The Ingenesist Project

The Next Economic Paradigm

Tag: Mexico

Model For The Mobility of Engineering Professionals Under NAFTA

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On March 4, 2011

In General Information

I published the following paper in 1996 as part of my participation in the negotiations for mutual recognition of Engineering Professionals under NAFTA.  We had just completed a program that ultimately sent close to 200 Mexican Engineers to the U.S. NCEES Engineering Board Exams with the support of CETYS Universidad and The State of California BORPELS.  In short, the performance of Mexican Engineers on this exam was extraordinary.  Their pass ratio was comparable in every way (especially when language disparity was removed), to US engineers who took the same exams.

Model For The Mobility of Engineering Professionals Under NAFTA – Please follow this link for PDF: INCNE596

This work is highly significant because it represents original research toward what was likely one of the first modern attempts to trade ‘human knowledge’ like a financial instrument.  The idea was that Mexican, American, and Canadian Engineers would be allowed to practice engineering in the exchange of services across all three borders.  The hope was that the financial structure that supported the American and Canadian engineering profession as a vetting mechanism [for the technical risks details associated with major infrastructure projects] would transfer into Mexico.

Comparative Education

It is also significant because this may be one of the largest comparative education projects between the Mexican Education system in Engineering and the US engineering education system as measured by an established standard examination.  For example, data clearly showed an advantage in Mathematics for the Mexican engineers but a disadvantage in physics and chemistry – likely correlating to the cost of producing such education (labs and equipment) between the two systems.

Relative States of Development

It is abundantly conclusive that Mexican Engineers, and therefore the Country of Mexico, is highly capable of development and technology enterprise based on the education criteria in which America measures itself.    So when looking at the relative states of development between the two countries, the question arises; if the difference is not in the quality of engineers, then where is it? Of course, the answer does not surprise us when we see political turmoil as the source of most wealth disparity metrics.

Language Disparity

Finally, on a relatively minor discovery, this research measured a language disparity of approximately 15% in the speed that the engineer from Northern Mexico can accurately interpret an engineering problem expressed in technical English.  This is useful when planning timed exercises such as examinations where language differences are difficult to remove from the sample set.

Epic Value Game FAIL

As it turned out, the Mexican Negotiators did not accept the author’s recommendations presented here in stead adopting an MRD strategy that was highly restrictive to both the mobility of engineers and the vetting requirements of financial institutions. America literally handed Mexico the Knowledge Economy on a silver platter and Mexico refused.

This author argued in 1996 that Mexico would compete in the future with emerging economies such as China and Vietnam in the the low-value labor market rather than competing with, say, India for the highly valued knowledge market.   It is unfortunate that they chose the former.  I’ll leave my opinions as to why, for a future post.

Model For The Mobility of Engineering Professionals Under NAFTA

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My Christmas Gift

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On December 24, 2010

In General Information

This year, I send my Christmas greetings from Mexicali, Baja California, Mexico.

Besides seeing all of my wonderful in-laws and cousins, I had the opportunity to meet with a couple of my students from many years ago.  They are now entrepreneurs, business owners, and influential leaders in the complex web of Mexican and International society.

I knew them when they were just kids struggling through engineering school – I saw them as gems in the rough, now I get to marvel at the diamonds.  Wow, what an incredible experience.   Of course, they can’t see how I view them nor can I see how they view me.  One thing is certain, these are very special relationships.  I managed to hold back tears of joy.

The trust is instantaneous and profound.  We hang on each other’s words as incalculable truths pour from our experiences.  We cite each other’s nuances and we recall quotes long ago lost.  I remember the extraordinary challenges of getting 250 of them through the US Engineering Board exams.  We spoke of the early days of NAFTA and the oppression of the Maquiladora Industry.  We spoke with the wisdom that we wished we had 17 long years ago.

I wonder what happened to the others.  I know a few that have also become quite successful.  The only thing I gave them was proof that they were equal in every way to any engineer on earth.  As such, they managed their careers with that single data point lodged in the back of their mind.  Now they are proving to me what I had only suspected then.

In return, they gave me everything that I am thankful for today as I celebrate Christmas with my wonderful family.  I met my wife while working with these kids.  I found my own ethnic identity working with these kids.  I learned Spanish working with these kids.  I earned the wisdom to represent a fortune 100 company around the World after working with my kids. In fact, my blog and all supporting research is a direct result of a flaw I observed in market capitalism while working with my kids and their interaction with NAFTA. The courage to leave corporate life and take a leadership role in an hugely disruptive start-up company is a direct result of working with these kids.

These kids (men and woman) are among the greatest gift I could have ever imagined receiving.  My advice to others is to always have students.  Always teach people what you know.  Always elevate others and you will find yourself elevated to astonishing heights. Be a student and provide this joy to those who wish share themselves deeply with you.  This is where true happiness is found.  This is the gift that Christmas celebrates – be a teacher

Merry Christmas.

