Tag: destruction

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.

Have you ever seen a commercial advertisement for Carrots?

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.

Is the Credit Score Obsolete?

By Admin

On November 12, 2009

In General Information

The Ingenesist Project prides itself in making certain predictions that often seem to manifest in some small way every day. One of our most enduring suggestions is that social media will begin to replace failing institutions of government and industry.

OK, that’s pretty far out, or is it?

The Wall street Journal reported recently that new bond issues – sort of like collateralized debt obligations – are being developed without consideration for the credit rating of the assets forming the bond. The justification is that credit rating did not predict or help avoid the last crisis, so what good are they?

Now here is the twist – a surprisingly “Social Media” style solution is proposed – and accepted by the market. The bankers put their personal and corporate reputations on the line. If you trust the banker, you can trust their bond.

Is the Credit Score Obsolete?

This sets up an interesting new game now that many bad banks are gone and public sentiment is turned against them. The new game is playing out in interesting ways.

The bank does not want to put their reputation in the hands of a 3rd party credit rating agency.
Investor wants to put their money into the hands of the person who actually hangs if the deal goes bad.
“Inside Information” has become so systematized; the banker knows things long before the rating agency.
A system had been built to “game” the credit agencies…lose the game and lose the risk?
Avoid government vetting regulation in favor of “social network” vetting.
Tactical advantage over corrupt competitors
It’s easier for everyone to understand – including the banker, investor, and bond asset.

This is a profound shift in thinking from only a few years ago and almost seems like a return to a bygone era; remember the old days when the banker was actually a member of the community where the bank invested their money?

There are some lessons to take home. If don’t need credit ratings for corporate bond issues, do they need credit ratings for people? What if all of these institutions adopt a social network based credit score? What would that look like? Social media by and large rewards high integrity and punishes low integrity. The value of social media includes a component of risk reduction. You would think that Banks, Insurance, and even homeland security would be all over this game.

Innovating Disruption:

What happens if your credit rating is divorced from your finances? What good is your social security number? How does this effect all the downstream users of credit ratings like insurance, employers, credit card companies, social security payments – if any? Much of what we’ll associate with the innovation economy is the disruption, if not outright destruction, of an impossibly unstable system of finance.

Is the Credit Score Obsolete?

The Competition is Competition Itself

By Admin

On June 7, 2009

In General Information

In quantum physics, the Heisenberg uncertainty principle states that certain pairs of physical properties, like position and momentum, cannot both be known. That is, the more precisely one property is known, the less precisely the other can be known.

A practical analogy is the modern corporation. It is difficult for a corporation to truly innovate because people behave as a function of the corporation’s interaction with them. Heisenberg’s uncertainty principle suggests that the more we know about competition, the less we may know about cooperation.

Is competition is good for innovation?

A corporation is a closed loop that feeds on internalization. External influence is traditionally shunned because of the great promise of the competitive economic system. We compete with other companies, with our own legal system, with Unions, and with each other. We hold and protect trade secrets; spend millions on patents that never get used. We make our “intangible Human Assets” sign “tangible” contracts of secrecy and non-competition.

How do we define cooperation?

We often think of cooperation as teamwork. However, we define cooperation as the alternative to working separately in competition. The definition of cooperation is derived from competition; the assumption that there is an opponent. There needs to be a war against something in order to accomplish something together. If you are not with us, you are against us.

Who exactly is the opponent?

Competition is a deeply ingrained part of our culture. The business world is filled with sports analogies like; “knock them dead”, “carry the ball”, “we need a home run”, “great save!” We see that national sports franchises command the highest pay and best ratings. Reality TV is all about kicking people off islands, backstabbing one’s fellow apprentice. We have even turned the pursuit of love and happiness into a competition. The object is to decimate the competition. We define ourselves with slogans like: “may the best man win”; “the survival of the fittest”; “winner takes all”. Destruction sells.

Beating a dead horse:

So what happens when we compete with each other? What are the consequences when we decimate each other? What happens when one departments competes with another department in the same company? What happens when one person competes with another for a salary and bonuses? What happens when society competes with Wall Street for their 401K? What happens when the competition is already lost – do we continue competing or do we then cooperate?

The unwinnable war

After a while, societies and communities becomes a closed loop much like the corporations that they interface with. They have no idea who the friend is or who the enemy is. When people are in a game that they cannot win, they feel alone. Loneliness is the war that cannot be fought.

Social Media Cooperation; A closed loop system:

Social Media is emerging as an astonishing force in cooperation by uniting communities and people of diverse and complementary interests, affinities, and actions. Social media works in a new dimension: It is a “cultural dimensions” where the opponent is opposition itself.

Social media teaches cooperation. The more we know about cooperation, the less we know about competition.

The Next Economic Paradigm

Tag: destruction

Collaborative Production, Consumption, or Destruction?

Collaborative Production

Have you ever seen a commercial advertisement for Carrots?

Collaborative Destruction

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