Deep Web Search Engine is here. This represents a new economic paradigm since increasing the available information increases the rate of change of knowledge across diverse communities. Keep your eyes on this one – it’s a big one.
Tag: economy
A New Economic System of the country of Montenegro is based on complete and unfettered economic freedom; in other words, the elimination of all barriers to conducting business. Is Freedom A New Economic Paradigm?
Veselin Vukotić ‘s paper titled Economic Freedom and New Economic Paradigm, offers a case study that enlightens us as to some of the core changes, some easy and some difficult, that any proclaimed ‘new economic paradigm’ would place on people, culture, politics, and the markets. From this insight, perhaps we’ll see a new paradigm emerge.
Freedom; A competitive Advantage
Montenegro has achieved a competitive advantage in their Eastern European region by reducing international trade barriers, treating foreign and domestic concerns equally, reducing “contribution” fees and other taxes, reduction of public spending, affirmation of private property, and encouraging entrepreneurship. Veselin Vukotić also notes that the concept of economic freedom is a complete theoretical and practical expression of an idea. He quotes Plato:
The difference between concepts is the difference between starting ideas!
Therefore, he concludes that the idea of economic freedom is freedom of an individual to conduct business (earn money), and that business is the key factor of a society’s development and individual wealth. While we now know that unfettered capitalism breaks down at some point, he does accomplish something important – the elimination of all government as a defining element of freedom.
The Singularity Solution
We know it is often easier to solve a problem if we can remove certain elements, even temporarily, and analyze components individually. Suppose we eliminate Government from the equation, corporations would rule. However, corporations are made up of individuals, so individuals would rule…they would rule whom? The logic also breaks down.
There is one exception: what if all individuals were corporations and they ruled only themselves? Corporations are keeping government out of their affairs by keeping people off the books. The solution is for everyone to structure their existence as a corporation contracting to each other for every conceivable business arrangement. Heck, it only costs 40 dollars to open a business in the the U.S.
Self-regulating Freedom?
Knowledge would be shared freely, people would be paid for their productivity, diversity and strategic combination of knowledge would be rewarded. Everyone would own their knowledge and would seek to accumulate more. Trade barriers would be eliminated, taxes would be reduced, private property would be affirmed, and entrepreneurship would be encouraged. Like a family, no corporation could become wealthy at the expense of another corporation for very long.
Would you be willing to pay the government to leave you alone? Is that Freedom or a new economic paradigm or both?
(Editor’s note; This is the first in a series of articles that challenges the “degree system” of knowledge measurement as archaic and irrelevant to what is actually happening in the world today. Like the resume system – it is ridiculous if not outright damaging to the prospect of knowledge behaving, and therefore, trading like a financial instrument.
Why do we still care about college ‘degrees”?
The information that fuels the next economic paradigm will not be captured in the form of college degrees; rather, it will be captured in extremely detailed granularity of unique collections of knowledge assets in diverse combinations of persons that solve complex puzzles – and then share the solution with others.
This begs the question, why do we still care about University Degrees?
The Advertising Industry has some serious problems. Ad agencies are having a difficult time understanding the modern advertising space with the limited, if not worthless, paradigm carried over from the days of radio; the CPM.
CPM stands for Cost Per Mille
CPM means: how much does it cost to penetrate 1000 heads?… or 2000 eyeballs, I suppose. They count the penetrated heads, like an act of war – the body count, the bullet shells, the napalm canisters…and that is the basis of their decisions. As Dr. Phil would say “How’s that workin’ for ya?”
The CPM is however, a great way to kill off creativity, highlighting the flashy crap while burying the good stuff. Maybe it works well in the counter insurgency of Afghanistan, but it does not work in social media space. What happens after the mommy blogger gets a look at that Spiderman drinking cup that melts in the dishwasher? Imagine the blog post about that cool new GM retro rod that smells like formaldehyde to the undertaker enduring their midlife crisis.
What’s the CPM for the blogger?: zero. Can advertisers compete?: no. Should they stop?: yes.
People are not stupid and they do not work for free. Yet, the entire web advertising model tries to get them to walk through a rat maze of links and pages just to hit more banner ads (impressions). Advertisers keep doing it, ad after ad, page after page, year after year. They wonder why the rat don’t hunt. The most important thing to a rat is food, family, and friends. There must be a tangible economic incentive for people to do what you want them to do. Even after that, not all impressions are equal, or favorable, or lead to sales – but every one is valuable to your product and your brand if you know who I am.
Foresight is 20/20
It is always very expensive to change people’s behavior and the best management policy is to accommodate what people are going to do anyway. If I want to drive a retro rod, help me do enjoy my friends with it – don’t pull the emergency brake. If I want to spend time with my family, don’t interrupt me. If I want to walk in the park, don’t whack me on the head with a billboard. That’s not a great way to start a conversation.
