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Tag: paradigm

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?

The Innovation Banker

Future of Banking

When I use the term “Innovation Bank”, people conjure up the image of a cheery place where anticipation reigns as starry eyed depositors arrange their intellectual property in neat cubby boxes, Patents fly like cash register receipts and companies troll the halls looking for a cure for their bottom line blues.

This is not exactly what we have in mind, nor is it too far off either. An innovation Bank is simply a knowledge inventory that contains knowledge assets that exists in the format of a financial instrument and can be deployed for the purposes of increasing productivity.  In the process, it makes 10X more of itself every time it is deployed.  It mints its own money.

The Innovation Banker

This is not much different than a financial bank. In fact, in the financial bank, everyone assumes the borrower has the knowledge to execute the business plan and the bank lends the money. Oh, by the way, the money makes more of itself  10X over (fractional reserve system) every time it is deployed.

With the innovation bank, everyone assumes the entrepreneur has the money to execute the plan, and the seek to borrow the knowledge. Other than that, they can be considered identical. The key is in the scope, depth, and format in which the knowledge assets live in a community as well as the ability to track and preserve the creation of new knowledge in a community.  An innovation banker is a knowledge banker

A Virtuous Circle

Together with the financial banking, these two system engage in the dance of the virtuous circle of innovation enterprise. Apart, they collapse into the swirling cesspool of eternal debt and infinite interest (pun intended).

Ingenesist.com

Music by Phil Felicia

Social Currency And The Innovation Bank

'Innovation and Growth, Chasing a New Frontier' book launch(2)The real estate market is trashed, money markets are unstable, commodities are in the tank, the banking system is corrupted to the core, inflation is looming around every corner, and the politicians are engorging themselves in a game of Cerebral Gridlock.

Literally, there is no safe place to put your money. Instead, people are investing their productivity in social media – social media is simply a storage device for knowledge assets. Soon it will become a stock exchange for knowledge assets. Investors should not take this lightly – the best place to store your money is in the real productivity of real people.

People are trading knowledge assets in social media. This exchange is denominated by a conversational currency. If we consider the structure of conversations and compare that to both the structure of social networks AND the structure of our financial system, we see a huge opportunity to develop an alternate financial system that can capitalize and securitize knowledge assets in social media.

Ingenesist.com

Music by Phil Felicia

A Community of Knowledge Assets

A Community of Knowledge AssetsOur culture organizes itself around winners and losers. Corporations reflect this competitive nature to the core of their Capitalist doctrine. Sports analogies abound across the enterprise straight through to the HR department always on the lookout for the most amount of superstar for the least amount of money.

Social media has every industry trying to understand the concept of community. Among the most difficult ideas to grasp is that knowledge assets in a community live on a bell curve, not in winner and loser columns. Everyone is an expert at something and nobody is an expert at everything. Someone who is not performing adequately is simply a misallocated asset, not flotsam subject to jettison at the next layoff or outsource “opportunity”.

A Community of Knowledge Assets

Like most assets, there is a perfectly legitimate market for everyone in a community – nobody need be excluded, marginalized or laid off. Social Media is turning the tables on the hierarchy and old winners who don’t play by the new rules quickly become the new losers. Maybe we ought to run our economy like a community instead of losing so badly at trying to be a winner.

A Community of Knowledge Assets

The Social Media Paradox

Starbucks paradox (Bernie Hou)The very nature of the traditional corporation is called to question by the Social Media Paradox:

Definition (by me):

Social Media Paradox: The degree to which the act of engaging in the social media paradigm reduces one’s ability to engage in the pre-social media paradigm; and vice versa.

Success in social media requires humility, authenticity and commitment to the medium.  Like a tattoo, that impression defines the person and is not easily removed – after all, everyone’s got to have some skin in the game.

Social media rewards people for doing what they are best at and saying what they feel to be most true. Furthermore, brands need to trust their employees to represent them – this means that they need to give up control of the message.  The more they try to control the message, the less effective they are in a social medium.

Sounds like a great idea, but is it practical?

Many people still need to work for a living often find ourselves at the mercy of corporations for an actual paycheck.  Social Media provides a free source of reference material on a new candidate.  If a person is seen as edgy, ‘counter culture’, or defiant by any number of risk averse HR gatekeepers, one’s “old-paradigm” employability can be affected.  The subtle irony that the those who best understand the medium can make themselves unemployable as a result.

