# Tag: knowledgePage 1 of 5

The WIKiD Tool algorithm provides a mathematical framework for analyzing dynamic data related to social interactions in a network and memorialized on a Blockchain. This example uses an analogy to the position / velocity / acceleration equations that some people may remember from their school days.

These types of relationships are important for measuring things like innovation. Ask any VC for a definition of Innovation and they’ll probably say “I’ll know it when I see it” or “it’s a good idea with an economic outcome”. Neither of these things are measurable until long after the innovation occurs which is not practical. However, if we could measure something that is closely related (correlates) with innovation, perhaps we could use that to measure the thing we can’t see.

A similar thing happens on Wall street – how do you measure consumer confidence? Financial analysts noticed that the price of some commodities track closely with consumer confidence so they use that as a proxy for the thing they cannot measure directly. This is called a derivative – something whose value is derived from the value of something else. Suppose we use the same idea to measure things like Wisdom, Innovation, Knowledge, Information, and Data (WIKiD)?

As engineers interact with each other to form transaction records, the blockchain records the chronological order of every event, so we can now correlate all events with respect to time.  The connections that are made may be analyzed for both quantity and quality (magnitude and direction). We can now use common mathematical tools from finance and physics.

We have established that the blockchain records the time function for all events to an immutable ledger.  In order to represent vector magnitude we’ll follow a well known analogy to the displacement-velocity-acceleration formulas from physics and associated Calculus.

WIKiD stands for:

(W) = Wisdom
(I) = Innovation
(K) = Knowledge
(i) = information
(D) = Data

Data: In general, we can define data as points placed on such a coordinate system. Each point defines a position in space and the time where an event is recorded. The distance between data points can be called “displacement”, because of the relative distance between the points. In the simplest sense, we can see that Data (D1) and Displacement (D2) share an analogy.

Information: When you draw a line connecting two points, or you draw a line approximating a cluster of points, the slope of that line on a graph provided information about the phenomenon under observation. Is it getting larger slowly? Is it getting smaller rapidly? In essence, the slope of the line represents the rate of change in displacement with respect to time and gives the observation its “velocity”.

This may be represented by the relationship simply stated as:

i = dD/dt

Information is proportional to the rate of change in the data with respect to time

It should be clear that we are defining ‘information’ as a derivative of ‘data’.  a derivative in physics is the same as a derivative in finance, that is “something whose value is derived from the value of something else” That said, we now proceed down the latter of derivatives.

Knowledge: The analogy between velocity and knowledge is intuitive. Knowledge is a phenomenon that may be modeled as the derivative of ‘information’. Strictly speaking, the value of knowledge is derived from the value of the information from which knowledge was created. It is intuitive that one accumulates knowledge over a long period of absorbing information and integral data. Education is the process of absorbing information from a printed page or screen, and combining that with other previously accumulated information to form knowledge.

Hence, the following relationship holds and is simply stated as follows:

K = di/dt =d2D1/dt2

Knowledge is proportional to the rate of change of information with respect to time

Innovation: The analogy between acceleration and innovation is also intuitive but a little more difficult to put to words  (that is why we use equations). Consider an child who is knowledgeable in riding a bicycle on pavement. Suppose that the child, for the first time, encounters sand on the pavement while also executing a sharp turn. During the ensuing deceleration, the child experiences a very high increase in knowledge about their environment within an extremely short period of time. In any case, the child is forced to innovate a solution. Likewise, the motocross racer is constantly innovating to adapt to the conditions of the track.  You can read a book about riding bicycles, but none can adequately describe the moment when the child must create the experience anew.

For the fact of innovation, we provide the following relationship simply stated as follows:

I = dk/dt = d2i/dt2 =d3D/dt3

Innovation is proportional to the rate of change of knowledge with respect to time

Innovation Example: One of the gross errors that we make in business is due to the inability to differentiate an economic event from it’s constituent physical parts.  The classic example is innovation; Venture Capitalists often describe innovation as a new idea that has an economic outcome.  This is problematic because innovation is defined with one equation having two unknowns.  This is mathematically impossible to solve, except by laborious and expensive iterations.

The rational (mathematical) approach would be to test and observe high rates of change of knowledge in a community and use that as a proxy to identify the presence of innovation (as defined above). After that, the community may be tested for economic outcomes.  Unfortunately, I=dk/dt is not normally possible to observe in a hierarchical business structure.  However, when formatted and validated correctly, and applied to a network organizational structure, then I=dk/dt can be represented graphically and accurately identified even by a child.

Wisdom: When we think of wisdom, our minds conjure the image of an elderly person with a lifetime of experiences behind them. Somehow, our elders seem to be able to predict the outcome of a series of actions before those actions take place.   This is why we seek wisdom to lead our organizations and institutions.

Consider the manager of a factory floor who has 30 years experience. During those 30 years, they have seen many things succeed and many things fail. In fact, their experience represent a statistically significant sample of representative events that they have experienced in the past.   The wise manager is able to process new information with old information to predict the probability that the new idea will yield the desired results. The propensity for wisdom may be modeled as a time function in a similar manner.

W = dI/dt = dK2/dt2 = d3i/dt3 = d4D/dt4

Wisdom is proportional to the rate of change of innovation with respect to time

In general we could say that Wisdom is the second derivative of Knowledge and the fourth derivative of Data. Similarly, Innovation is the first derivative of Knowledge and the second derivative of information, and so on.  In order to identify innovation, we would measure high rates of change of knowledge.  Wisdom would be proportional to high rates of innovation, etc.  The utility of these functions should be apparent.

Conclusion

The WIKiD tools algorithm provides a set of relationships for what are now considered intangible assets that are integrated by a time function.  The Blockchain provides the master schedule for the time function to be recorded, leaving us with a somewhat routine task of identifying rates of change in observable events.

Image Credit

Few people recognize the true economic potential of Wikipedia. Obviously, Wikipedia is an important resource for individuals and profit making companies.  It would take Billions of dollars to recreate it from scratch. But the true value of Wikipedia does not end here.

Wikipedia is a really huge set of interconnecting nodes – a massive dynamic database in the commons. When two points are connected, the magnitude and direction of the resulting line provides information about the data and proximity to other data.  Wikipedia is a venerable roadmap of connections between significant people, places, things, and ideas. Not unlike the Facebook social graph, Wikipedia in aggregate is a knowledge graph of humanity.  It is therefore as perfect a representation of humanity because it was created by humanity.

Mass Encryption

One of the more effective ways to encrypt data is to hide it among other data. In fact, your personal knowledge graph, stripped of  personally identifiable information can be hidden – like a needle in a haystack – among the wikipedia knowledge graph.  Your knowledge graph can then extrapolated along the nodes, edges, and paths of Wikipedia to draw inferences, make decisions, or set priorities for yourself and your interaction with the community.  It’s like your own private Big Data engine that only you can see.

The idea behind Curiosumé is to develop that vehicle from which a person can interpret actionable information when they overlay a persona (or Proxy) of themselves on the Wikipedia commons.  When many people overlay their personas to the Public Wikipedia Haystack, they can specify criteria out of nodes and branches of the wikipedia knowledge graph to find each other, to work together, to learn and teach.

Enter Block Chain

Each owner holds a private key in a cryptographic vault to their proxy that they can share, rent, or retract from others. The Private key is the only way to associate the owner with their proxy and with the commons. Mutual private key exchange will define a market for intangible assets among owners of such assets.  This exchange device would be ideally suited for a cryptographic platform such as Maidsafe protocol or Bitcoin Protocol.

