and capital failed as a an economic cornerstone for all those who had once called this land home.

In the Middle East, with few jobs and even fewer opportunities for youth, the quaint notion of “land and labor allocations” crumbled under the forces of people with mobile access to dynamic data, free information, community knowledge, innovation, and wisdom. Governments, with no relative shortage of money, were unable to challenge the opposing factors.  Again, the idea of land, labor, and capital as the economic cornerstone had failed.

Quite appropriately, Occupy Wall Street was executed on borrowed land, with borrowed labor, and borrowed capital.   The operation was peaceful so nobody died. The stock market did not even crash.  Politicians went largely unscathed and the attorneys stayed in their collective offices. Nothing physical was actually created, and therefore, nothing physical was actually destroyed.  However, a great deal was produced.

All three of these events had something in common – they all produced something very tangible.  They all produced an idea in the minds of others.

As we review the year we review it is increasingly evident that land, labor, and capital are inadequate to articulate what people actually produce.  It will be through these shortcomings of classical economics that a new economy will form.  The degree to which society actually produces the things that society actually needs, this new economy should not look much different.  The degree to which society does not actually need the things that capitalism produces, great new ideas will emerge.

What was once the land of opportunity can now become a planet of opportunity.

Photo Credit: David Shankbone via Mashable 

Plenty of Work But Where Is The Knowledge?

Millions of people are looking for Jobs.  Meanwhile, employers complain of a chronic “skills mismatch” that prevents them from hiring people or initiating new innovations.

When an engineer is laid off from an airplane manufacturer, a company like Starbucks has no idea what that person knows even though aircraft and milk steamers have a great deal in common from the perspective of the Engineer (both are pressure vessels subject to extreme environmental conditions).

The same is true for a marine engineer, and HVAC engineer, or an electrostatic coating machinery engineer.  Each of these disciplines has far more in common than they have differences.  However, if you compare the descriptions for any of these jobs, they sound like they all happen on different planets.

God forbid you are not an expert on MS Excel, which only takes a few hours for almost anyone to learn – yet not tagging that radio button can negate 20 years of experience that only 1% of people have the desire, discipline, and intellect to achieve.

The same holds true for many talents and professions. There are serious problems with the way that we discern the supply and demand for knowledge assets.

What is needed is an intermediate knowledge inventory in the commons that everyone can index to.  So when an engineer tags “pressure vessels” the term registers into the resident ontology of all observers.

Why is this better?

Of course companies are trying to eliminate variance and risk by hiring a person who has been trained by someone else – preferable a direct competitor.  On the other hand, the mantra of modern business is to innovate.  Innovation does not happen by duplicating yesterday’s ideas. Mixing diverse combinations of knowledge assets, and not all common knowledge assets, accelerates the process of Innovation.  Think of all the music that is yet to be created for lack of musicians to play the different instruments.

An intermediate knowledge inventory solves both problems by allowing companies to introduce diverse knowledge assets without introducing irrelevant knowledge assets.  It also gives people far more mobility to pursue specialties that they are most talented and interested in.  As such, the allocation of knowledge assets would improve to match supply of knowledge with the demand for knowledge in an innovation economy.

There is not a shortage or work, only a shortage of knowledge about knowledge.  

Supply and Demand for Knowledge Assets

If we follow the Wall Street accounting model, the supply and demand for knowledge assets are cast against the factors of production; land, labor, and capital.  The typical corporate human resource department looks to the community for labor units within commuting distance to a factory, and who are willing to rent their time in exchange a minimum amount of money.

But Land is Obsolete

Technology has made the idea of “land” as a factor of production almost obsolete.  Knowledge assets travel over the Internet and can be deployed and organized in many ways across long distances without a factory.  Indeed there are server farms and automation houses where things are made if needed – but these are hardly factors of production as they once were.

What exactly is a Labor unit again?

Machines have replaced much of what we once called “labor”.  I am sitting at Starbucks where a smiling robot is the only thing missing from the age of automated lattes.  The social, creative, and intellectual capital required to create, design, maintain, and serve the technology is what ushers us into the knowledge economy and the associated innovation economy.

Capital is arbitrary

Everyone knows that money is created out of thin air when someone allocates their future productivity to the bankers balance sheet in exchange for a place to sleep.  When this game loses its entertainment value, “capital” as a factor of production will also become obsolete.

The Supply and Demand for Knowledge Assets:

Knowledge assets are deployed by teachers and replicated by student.  Teachers represent the supply of knowledge and students represent the demand for knowledge.  In between these two extremes are collaborations – that is, varying combinations of teaching and learning that ultimately results in a productive outcome such as a latte, automobile, or computer program.

If we sample a population of knowledge assets across some geographic area (Land) we would expect to find something that looks like a bell curve.

If the bell curve has a different shape, this tells us what things can be made and what things cannot (Labor).

So when people allocate their own productivity, they are in effect assigning their productivity to a community balance sheet (Capital).  They are saying “this is what we are willing to make because we have the freedom, liberty, and we intion to pursue our happiness”.