The opposite is also true:

Is the Corporate Structure Obsolete?

The Social Media Production System

Social Media has demonstrated in many ways capable of meeting or exceeding the deliverable output of many traditional industries such as advertising, marketing, journalism, human resources, design, community organizing, education, and social vetting.

We have also seen social media form communities that increase productivity in manufacturing processes, software development, and project management.  We have seen people self manage in social media to segregate and elevate good information away from bad information.  We have seen communities act with logic, tact, and precision previously thought to be the province of top management guidance.

In short, we have seen social media replace or duplicate almost every structural element of the traditional corporation outside of the construct of corporations.  Can social media provide a corporate structure in and among itself?

General Accounting Practices:

Corporations have an internal accounting system, internal processes, internal procedures, and often their own lexicon and unique job descriptions relative to their product.  This is how a corporation stores knowledge and trades value internally and defends itself from external influence.  The common thread is that each department is accounted, assessed, and compared in terms of money.  Standard balance sheets are compared by banks and investors.

Social media uses the exchange of information, knowledge and new ideas to store value.  Processes, procedures, job descriptions, and accounting are done in a public lexicon that everyone develops collectively.  People share, trade, and exchange information, knowledge, and new ideas like tangible property; and they trade options on futures in the same.  Increasingly, access to the community knowledge inventory is becoming a means be which people can convert productivity to money.

Standard Balance Sheet for Social Media

Most elements of a corporation can be duplicated in social media.  For those parts that cannot, the entrepreneur will soon figure out how they can.   The entrepreneur does not worry about money, they worry about productivity and the money always follows.  The next paradigm of economic development will reside almost entirely on a statistical game of managing risk and return, matching surplus to deficit, and increasing human productivity in the operating system of Social Media.  Every Newspaper that falls to Social Media is simply transferring its value to the new paradigm.  That value is still in play.  This trend will continue until a new currency representing that value is introduced.

Business Plans of the Future:

As you witness the progression of Social Media unfold, look for innovations that contain incentives for people to reorganize themselves.  Look for similarities between new social media developments and traditional corporate departments.  Look for businesses and institutions that support social vetting mechanisms, knowledge exchanges, and groups bringing together strategic combination of diverse knowledge assets, not just similar knowledge assets.  Most importantly; look for the “Last Mile of Social Media”; diverse groups of 5-10 people living within a few miles of each other forming new enterprise.

Threats:

Finally, look for the threats that can corrupt an innovation economy.  Social Media is currently responsible for trillions of dollars of productivity gains – all this money is still on the table for social entrepreneurs to monetize once the integration reaches a tipping point.  Be watchful for attempts at censorship, attempts to monopolize information nodes, and the corporatizations of social networks.   Wall Street was corrupted when the value of the currency became divorced from human productivity.  Don’t let the same happen to Social Media.

Next Economic Paradigm; Part 1

Technological change must always precede economic growth. We are going about the process of Globalization as if economic growth can precede technological change. This is the singular flaw of market capitalism that needs to be reversed.

The Next Economic Paradigm will be an Innovation Economy. Unfortunately, this will not be delivered by corporations, Government or Academia. There no single person, country, ideology, or philosophy that can meet the challenges of the future alone – everyone will be required to participate because everyone has a stake in the outcome.

The Ingenesist Project outlines a very optimistic future. The problems ahead have a relatively simple solution that can be implemented today using existing tools and infrastructure. These tools acting in the right system can have profound impact on future economic growth and the sustainability of our resources.

The Ingenesist Project identifies a core problem:

This is the human productivity chart. Every time humans invent better ways of doing things, they become more productive. Where more people are more productive, the economy gets bigger. This is a fact.

About 50,000 years ago, humans began to make tools using tools and innovation increasing exponentially. Tools made hunting and gathering easier. As farming developed so did the emergence of cities. When people could produce more than they needed, they had time to think about things like philosophy, art, astronomy, written language. This led to a scientific revolution that continued to make new observations about the world. These observations were applied to systems that made people still more productive. The industrial revolution followed. Industry produced a lot of information. The ability to process that information using computers led to the information revolution. Soon people began seeing new trends among the information, facts, and data. This ability largely defines the knowledge economy that we see today.