Open letter to Pitchmeisters
Dear CPM mongers, I have learned to ignore you. Like the paint blots on a Monet, I have learned to see the image despite your distortions. Your “fear” pitch is comical to me. The buy-me-love pitch is goofy. The lifestyle-threat angle sounds as ridiculous as an old like Archie Bunker re-run. The most fun I can have is using my ability to walk away leaving you talking to yourself like a deranged chimpanzee at the zoo.
Measure what I measure
Help me do what I’m going to do anyway even if I still ignore you – all data is data. If you want to understand me, measure what I measure; health, happiness, productivity, laughter, family, friends, hope, vision, safety, music art, quality of life. Help me make friends, empower my community, and care for my family. Don’t try to take these away from me – you will lose.
There is no knowledge inventory. There is no knowledge inventory. There is no knowledge inventory.
This is a stunning omission for a society that intends – no, a society whose future is irrevocably dependent on it’s ability to innovate it’s way out of inevitable monetary collapse.
America does not know what Americans knows. Entrepreneurs do not know what knowledge is available to them. Markets do not know the supply and demand of knowledge assets. The self-correcting magic of market capitalism is utterly unavailable if people and their knowledge assets are invisible.
- There is a story out of the past mayor (someone who performed their civic duty to run for elected office) of Bennett Colorado who is one eviction letter away from living in a Ford Explorer with her 4 dogs.
- Thousands of older Engineers are unemployed when Congress is crying for more Engineers. This is the reason why there are none – the career has been reduced to a lousy bet.
- Experience is knowledge, yet older workers also have a tougher time finding new jobs once they become unemployed. The average duration of unemployment for those age 55 and older is almost 30 weeks.
- About 38 percent of the older workers and 26 percent of the younger workers had been out of work for 27 or more weeks in June.
Our economy needs to be able to efficiently match knowledge surplus with knowledge deficit in order to produce things and educate each other. Diverse knowledge assets need to be combined in new and strategic ways. Knowledge assets need to be matched by proximity as well as innovation potential. Investors need to know the probability that a collection of knowledge assets can execute a business objective in order to decrease innovation risk.
Nothing can be accomplished without a knowledge inventory. We have empowered corporations to be the stewards of the US knowledge inventory and the associated innovation economy. Information, knowledge, and innovation act as a system. Without one of the pieces, you cannot have the other two. If we outsource the knowledge economy, we lose the innovation economy.
The great promise of Social Media is that the knowledge inventory becomes a public reference. People need to know what other people know so that they can build things.
Once you are outsourced – you become invisible. Who will be the next invisible person in your neighborhood?
Google 10^100 award voting is Launched. There are two sectors that we believe would have the greatest impact on the greatest amount of people; building a better banking system and funding social entrepreneurs. You can’t have one without the other – if Google funds these two sectors in concert, the outcome would be incredible.
Build A Better Bank
In the old banking system we assume that we have the knowledge to execute a business plan and we go to the bank to borrow the money. In the new banking system, we will assume we have the money and we go off in search of the knowledge. Social Media is an excellent “public accounting system” for knowledge assets.
Our current banking system has gotten it backwards.
Technological change must always precede economic growth. The supranational currency may be backed by productivity and not debt. Social media provides an excellent platform upon which to design such a banking system. People trade “social currency” at a tremendous rate. This is evidenced by the amount of destructive innovation is occurring in many legacy sectors due to social media.
Better Banking Tools for everyone
“Partner with banks and technology companies to increase the reach of financial services across the world. Users submitted numerous ideas that seek to improve the quality of people’s lives by offering new, more convenient and more sophisticated banking services. Specific suggestions include inexpensive village-based banking kiosks for developing countries; an SMS solution geared toward mobile networks; and ideas for implementing banking services into school curriculums”.
Suggestions that inspired this idea
1. Enable prepaid cell phone bank accounts for millions of people working in the informal economy
2. Create a community-level electronic banking system for rural areas
3. Build IT-enabled kiosks which provide access to financial services
4. Create a single world bank or supra-national currency, uniform rules and transparent public accounting
Fund Social Entrepreneurs
Venture Capital is ridiculously expensive. Corporate innovation serves shareholders value over social priorities. Some say that the financial risk of funding innovation is too high. The top ten reasons why start-ups fail are due to knowledge deficits, not money deficits. A new banking system that trades knowledge as currency would solve this problem.
The key is to match most worthy knowledge surplus to most worthy knowledge deficit. Google is perfectly able to build a search app for knowledge assets if there were an inventory of knowledge assets. With the most worthy match, Risk can be reduced and new financial instruments can be developed such as the innovation bond, innovation insurance, tangential innovation markets, and destructive innovation transition contingency options, etc.