Hardly a Wall Street model.

The result is that the social, creative, and intellectual assets of people must now replace Land, Labor, and Capital as factors of production in the new value economy.  Trying to produce anything less would be inefficient in a Capitalist system – perhaps some may have noticed as much lately.

A Better Way To Occupy Wall Street

What if I told you that we could occupy Wall Street without actually camping out there?  In case you have not noticed, Wall Street occupies your house without you ever seeing any suits milling around your driveway.  So what’s the plan?

In the Age of The Internet, redistribution of wealth should not be a very difficult thing to do, yet the approach is surprisingly low-tech.  Just look at the pictures; if this is going to be our approach, then we’re in deep trouble.

Here’s the trick. Wall Street is built on a foundation where the factors of production are land, labor, and capital.  All we need to do is shift the factors of production to something else. We don’t actually need to shift Wall Street, we need to shift ourselves.

The reality is that the today’s economy is built on social, creative, and intellectual factors of production – these are the factors of production of that so-called 99% of the value of our economy.  It’s a knowledge economy, remember?

Now, notice how land and labor are constrained by geography, property laws, political districts, and “national borders”. Also notice that the accounting system (capital) is as anonymous as possible, if not shrouded in secrecy.  Do you remember how Steve Jobs told us that it’s OK to copy good ideas?

First, we need to build a knowledge inventory of all the useful stuff in our brains and integrated by geographic proximity so we all can find each other.  This is how we’ll mimic land and labor.  Next, the knowledge inventory must be anonymous until the point of transaction – this is not for privacy concerns, rather, we need to do this to create scarcity (nothing personal, Zuck).  This is how we mimic “capital”.

At the end of the day, your knowledge inventory is your personal API – you create your own value and integrate with others or withhold it as you wish…just like Wall Street. Of course, everyone would then need to become a corporation so that we can pay our fair share of taxes (but not a penny more). That’s code for “too big to fail”.

Have you forgotten about Wall Street yet?  If so, it’s not too early to coin the term APIcracy.

It Is Time To Evolve

I saw a Fox News commentary on the Occupy Wall Street movement.  They interviewed a bunch of kids who were taking part in the parade and asked them a simple question: “So, what do you expect to replace Capitalism with?”

Then Fox, in their fair and balanced tradition, portrayed their subjects as the poster children of a failed education system (some children left behind after all) and further testimony to the failure of the Obama Administration. because obviously “These kids don’t know how the real world works”.

The Pundits can’t climb the tree any better.

Unfortunately, nobody else has an answer to that question either – none of the pundits or anchors produced anything except the tired argument that we tried Socialism and it failed so therefore more Capitalism is the only way to fix Capitalism.

It’s a Simple Problem

Market Capitalism only articulates value in the things that people make which can physically sit on a market shelf.  Market Capitalism does not articulate the value of individual people; those things that people make in society.

Of course, it is also a double edge sword since those that really don’t produce anything – like hedge fund managers, pundits, and politicians – will become impoverished. Meanwhile, those who really do produce things – like teachers, engineers, and firemen – will become wealthy.  So watch how the lines are redrawn in this debate.

How the world really works

The Internet and social media have shifted the factors of production away from land, labor, and capital to a higher order of human organization.  This is what we need to be talking about.  People today produce things with knowledge – social, creative, and intellectual knowledge.  These are the factors of production for that 99% of the value that exists on Earth.

A Simple Solution

After many a blue face, I’ll say it again; there is no way to build anything meaningful without an inventory of parts.  Car companies have inventories of parts, Banks have inventories of assets, even biology has an inventory of genomes – but there is no knowledge inventory for our communities.  We don’t know what we do or do not know.  We have absolutely no idea how valuable we are yet we complain that we’re impoverished.  Meanwhile corporation create technology to replace people when people could be just as easily be creating technology to replace corporations.

How on Earth can we determine supply and demand for knowledge assets without an inventory?  How can we expect to create any type of fair and rational economy from a bunch of invisible stuff milling around the parks?  There is no escape from Market Capitalism and no path to Social Capitalism without a Knowledge Inventory, period.

A Stunning Omission

This is a very easy problem to solve and we have all the cards waiting to be stacked in our favor using the tools that are right in front of our collective noses.  If we fail at something so simple, then we deserve to be enslaved.  After all, 100,000 years ago, such people would have been eaten by tigers.  It’s time to Evolve.

Of Anxiety and Optimism

Keep it Simple

I’ll keep this simple because it is simple.  Most people know exactly what I am talking about.  Most people feel that a huge change is underway.  Most people feel deep in their hearts that whatever we are doing today will be different tomorrow.  Most people feel a strange combination of anxiety and optimism.

It’s Time to Change

No, it’s not just a political change or an economic change or even a social change.  All of these, in their simplicity, would not do justice to the magnitude of what is really about to happen.  The forces now in play will resolve to the equivalent difference between the hunter gatherer civilization, and the Renaissance.   The next economic paradigm will be as different as the abacus is from the computer itself.  Yet, the process by which this is happening is so simple, that the mind is repelled.