Obviously, There were economic “eras” in the past and there will be more in the future; of this is not the end of human economic development. Something else will happen after the knowledge economy. This next economic paradigm is not easy to see.  Many people have a sense that civilization is changing – it must change.

Looking at the productivity chart, we notice a few interesting trends.

  • Every level of economic development was derived from the prior level of economic development.
  • That transformation was achieved by integrating the tools that were developed during the prior economy.

The two greatest tools in the knowledge economy are the Internet and Social Media. The Innovation Economy must integrate these tools.

Now, this is the Human Gross Domestic Product Chart. This is obviously very similar to the productivity chart except that the bottom axis is labeled with Global Gross Domestic Product over the same time period. The global GDP of 50,000 years ago was about 200 Million in current dollars.

Today, the Global GDP is about 65 Trillion Dollars.

If this curve was to continue, and it can, the next level of economic development could easily value in the Quadrillions. However, this cannot happen without some adjustments to the current system:

The only way to create more money is to increase human productivity and the only way to increase human productivity is to Innovate. This is the guiding principle of an Innovation Economist.

The problem is that the financial system is highly organized while the “Innovation system” is nearly random.

Economic growth with “money” as the scorecard lives in a complex, global and highly integrated system where billions of dollars circle the globe daily at the click of a mouse.

By contrast, human innovation lives in the patent system which is extremely slow, static, and prohibitively expensive. Of course, innovation certainly happens in places like Silicon Valley, Government Laboratories, Universities, and let’s not forget the proverbial “Steve’s Garage”; but these sources are not integrated and they do not behave like a system – except at the mercy of the financial system.

Innovation is market driven, markets should be innovation driven.

It is clear; there is no Innovation system to match the financial system in speed, efficiency, and integration. The objective of the Ingenesist Project is to specify an innovation system that integrates the tools of the knowledge economy into a structure that mimics the financial system. If it looks like money, it will behave like money and people will trade it.

The Next Economic Paradigm must duplicate the same 5 essential components as today’s economy.  These 5 components interact with each other as a system.

The 5 Essential Components of an Economy

1. A Currency to store value

2. An Inventory to account for the storage and exchange of value

3. Institutions that are supposed to keep the game fair

4. Entrepreneurs to do the “fuzzy math”

5. Business Plan or philosophy such as “Capitalism”

If any of these pieces are missing or corrupted, the market will fail. All 5 of these elements must be operational and integrated in order for a market to be efficient.

In the next several articles, we will go through each of the 5 elements and develop the corresponding knowledge system that will be integrated as we create the structure of the Innovation Economy.

If you give people a game they can win, they will play it all day long. In this regard, human behavior is highly predictable.

The Great Convergence

Hey Kids, It’s 3D:

The objective of this article is to discuss the Great Convergence of computer enabled society. Social media must not be allowed to converge to a single apex – rather, it must converge to 3 distinct and tangible dimensions.

The factors of production for the industrial economy are land, labor, and capital.  If you lose one, you can’t use the other two to build an SUV, for example.  The factors of production for an innovation economy are social capital, creative capital, and intellectual capital. All production in the new economic paradigm will result from the allocation of a “secret sauce” of social capital, creative capital, and intellectual capital.  Again, if you lose one, you can’t use the other two to build anything meaningful.

The congregation of congregations:

In order to find The Great Convergence, we simply need to examine Social Media to discover where social capital, creative capital, and intellectual capital tend to congregate.

One of the more obvious illustrations appears to be playing out between LinkedIn, Facebook, and Myspace.  Many people use Linkedin for professional contacts (intellectual Capital), other people use Facebook for friends, family and more diverse associations (Social Capital), while many others use MySpace to post videos of their rock band, Artwork, or to discover the latest Mash up (Creative Capital).  Of course there are many more social networks, lots of cross talk, different demographics, rants and raves, etc.  I intentionally leave this analysis sparse as these conditions simply reflect the nature of The Great Convergence.