Connections, intersections, and resultant “vectors” will reveal patterns from which decisions can be made.  The future economy may include the exchange of private keys.

Level Playing Field

As long as proxies – or personas – are anonymized, it would be OK for everyone to have access to them in the commons.  In fact, the quantity and the quality of the personas in the commons for a community or location could underwrite the currency of that community.  Everyone would have the ability to test their persona in the public domain upon any market to reveal their greatest economic potential.  Such a community currency would have a relative value to other communities not unlike, say, Forex.

The community can even test their own combined personas against a host of scenario proxies such as job proxies, investment proxies, etc., all without committing personal information. However, when two or more parties engage in transaction and/or interface with a regulatory agency, they will need to reveal their private key in order for a transaction to pass a pre-established compliance proxy that is also comprised of nodes and branches in the commons.

The Art of War

It would be very difficulty for people to violate another person because they will need access to the other person’s private key as well as a change in the commons in order to formulate a deception. If they modify the commons, they will in fact reveal themselves as a transaction.   If a perpetrator can somehow change the other person’s proxy, then they will notify others connected to that proxy of that change. Further, the perpetrator may be unwittingly doing more harm to themselves than good in their own connection to other proxies when attacking a particular persona – any action, except the truthful action, could have implications that are unknowable.

As such, there is little incentive to cheat.

Cloud Wars

As such, any disputes will be fought in the commons and not at each individual node where the world engages in wars, competition, and oppression today. Wars would be fought in the info commons rather than being shrouded in the fog of ground ops.

#### The Future of Common Knowledge

The future of common knowledge is the “commons”.  If every person, corporation, or institution were to index to a commons based data source, we could all observe each other while maintaining our privacy.  Economic scenarios could be run without expending money.  Disputes could be handled in the cloud.  The maintenance of the commons could become a new form of governance.

My prior post “The Tale of Two Cities” demonstrates that the intangible social value conjured into existence by the bridge that connects two fair cities far exceeds the ‘tangible’ value of that bridge.  Yet, only the tangible value of the bridge is accounted for on a balance sheet such as GDP.

#### The Conjuring of Intangible Values

This may seem trivial until you observe that people are paid for their intangible assets (knowledge, creativity, and engineering calculations) as a percentage of the far lower number while the bankers, government, and corporate interests compensate themselves as a percentage of the far higher number.  The difference appears to be unaccounted for.

The Tail of Two Cities article concludes that the value that is conjured into existence by both the bridge and the fractional reserve system must be equal, by definition; otherwise the metaphorical breezeway that connects the two worlds would fall.

Bitcoin suffers from a similar curse as The Tail of Two Cities.  The prevailing argument against the crypto-currency is that it has no intrinsic value.  I have personally argued that a currency must represent human productivity intrinsically or else no other human would be willing to work (be productive) in exchange for it.  An article by Paul Bohm “The Value Of Bitcoin is Decentralization” makes a good point that the intrinsic value of Bitcoin is based on the value conjured into existence by increased productivity to society by what can be accomplished with Bitcoin that otherwise would be impossible without Bitcoin.

So if the valuation of a bridge crossing the river and the valuation of Bitcoin crossing the broker both suffer the same curse that there is no accounting system for intangibles, wouldn’t it make sense to solve that problem first  – i.e., measure into existence the intangible value of the Ingenesist – and then release those millions of human intentions (bridges and Crypto-currencies, not withstanding), into the system of trade?  This is the problem that Curiosumé proposes to resolve.

I believe that we first need to solve the under-mining problem that there is no accounting system for intangible assets.  Only then can there be intrinsic value in the conservation of those assets

… then maybe none of this would seem so mysterious.

apitalism is evolving. Society needs to reorganize itself to trade “abundant intangibles instead of scarce tangibles”.  Then, all the decentralized innovations currently coming online can truly integrate.….and, everything will change.

### Reorganizing In The Era Of Social Capitalism:

This 16 minute video describes a method for intangible assets to be made tangible in an accounting system for the purpose of storage, exchange, and creation of new value in communities.

The next step is to create a series of similar videos specifically tailored to each major industry in our economy specifying how Curiosumé would benefit them. That is described in the following document:

#### Video Proposal

We also seek to reach the community of entrepreneurs who will build the next generation of data visualization tools that will facilitate matching algorithms for communities.

Finally, we will introduce The Value Game and the WIKiD Tools Algorithm with which we may form a new cryptographic currency backed by abundant intangibles rather than scarce disposable tangible assets.

That is Reorganizing In The Era Of Social Capitalism

Money is supposed to represent human productivity; otherwise nobody would work for it (think about that for a second).

Today, money is created from future productivity in the form of debt;  when you take a loan, money is created out of thin air and posted as an asset on the banks ledger.  Unfortunately, the money required to pay interest is never created at all, which drives eternal scarcity.

#### What Happens Next:

Through the miracles of the fractional reserve system and high finance; money gets thrown into a blender where it is then divorced from the productivity of those who create it, and is converted to exotic financial instruments that bet for or against the future productivity of the future productivity of the future productivity, etc – in both Calculus and Finance, these are called derivatives.

#### Why does it still work?

So the question becomes; if money does not represent productivity, then why do people still work for it? Well, there is no other alternative to money as we know it.

#### Then came … and went … Bitcoin;

Bitcoin is all the rage because it behaved sort of like a currency – it had many of the desirable characteristics for the storage, exchange, and unit of account for value. But something about it didn’t sit right with society in general – most people aren’t willing to work in exchange for it.

#### Bitcoin has 3 fatal flaws:

1. Bitcoin does not represent human productivity.
2. The total available Bitcoins were highly concentrated among a very few people.
3. Bitcoin are speculative in value.

Many words have been committed to these topics so I’ll leave a deeper understanding to the reader to research on their own.  However, we can now ask the question;

#### Consider an Engineering Backed Currency:

Let’s consider an engineering backed currency and the existing institution of the National Society of Professional Engineers (NSPE)

Condition 1: Engineering works increase human productivity in the form of roads, bridges, machinery, energy, clean water, sanitation, and generalized problem solving.  A currency backed by engineering would invariably be backed by human productivity thereby satisfying condition #1.

Condition 2:  Suppose that upon paying their 300 dollar dues to the National Society of Professional Engineers, the NSPE Knowledge Bank issues 3000 NSPE Bucks, a virtual currency, to the member so that any member can trade with any other member for the purposes of learning, teaching, and collaboration (don’t worry yet about the technical challenges of doing this).

If any member gets stuck on a project, or they need to understand new technologies, or are looking for complementary knowledge, they can compensate another engineer in the NSPE Technical Network using NSPE Bucks.  Young engineers can teach seniors about new tech, social media, hot mobile apps, and seniors can teach young engineers about nuances of engineering practice, etc., all in exchange for NSPE-Bucks.  NSPE bucks will become evenly distributed thereby satisfying condition #2.

Condition 3: The NSPE Bucks act as a form of insurance.  If an engineer gets stuck on a project or needs a review of their work or intersects another discipline, they can get rapid and effective support across a vast network of knowledge assets in the profession.  An engineer may be empowered to interact with their peers and innovate in their careers knowing that the wisdom and experience of their peers is mutually accessible.  As such, condition number 3 is met.