Help social entrepreneurs drive change
Create a fund to support social entrepreneurship. This idea was inspired by a number of user proposals focused on “social entrepreneurs” — individuals and organizations who use entrepreneurial techniques to build ventures focused on attacking social problems and fomenting change. Specific relevant ideas include establishing schools that teach entrepreneurial skills in rural areas; supporting entrepreneurs in underdeveloped communities; and creating an entity to provide capital and training to help entrepreneurs build viable businesses and catalyze sustained community change.
Suggestions that inspired this idea
1. Provide targeted capital and business training to help young entrepreneurs build viable businesses and catalyze sustained community change
2. Create a non-profit, venture capital-like revolving fund to invest in high-impact local entrepreneurs
3. Send young American entrepreneurs to underdeveloped communities to help create small businesses that would economically benefit those communities
4. Create schools in rural areas to teach local people how to become entrepreneurs
5. Create a private equity fund to help immigrants in developed countries finance business development in their countries of origin
Countless blog articles and news reports complain about information overload in our society. People are so occupied filtering information that they no longer have time to act on what is deemed important. Every thought, idea, message, and picture that enters the human mind is stored somewhere by the magnificent human brain. But the onslaught continues in spam, junk mail, billboards, pop-ups, aesthetic pollution, and road signs.
Endless War:
It’s a war that we cannot win so we just resign ourselves to the noise. Adult attention deficit syndrome is on the rise and I personally forget ideas quickly as they are replaced by new data appearing in my field of view. I am increasingly aware of the huge time expenditure and the tremendous loss of productivity that is induced.
Money is time:
The underlying premise of Innovation Economics is that money represents human productivity and the only way to sustainably increase the quantity of money is to increase human productivity. The only way to do this is to innovate. This and other articles from the Ingenesist Project predict the value of innovation economics by the amount of productivity saved through the application of IE principles.
The Ad Spend and who really pays?
In the United States 2% of the Gross Domestic Product is spent on advertisements, not including the production cost of the ad. This is equal to 280 billion dollars per year.
Although direct response professionals usually project a response rate of less than 0.1% which means that 99.9% of the views are irrelevant noise. Time, energy, bandwidth and human productivity are consumed in seeing the ad, determining it is irrelevant and moving on (or sitting through the ad if you are captive such as TV commercials).
Pass Complete Ratio:
On super bowl Sunday, 90 million people will sit through a 30 second commercial that cost the advertiser 3 million dollars to air. For an irrelevance rate of 99.9% , 375 man-years of productivity are lost. For an average salary of 50,000 dollars per year; 18.8 Million dollars of productivity is burned by a single commercial. For an 18.8M dollar productivity loss on a 3 M dollar ad spend, the ratio is about 6:1.
This means that for every ad dollar spent, 6 are lost in unrealized human productivity. For a 272 Billion dollars spend at 6:1 irrelevance, then 1.6 Trillion dollars worth of human productivity are lost every year.
The most willing viewer is the most worthy viewer
The Ingenesist Project specifies a knowledge inventory system where a person’s knowledge inventory is represented by a packet of computer code. Since the dissemination of this code is in the power of the owner, money spent on advertising can now be spent on compensating people for their time viewing and responding to an advertisement that they are actually interested in.
Economies of scale for advertisers can be produced by supporting groups that bring communities of people together in social media activity.
Spread the word:
So if media advertising disappears, what will the rest of us do with all of our spare time? We’ll spend it with our families, friends, communities, and groups talking about what we know best – and the great products that empower us.
Money represents human productivity.
Recent headlines declare that 78 billion dollars worth of fuel and productivity are wasted each year by congestion on highways. 1.2 Trillion dollars per year in productivity is lost due to past failures in education. The US spends 7% more of our GDP on health care than the average of other developed nations leaving nearly 1 trillion dollars of unknown ‘productivity value’ in vapor per year. 200 Billion dollars per year is spent on war, whether necessary or not, that has not increased American productivity in an economic sense.
2.5 Trillion Units of Human Productivity
Without even trying hard, 2.5 Trillion Dollars per year in stuff not produced is wasted on activity that does not increase human productivity (stuff produced). Obviously debt is a promise to produce stuff in the future. But we’re wasting stuff now? At some point the logic falls apart but no matter how you look at it, money represents productivity and the only way out of this mess is to innovate at an astonishing rate.
Conversational Capital
In an earlier article, we conjured up a rough tabulation of productivity gains due to social media:
One billion messages are sent on Facebook every day. Suppose that each Facebook conversation has a net value of $1.00 per person. That comes out to 730 Billion dollars per year of human productivity saved.
Twitter is worth a cool 100 Million tweets per day. Let’s assign a net productivity gain of $1.00 per tweet delivered. That is $36 Billion per year in increased human productivity.
Suppose each blog article published increases human productivity by $0.50 each. With over 100M blogs, that is 10 billion dollars per day – or1.8 trillion dollars per year.