The Next Economic Paradigm:

We need to watch The Great Convergence with laser focus and deep personal interest because it will be extremely important for the development of what comes after the knowledge economy.   Whatever form this next economic paradigm takes, globally and locally, will depend upon The Great Convergence.  The Innovation Economy is the only wrench left in the toolbox for resolving the vast global problems that we face today.

The Innovation Economy must end global warming, restore financial accountability, enact sustainable enterprise, and institute renewable energy – or not.  This is a huge burden to ask of the next “greatest generation”.  It is clearly in everyone’s best interest to identify, encourage, and support The Great Convergence to form in 3D, before the old single-apex game “resets” and starts all over again, perhaps for the last time.

[The Ingenesist Project discusses this concept at length and identified various predictions, methods, and scenarios, including specifications for an Innovation Economy.]

Social Media; The Opportunity of a Century

The Perfect Storm:

We are at an historic time in human history; one that may never repeat itself again. The current financial crisis may provide just enough disruption for a completely new economic paradigm to emerge; the Innovation Economy.  We cannot squander this moment arguing over common logon for our Twitter and Facebook profiles; a far greater integration is required from Social Media.

Advertising is not the correct revenue model.

It is astonishing that Social Media, in general, has not figured out how to make money.  Social Media IS money.  All wealth on Earth was created from the social capital, creative capital, and intellectual capital of people – wealth creation is already crowd sourced.  Now, there is an opportunity for Social Media to harness this engine of economic growth and wealth creation – if they could only see it.

The problem is simple: Globalization is proceeding as if economic growth can occur before technological change. Some time in the past, we got these two things up mixed. It does not take money to make money; it takes innovation to make money.  Technological change MUST ALWAYS happen before real economic growth can occur.  Anything else is a transfer of wealth, not the creation of wealth. All that is unsustainable today – the economy, the environment, natural resources, energy – is due to this itsy bitsy anomaly of current market economics.   Today, we can easily correct this little flaw with almost a flip of a switch – but the window of opportunity will be short – and we need to be clever.

The idea that human knowledge is tangible and behaves individually and collectively like a financial instrument is still considered impossible.  The ability to place a market value on the social capital, creative capital, and intellectual capital of a team, community, or geographic population of people – let alone a social network – has never been accomplished.  This idea remains the Holy Grail of finance and one that Social Media is uniquely positioned to capture.  If the finance industry can invent “tangible derivatives” out of thin air paper, then we ought to be able to do the same with knowledge assets that live and breathe tangibly all around us.

If it looks like money, it will behave like money, guaranteed:

First, we need to build a knowledge inventory system that includes everyone; and which can be anonymously codified and amalgamated with logic in machine readable format (the Universal Decimal Classification System is a good candidate). Second, we need to sample our inventory in a community using the proverbial “Bell Curve”. Third, we need to develop a search engine that returns the probability that a strategic combination of knowledge assets can execute a given objective. Fourth, we need an innovation Bank that will “pull” knowledge surplus and “pull” knowledge deficits together from diverse communities.   (Please see the IEc101 at http://www.ingenesist.com)

This should not sound too weird; it is the same game that Wall Street plays.  The switch is flipped when we engage our innovation system with the financial system.

Go where the money is:

Social Media is perfectly positioned to develop these features in their products and in our communities. We first must understand that innovation is predictable.  We may not be able to say exactly where the innovation will lead, but we can be sure that if we place a group of strategically diversified persons in a room, innovation will happen.  If the fact of innovation is predictable, risks related to the invented can be pooled, morphed, or diversified.  If risk can be diversified, it can be hedged to zero.  If innovation has zero risk, Wall Street will salivate to issue “innovation bonds” to finance diverse communities of practice.  If innovation capital is inexpensive and accessible, a great amount of innovation will occur.  The anomaly of capital markets can be reversed, and the result will be sustainable economic growth.

Naturally, the compensation structure will be in the form of dividends, both financial and in social welfare.  New corporations will emerge and the old corporations will become more efficient. What is invented will tend to reflect social priorities rather than today’s short term Wall Street priorities.   America must innovate at an intense and sustained rate in order to compensate for the imbalance of debt economics that has been created in its absence.  Social Media can be, and must be, the infrastructure upon which an Innovation Economy is built.  Again, this opportunity is staring us straight in the eye.  This is the conversation that must be having today if we will meet the challenges of tomorrow.

