The Next Economic Paradigm

Tag: incentives

Diversity in Innovation

Most literature on the subject of Innovation cites diversity as an important component of the innovation enterprise. Unfortunately diversity rides a political narrative rather than practical applications. Polarization is the death of diversity and the political narrative that plagues our country also plagues our ability to innovate.

Process Diversity

Not only does the diversity in innovation matter, the diversity of acceptable outcomes of innovation is also important. In addition, the diversity of attempts at innovation is essential, i.e., failure must be culturally acceptable. Preconception, bias, thresholds, and ideology often spell the end of a economic outcome.

Moving Against the Grain

Unfortunately, the forces acting against diversity are deeply ingrained in each of us whether we’ll admit it or not. For example, if you are in charge of producing diverse groups, processes and outcomes. How does one extract their own personal bias? How does one determine how much diversity is needed? Removing oneself produces randomness. Including oneself produces similitude. Polarization returns.

A Diverse Quagmire

Most companies innovate with existing personnel whose behavior can only be a function of their interaction with the company for their career and retirement prospects. Utilizing external sources does not eliminate this bias and may in fact magnify it.

There may be a way out of this quandary; we must open our observation to include all possible outcomes as worthwhile. Then we must distribute the results broadly. Where diverse people observe the same event, objectivity is achieved.

A striking resemblance to social media

By observing something derived from unobservable events, we can gain a great deal of information. because Social media is experiencing extraordinary growth we can say that a great amount of innovation is occurring. It is our prerogative to capture the innovation and not to expect the innovation to capture us, our government, or our corporations.

Diversity by Proxy

At the Ingenesist Project, we define innovation as outcomes proportional to the rate of change of knowledge with respect to time. As such, all we need to do is look for high rates of change of knowledge and we know that innovation is taking place. We do not know what the innovation is, where it’s directed, or what the market for the innovation may be. However, when we employ diverse observation, these answers begin to emerge.

Social media provides an interesting backdrop to the innovation process. Social Media does not care what you look like, the clothes you wear, or the church you attend. Social media hold no monopoly of opinion on diversity –

Diverse Incentives

If we take a lesson from economics, we know that people will generally act in their own perceived best interest. Then we can apply a set of incentives that modifies the best interests of the people. These incentives may be rewards, access to more incentives, or reduction of risk. Suppose that diversity were in fact a process of self selection or self removal from an objective? That is, people would have enough information regarding the potential outcomes that they could choose to interact with the process or not. In effect, innovating as an economy.

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Deep Web; Database of databases of databases….

We have posted a few articles about the Deep Web and presented an emerging technology project that promises to provide a database of databases for the next great development of Internet Search.  This short post considers the significance of one aspect of Deep Web Search.

Economics is the science of incentives

Google Search has provided a set of incentives that drives people to document their world by blogging, developing social media, and creating seemingly infinite video content.  The ability to see and be seen is the essence of market economics.

While the promise of searching a huge store of databases may not sound like Saturday social night at the local drive in burger joint, it does by extension, introduce new incentives.  The new technology will drive people to build databases.  A new generation of entrepreneurs will collect, organize, analyze and create – not information – but data.

Database of databases of databases

The first things entrepreneurs will organize are human knowledge data – starting with their own, then relating it to others. Not unlike the human genome project, the vast human knowledge reservoir will be mapped. Entrepreneurs will enter their communities (on line, neighborhood, work, school, church, social networks) and create a database for what other people know and parse the data in any number of important and useful databases.

The reason for this is simple; data are collections of human observations.This is the only thing people are willing to pay for. Markets cannot and do not get any more fundamental than that.

Old News is Bad News

Anyone who follows the news, social media, or some of the tech blogs may have noticed a lot of rehashing of old data – every blog has a posts about how social media will “really catch on”.   New media isn’t so new anymore.  The only thing that makes money is is the disclosure or new data – followed by weeks of rehashing of the data all the way down the rankings.

Next Economic Paradigm

All Financial instruments are characterized in terms of a quantity and a quality. Real news, real insight, and real productivity results from new and reliable data, qualified interpretation of data, and relevant analysis of data – relative to time.   The value of money is directly associated with the quantity and quality of the data representing money – relative to time.

Summary: Going to the source

Data alone are useless.  People must process data into information – the backbone of all economics.  Human knowledge and productivity is the source of all information – derived from data.  Therefore, the only things people are willing to pay for are, in fact, data. Monetization of social media may be the deep dive into the data. Do the math. That’s big news.

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The New Reverse World Order

The 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.

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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.

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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.

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