The grand total is 2.5 Trillion Dollars worth of conversational currency.
In Search of Waste Economics:
Now, return to the waste side of the balance sheet let’s reflect on the areas of impact that social media has on: transportation, energy, education, health care, and world Peace:
Social media reviews automobile quality and drives social priorities toward green industry. Social media allows people to find work close to home, social media vets energy systems such as wind, solar, nuclear. Social media is driving journalism to value added roles and away from corporate collusion. Social media provides richer and more current content than textbooks. Social media is driving social priorities over Wall Street priorities in health care, energy, politics, industry, and science. You Tube is seeing a 1700% increase in downloads as people set up video cameras all over the world searching and reporting injustice. Little Brother is watching.
Social media strikes back
In order to predict where social media will strike next all we need to do is look for the waste economy; areas where world governments, institutions, and corporations are inefficient, wasteful, co opted, or corrupt.
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.
In case you have not noticed, it is largely in the best interest of one group of people to keep another group of people poor, weak, and disorganized. I’ll let the reader connect these dots as they see fit, however, the fact is that is how capitalism works – there must be a merchant class and there must be a working class. And even after all the inequality that this arrangement implies, capitalism is still the only game in town for creating and distributing wealth.
As the burden of supporting the capitalist system is increasing with interest on debt that can never be funded, the pressures on the working class will enter a phase of rapidly diminishing returns.
The Poor:
The inherent conflict is that the working class will always seek to maximize their wages and the merchant class will seek to minimize those wages. Inadvertently, there is a suppression of information, and therefore education, to the working class. The result is a net loss of intellectual capital.
The Weak:
The inherent conflict is that the working class is assigned the tasks of carrying out the wishes of the merchant class even if it is not in their own best interest. Inadvertently, conformity becomes a survival strategy for the working class. The result is a net loss of creative capital.
The Disorganized:
The inherent conflict is that the working class will organize themselves into collectives as a means to match the relative power of the merchant class. Again, inadvertently, if people are held below a certain economic threshold, they will fail to organize because their concern is greater for simply feeding their family. The net result is a loss of social capital.
Diminishing returns
The result of the net loss of social capital, creative capital, and intellectual capital is the inability to create new wealth. While these conditions were once the exclusive domain of less developed countries especially under communism, similar conditions are now arising in the United States under capitalism. That is, before Social Media was used to enrich, empower, and organize.
I am a capitalist:
The tools of the old merchant class trade are eroding. As the financial crisis envelopes the United States, more and more people are turning to Social media. Traditional media is over commercialized, polarized, and gentrified while the audience can now control their bandwidth, seek multiple opinions, and become highly diversified. The draw to social media is nothing less than extraordinary even among those who still have jobs. When people are released from the clutches of the merchant class, they wake up, look around and inspire each other. The innovation economy is upon us.
Innovation Economics
The paradigm shift is really quite subtle. It behaves as a function of the human embodiment of innovation. For example; most of us do not wake up every day aspiring to improve the Ipod, the Wii platform, the better mousetrap, or any other inanimate object for that matter– instead, we seek to improve ourselves, and by extension, those around us. This is the self embodiment of innovation – something improved with an economic outcome. To improve one self is to innovate; social capital, creative capital, and intellectual capital are the factors of production and social media is the corporate structure. I am Capitalist and if you have read this far, so are you.
The bad, the good, and the ugly
The bad news is that United States has a global comparative advantage in producing bullshit. The good news is that we may actually be able to till it into fertilizer for the Innovation economy.
America’s financial crisis was caused by money created from money which was in turn a derivative of wild-eyed speculation in assorted proxies for real productivity, including real estate. Stock prices were supported by imperfect information in a Tickle-Me-Elmo culture while broker fees are embedded in every conceivable transaction.
America has become a world leader in hype, marketing, lawsuits, and fantasy. None of these industries actually produce anything yet nobody can say they are not immensely creative, induce sweeping social movements, and their propagation demands extraordinary intellectual resources, flexibility, and adaptability.
The Theory of Comparative Advantage
It is not efficient for, say, Ghana to produce rice and Vietnam to produce cocoa. If they each produce their natural endowments and then trade the differences, fewer resources are expended to produce more goods. This theory is the basis of global free trade and the efficiencies are irrefutable so globalization is here to stay.
Meanwhile, the literature on the subject of innovation agrees that innovation is maximized as a function of endowments in social capital, creative capital and intellectual capital. Silicon Valley is widely held as the poster child for emerging from the deep social movements of the 1960’s attracting an inflow of diverse people where high tolerance, creative art and music were abundant in close proximity to intellectual centers of Stanford and Berkeley.
Comparative Advantage for Innovation:
By the theory of comparative advantage, if a country does not possess a comparative advantage in intellectual capital, creative capital, and social capital, they would not hold a comparative advantage in an innovation economy.