Social Media; the Integrator of the Innovation Economy

Where are the gray suited diplomats holding each others forearms against a world map backdrop vowing to correct the world’s innovation system?  Where are the politicians joining across party lines about how to inject 700 billion dollars to fix the nation’s innovation system?  When will the Federal Reserve Chairman find the flaw in our national innovation system?  Hey, when will someone notice that we don’t have a national innovation system?

Schumpeterian Economics argues that corporations represent our nation’s innovation endowment. However, the primary function of a corporation is to make money, not explicitly to innovate.  Sure, they innovate if they must – most likely to beat down a more innovative competitor.  But, as soon as bad times hit, most will shift money from R&D to marketing.

If we look back only 400 hundred years, everyone on Earth lived on an average of about 500 dollars per year.  Then the innovations from the prior 2,000,000 years started to converge.  Counting backwards; the knowledge economy was “derived” from the information revolution, which was derived from the manufacturing revolution which was “derived” the Industrial revolution which was “derived” from the scientific revolution, which was “derived” from the agrarian economy.  Each revolution “Integrated” the tools of the prior revolution; The Knowledge economy integrated the tools of the information age and the information age integrated the tools of the manufacturing economy, etc.  By the way, the term “derived” is related to the term “derivative” – the primary hedging tool integrated in our current financial system.

Each economic revolution was marked by a tremendous increase in human productivity – we no longer need to milk our own cow. Victoria trades a dollar’s worth of her time as an airplane engineer for a dollar’s worth of the Robert’s time as an agricultural engineer.  Bill Gates is worth 50 billion dollars because he increased the productivity of a minimum of a billion people by a minimum of 50 dollars each.  I save 5 dollars in gas by not driving to the library when I can just search Google or Wikipedia.

The only way to “make” more money is to increase human productivity and the only sustainable way to increase human productivity is to find better ways of doing things.  Anything else is simply a transfer or redistribution of money.  Both are important – but often we confuse them under the same terminology: “making money”.  Or, we reverse the two by literally making (printing) money and then transferring it to corporations under the assumption that they will innovate enough to support everyone else plus the debt.  This system worked great for many years and in many political forms – it brought us from living in caves to a 65 trillion dollar global economy.  But like the economic revolutions before it, the current economic structure will soon give way to a new paradigm as we are forced to reach for higher productivity.

What the brilliant economist, Joseph Schumpeter did not have in his time was the technological breakthrough of Computer Enabled Society.  Taking a hint from the past; the new economic paradigm will be derived from the knowledge economy by integrating the tools developed during the knowledge economy. That is why we now have Linkedin, Facebook, YouTube – and all the rest.

Everyone agrees that information, knowledge, and innovation are profoundly related.  In fact, we can say that knowledge is derived from information and that innovation is derived from knowledge.  The new paradigm will be called the Innovation Economy and it will arise from the integration of the tools of the knowledge economy using social media. We see terms like open-sourcing, crowd sourcing, social networking, groundswells, innovation exchanges and a host of new Social Media Internet applications.  All of these have one thing in common; the tangibility of human knowledge.  This is the Holy Grail of modern finance and it is not a coincidence – it is now within our grasp.

In the past, human knowledge was only tangible inside the construct of a corporation – the corporate structure integrated knowledge assets to make things people want and need. However, with Social Media, knowledge assets will become tangible outside the corporate structure and integrated by knowledge communities, social networks, crowds, groundswells, etc. Knowledge communities will mix, combine, interact, and share knowledge; inevitably the end result is innovation – to make things that people want and need. These knowledge communities will become the next “corporation” acting directly as the integrator of human knowledge.  Ironically, Social Media “outsources” management.  Traditional corporations will not disappear as the agrarian economy never disappeared – they will just integrate.

Ideally, Wall Street is a simply a horse race where money is bet on corporations to fund innovation.  There is nothing wrong with that.  We don’t need a new financial system; we need a new and improved innovation system.  We have the technology; all we need now is the “integrator”.  The Ingenesist Project is the only viable comprehensive integrator now being proposed.  Perhaps it is not perfect, but the next economic paradigm will be certainly be derived from its improvement.

Social Media; The Central Bank for Knowledge Assets?