Hold on to your seat – this last point will blow you away:

Innovation is the domain of engineering – the two words are synonymous.  People innovate today for the purpose of increasing productivity in the future.  Remember, debt is also a currency backed by future productivity.  Therefore, when you have two currencies that are backed by the EXACT same underlying asset, they are fully convertible on an open exchange.  So NSPE bucks can be easily converted back to dollars or simply traded broadly in a market.

#### The Mother of All Hedge Funds

As the dollar weakens in scarcity, the NSPE Buck will strengthen in abundance, value will be preserved in the works of engineering that are created. In fact, an engineering backed currency would hedge the dollar as it weaken in it’s ability to maintain infrastructure, build schools, solve climate problems, and provide for the safety health and welfare of people and property.

There is no shortage of work to do and there is no shortage of innovation – there is only a shortage of money.  If Banks can print money out of thin air, why can’t engineers?

Big Data, Bigger Data, Not Neutrality, Mega-Mergers, Election Deform – BIG (fill in the blank)  spells BIG trouble for LITTLE (rest of us).  We don’t stand a chance against the tsunami of surveillance that is barreling our way.  Big Data is becoming it’s own feedback loop and, like shoving a microphone into a stack of tweeters, the noise is deafening.

Nature tells us many things about how an organism responds to externalities.  For example, when a stand of trees encounters an insect infestation, they work in symbiosis with fungi and micro-organisms to amazingly communicate signals across distance and across species to develop compounds to arrest the attack.  Nature collaborates in magnificent ways with often astonishing results – survival of the collaborators.

The entire human organism is in this position today, we cannot attack our own do-loop without also attacking ourselves.  We must adapt a new one.   We must address the perils ahead by organizing ourselves in a radically different manner.  When threatened by inundation, we must also become fluid, mix with the tide, and change its composition from within.

The following presentation was delivered at Seattle University in April 2014.  This presentation demonstrates why – and most importantly –  how we need to re-visualize society, especially our own place in it.  We need to reorganize ourselves as a species to face these powerful new forces that ultimately threaten to smother the knowledge, creativity, and wisdom from our one and only planet.

Our objective with this video is to communicate to all other New Value Movement applications that there is a new form of organization that we can all adapt in order to integrate ourselves in collaboration outside of BIG Data.

Only 20 minutes – be prepared for a mind bender!

Over the last 20 years or so, I have spoken all over the United States and many parts of the world about the idea that there may be a single and relatively easy way to correct very evasive flaw in market capitalism.

Fixing this flaw could correct many of the biases and divisions that plague relationships and communities in an otherwise functional social organization system.  The work of the Ingenesist project, of course, is precisely to correct the flaw.

From past experience, I always get one of three reactions to our work:

1. Some people get it immediately, and engage deeply.
2. Some people don’t get it and ignore completely,
3. Some people attack it, sometimes dangerously.

I learn a great deal from each type of response.  In fact, the vast majority of ideas in the Ingenesist Project come from hundreds of brilliant people who have participated in one of these three ways.  The first two types are self-explanatory. This post is about the third type – I call them “the antigens”. As the term implies, when an Antigen perceive a threat to the existing body they react strongly to neutralize it.

#### The Flaw in Capitalism is well protected

The antigen is not just a person who disagrees with a fact or feature of our work.  They hold a deep visceral objection that is personal, emotional, physical and always disproportionate to the level, scope, or even the topic of conversation.

Much to our astonishment, the antigen is always someone who would be expected to embrace our work and ideas.

The problem, I have come to realize, stems from the suggestion that the Zertify knowledge inventory strategy seeks to increase the efficiency of matching the supply and demand of knowledge assets in a community. The antigen has a vested interest in this same goal and does not believe that there could or should be a better broker than themselves.

#### If it’s not Broker, don’t fix it

Several examples of antigens that we have encountered:

One was the economic development agency for a less developed country.  Our proposition was to present their engineers as world class quality.  They saw this as an emigration threat more than an off-shoring draw, and shut the program down.

One was a celebrity author and lecturer that champions the cause of the common man against the oppression of corporate tyranny.  This individual makes his living selling books, lectures, and endorsements. His scathing misinterpretation of our work hurt us badly.

Another recent  antigen was a person who runs an “accelerator” for start-up companies whose passion is to identify promising start-ups and match entrepreneurs to funding in the spirit of high tech titans of the past.  He saw us as a threat to his “God’s Eye” approach to the garden of money.

On the surface, it would seem that these people or entities would embrace a comprehensive knowledge inventory and machine enabled means of matching supply and demand for knowledge assets.  Instead, they saw us as a threat to their vested interests.

It’s not about right and wrong

The point of this article is not to make the antigen wrong about their response –  it is quite natural and we have all done it.  The Flaw in Market Capitalism is the antigen behavior/reaction itself – not the person demonstrating it.  Our challenge for the future will be to amplify mavens and community organizers to become better at connecting people in collaboration with each other while also identifying and redirecting the antigen response before it is activated.  Because once it emerges, it cannot be put back in the bottle.

The corollary:

Those who would embrace this work likewise have little or no vested interest in “controlling” others and would therefore appear to be the least likely to accept our work.  So by definition, those who accept the ideas that we present are those who would perform well in such an environment.  This further demonstrates the counterintuitive nature of The Ingenesist Project.

This is the final post of the Financial System Hack Series.  Contrary to conventional wisdom, the currency is the last hack, not the first.  Only after Zertify, Gamidox and Exoquant are established would it be possible to introduce a currency that could compete, if not hedge the dollar.

With Zertify we can estimate the probability that a collection of knowledge assets will be able to execute a business plan some time in the future.

With Gamidox, The Value Game is played where several communities interact around a shared asset such as a condominium, airplane, school, hospital, road, car, or any “product” that has socially redeeming value.

These interactions are measured such that we can assign “value” to the game with the Exoquant algorithm.

#### So taken together:

If we can predict the probability that the interactions carried out by communities of people (relative to a product) will have a known value in the future, we can represent it as a “cash flow” with a known volatility (risk).  Now, combining many interactions carried out by many communities around many products with known volatilities, we can pool the predicted cash flows into one large diversified cash flow.  Next, we can  cut the large flow into “bonds”, which we can extrapolate to net present value and to fund the community activities.  This very similar to the way that corporation form and raise money – except without the corporation.  While banks continue to issue Debt Bonds, communities will issue Innovation Bonds in parallel

#### Here is the hack:

In the old days everyone carried gold around with them to engage in trade.  Since gold was heavy, bankers let people keep the gold in their vaults and they wrote little chits that represented the gold.  After a while, people just traded the chits and it was no longer necessary to convert back to gold with each transaction.  Eventually, the gold standard was eliminated altogether and people just traded the paper that now represents their future productivity (debt), not necessarily gold.

#### The currency of abundance

Likewise, after a while it would no longer be necessary to convert the community currency into dollars.  As the dollar slowly starts losing it’s value under the weight of the debt load people will just trade community currencies.  All of these values are made visible and validated from Zertify, Gamidox, and Exoquant data.

The antigen will not be triggered because this is exactly the same way that corporations interact with banks to capitalizes and securitizes dollar debt, the difference is that we are capitalizing and securitizing community innovation by measuring data, information, knowledge, innovation, and wisdom.  A currency of abundance can then replace the currency of scarcity.

#### Nothing Changes and everything changes

Corporations and government can continue activities to the degree that they produce socially redeeming value by simply purchasing innovation bonds from the people with their dollars – if they’ll accept them.