For example; China has a huge endowment of intellectual capital and throughout history they have been an inspired creative force. However, the current government thwarts social capital. Therefore, whereas China has a comparative advantage in a manufacturing economy, they would not necessarily have a comparative advantage in an innovation economy.
Many other countries have endowments of intellectual capital as well as democratic governments, but cultural norms may still constrain diversity related to gender roles, social classes, lifestyle tolerance, or the acceptance of “outsiders”. As such, they may have comparative advantage in a knowledge economy, but the relative deficiency in creative capital would inhibit a comparative advantage in an innovation economy just as quickly.
The Fertilizer Economy:
That said, the United States has a vast abundance and tremendous economies of scale in social capital, intellectual capital, and creative capital in comparison to any other country in the world. The problem is that these assets are sequestered behind the corporate veil, suppressed from true wealth creation by the priorities of a financial system built to produce nothing except analyst expectations. Like sugar calories, lots of energy is delivered, but sustainable health is not.
The harvest in the wind
The brokers, speculators, and marketers are not bad people – in fact, they are brilliant. They are simply stuck with the wrong set of incentives. The Ingenesist Project dramatically changes the incentives and promises a far better allocation of intellectual capital, social capital, and creative capital. By making such assets tangible outside the construct of the Wall Street, the comparative advantage of the United States in an innovation economy will be astonishing.
Where there is fertilizer in the wind, Wall Street will lead. Where there is a harvest in the wind, Wall Street will follow.
Another approach for spending a Trillion dollars (backed by debt) would be for the government to issue innovation bonds (backed by innovation) to fund new enterprise. Surely the World still greatly admires and respects American Ingenuity (social capital, intellectual capital, and creative capital) and would likely buy such a financial instrument instead of more of our debt.
The final frontier; your backyard
The Last Mile of social media is a vastly unexploited resource with an astonishing wealth creation potential. The Ingenesist Project (TIP) specifies a structure for an innovation economy through the application of 3 simple web applications deployed to social media that will ignite “The Last Mile”.
Already, people use social media to harvest great ideas from around the world. The Ingenesist Project will enable global ideas to be applied in local economies throughout our communities.
Running Numbers:
The sweet spot for Last Mile social media is (2-6) people living within a (1-6) square mile area. Assume an average innovator density is about (1) person per square mile. The United States is a little more than (3) million square miles. If only (1) of the thousands upon thousands of potential applications of Last Mile social media were implemented across the country, then (3) million jobs would be created.
Dan’s List; Leave a Tip
Here is a list of (10) hypothetical business ideas that a buddy and I dreamed up over lunch using TIP methodology for inducing an Innovation Economy. Each of these ideas has a working revenue model.
1. Zertify: This company is a last mile/vetting social media application where neighbors “Zertify their Zillow Zestimates”.
2. Start Up Neighborhood (SUN): is a last mile social media application where neighbors get together to innovate and create new businesses.
3. ScatterWatt: is a last mile social media application for decentralizing power generation aggregating local clean power generation systems (rooftop wind, solar, greenery).
4. ComPrac: is a last mile/vetting application of social media that forms and organizes communities of practice for the purpose of mentorship and cooperation in innovation.
5. CombinePac: is a last mile/vetting application of social media that combines communities of practice strategically for the purpose of tangential innovation
6. TopUse: is a last mile social media/vetting application that makes best use of already disturbed lands saving undisturbed lands from exploitation.
7. CodeVitae: is last mile/vetting service that translates CVs and job descriptions into universal decimal classification system for computerized analysis, normalization, and improved allocation.
8. Proximizer: A last mile social media application that reallocates knowledge assets for best proximity to home space for carbon credits.
9. CarbonCops: is last mile social media application to register, certify, and implement carbon savings ideas.
10. VetBucks: is a last mile/vetting site for the verifying expenditure of public funds.
Improving Information for Fun and Profit:
The degree to which information is improved in a market is the degree to which the innovation adds value. As such, monetization becomes a relatively simple matter. Furthermore, the options that are created will have a multiplier effect in the communities as neighbors learn what knowledge assets are available with which to cooperate in their communities and where their knowledge assets can be deployed productively. New ideas generate more new ideas as the markets will seek to fill in the blank spots and support more structure for innovation economy.
An Endowment for their Grandchildren:
While the leadership elders are to be respected for their wisdom and accomplishments, they have very little comprehension of the economic growth potential of social media. It is understandable that they may overlook this opportunity. The capitalization of social media lays in the hands of the young people who know exactly what to do if given the opportunity. Why not give them a shot at getting the books in order? Call it their inheritance.
So who exactly is paying for this? The next economic stimulus package will not come from the halls of Washington or the boardrooms of Wall Street, but from the streets of America. The objective of The Ingenesist Project is to induce a crowd sourced innovation economy by integrating Social Media with three web applications. It’s all about to become extremely exciting.