Factors of Production

In the Industrial revolution, a machine would make widgets.  It did not matter whether you or I ran the machine, the same widget would emerge.

Today, the machine is a computer.  Your interaction with the computer is entirely different than my interaction with the computer.  In fact, you could swap out the computers and our individual output would remain unchanged.

A HUGE difference

Factors of production are no longer the land, labor, and financial capital of Classical Economic theory.  The factors of production are social, creative, and intellectual capital of  people and their communities.

Classical economic theory is breaking down.  There is a huge change on the horizon. The new economic paradigm is in the process of siphoning off the old economic paradigm.  We’re approaching mid-span; both tanks are half empty or half full, depending on how you look at it.

Confidence is a mixture of anxiety and optimism

I can say with great confidence that anxiety and optimism are the correct emotions to be experiencing today.  So go ahead and tell the children in your life that everything will be OK.

How Obama Will Save The World

Do the math – Interest on National Debt can go all the way up to infinity while Austerity measures can only go down to zero.   There is tragedy looming at both ends of the political spectrum and the Golden Goose can’t fly much longer.  Captain Obama is in a tough spot.

Someone will eventually need to gently lay the economy down in a nice soft spot with a just a few critical social programs intact. A task comparable to US Airways Pilot  Capt. Sullenberger who successfully landed his stalled airliner on the freezing Husdon without ripping off the wings, catching on fire, splitting the hull, or sinking the ship with all the passengers inside.

Here is how the endgame is shaping up:

Through some secret signal, all of the World’s money barons will come together and agree to simultaneously lop off three zeros (000) from all financial balance sheets.  This will effectively reboot the world economy.  A $50 trillion debt obligation now becomes a quaint and manageable $50 billion debt.  Unfortunately, a $500,000 dollar pension becomes worth about $500 bucks.   The game will reset with champaign toasts and business-as-usual in a race to conjure new debt into existence.  The recovery is on … for some.

Those who have exactly as much debt as they have tangible assets will enjoy a net zero impact.   Those caught at the extreme ends with too little debt or too much cash will lose spectacularly.

A stoic and sober Capt. Obama is at the controls, should we be worried?

Well, maybe. Just to give you an idea of what’s happening in the cockpit: Capt. Obama will project his glide path into the visible horizon.  If he can’t make it out to Hillary’s term, he will probably try to set it down right after he is re-elected and can still blame the GOP.  The GOP will try everything they can to wrestle it down before 2012 – split hull or not – so that they can claim the presidency.  If they win 2012 without the landing, they’ll land it soon after 2012 and blame it on Obama.  Note that none of this has anything to do with aerodynamics.

Why should this inspire anyone’s confidence?

There are a few people in the back seats working really hard to build a parachute that will hedge their fall.  None of the people near the cockpit, boardrooms, or stock exchanges have any idea what these passengers are doing – they don’t seem to care – instead, they are too busy topping off their debt to equity ratios for optimum survivability upon impact.

But, the hedge instrument is playing out in Social Media, slowly siphoning the factors of production into a new economic system. Some passengers are only inches away from jump-starting an alternate economy using a social currency backed by real productivity, not debt, in a new form of capitalism.  All they need is an instrument that is only a little better than what’s flying now.  Then, all the money in the world will convert to the hedge currency.

Now THAT’s monetization.

The guys near the cockpit will never see it coming – they’ll only see it leaving.  That’s how Obama will save the World. Let’s hope he can swim.

Social Capitalism: Meet The New Intangibles

Today, land, labor, and capital make up the “Tangible” assets allocated by entrepreneurs in the production of all products and service.   Meanwhile, Social Capital, Creative Capital, and Intellectual Capital of people and communities are called “Intangible Assets” on the corporate balance sheet.

As soon as you leave the Corporation, this condition reverses.  What if the new generation of corporations were built on this reversal?

Suppose it is already happening.

The next economic paradigm will be built on Social Media as soon as people start getting together to build things.  Social Capital, Creative Capital and intellectual capital will be allocated by entrepreneurs in the production of all products and services.  Meanwhile land, labor, and capital will be the intangible assets.

This may not be so far out.

LAND: with Social media, Mobile internet, geolocation applications, mobile applications, and speed blogging – most activity is independent of physical land.  Instead, Public “land” or private “land” behave as the intangible component where people assemble and produce things.

LABOR: no longer means that two physical parts are assembled into a machine.  Instead two ideas are assembled into a third idea and redeployed as data, information, knowledge, innovation or wisdom.

CAPITAL: Seriously; what exactly is Capital these days except the thing that banks play with and politicians argue about? Capital is created from debt.  The continuation of Capital Markets as we know them exists more as the absence of a reasonable alternative than an actual proxy for true value or productivity.

Instead; 500 Million people flock to Facebook, Twitter, Google, Linkedin, Foursquare, Gowalla, etc., to collect options and store social value.  Uhm…Why?