Countless examples abound where the forces of INTANGIBLE assets align is ways that allows them to detach from their shackles and float like a gyroscope. Invisible internal forces allow new social entities to organize, travel, produce, and consume seemingly without structure or anchors. Yet they influence the most tangible of assets in their path.

The next step is to harness this social energy toward sustainable productivity.  Then, and only, then can we arrive at the new economic paradigm (albeit one that may be largely unrecognizable from what we know of today).

#### The United States has a skills crisis

Millions of smart, motivated, and skilled people are out of work. Meanwhile companies complain that they cannot find the skills that they need to fill open positions.  Predictably, the arguments rage polarized; companies are unwilling to train, the education system is unwilling to teach, etc.  But I don’t think that is the problem.

#### A Function of Time

The lag time in the traditional competitive cycle remained the same; measured in months for a marketing campaign, or years with a product development cycle, or even decades as with an aircraft program.  Government is also slow to act with election cycles, public debate, and assorted diversions. Likewise, education system curricula can take 3 to 5 years to go through the release process.

#### Like car crashes, bubbles pop when the system is too slow to respond.

Meanwhile machine enabled social technology is developing so fast that companies do not have time to respond in competitive manner.  Everything becomes a bubble as companies find themselves playing in a game that can crush them at any moment by any number of forces; financial, economic, political, regulatory, public relations, wiki leaks, Facebook, YouTube, Smart Phones, etc.  Even strategic partnerships can unnecessarily and irrevocably tie an institution to the possible misfortunes of associates, with no prior predictability or analysis – until it is too late.

#### The Tangibility Of Tangibles

The corporate structure that is supposed to be the MOST TANGIBLE assets that an institution can hold is what effectively nails them to the floor.  The bottom line is exactly that, the bottom of the value barrel.  Companies that cannot see past the bottom line, can only see the bottom – and that is where they are staffing today.

#### The Value Game

Although developed independently, The Value Game (described herehere, and here) resembles a form of Michael E Porter’s 5 forces of corporate competition – except moving at hyper-speed to generate internal forces like a gyroscope.  Players have neither the time nor the incentive to compete with each other, rather, they compete with a game that produces both tangible and intangible assets in a common accounting system creating new value at an astonishing speed.

Of course, the corporation will not disappear any more than industrial revolution eliminated the agrarians. However, you can bet that the differences will be equally profound.

The New Value Tool is a repetitive simulation of The Value Game (described herehere, and here) that may be used to determine in advance the true value that may be created when people interact with each other around a shared asset.

#### The Social Charter

This should not be too difficult to envision since The Value Game plays out daily in the modern corporation where workers acting in the best interest of the corporation (the shared asset) interact with each other in various departments to preserve the asset rather than consume the asset – this is how corporations create social value; through the employment of people and the social utility of their products.

Obviously, corporations that fail to fulfill their social charter likewise fail to sustain value creation in a community.  Those that do, tend to thrive in the Internet Age. The objective of the New Value Platform is to enable communities to organize, as do corporations, except without the burden of corporate governance or the priorities of outside investors.

#### Drag, Drop, and Dream

The New Value Tool is simple to use; just drag and drop from the Zertify Personal Knowledge Inventory into The Value Game and see what the Exoquant dashboard tells you about your simulation. It may take some practice at first to see how to make the numbers move, but soon it will become intuitive which scenarios create lots of New Value – and will likely sustain themselves in practice.  Scenarios that do not, will likely fail in a particular community and ought not be ventured to practice.

#### Community Algorithm

Exoquant provides a very simple algorithm relating the creation of data, information, knowledge, innovation and wisdom that govern the Value Game.  However, the weighting of these elements is a component of the “fuzzy math” that entrepreneurs bring to the game.  The empirical data resulting from the application becomes property of the players (community) as their “Secret Sauce” of value creation in their own uniquely optimum economic game.

#### On the path to a Social Currency

The New Value Tool May become an important system for analyzing existing ventures for optimum social value creation as well as predicting how collections of knowledge assets in a community can optimize their social value in collaboration with each other.  Eventually, the predictability of the outcomes will improve while diversification of projects will eliminate risks such that a social currency can be capitalized and securitized.

Yesterday’s post “This is what I believe” I make the following 4 statements:

• Information is proportional to the rate of change of data with respect to time
• Knowledge is proportional to the rate of change of information with respect to time
• Innovation is proportional to the rate of change of  knowledge with respect to time
• Wisdom is proportional to the rate of change of innovation with respect to time

#### In clinical terms, this is called a “Differential Equation”

I always get a lot of questions about these.  Most people’s eyes glaze over as their expression goes blank with far off images of high school Calculus class.  Few people realize that these relationships are so common and so intuitive that we are all  performing “Calculus” in many of their thoughts, words, actions, opinions, observations, and conclusions about the world around us.

#### But, just in case there is any doubt about the pervasiveness of differential equations in our culture and thinking, listen to the experts:

***

Move fast and break things” – Mark Zuckerberg

The idea here is that it’s OK to fail because this is how learning happens (rate of change of knowledge) but make sure you do it fast (with respect to time) because the objective is to innovate, not to not make mistakes.

honor your creativity and you don’t ever ignore it or go against what that creative image is telling you. – Lady Gaga

Here she is referring to the proportionality component of creativity. The magnitude of the inspiration (rate of change of one’s knowledge of a matter) is greater than all other thinking moments, but it is constrained in time (with respect to time).

“The Googly thing is to launch [products] early on Google Labs and then iterate, – Merissa Mayer, Google VP

Marissa is talking about Wisdom.  While innovation is proportional to the rate of change of knowledge, wisdom is proportional to the rate of change of innovation.  The speed at which Google can innovate is how Google creates wisdom of what to do next.

***

#### Here are a few more. See if you can spot the differential equation:

“What Mark worries about the most is the lack of change, the lack of innovation” – Sheryl Sandberg, COO Facebook

“Every new thing creates two new questions and two new opportunities.”– Jeff Bezos, Founder of Amazon.com

“It’s always about timing. If it’s too soon, no one understands. If it’s too late, everyone’s forgotten.’” – Anna Wintour, Editor in Chief, Vogue Magazine

All technology starts as a spark in someone’s brain”. – Nathan Myhrvold, Intellectual Ventures (hint: sparks travel at the speed of light)

“As people innovate and learn faster, they help generate new ways of performance improvements for everyone while progressing toward their own higher goals” – John Hagel, The Big Shift

#### Differential Equations are used to describe a vast array of phenomena in our physical universe.

These include the the forces of particles in motion, diffusion of medicine through cell walls, the decay of radioactive substances, and effects of gravity on bodies, weather, energy, chemical reactions, even the creation of money itself.  It should not be a shock then that bankers, CEOs, politicians, and all “investors” are not actually concerned with money, they are concerned with the rate of change of money with respect to time.

The question now becomes, why would their NOT be an algorithm for human values of knowledge, innovation, and wisdom when there is an algorithm for everything else with respect to time.