Social Media Grows Legs
There only remains three tiny applications yet to be developed and deployed to social media that will allow human knowledge to become tangible outside the construct of a corporation, and therefore, independent of Wall Street. Social media technology is very close to duplicating nearly every function of the corporation outside of the traditional corporate structure. America’s most valuable asset is not money, it is social capital, creative capital, and intellectual capital, and it’s about to stand up, brush itself off, and walk away from the mess left by the excesses of greed and power.
The Evolution of a Species:
1. Social Media will be used to develop a knowledge inventory in a computer code based on, say, the Dewey Decimal System. Suddenly, human knowledge will become organized like a library and searchable by computer in very high resolution.
2. Boolean logic will be applied to the knowledge inventory and the resume will be replaced by a high resolution computer readable descriptive code.
3. Communities of practice will normalize (bell curve) their knowledge domain. At this point, knowledge will appear in the same form as a financial instrument and can then be treated as a tangible asset.
4. A percentile search engine will calculate the probability that a various collections of knowledge assets can execute collections of innovation business plan scenarios.
5. An Innovation Bank will match most worthy knowledge deficit to most worthy knowledge surplus and keep a record of the “secret sauce” of success feeding back to the search engine.
Wall Street Calculus:
Using the same equations as Wall Street, the Innovation Bank will predict the probability that a venture will be successful given a set of knowledge assets. The Innovation Bank can then predict the future cash flows associated with the venture. Now, thousands of ventures and their predicted cash flows can be combined, diversified, and diced up into innovation bonds having superior returns over any other investment. Investors will flood the Innovation System with cash. This cash will be used to fund more innovation investment and the cycle will continue. Everyone takes an equity position and innovation reflects social priorities rather than Wall Street priorities. This changes everything.
This can happen today with existing infrastructure. The only thing needed is a social movement; that’s what Americans are best at. Where does this leave Wall Street, failing businesses, and all their debt? The funny thing about knowledge assets is that they can walk if necessary.
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.]
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 https://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.
In order to restructure our financial system; we first need to restructure our innovation system. ALL of the top ten reasons for business failure are due to a lack of knowledge, not a lack of money.
Top 10 reasons why businesses fail:
1. Lack of an adequate, viable business plan
2. Insufficient sales to sustain business
3. Poor marketing plan: unappealing product, poor customer identification, incorrect pricing and lackluster promotion
4. Inadequate capital, misuse of capital and poor cost control
5. Poor management skills: lack of delegation, leadership and/or control
6. Lack of experience and knowledge
7. Lack of managerial focus/commitment
8. Poor customer service
9. Inadequate human resource management
10. Failure to properly use professional advice: i.e. accounting, legal, financial, etc.
Lack of a viable business plan is an act of negligence where research, scenarios, and assumptions have not been tested. Market ignorance is not an excuse nor is the failure to know one’s customer. Death by poor marketing plan is knowledge deficiency related to product appeal, customer identification, pricing structure, and lackluster promotion. Obviously, one needs to know how to manage a company in order to be focused, let alone correctly estimate capital needs. Lack of customer service knowledge is deadly in the age of social media. Inadequate HR is an oxymoron – if it’s inadequate, it’s not a resource – human or otherwise. Finally, failure to listen to knowledgeable people is ego driven irrationality.
The financial system is not the only problem; the innovation system is a crucial element. Information, knowledge and innovation, by any definition, are profoundly and inseparably connected. A failure in one kills the other two. So, just because an entrepreneur does not have the knowledge, does not mean it the ‘knowledge’ fails to exist – it simply means that entrepreneur failed to find it.
So where is the knowledge? Unfortunately, there is no public knowledge inventory – people do not know what each other knows. There is no website where that people can go search for all 90th percentile social media experts living in zip code 06776, let alone build a dedicated local management team. There is no way that anyone can assemble the knowledge needed to execute a business plan with a known probability of success given the information available. As such, there is no way to finance public innovation.
Insurance companies can tell you the probability that you will die exactly on your 80th birthday, but we cannot estimate the probability that a business will be successful. Nothing has more variables that human physiology, yet it is predictable and business success probability is not. Why can’t this be fixed?
If we could identify, integrate, and predict public information, knowledge and innovation, we could diversify risk exposures away. With risk exposures managed, we could insure start-ups risks. With start-up risk eliminated, we can sell innovation bonds at, say, 6% to fund the extraordinary rate of public innovation that we need to support our debt and pressing social liabilities. If the innovation bond returns a modest 20%, human productivity, by definition, has increased by 20%. A 20% growth in human productivity is a 20% growth in an economy. Again, financial system is not the only problem; the innovation system – or lack of an innovation system – is the problem. Perhaps oversimplified, but this is an astonishing omission from the national dialog on the financial crisis.