The next phase for social media will become user generated productivity.  That is when people get together outside the construct of government and corporations to build something.  If we are lucky, this transition will happen before we are forced to “rebuild” something.

***

The Ingenesist Project specifies an Innovation Economy built on a platform of social media as the next economic paradigm.  Material based on video series here

Non Quantifiable Exchanges

IMG_1468-600-creamy-tuna-sandwichI had a personal breakthrough recently at the Future of Money and Technology Summit. I sat on an excellent Panel discussing non-quantifiable exchanges for an audience of about 70-80 very intelligent people.

Non Quantifiable Exchanges
Moderator: Tara Hunt, The Whuffie Factor
Chris Heuer, Social Media Club
Dan Robles, The Ingenesist Project
Micki Krimmel, NeighborGoods

I will write a post for each of these incredible panelists in the near future because each are building out the infrastructure of the new economy just by doing what they like to do most.  Soon everyone will be doing the same.

My experience

For one hour, we engaged in a remarkable conversation together. For me, it was a watershed event – I grew personally, socially, and intellectually.

Throughout the 16-year history of The Ingenesist Project, my challenge has always been to explain and demonstrate how the simple act of a conversation among informed people does, in fact, create value in a process that extends back to an intensely complicated production system. The value contained, stored, and exchanged by people is a direct result of their accumulated past and the interaction with their own environment. Until this summit – those two ends would rarely meet.

For example:

Reaching into your wallet and pulling out a dollar bill to purchase a can of tuna fish may seem like a very simple transaction. It is, in fact, intensely complicated from the funding of the fishing vessel, compliance with international law, packaging and distribution, all the way to the creation of the dollar in your wallet amplified through the miracles of the fractional reserve system. It is deeply complicated.

When we bite into our tuna sandwich, we take this complexity for granted. We are in fact, consuming the strenuous articulation of a financial system disguised as the simplicity of the checkout stand, the application of mayonnaise, and aroma of toasted wheat bread.

Similarly, for any meaningful conversation, the events prior and the effects after the conversation, for bettor or worse, reinforce the system through which future conversations will be shared.

While it would have been inappropriate to deep dive on this panel – I was able to transact effectively in this conversational currency system. I was able to come closer to communicating this comparison between the financial transaction and the knowledge transaction in a public forum than likely ever before. For this, I am deeply grateful.

No matter how you slice it:

1. The vast majority of value of an exchange has a history far greater, and future effect far longer lasting, than the transaction itself.

2. When the production systems become more integrated with markets value is created, huge shifts in value can be transferred.

3. Conversation is currency

This, I believe is the future of money and technology

Future of Money and Technology Summit

I was invited to present at the Future of Money and Technology Summit in San Francisco on Monday April 26. Representing The Ingenesist Project, I’ll be seated on a panel with two very important futurists; Chris Heuer and Micki Krimmel discussing non-quantifiable exchanges. The ever esteemed and respectable Ms. Tara Hunt will be moderating the session.

From the FMTS website:

The Future of Money & Technology Summit will bring together the best and brightest thinkers around money, including visionaries, entrepreneurial business people, developers, press, investors, authors, solution providers, service providers, and organizations who work with them at the convergence of cash and commerce. We meet to discuss the evolving money ecosystem in a proactive, conducive to dealmaking environment.

What I find especially interesting is the incredible collection of technologies for the storage of value and the amazing group of entrepreneurs corresponding to the exchange of value in future markets. The definition of currency is something that is used as a medium for the storage and exchange of valuable. As such, it would be quite the understatement that the FMTS will be a valuable experience.

A great deal of thought, planning, and money has gone into these ventures and now they are together in one room. This can only be attributed to the increasing inability of the current financial system to function as an equitable means to store and exchange value that drives entrepreneurs to new conclusions.

When I witnessed the Mexican Devaluation, the social reaction was to empty out the local WalMart. Those “goods” such as clothing, appliances, and furnishings became an intermediate currency that stored the prior day’s peso value for exchange with tomorrow’s market. The same is true for most financial crises with significant devaluation events in recent history.

The clear and present difference is Social Media.

We now see people busy at work to replace the old currency with improved systems and tools for the storage and exchange of value before the actual calamity arrives. In effect, the new systems are hedging the old one.

It will take many years for the implications and importance of events such as the Future of Money and Technology Summit to make it into the case studies of the major B-school curricula. Ironically, that does not mean that real history is not being made – or shall I say, old history is not being re-made.

So please consider joining us at the conference (details). If you are attending, please, please, please, find me and let’s talk about everything. As always, thank you dear reader because ultimately you are the only reason that people want to talk to me 🙂

Culture: When Engagement Is Not Optional

pLASMA bALLToday we see Social Media duplicating many of the functions of earlier society by storing community wisdom, applying social vetting, and deploying social currencies.

It takes a Community

Here is an article is about a a person who learned through social media profiling that her fiance was active in hobbies that conflicted with her moral constitution – before the wedding instead of after.  In the old days, the community would also profile each individual based on the social record of their behavior.