Additional information can be fount here: Exoquant; an algorithm for Social Capitalism

1. There is a tiny flaw in Market Capitalism that can be easily corrected
2. Technological change must always precede economic growth; we are going about the process of globalization as if economic growth can precede technological change.  We got it upside down, that’s all.
3. Anything that can be made by allocating scarce land, labor, and financial capital can also be made by allocating abundant social, creative, and intellectual capital.
4. For every dollar of tangible value, there is at least 100 dollars worth of  ‘intangible’ value that is really just ‘invisible’.
5. The global debt is trivial in comparison to the invisible value that exists with no accounting system to represent it.
6. There should be no economic incentive for anyone to make anything other than what they are most talented, interested, and passionate about.
7. Nobody knows everything.
8. Everybody knows something they can teach any other person.
9. Students, by definition, hold an equity position in their teachers.
10. Therefore, teachers should hold an equity position in their students – this will fix a lot of things.
11. Nothing economic happens until two or more people get together and build something.
12. Competition is over rated.
13. Collaboration is under rated.
14. All monetary things are valuable but not all valuable things are monetary.
15. There is a perfectly legitimate market for everyone.
16. A new currency will be the last thing that happens, not the first.
17. You can’t eat Gold
18. Information is proportional to the rate of change of data with respect to time.
19. Knowledge is proportional to the rate of change of information with respect to time.
20. Innovation is proportional to the rate of change of knowledge with respect to time.
21. Wisdom is proportional to the rate of change of innovation with respect to time.
22. If you want to create wisdom, go increase the rate of change of innovation.  If you want to create innovation, go increase the rate of change of knowledge, etc. Now, flip over the series 15-18 above.  See, you’ll do just fine.
23. Money represents past, present, or future productivity – otherwise nobody would work for it (think about that ).
24. Therefore, a currency backed by debt and a currency backed by innovation would become the mother of all hedge funds.
25. Securitization is a miracle of scale if done correctly, a disaster of scale if not
26. Time is the only valid basis of a currency.
27. My singular objective and greatest aspiration is to make “intangible” value tangible.  I am confident that my children – and yours – will know what to do next.

The Human Productivity Chart:

Human civilization has progressed through many stages.  Each stage arose from the “integration” of the tools developed in the prior stage.  Believe it or not, the next economic paradigm will arise from the integration of the tools being developed in the current stage of human development. Let me explain:

Hunter -gatherer:

We started as hunter-gathers who traveled from place to place to follow animal migrations and seasonal flora.  People would collect fallen branches and burn them for heat or cooking.  Then people started to sharpen rocks that could be used to hunt food better than a dull rock. They sharpened rocks to chop down trees for warmth and shelter.  Soon they sharpened rocks to till soil.

The agrarians

The arrival of the agrarian age came when the arrow, the axe, and the plow were integrated; that is, the output of one became the input of another – allowing people to conserve energy and increasing productivity. The emergence of communities led to the division of labor as people specialized their skills. People soon developed tools and techniques for forging metals, building structures, and harnessing of forces such as wind, sun, water, and domesticated animals.

City-states

The arrival of City-States arose when division of labor, harnessing forces, and transportation became integrated.  Spare time became available to experiment in ideas such as governance, laws, civil services, and currency. Travel allowed for trade of goods, services, and the spread of knowledge across great distances.

Philosophers

The age of philosophy emerged as the leisure class, knowledge exchange, and civil law integrated such that people began to question existence, spirituality, and test theories about the observations that they constantly witnessed in the natural world.

Scientists

The scientific age emerged from the integration of tools developed during the philosophical age.  Written language, mathematics, geometry, came together as alchemists attempting to turn lead into gold, instead created many other new and useful things from the elements. Astronomy, calculus, the scientific method, and modern finance were born.

Industrialists

The industrial age emerged as an integration of the tools developed by the scientific age.  Eli Whitney demonstrated the “interchangeability of parts” paving the way for modern production. The printing press and cotton gin demonstrated the scalability of machinery while capitalization and securitization of value (finance) allowed a merchant class to allocate land, labor, and capital.

Information

The age of information formed from the integration of tools created by the industrial revolution.  All that machinery created a tremendous amount of data.  Computers were developed for processing data creating information that could be used to make productivity more efficient.

Knowledge

The Knowledge age emerged from the integration of tools developed during the information age. The Internet vastly accelerated the amount of information available from which knowledge could be applied as factors of production in physical systems from weather prediction, space travel, medicine, and new ways for people to organize their selves.

Innovation

The innovation age will emerge from the integration of tools developed by the knowledge age.  So called “social media” is creating thousands of platforms upon which people reorganize themselves around interests, affinities, relationship, and commerce.  As these tools integrate; that is, when the output of one tool becomes the input of another tool (and vice versa), a new economic paradigm will emerge.

Wisdom

Keep in mind that the agrarian economy and all previous stages are still with us today. Keep in mind that elements of future economies also exist today.  Keep in mind that the US dollar has not always been the currency of trade nor should we expect that it will always be with us in the future. We can assume that the productivity inherent in people and communities is not dependent on the currency, rather, currency is dependent on it.  Time is the only scarce resource and everyone has an equal amount of it.  As such, time is the only true currency.

Teachers are “threatened” with layoffs. In some cases, the profession is openly mocked. Meanwhile, corporations are staring blankly at the knowledge gap in their industries.  The older generation is retiring, moving on, and taking their knowledge with them.  Teacher’s unions are busted and disappearing. Apprenticeships are a thing of the past.  Everyone is asking “where are the jobs – there is plenty of work to do”

Education is obviously a financial instrument.  Think about that for a minute – it is an investment like any other investment. Wall Street has an arbitrage instrument for every market anomaly – why not education?

What would happen if teachers were given an equity position in their students?  Isn’t this what families do to prepare their kids to take over the family business?  Isn’t this what happens in corporations where executives pick proteges?  Isn’t this what happens in politics where knowledge is traded among a closed group?

A school like Harvard University or MIT certainly hold and equity position in their students. What if every community viewed every child as an asset instead of a liability?

Social Flights is a complicated game.  Aviation is a complicated business.  This makes Social Flights a challenging business model as much as a great opportunity for those who can figure it out how to play for keeps.

The Challenge

The challenge is to bring on as many as 5000 independent Travel Tribe leaders distributed broadly across a wide geographic area.  Their task will be to strategically build flight plans for private aircraft in their communities. Community leaders will be compensated financially for driving revenue … much is common to a traditional sales channel.

However, each of these community leaders will have already accumulated a vast set of strategic knowledge and experience that can benefit Social Flights across the system. Likewise, Social Flights needs to bring each of them up the ladder of domain specific knowledge in the aviation business.

For compensation, Social Flights offers a tiered affiliate program that pays out various levels of commissions on flights booked according to the affiliate’s tier.  One concern is that this strategy may not create an incentive to share information broadly if one is protecting their own tier standing or their own order of influence.

Another approach would be to use a cascading information system.  This is a gamification theory that suggests: information should be released in the minimum possible snippets to gain the appropriate level of understanding at each point during a game narrative.

Initially, information would be released by social flights in our initial training program.  Later, other players of the game can release information to each other in specific packets defined by the flight scenario.  Such packets of information can be rewarded with other packets of information – or access to more scenarios. The Cascading information theory promotes loyalty, engagement, influence, and time involved in the game of building flight plans.

Gaming the game:

From the onset, Social Flights encourages gaming the game.  This means that we expect to learn a great deal about our business by watching other people play it.  There are far too many scenarios and permutations of business strategies for us to predict how and where they would apply.  All we can do is specify a baseline game scenario form and watch the ways the game is gamed.

In a sense, Social Flights would also be subject to the Cascading Information Theory, thus demonstrating how a corporation would enhance their own engagement, loyalty, influence, and time-quality in the communities where they operate.

There is a raging debate about data usage, privacy violation, and even epic technology data hacks.  The reason is simple – data has value.  Ultimately, data are convertible to value – in some form or another, including money.  That means that data are a convertible currency.  This is not necessarily bad, however, there is a right way and a wrong way to convert data into value.