The emergence of Social Media technology presents an extraordinary opportunity to organize a knowledge inventory outside the construct of a corporation and marry it to the financial system, much like a corporation. Knowledge tangibility must be the most important “innovation” in the pipeline today if we expect to meet the crushing challenges that await us. Just because we cannot predict innovation does not mean it cannot be done – it just means that we do not know how… yet. This is not about inventing a new currency, it is about the public taking control of the old one. We, the people, don’t deserve to lose this game; join The Ingenesist Project and help build a sustainable Innovation Economy.
We have launched The Ingenesist Project. The Innovation Economy is an absolutely huge and necessary step forward for all of us. The current financial system is unstable and it will fail. At best, the innovation economy can increase human productivity sufficiently to support the debt load. At worst, there needs to be a system of trade in place for society in the event of a crash or devaluation so that people can purchase the necessities until the recovery can take hold. So yes, this is serious business.
Anyone following this blog please spread the word. I need to get people to the point where they will read the 18 articles – after which, hopefully, their outlook on the tangibility of knowledge in social networks will be permanently altered.
My challenge, of course, is to make a very difficult subject matter easy to explain and compelling enough to call people to action. Those 18 articles condense 400 years of financial industry development and history into a few pages. Yes, the analogy between social networks and finance holds well. This is not easy to explain, but the solution to the financial mess is right under our noses. It’s almost too simple to see.
The forum has been added to solicit threaded comments to the 18 articles. This is the backbone to the open source development. I hope to build future posts on the comments that arise – a feedback loop. We will identify the sub components, partners, strategies, and action items together. Participants will pay each other in a new currency.
I will soon simplify and interpret the preferred embodiments from the patent which will illuminate the countless new-to-this-world business opportunities that will become available to entrepreneurs in this environment.
As a demonstration; vetting mechanisms make markets more efficient. Ebay has the feedback score, Craigslist has the flagging feature – this is fact. Social networks are perfectly suited to act in this manner across the entire spectrum of commerce. This is a multi-billion dollar industry that can be very easily monetized in the innovation economy. I hope that others can see this too. There is a great deal of wealth to be generated for each other.
I would like to thank all of the people who advise this program. I soon hope to invite a Board of Directors and formalize the growing concern that is The Ingenesist Project. Anyone reding this, I am an open networker on Linked in – sent me a invite and I’ll respond.
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For immediate release:
The Ingenesist Project; Putting an End to Debt Economics
(Seattle) The Ingenesist Project is an open source economic development program that will challenge America’s financial meltdown head-on by creating an innovation economy trading rallods (dollar spelled backwards) backed by innovation instead of dollars that are backed by debt.
“Deficit spending is unsustainable. When the dollar crashes, People will need an alternate economy to trade in – one whose currency is backed by something tangible; and there is there is nothing more tangible than the human imagination, including gold”, says originator, Dan Robles. “Capitalism likes competition; well today, Social Networks are the ultimate competitor”
The Ingenesist Project has identified three relatively simple web applications which, when applied to Social Networks, will allow human intellect, social capital, and creativity to become tangible outside the construct of Wall Street and Corporations.
By definition, the rallod is pegged to the national debt, as such, The Ingenesist Project has 10 trillion rallods (and counting) to distribute. Participants in the Ingenesist Project Development Forum will award these rallods to each other on a reputation scale for their work in design, development, and improvement of the three web application that will release society from the shackles of debt economics.
The forum is open to anyone and participants can earn millions of rallods for their work in developing these applications.
The New ‘Stock’ Market
The Ingenesist Project has a patent pending for an Innovation Banking System to finance social innovation and will release all rights to the public domain.
“This is one of the most important patents applications published in our time. Countless ‘new-to-the-world’ business plans and patentable methods, systems, and devices will result from the The Ingenesist Project”, says Robles “Everything changes from the University System to the prioritization of global resources. Wall Street will be come the steward instead of the master”
Entrepreneurs are encouraged to patent, protect, or contain all intellectual property that they develop in the new economy and become as wealthy as they possibly can under the condition that they pay royalties, equity, or options to their knowledge inventory.
The entrepreneur’s “Secret-Sauce”, however, must be shared with The Ingenesist Project in order to improve the Percentile Search Engine Algorithm for the benefit of the public domain.
The Rallod
The U.S. National Debt is over 10 trillion dollars. Assuming deficit spending stops today, every man, woman, and child in the US is responsible for $33,500.00.
This means that $33,500.00 of every person’s productivity has already been spent. Obviously, the only way to pay the debt is to increase every person’s productivity by exactly $33,500.00.
The only sustainably way to increase human productivity is innovation. If the dollars crashes and pegs to the Rallod – the innovation economy will replace the debt economy and those who build it will become the bankers of tomorrow.