Social Capitalism

Here is a video article that discusses how social media is  duplicating many functions of the corporation outside the construct of the corporation. Factors of production increasingly enter the org chart as a social media application.  We now question whether the corporation itself is the sole vehicle of wealth creation.

Social Currency

We see social media duplicating many of the functions of the financial system where currency, credit scores, banks, land, labor, and capital are being replaced by social currency, social vetting, social capital, creative capital, and social entrepreneurs.

Macro vs. Micro

We see divisions of scale from the long-winded one-sided content of the static web presence to the micro blogging applications that more closely resemble a conversation.  Time factors are accelerated to the point where real-time is not fast enough.

Local vs. Global

We see an emerging segmentation between Local Social and Global Social. At first global leverage was the awarded the small entrepreneur with something to offer to the world.  Now ‘Local Social’ enjoys substantial leverage over global corporations by reorganizing the way people prioritize and experience each other and their community.

Everyone is a node

Taking an analogy from the physics of electricity, the term “potential” means the difference in energy between two nodes.  The greater the difference, the bigger the spark and the greater the impact.   The local energy at each node influences the direction and size of sparks between nodes.  As people accumulate ‘Social Current’, their position relative to those around them changes. Likewise, their potential also changes relative to the ‘Social Current’ of others. Everyone has some potential relative to every other node.

Integration has arrived

Much like the knowledge economy integrated, but did not replace, the agrarian economy, Social Media will not replace the corporation, the financial system, dissertation, conversations, localization or globalization.  Rather, everyone becomes a corporation, everyone prints their own social currency, everyone publishes their intentions, everyone has local and global leverage.  That’s what Integration is all about.

A ‘culture of one’ is moot.

It is not surprising then that our culture itself is now being defined in terms of social media with effective aggregation of  social norms, storage of social wisdom, and medium of exchange for community ideals.  The true test of “culture status” is when engagement is no longer an optional.  Without engagement, there is no culture.


Factor of Production #2; Creative Capital

Land_Labor_capitalThe financial system that we live in today is allocated to us all through combining chunks of Land, Labor, and Capital. It should be fairly obvious that there are some issues with land (real estate bubble), Labor (high unemployment/out sourcing), and Capital (financial system meltdown).

As Dr. Phil would say: “How’s that workin’ for ya?”

There has been a flash of conversation centered around the idea of Social Capital as a form of currency in these two blog posts by Brian Solis and Venessa Miemis. I would like to use this post to expand those ideas to one of at least two more “Factors of Production”: Creative Capital, and Intellectual capital, in future blog posts.

Introducing the subject of Creative capital (more later, no doubt), here is a video from TED about the league of extraordinary dancers. Watch them move but also listen to how they talk about what they are doing. Skip through the 17 minutes if you must (you probably can’t!), just see how different they see the world.

If we expect to deliver an alternate social currency backed by innovation, we need to reflect deeply upon this specific factor of production.  We need to think, observe, and interpret with the flexibility that “Creatives” have – if not, we need the humility to let them help us.   Only then can we start connecting the dots.

What is the Secret Sauce of Innovation?

Most studies on Innovation study the to 99th percentile human in the hope of discovering the “secret sauce” of wealth creation. One such study identifies 5 discovery skills and conclude that the top innovators are also in the top percentile for all these skills. What a surprise that the top university would conclude that they – and people like them – were the secret sauce of all wealth creation.

But what about the rest of the world? What about the individuals and teams of people who actually carry out the plans of those great people? Are they relegated to the footnotes or is there a way for two or more people to simulate the attributes of a 99th percentile person?

This video argues that a 6th discovery skill is the ability to recognize one’s weaknesses AND the strengths of another person. This takes humility and an knowledge inventory of one’s community. Given the ubiquitousness of the persistent economic crisis, ostensibly managed by those paragons of intellect, the masters of the 5 discovery skills – we may need a new way of building so-called “consensus” about what innovation is and who the innovators are.

(I did fail to point out in this discussion that the ability to network with similar people is a distinctly different than the ability to network with dissimilar people. As such, the 5th discovery skill and the 6th are distinct)

Where is The Knowledge Inventory?

Knowledge marketsThere is no knowledge inventory of our communities. The is a STUNNING omission for a country whose only hope at climbing out of economic hardship is sequestered within the innovative minds of its people.

If done correctly, knowledge can behave as an asset of trade. This must first start with a comprehensive knowledge inventory. Like the human genome project, the knowledge inventory project must be a sustained effort.

Link to specification document

Open Letter to all Deep Web Researchers

iceberg80This Open Letter is directed to all Deep Web researchers, authors, developers, practitioners and people who have a great interest in what lies beyond the popularity contests playing out on the ‘surface web’.

I submit this letter in appreciation for the work that you do I also want to present an important application to your research for which you may not yet be fully aware.

As they say, beauty is only skin deep and the hard work of organizing the Deep Web offers an astonishing opportunity for the next economic paradigm. Very few people are aware of this.

Who are we?