The wrong way is to steal it from it’s rightful owners

You and I, by our motions, movements, communications and the pursuit of freedom and happiness create a huge amount of data.  This belongs to each individual.  When two or more   people interact with each other – the data they create belongs to them, and nobody else.  This is a very powerful relationship that others seek to exploit.  Equally culpable are those who don’t protect their data and the data they share with people around them.

The right way to use data is to play a game

If you observe any game that people play – from children’s games to sports, and even gambling – they all have one thing in common.  Each player has the same information as all the other players.  The game is largely the ability to influence the information with data. Kids know the probability that a they will be tagged and influence their strategy accordingly – but they all play on the same field. In a basketball game, gravity behaves exactly the same for every player on the team. Poker players know the probability that their opponent will draw a flush – there are only 52 cards.   Stealing Data is like slanting the playing field, stealing cards from the deck, or changing the influence of gravity.

Fair Market Value is a Value Game

The underlying assumption of market capitalism is that everyone has the same information.  Two people holding the same Carfax report can have a rational and fair negotiation about the value of that used car.  As such, the used car market is efficient.  Package labeling, truth in advertising laws, and pharmaceutical disclaimers are an attempt to keep a market efficient so that the market can arrive at a “Fair Market Value”.

The Value Game

The Value Game being tested now at Social Flights is a real life game where real people fly to real places to do real things on real nice airplanes.  There are no badges, tokens, little pink cows, wiggly worms, mayorships, or leader boards.  The Value Game is a real economic game built on real data that real players create, own, and share only with other real players.

How to use data correctly

The Value Game will process a great deal of information to make Social Flights operate efficiently.  Data must be normalized to calculate the probability that a flight will fill so that everyone can make a rational decision about price.  Normalized data can be used to create a seat cancellation insurance policy to reduce price volatility.  Normalized data can help travelers buy an option on game 7 of the World Series, before game 5 has ended. Normalized data can be applied so the player knows exactly how much of a discount to require from a vendor for accepting a coupon. Etc.

The Value Game does not need to know your name, address, phone number, or credit score to compile useful information.  The Value Game does not even need to know such information about your friends, family, or professional relationships.  Nobody needs to know your private information –  unless they intend to use your data incorrectly.  After all, thieves need to know who to restrict your data from – you.

Many important ideas are emerging related to collaborative consumption and the sharing of physical assets.   The primary idea is that communities can save money and conserve natural resources. The most powerful byproduct of collaborative consumption, in my opinion, is that communities can organize around physical assets to produce what they actually need, not what they are told to need.

The idea of collaborative production is generally referenced around a host of enterprise collaboration tools.  However, many of these tools are designed to benefit the for-profit enterprise allowing them to collect high value knowledge assets while eliminating high risk employment liabilities under the noble flag of “Crowd Sourcing”.

#### Collaborative Production

True collaborative production is related more to the idea that communities decide what to produce. In classical economics, the merchant class allocates land, labor, and capital and largely decides what will be brought to market but also what can be withheld from a market.  Collaborative Production starts with the idea that a community allocates it’s own knowledge resources to produce what they need and withhold what they don’t need.

This distinction is actually quite important.  Combining some sugar with fat and stirring in a lot of advertising to produce candy is much faster and easier to do than raise carrots, for example.  While the farming community may prefer to raise carrots, profit margins on carrots are driven by supply and demand for calories – as such, carrots compete directly with candy.

Ultimately what gets produced is that which is easiest and cheapest to produce, store, and transport – not necessarily what a community needs to be cheaply and easily produced.  Eventually the knowledge assets required to grow carrots begin to atrophy by the process of collaborative destruction.

#### Collaborative Destruction

Today, many communities are trapped behind closed doors.  People do not know their neighbors.  They are unable to reach an agreement about what they can build together.  When they lose their “Jobs” they lose their identity and direction and they attach to whatever idealism crosses their fear threshold.

The greatest challenge ahead of us – and the greatest opportunity as well, will be to interact with each other.  We need to know what the other people around us know and find a place for our own knowledge assets in our community.  Communities need to collaborate outside the construct of a corporation and produce the things that they need.  Social Media provides an astonishing tool for a new form of social organization if and only if it can be used to beat the effects of collaborative destruction.

In the last few articles, I’ve discussed the importance of Intentions as a superior means of storing and exchanging value because of the ability to predict economic outcomes.  Only from these conditions can we construct an alternate currency.

#### For all Intents and Purposes….

Suppose that we suggest that one’s knowledge inventory is a good representation of their intentions to do things.  You can test this by strolling through the aisles your neighborhood Barnes and Noble book store and observing your own reactions to the titles as they flash by.  Notice how your tendency to act  (stop to read the byline or even pick up the book to read the cover) correlates to your organic knowledge, passion, interest, or experience.  Notice which sections you tend to linger in and how your eyes float up and down through the shelves, etc.

So let’s say that you studied business in college.  We can then say that you have an intention to conduct business.  The same holds true if you studied math, engineering, art, music, creative sciences, and/or social sciences. So we can say that a knowledge inventory is an intention inventory – assuming that you are not distracted by ADVERTISING.

#### Let’s make some predictions:

If you have low knowledge and high interest, your intentions would correlate to those of a student. If you have high knowledge and high interest, your intentions would correlate to those of a teacher.  If your have low knowledge and low interest, you would register no intentions.  If you have high knowledge and low interest, your intentions are ambivalent.

#### One step deeper:

If we were to assemble a community’s knowledge and interests on a few bell curves, we could make predictions about what a community intends to produce. If a community has high knowledge and high interest to build airplanes then we can place a value on those intentions in a market.

#### Now here is where the fun starts:

If we can predict future value, we can create and “intention currency” and capitalize it.  That means that we can turn it into a debt instrument and make a promise to pay back the today’s intention currency with future intentions.  If we can capitalize an intention currency, we can securitize a combined pool of many intentions and sell “Intention Bonds” that finance today’s intentions with those of tomorrow. Meanwhile, as we build the airplane, we have the incentive to innovate and create new knowledge that we can use to pay off the intention debt in the future.

#### Preoccupied or unoccupied?

If is sounds crazy, be assured that it happens all the time by corporations, marketers, demographers, politicians and even among some prison inmate populations.  Of course they will never tell you this, but unfortunately communities of people, social networks, and all the knowledge inventory sequestered inside corporations or messing around on Facebook have not figured out how to monetize all these intentions for themselves.  This is because they are preoccupied by an influence currency called – ADVERTISING

The wisest people in history have been saying the same thing over and over again, yet we fail to listen and act: People are an asset, People are the greatest asset.

#### So Then, Watch your assets

Meanwhile, our “risk based” capital structure accounts only for the observed randomness of individual human nature rather than trying to securitize the potentially infinite wisdom of crowds.  This is a problem, this is our very serious problem.

#### Everyone is Committed to The Public Domain

Anyone familiar with The Ingenesist Project knows that we commit a new class of business methods to the public domain for other people to use for building the next economic paradigm. For example, The Value Game developed by ourselves, is being used by at least 3 new start-ups as the value creation mechanism of their business plan.  We likewise consult to social entrepreneurs across the World to help them build a new form of capital structure where knowledge assets are the basis of fungible social currency.