More Information:
Please review www.Ingenesist.com
The Ingenesist Project; Putting an End to Debt Economics
The U.S. National Debt is over 10 trillion dollars. Assuming deficit spending stops today, every man, woman, and child in the US is responsible for $33,500.00.
This means that $33,500.00 of every person’s productivity has already been spent. Obviously, the only way to pay the debt is to increase every person’s productivity by exactly $33,500.00.
The only sustainably way to increase human productivity is innovation. The Ingenesist Project is an open source economic development program that will meet this challenge head-on by inducing an Innovation Economy.
The Innovation Economy:
The Ingenesist Project has identified three relatively simple web applications which, when applied to Social Networks, will allow human intellect, social capital, and creativity to become tangible outside the construct of Wall Street, Corporations, and Government.
The Ingenesist Project will build a mirror economy trading rallods (‘dollar’ spelled backwards) in an innovation economy. Rallods will be backed by “innovation” whereas dollars are backed by “debt”, hence, a mirror economy.
The Ingenesist Project has a Patent Pending for an Innovation Banking System and will release all rights to the public domain. By definition, The Ingenesist Project holds 10 Trillion rallods – and counting – to spend on development.
The Ingenesist Project will generously award rallods on a reputation scale for posts to The Ingenesist Project public forum toward the design, development, and improvement of the three web application (did I mention TIP has 10 million million rallods to blow?).
The New ‘Stock’ Market
Countless “new-to-the-world” business plans and patentable methods, systems, and devices will result from the The Ingenesist Project.
Entrepreneurs are encouraged to patent, protect, or contain all intellectual property that they develop and become as wealthy as they possibly can under the condition that they pay royalties, equity, or options to their knowledge inventory.
The entrepreneur’s “Secret-Sauce”, however, must be shared with The Ingenesist Project in order to improve the Percentile Search Engine Algorithm for the benefit of the public domain.
Participants eventually be able to trade services among each other in Rallods.
Objective:
Deficit spending is unsustainable. The existing financial system has exceeded its ability to pay back the debt and is being consumed by the interest on this debt.
As the dollar crashes, society will need an alternate economy to trade upon – one whose currency is backed by something tangible – our own productivity!
The dollar may eventually peg at some exchange rate to the Rallod.
More Information:
Please review www.Ingenesist.com
Please review Articles in Sequence (18 short articles explain the concept)
Please review Patent Pending
<a href=”http://technorati.com/claim/qy3cxbstqg” rel=”me”>Technorati Profile</a>
Every time humans invent better ways of doing things, the economy gets a little bigger. This is a simple idea. The cave dwellers discovered that they did not have to travel as much hunting and gathering if they could sharpen a rock enough to chop a tree down for firewood or for spearing animals. That same tool helped them to dig holes to plant seeds. By growing food and domestication animals, they could stay in one place and conserve energy. By living in cities, the division of labor led to more efficiency as the farmer, metal smith and rancher bartered their services. Enough surpluses were created so that a leisure class was free to develop philosophical thought leading to early scientific principals.
After a while, the invention of the printing press greatly advanced the availability of formal education. In the Early 1800’s, Eli Whitney stunned the world first with the cotton gin and then with his concept of “interchangeable parts” where he disassembled ten working muskets, scramble the parts and reassembled ten working muskets. What seems trivial today lead to great advances in the industrial revolution, becoming further refined in the manufacturing economy. Computers then ushered in the Era of Information followed by the knowledge economy that we live in today.
At each stage, there was a quantum leap in human productivity and financial wealth. Obviously the two are related.
If we look at this history from the big picture, we notice that each level of human development was derived from the prior level by integrating the tools of that prior level. As such, the knowledge economy was derived from the information era by integrating the computer tools leading to the Internet. The agrarian economy was derived from the hunter-gatherer tribes by integrating the wheel, wedge, and lever into agriculture and livestock. The industrial revolution integrated scientific principles from the Renaissance. This is fairly consistent.
If we look at this history from a microscopic view, we see that no single idea drove human development, rather, billions upon billions of little ideas from many diverse sources combined in unique ways to form larger ideas which then combined to form even larger advances eventually leading to those big innovations that we see as the milestones above.
Also, we notice that the over time, rate of change at which these ideas have been combining is getting faster and faster. The hunter-gatherer phase lasted 2 million years, The agrarian age lasted about 40,000 years. The scientific revolution lasted 1500 years. The knowledge economy is barely a single generation in play.
These are important concepts because later, when we build a mathematical model for the next economic paradigm, we will use a few tricks of calculus called the “derivative” and the “integral” to describe how things change over time so that we can measure and analyze productivity and wealth creation in the new economy.
Finally, we ask, what comes after the knowledge economy? There are two things that we can be certain of. The next great leap in economic development will be derived from the knowledge economy by integrating the tools that we developed in this knowledge economy. I strongly suspect that computer enabled society – or social networking will have something to do with it.
Welcome to the Innovation economy.