I am the director of The Ingenesist Project, an obscure Think Tank in the Seattle area modestly funded by visionaries. Our job is to specify an alternate financial system that we loosely describe as an innovation economy built on a platform of social media.

Consequently, we also specify a new currency backed by innovation instead of debt. Innovation currency is very similar to debt currency since they both ‘represent’ future productivity. As such, these two currencies would be readily “convertible” in exchange – something that we all may need in the not-too-distant future.

Where do you fit in?

Essential to this concept is the relationship between data, information, knowledge, and innovation which we express as a differential equation. Here is a quick explanation – please bear with me:

We can predict the value of innovation by observing rates of change of knowledge. We can predict the value of knowledge by observing rates of change of information. But the most critical element is the ability to predict the value of information by observing rates of change of data. The most critical element in the next economic paradigm is the human interaction with data.

With that missing piece, a new financial system can then capitalize and securitize these “predicted future values” much like Wall Street does with social debt. Deep Web Researchers literally hold the key to ending the oppression of debt economics worldwide. No kidding.

What’s in it for you?

This is where your work gets us really excited: Google induced economic incentives that drove millions of entrepreneurs into the work of creating new information – and yet direct widespread monetization remains elusive. In contrast, human interaction with the Deep Web will unleash economic incentives that will drive millions of entrepreneurs to create databases. The difference is that new Data are the only thing that a market is willing to pay for – not the popularity contests. And wow, is there a market waiting for you.

I understand that you are all very busy given the magnitude and complexity of your work. If this letter speaks to you, then please speak with me. Let’s discuss how your work would be applied to this very important effort. I’m easy to find in the datasphere.

Thank you

Gross National Happiness

Continuing our series on the Search for the Next Economic Paradigm, we feature an unlikely authority on Economic development. The Gross National Happiness Metric hails from the Himalayan country of Bhutan listed by the UN as a “Least Developed Country”.

The linked presentation below reports on the GNH (Gross National Happiness) conference. Yes, people are getting together for an annual GNH conference just like the famed GNP (Gross Domestic Product) conferences elsewhere.

Hypothesis: Paradigm shift related to global societal development

• ‘Economic growth’ as the dominating paradigm of ‘progress’ is increasingly under challenge
• Growth of GDP is unsustainable and does not lead to more happiness
• We are in a process of Redefining Progress and Global Transformation
• Needed: Multi-stakeholder, multi-cultural and intradisciplinary as well as participatory public support networks for an emerging new development paradigm

The Production of Happiness

When Capitalists Are Really the Socialists

SocialistMickeyYikes…

Unemployment tops 10%.  Add in the under-employed, part timers, young adults trying to enter the job market, the ones who have given up or otherwise marginalized, and we’re well into the 15-20% range.

Mediated Reality:

When will people come to the realization that a new financial system is needed to represent the new social order?  When will people realize that they have in their possession the most important tool ever devised by humanity for the benefit of humanity?  When will they shut off the TV and reject the barrage of mediated reality that blinds them with propaganda at every turn?

Toyota Raises the Bar, Again

Adapted from NY Times article here

Last week Akio Toyoda, president of Toyota Motor, apologized for his company’s poor financial performance and possible culpability in the death of an American family for faulty product.To this, I ask – what is the value of this conversation in the age of Social Media and where is the associated innovation?

I worked extensively in Japan and apologies from CEOs are not uncommon.  When All Nippon Airlines and Japan Airlines had a few runway incursions – both CEOs (competitive enemies) appeared together on national TV nearing tears and ending with a loooooooong bow of remorse.  US media does not often get a chance to see this side of Japanese culture because of it’s intimacy, sensitivity, and frankly, it’s a little bit strange since scandal and corruption in Japan can be truly world class.

A few interesting quotes from Mr. Toyoda:

  • Toyota was shamefully unprepared for the global economic crisis and now is a step away from “capitulation to irrelevance or death,” said Mr. Toyoda, the grandson of the car maker’s founder. The company, he added, is “grasping for salvation.”
  • Toyoda declared the automaker had gotten too arrogant on “the hubris born of success” and the “undisciplined pursuit of more.”
  • “I want Toyota to return to profit, so we can start paying taxes and go back to contributing to society,” he said.
  • And in a peculiar show of deference, even the reporters gathered were issued an apology.
  • “I’m sorry I am standing on a podium, standing above you,” Mr. Toyoda told the seated audience. “But my seniors always taught me that I must stand when addressing those who are above me.”
  • ….and they go on and on….

And on the other side of the pond…

I am still waiting for a single US Banker, Insurance company CEO, or Corporate executive to apologize for mismanagement and failing to sell worthy products.  Not one – Sure, they will kowtow to the Congress or the courts, but not the people – all they need to do is look straight at the camera. Seat belts were not even installed in US automobiles for the first 60 years because they did not want to give the “impression” that automobiles were unsafe.

The devaluation of conversation?

“Sometimes, this apology business is a way to avoid taking real action or responsibility,” said Robert Dujarric, director of the Institute of Contemporary Japanese Studies at Temple University’s Japan campus.