#### Zertify.com

Zertify.com is a business plan that will convert social currency to financial currency and make money for you, dear reader. Zertify.com can employ well over 40,000 people directly (and tens of millions indirectly) in the US alone within months, not years. Zertify.com is a knowledge inventory system that accounts for knowledge assets as they reside in a community – not necessarily as they reside sequestered within a corporation.

Here is a downloadable PDF of Zertify.com Sample Business Method. The word “Zertify” comes from the combination of the words “Certify” and the statistical Z-test.  These two things correspond to “Social Vetting” and “Predictive Modeling Capability” – these are the two ESSENTIAL elements for the capitalization and securitization of any asset.  Of course, I have made certain assumptions regarding taxonomies and proficiency criteria – my intention is simply to re-deploy existing market infrastructure as best as possible in this Example.  But go ahead, change it, modify it, understand it, build it, and let us help. Become a billionaire – see if we care.

#### Why?  because we do care.

In case you were wondering who all those wise people are, flip through this presentation (great to see Tara Hunt among such luminaries !!)

I am deeply concerned with the Liberal / Conservative flame wars. Countless Facebook discussions start with a casual reference to one position or the other, then quickly devolve into deeply divisive language. I see it in forums, Chats, Comments on blogs, news articles and YouTube Videos.

It’s getting worse – people can no longer agree to disagree.

I do not believe in big government. On the other hand, I do not believe that corporations should be the sole protectors for safeguarding the social charter. Call me an idealist, but I truly believe that given the right incentives, people can govern themselves to a very large degree.

Weapon of Mass Reconstruction

We have at our disposal the most powerful tool ever created for the potential benefit of humanity. Societies since the beginning of our time would have envied us beyond words – as their villages were pillaged, as the plague spread, or as the hurricane hit shore – if they had a system that could unify and organize people as we can do today with social media.

My fear, is that we will use this tool to divide instead of unify. Traditional media and the advertising industry are in deep trouble as people go online to self-select their news and content.

Unfortunately, traditional media (TV, print, and Radio) are under extraordinary pressure not just to maintain ratings, but to increase ratings to subsidize less successful areas of the enterprise. As a result, the content must become more and more sensational in order to keep people watching commercials. If I earned one dollar for every minute of YOUR time that I could waste, would you trust me? Yet people do.

The Terrorist Within

I am terrorized by the notion that Americans will turn against Americans. The problems facing this nation are so complex, so controversial, and so far reaching into the past and the future that it is unlikely that any intelligent person is more qualified than any other intelligent person to hold the highest office. Barrack, Hillary, Sarah, John, would all have the same pressures pushing back on every move leading them down 95% similar paths. None could be better and none could be worse – we’re officially in this together.

So until the super-star with extra-human discernment rides out of the clouds, People should really really be looking for a third way through this. Pure Communism is a Failure, Pure Socialism is a failure, and we are quickly learning that Pure Capitalism also runs out of track.

#### America’s Uncivil War

The Next Great American Civil War will be a battle against ourselves – all of the artifacts of past generations that pull at our subconsciousness; the reactionary fight or flight instinct of our ancestors. We are being called to something new. Let’s get on with business and find out where this road leads – together.

Marketers need to recognize the order and permanence of human evolution. Once our species started to walk upright on two legs, we never permanently returned to walking on all fours.   Such is also the case between the lower social order of communication called “Information” and the higher social order of communication called “Knowledge”.  I will explain the difference now.

Social Value written or spoken to a medium is defined as Information.

Social Value which exists only between human ears is defined as Knowledge.

Likewise,

Social Value is created by transforming Information into Knowledge.

Social Value is reduced by transforming Knowledge into Information.

Once humans learn to create, store, exchange, and trade knowledge among each other, they will never return to the utterly primitive practice of mining and exploiting information.

If you agree with me then I congratulate you for your advanced state of evolution.  If you do not agree with me, then I apologize for the inconvenience.

Living in the Past

Advertisers have an especially hard time with this because it is their core competence to devolve human knowledge into information through data mining, social media espionage, and machine gun marketing – all without necessarily elevating anyone to a higher state of social order.   This is, by definition, a reduction of social value.

Consumers now walk on two feet in forming a strategic networks of knowledge assets in social media. Meanwhile advertisers still slither around on all fours pimping info biscuits.  Consumers can easily see when Value is being stolen from them so they simply ignore the screeches and clamoring of the devolved creature.  Or worse, a counter attack is a very simple – and often quite entertaining – using an evolved tool set.

Holy shit, I need a Guru:

So, the advertisers go off and hire a Social Media Guru to make the old evolutionary order all better again.  The Social Media Guru does all sorts of things that look civilized to a four-legged creature, but appear increasingly ridiculous to the evolved being.

Lo and behold, the advertiser is hugely successful in attracting lots of other four-leggers and believes this to be progress!! This makes the Guru into a Celebrity.  But still, the advertiser simply cannot get any attention from the two-leggers, who now control all the Value.  So, the advertiser goes back to the Social Media Guru who responds by joining forces with yet another Social Media Guru….

Surely two gurus are better than one, especially to those who still believe that four legs are better than two.

People accumulate a wealth of knowledge in their lives as they pass from project to project and industry to industry.  Each of our social, creative, and intellectual pursuits and exposures combines to form the person who we are and the contribution to society that we represent.

Your knowledge and experience also helps others predict what preferences you may have and what decisions you may make. Corporations, advertisers, banks, insurance companies, and politicians all want to know this and they will go to extreme and expensive measures to get it – why not just sell it to them?

Management of companies, little league teams, Rotary Clubs, even raising a family, is extremely valuable knowledge to a wide variety of situations. Civic service, spirituality, military service, and philanthropy provide a basis for a host of knowledge attributes.  Academic accomplishment, physical achievement, artistic expression, manual dexterity, and whole body coordination provides great insight to the application of all knowledge.  Physical challenges, grief, personal struggles, and the experience of injustice further add to the wealth of knowledge one accumulates in a lifetime.

Every person is unique with a different set of knowledge than any other; therefore, everyone has something to offer to someone else.   Each person’s combination of formal and informal education is valuable in it’s uniqueness.  With the proper system and incentives in place, trillions of dollars are on the table to bid for access to your knowledge.

The Den of Thieves:

The resumes that we post on Monster.com are woefully inadequate and so heavily gamed that predictive utility related to your future decisions and innovative capacity is severely compromised.

The credit score also measures past behavior by tracking negative events; many of which are outside the control of the subject such as a layoff, fraud, medical emergencies, etc.  Again, the credit score is quite useless as a predictor of future decisions and innovative capacity.

Now we have Social Media and the mad scramble to be visible in social media space.  The scourge of marketers, spammers, and fraudsters are close behind chasing your information that they are all too happy to sell to the aforementioned “clients”.

Take a Step Back … and get a grip

We are talking about your information that describes your knowledge attributes which predicts your preferences, your future decisions, and your innovation.  Yet complete industries exist to collect it from you for free, organize it, and sell it to others for a great deal of money.  There are 5000 job boards collecting resumes, 300 Million credit scores being securitized by Wall Street, and 12,000 social media sites aggregating your creative content, relationships, and knowledge attributes.

Join The Ingenesist Project:

The Ingenesist Project specifies a system where your knowledge attributes are expressed in a packet of code that you control, distribute, regulate, withhold and track as you wish.

The result is that you will be paid to learn, to know, to practice, and to participate in life as you wish.  It becomes in your best economic interest to produce exactly what you are best at, and have a talent for producing.  It will be in the best interest of corporations, marketers, Wall Street, insurance companies, and Politicians to support you in these pursuits so they can “farm” the knowledge today that will buy their products tomorrow.