It is very interesting to watch Social Media follow familiar trajectories as earlier paradigms in finance.  I see many social media platforms struggling to make human knowledge tangible in their respective markets.  The challenge is so simple, yet so complex.  Let the litmus test for knowledge tangibility be as follows; “Can you buy groceries with it?”

The Romans Empire had a similar problem; how to sack Europe and bring home the booty.  The only thing most people had at the time were sheep, fish, and wine.  So the emperor created a coin that represented a peasant’s productivity in raising sheep, catching fish, and making wine – and it was a lot easier to collect taxes.  The conquest of a continent has far more to do with the social acceptance of the currency than the actual pillaging – pillaging, after all, would be counter productive in a social network.

Today the dollar also represents human productivity – except a ‘necessary flaw’ was introduced to finance innovation leading to fantastic worldwide economic growth from which many people benefit greatly.  Now, this flaw threatens to topple the whole system.  Money still represents productivity, except it now represents future productivity allocated to paying debt.  As long as innovation increases fast enough to outpace debt, everything is OK.  Problems happen when debt exceeds our structural ability to innovate.

We do not need to restructure the financial system – we need to restructure the innovation system.  The human race is exceedingly fortunate that the end game for debt economics will happen at the exact moment in history that the technology required to start a new game of sustainable innovation economics has arrived.   If done correctly, Social Media (computer enabled society) can become the most important human invention since to the printing press.

Today, human knowledge, in the form of social capital, creative capital, and intellectual capital, is captured and hidden inside corporations.  Each corporation has its own business plan, lexicon, culture, organization, structure, and processes by which human knowledge is exchanged in the creation of a “product”.  Outside the corporation, however, true knowledge assets are either invisible, incomplete, or only appear as a proxy of the corporation.  This leads to stagnation, silos, mis-allocation, vulnerability to external shock, and greatly limits the diversity needed for sustainable innovation.

In the 1700’s Banks printed their own currency – these were called “bank notes” because they were little notes that declared who had a surplus and who had a deficit of money relative to the bank.  People would trade these notes in society to purchase things, buy feed or seed, and to keep track of things.  Everyone had a job to do and the general flow of these notes is what “incorporated” townships. Unfortunately, such banking also lead to industrial stagnation, silos of wealth, and lack of diversification leading to corruption, bank failures, and ‘bottle necks’ in the flow of capital.

Barely 150 years ago, the U.S. government established a central banking system with common currency, common practices, common accounting, and common regulation. The system became much more efficient, diversified, and accessible across the landscape.  The industrial revolution, manufacturing revolution, lots of wars, the era of information, and the Internet Industries were all financed through a central banking system.  Human productivity increased at a tremendous rate and the relative wealth that we enjoy today is a tangible result of innovation.

Now the Pied Piper has come to take the children to sea.  The banking system needs to invent new, exotic, and increasingly risky financial instruments for trading your productivity in order to keep the game alive.  Meanwhile, the tangibility of human knowledge is stuck in an 18th century banking system.  There is no common knowledge inventory, there is no common accounting practice for skills and abilities, there is no way to measure social capital and creative capital – the system is too biased toward “intellectual capital” measured by Ivy League degrees and access to wealth.  Knowledge assets are not tangible, organized, classified, or collected in a society in any structured way.  “Can you buy groceries with it yet”?

With the emergence of Social Media, we have an extraordinary opportunity to make knowledge tangible outside the construct of a corporation much like banks notes became tangible outside the construct of a single township.  There are vast and crushing problems in the world today.  The only way out of this mess is to massively increase the rate of innovation in society.  Like off-shore drilling – vast wealth in the form of social capital, creative capital, and intellectual capital lays hidden beneath thousands of layers of philosophical limestone.  Social Media and the first amendment = drill baby, drill.

The only thing separating us from a debt economy and an innovation economy is social agreement. The philosophical chasm holding us back is about to be broken by The Ingenesist Project: In the current paradigm, money is backed by future productivity allocated to pay off today’s debt.  In the social media paradigm; money will be backed by future productivity created by today’s innovation.  At the end of the day money still represents productivity.  The conquest of a continent has far more to do with the acceptance of the currency than the actual pillaging.  Hey, why not buy groceries with it?

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