“When you hear these long apologies,” Mr. Dujarric said, “It makes you want to say: ‘Don’t be sorry, just do something about it.”’

Now, enter Social Media:

Toyoda again has set a new standard.  This story is covered throughout social media space – most other big Japanese apologies had not.  The difference between the US automaker and the Japanese is stark.    Toyota intends to be the standard by which all other competitors are compared.  When most are trying to lower the bar, Toyota raises it.

That’s the value of conversational currency.

Building a Better Entrepreneur; Google 10^100

Google 10^100 award voting is Launched.  There are two sectors that we believe would have the greatest impact on the greatest amount of people; building a better banking system and funding social entrepreneurs.  You can’t have one without the other – if Google funds these two sectors in concert, the outcome would be incredible.

Build A Better Bank

In the old banking system we assume that we have the knowledge to execute a business plan and we go to the bank to borrow the money.  In the new banking system, we will assume we have the money and we go off in search of the knowledge.  Social Media is an excellent “public accounting system” for knowledge assets.

Our current banking system has gotten it backwards.

Technological change must always precede economic growth. The supranational currency may be backed by productivity and not debt.  Social media provides an excellent platform upon which to design such a banking system. People trade “social currency” at a tremendous rate.  This is evidenced by the amount of destructive innovation is occurring in many legacy sectors due to social media.

Better Banking Tools for everyone

“Partner with banks and technology companies to increase the reach of financial services across the world. Users submitted numerous ideas that seek to improve the quality of people’s lives by offering new, more convenient and more sophisticated banking services. Specific suggestions include inexpensive village-based banking kiosks for developing countries; an SMS solution geared toward mobile networks; and ideas for implementing banking services into school curriculums”.

Suggestions that inspired this idea

1.    Enable prepaid cell phone bank accounts for millions of people working in the informal economy
2.    Create a community-level electronic banking system for rural areas
3.    Build IT-enabled kiosks which provide access to financial services
4.    Create a single world bank or supra-national currency, uniform rules and transparent public accounting

Fund Social Entrepreneurs

Venture Capital is ridiculously expensive. Corporate innovation serves shareholders value over social priorities.  Some say that the financial risk of funding innovation is too high. The top ten reasons why start-ups fail are due to knowledge deficits, not money deficits.  A new banking system that trades knowledge as currency would solve this problem.

The key is to match most worthy knowledge surplus to most worthy knowledge deficit.  Google is perfectly able to build a search app for knowledge assets if there were an inventory of knowledge assets.  With the most worthy match, Risk can be reduced and new financial instruments can be developed such as the innovation bond, innovation insurance, tangential innovation markets, and destructive innovation transition contingency options, etc.

Help social entrepreneurs drive change

Create a fund to support social entrepreneurship. This idea was inspired by a number of user proposals focused on “social entrepreneurs” — individuals and organizations who use entrepreneurial techniques to build ventures focused on attacking social problems and fomenting change. Specific relevant ideas include establishing schools that teach entrepreneurial skills in rural areas; supporting entrepreneurs in underdeveloped communities; and creating an entity to provide capital and training to help entrepreneurs build viable businesses and catalyze sustained community change.

Suggestions that inspired this idea

1.    Provide targeted capital and business training to help young entrepreneurs build viable businesses and catalyze sustained community change
2.    Create a non-profit, venture capital-like revolving fund to invest in high-impact local entrepreneurs
3.    Send young American entrepreneurs to underdeveloped communities to help create small businesses that would economically benefit those communities
4.    Create schools in rural areas to teach local people how to become entrepreneurs
5.    Create a private equity fund to help immigrants in developed countries finance business development in their countries of origin

The New Reverse World Order

Bank-of-Wal-Mart-Note--40279The New Reverse Order

If someone can track your spending, they can predict your behavior.  It is also true that if someone can track your behavior, they predict your spending.   The next economic paradigm is simply a higher order of the same.

On the next higher order, if someone knows your “Knowledge Inventory” they can predict how you will manage changing conditions – that is, how you will innovate.  Likewise, tracking how people innovate exposes the development of new knowledge assets (the ‘gold-standard’ of conversational currency).

Everyday some new headline shows that we are getting closer and closer to that point – for better or worse – where humanity learns to manage an innovation economy.

Profound Issues Arise.

The following article about Wal-Mart adopting the debit card (Wal-Mart to Staff: Bye-Bye Paycheck, Hello Debit Card) as a means of issuing paychecks represents a quantum leap in the monetization of knowledge assets.  We expect many more will closely follow in one of the most important financial developments in financial history – virtual currency.  If food stamps can be delivered on a debit card, why not frequent flier miles, Disney Dollars, coupons, rebates, tulip bulbs, beanie babies, or a new global currency such as the Rallod?

A Vetting Zoo

The only questions that remain are related to Vetting.  By all accounts Social Media is developing into the mother of all vetting mechanisms.  Who controls the card? What system is it replacing? Who can pull money off?  Who charges fees to whom and why? Who gets the business intelligence?  What is the PR spin?  Can advertisers interact with the card to apply discounts and rewards?  What types incentives motivate what types of people and can it go on a debit card?