Everyone wants to know what “The Next Google” is.  From WIKiD Tools, the answer should be obvious:  Google is an information company.  Their stated objective is to organize the World’s information.  The next element up the human development ladder from the Information Economics rung is Knowledge Economics rung. Therefore, the next “Google” will deploy technology that can organize the World’s knowledge.

A State of Mind

Unfortunately, knowledge can only exist inside the minds of people, so consequently, “The Next Google” must also engage in the messy task of organizing the World’s people as well as the knowledge contained in each one of them.  Not an easy task in dog-eat-dog Global Market Capitalism.

At first, it seems that Facebook may be converging on this – they are certainly trying.  The problem with Facebook’s approach is that they continue to  insist that Market Capitalism is valid (obviously preparing for the killer IPO) when they should be pioneering the hedge fund called “Social Capitalism”.  Facebook continues to bank on the suggestion that people really really want to share  their personal details and will tolerate invasion by armies of anonymous data miners in order to do so.  Facebook’s best shot may be for one of their gaming currencies to become a black market currency so that when the dollar collapses,  people would gladly sell their privacy in exchange for food.

Since a gaming currency can only be created by people performing frivolous tasks, at best, gaming currencies – phenomenal growth or not – are no more robust than the dollars it seeks to displace.   Sustainability? Uh, no.

Anonymity rules

Think about it this way.  Real human productivity is stored in a dollar bill; otherwise nobody would “work” for it.  The recipient does not know or care if the dollar bill was last used by someone to buy cigarettes or Girl Scout cookies.   The dollar bill is completely anonymous.  Likewise, value is stored in the brains of every living person – there is no need to know who they are until the transaction is exercised and profits are distributed.  Everything else is unnecessary invasion of privacy and certainly not something to build a currency around let alone the next economic paradigm.  The Next Google will treat people like the currency, not ‘like’ the Girls Scout Cookies.

The “Next Google” will be a percentile search engine that will return odds – or probabilities – based on an anonymized public knowledge inventory. Search results will predict the likelihood that any combination of knowledge assets can produce or execute any combination of products or services at a known cost based on the supply and demand for those known knowledge assets.  End of mystery.

Everyone can now make their bets and play their games with real productivity because, in effect, the percentile search engine will match most worthy knowledge deficit with most worthy knowledge surplus and throw the rest of it in the trash bin.

The only thing people want to know is what they want to know, and nothing else.  Now that’s what real productivity is made of, that is what real money is made of.

Please Vote for The Ingenesist Project to present at SXSW 2011

The Ingenesist Project specifies an Innovation Economy built on a platform of social media as the next economic paradigm.  60 minute solo presentation in the advanced technical track.  Your help is deeply appreciated. All comments welcome.  Material based on video series here

The Knowledge inventory will become the most important element of Social Capitalism.  Today, knowledge is largely sequestered behind the walls of corporation in the form of titles, skill codes, resumes, job descriptions, certifications, and college degrees.  In order to predict the future, we point to the things that we have done in the past.

2nd Place is 1st Loser

10% of the country is unemployed and less than 10% are fully actualized in their profession.  Competitive forces drive the hiring manager.  The consequences of all business decisions eventually lead to win-or-lose market scenarios.  People compete with each other for promotions, the boss’s time, the corner office, or just staying off the unemployment line.  That is the only future anyone can truly predict based on the past.  It’s easier to predict the loser than the winner – so that’s what happens.

Social media is very different.

People are organizing themselves in a new form outside the construct of the corporation.  Linkedin aggregates intellectual capital, Facebook aggregates social capital, and You Tube aggregates creative capital.  Millions of blogs, Twitter, and a generation of search engines reassemble all these parts in ways that create social value.  People are not competing with each other, instead, they live on a bell curve.  They are seeking cooperation and collaboration. People use “like” buttons, tweet counts, and analytic data to “value” the quantity and quality of another person’s knowledge.  There are fewer losers, hence more winners,  because there are a greater number of  markets – not just one corporation.  Everyone is a corporation.

No Governance, no anarchy, no problem

Since social media is outside the construct of a corporation, there is no governance. There are lots of people trying to control only to experience diminishing returns.  Microsoft, Apple, Google, and Facebook must tread extremely carefully on the landscape of public opinion precisely because of their dominance.  People use Facebook to attack Facebook, PowerPoint to attack Microsoft, YouTube to attack Google, and Twitter to attack everyone.  Retribution would be suicide.

The Last Mile of Social Media

Now, geo-location services are filling in the Last Mile of Social Media where communities will form to produce things that are tangible and real.  As a result, there is a sharp increase of interest in a form of currency that can represent this social value.  Some of this is because the dollar is losing its ability to represent people’s productivity.  So they engage a different economic system.

Social Productivity

The next great leap in Social Media will happen when people reorganize themselves in an external knowledge inventory, outside of corporations, and segmented in high granularity of knowledge assets in close proximity to each other.  Entrepreneurs can then assemble people in unique, efficient, and productive ways.   People will then build things for profit using a new currency – a new social currency.

Data are the raw material of the next economic paradigm.  Data, information, knowledge, innovation, and wisdom are all related; but it all starts with data.

In order to produce anything valuable in the domain of social capitalism, the creation and formation of data is hypercritical.  The better the data, the better the information, knowledge, innovation, wisdom and culture that will follow.  Each stage of transformation along the chain reaction from “data” to “culture” is an opportunity for both great value creation AND astonishing corruption.

Data is King:

Yet data are often collected and processed with very little vetting.  We all know that information is most easily spun from the data collection process.  We know that bad knowledge comes from bad information, and we know that unsuccessful innovation comes from inappropriate knowledge.  Obviously, to be an unwise leader is to be unimaginative leader.  A failed culture creates failed data…and the circle completes itself.

Data is an asset:

On the other hand, the ability to collect data is often the most tangible intellectual property that an organization can hold.  It is easy to copy a patent but difficult to recreate the system that generates patents.  Excellent data results in excellent technology from the moon landings to the Internet. The trick is that all assets must contain two components; a quantity and a quality.  This means that some rigor is needed in the data collection process. When data are produced, the quantity is the “measurement” but the quality is the certainty or uncertainty that what is being measured is actually what is being observed.

Data Relationships

Phenomena such as art, politics, emotions, capital markets, and spirituality are difficult to measure because the item being observed exists as a function of the observer’s interaction with it.  Still, the quality of the data includes the certainty that all data were measured the same way AND some disclosure of the uncertainty that remains.  This is an area of great omission and where severe problems arise especially where the most people rely on the data to make decisions.  The term “comparing apples to oranges” is  a real problem and it is particularly elusive at very early and highly incremental stages of ideation.

Mouse goes squeak:

Often the people involved with the intensely small or incremental portion of the data design and collection process are the least powerful people in the supply chain.  Often they have the least say in how the data is analyzed and certainly have no visibility of what happens upstream.   It is tragically amusing that the dominant characteristic of most hierarchies is that each level of management “filters” the data from lower levels and delivers it to the next level where actions are authorized.

The Culture of Data

Social media is entering the human culture at an incredible rate.  Social media has also shown us what happens when the good data becomes the important information, which increases knowledge among the most people leading to increasingly effective innovation and changing the conventional wisdom about an increasing diversity of subjects.  Social Capitalism will replace Market Capitalism simply because the culture is superior.

Hint: Culture Produces The Data.

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