A Steep Departure

Each of these questions, and the companies they spawn, will live or die by Tweet and Blog – this is a steep departure from the past.  For example; 30 years ago, if every American were told that their social security number would be tied to a credits score that is tied to their driving record, employability, insurance premium, health care, mortgage rate, and, yup, their debit card – the cities would have burned in protest.

Nobody could have seen this future except those who designed it.  Today, the designers are you and I – see the future now, see the future here at Conversational Currency.

Trust as a Social Currency

The idea of trust as social currency is appearing in more articles, conferences, and books.  This is all highly consistent with the TIP thesis on Innovation Economics which describes the necessity of a vetting mechanism among the knowledge inventory as a means for the emergence of a currency in a market – that is, a conversational currency.  People need to trust the currency if they are to trade the currency.

Shefaly Yogendra provides some excellent insights below.  Keep in mind that American Culture does not have a monopoly on the definition of trust.  It should not be an American expectation to define the conversational currency in our own image.  Indeed, convertability of such currency will be, and must be, global.

I kept the analysis sparse on this article because it is a valuable exercise to form one’s own perspective on trust prior to diving into someone Else’s opinion.  After all, it’s your currency – you own it.  Good luck.

******************

by Shefaly (please see her Bio here)

Trust is a non-negotiable essential in business. The post linked here refers to web-based business-to-consumer interactions. But as social currency, Trust is the most significant in interactions amongst organisations, customers, employees and regulatory bodies.

Definitions

Wikipedia defines social currency as “information shared which encourages further social encounters“. Social currency is different from social capital which refers to “connections within and between social networks and individuals“.

Social currency – some characteristics

a) No distinction between ‘physical’ and ‘virtual’ worlds

b) No distinction between ‘individuals’ and ‘corporate entities’

c) No distinction between validity of negative or positive normative labels

Determining the value of Trust as social currency

a) Verifiable Identity and antecedents

b) Consistency

c) Reliability

d) Peer recognition

e) Value of the network

f) Individuality and collaborative consciousness

The original article can be found here and it elaborates on each of the points above.

UA:F [1.6.1_878]

Does Social Relevancy Matter?

The Ingenesist Project Community concerns itself with the value of social reach since this will most certainly impact he relevance of  those conversing as well as the relevance of the conversation to some business activity.  Obviously, innovation is about having the right team in the right place at the right time.

Furthermore, business activities such as marketing and advertising need to make their communications more relevant and less wasteful of their audience’s limited bandwidth – lest they risk being perceived as “anti-social”.

Stated somewhat more clinically; the most worthy knowledge surplus must be matched with the most worthy knowledge deficit in order to produce the most valuable outcome.

Brynn Evans offers the following observation:

The future of search  involves social networks, social graphs, or social filtering in some capacity.  Companies will live or die by whether they get the “social” part right: creating the right level of intimacy, trust, reliability, social connectedness, and accuracy in their results listings. Of course, this specifically means that their user experience must at least meet or, preferably, exceed that of Google’s.

To achieve this, we must first stop arguing over the different flavors of search.

Real-time search. Social search. Semantic search. These distinctions are essentially meaningless, especially when we can’t even agree on definitions and when each of their boundaries remain undefined. Instead, we should recognize that they’re all part and parcel of personalizing and contextualizing search for individual users. Let’s stop playing the “name game” and start thinking holistically about how each (and all!) affects and improves what we think of today as “search.”

Defies analysis, defies control:

Ms Evans’ excellent analysis continues to identify numerous problems with attempting to classify Social Relevance – each system is merely trumped by new issues related to semantics, context, and proximity.  It seems as if the more you try to “control” social media, the more it defies control.  The more you try to study it, the more it shows you a mirror of yourself.  Introspection is the irony of extroversion.

The great big Sucking Sound

While nobody, including Ms. Evans can tell you how to increase your social relevancy, we can probably all agree on what does not.   If your message sucks, your social relevancy will also suck.  If you are trying to sell a product that does not actually save people time and increase their net productivity, your product will fail and your social relevancy will suck.   If you are in any way trying to match unworthy knowledge surplus with unworthy knowledge deficit, your social relevancy will suck.

Give up Control in order to gain control:

Business intelligence is the science of knowing what sucks and what does not.  Let Social media carry your message wherever it wants to carry it. The sooner the market tells you what it wants, the sooner you can adapt your products and services to meet the needs.  Things happen fast in social media space and the corporation needs to be faster.  This may mean corporations need to give up control in order to gain control of both the threats and opportunities of the future.  After all, even by the playbook of Corporate America : survival of the fittest is the only relevant social rank.

(Ed: Brynn Evans is a PhD student in Cognitive Science at UC San Diego who uses digital anthropology to study and better understand social search)

Page 1 of 2

Powered by WordPress & Theme by Anders Norén

css.php