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The Fundamental Flaw of NAFTA

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On January 1, 2010

In General Information

Leading into 2010, The Ingenesist Project will release a series of videos that specify the construct of the Next Economic Paradigm.  We begin at the beginning.

The following video discusses the flaw in modern globalization market economics that started with the failure of an obscure sub section of NAFTA – the free trade of services. The objective of the Ingenesist Project is to correct a tiny little flaw in market economics. This simple adjustment will result in dramatic change.

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Can Twitter Fuel a Run On Banks?

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On October 30, 2009

In General Information

The Ingenesist Project is retained by corporate clients because we look at the world through a different set of filters. We are looking for possible disruptions on the horizon as far in advance as possible so that our clients can be aware of potential perils and modify their business plans accordingly.

One of our signature assertions is that Money is merely a social agreement – not a federal mandate of a democratic government. People will trade whatever currency they agree to trade. Increasingly, people, empowered by social media can impact the financial system far more that a bunch of Quants peddling CDOs.

People simply do not know how powerful they are.

Suppose someone puts together a Twitter/Facebook campaign for everyone the withdraw their money from a single financial institution who just handed out big bonuses? At best, those bonuses will have to be recalled to keep the doors open. At worst, people will find an alternate currency to store the “value” that is destroyed by a bank run. Virtual Currency? Admittedly, it’s far-out, but we need to keep our eyes on these trends because once started, they move very very fast. That’s why they call it a “Run”

Is this scenario really possible? Read on…..

Read More

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The Greatest Threat To Social Media

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On October 14, 2009

In General Information

I taught an undergraduate class in International Business this weekend in Mexicali, Mexico as part of an international assignment as Associate Faculty for City University of Seattle.  I first taught in Mexico 15 years ago as visiting faculty during the NAFTA era where I spent 3 years conducting research which eventually lead to  The Ingenesist Project.

My first year in Mexico back in 1994, I thought to myself, “Wow, I can change everything”.  The next year, I thought to myself, “Wow, I can’t change anything”.  The third year, I thought to myself, “Wow, why would I want to change anything, Mexico is doing just fine the way it is”.

At that time, I was referring to the cohesiveness of community, family values, complex social structure, community interdependence, generosity, empathy and personal warmth – despite their “Cold War” classification as a “Third World” country – that the Mexican people held forward to each other as well as visitors.

I also remember the huge city-wide parties (imagine a million person party) after the country won a big soccer match, or after a popular political candidate won and election, or during New Years, Christmas, and Easter, etc.  Wow – what a magnificent place.

Fast forward to this past weekend; I was explaining the implications of the financial crisis relative to the changes that have taken place since NAFTA.  Today, thousands of Global Corporations now surround the city like an advancing army, proud people are now working for wages, Euro/America centric textbooks chart their course into modernization, and pending currency shifts loom unpredictable in their speed and scope – the effects will likely not be in the best interest of the people who actually produce things.  So, I deviated from the course material – If I didn’t do it, nobody else would.  I included material on how to use Social Media.

Mexico still has it, but they are losing it – often in spectacular ways.  It seems so natural that Social Media can have a tremendous impact in countries where the fabric of community is still essentially intact.  Unfortunately, when people are held below a certain economic threshold, they simply do not have the time or the energy to organize as a community to impact social change.  This is the greatest threat to the great promise of social media in Mexico … and the United States.

The following video, A nine-minute history of corporatism, articulates the conflict that I felt when teaching the courses on International Business in Mexico.   Please watch – it is that important.

Life Inc. The Movie from Douglas Rushkoff on Vimeo.

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Social Clipping and the Amazing Disappearing Economy

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On January 14, 2009

In General Information

In the early 1990’s, the NAFTA Mutual Recognition Document (MRD) for engineering professionals was the first modern attempt to treat knowledge like a financial instrument. Unfortunately it failed because of a tiny little flaw that I call ‘social clipping’.

Most trade agreements that followed were modeled after NAFTA and, as such, inherited the clipping flaw.  The flaw is that ‘products’, but not the knowledge assets that created them, are mobile in a global economy.

The MRD handed the knowledge economy to Mexico on a silver platter; but they turned it down.  The government did not want to give their engineers “wings” because they were afraid that they would fly away.  Instead, Mexico chose to sell their extraordinary young engineering talent off cheap to meet quotas promised to Asian, European, and American companies to relocate huge manufacturing plants to the country. Today, Mexico competes with China in a race to the bottom of a manufacturing economy and almost no indigenous design industries.

Two-way street:

Back then, the protesters raged about an influx of cheap foreign engineers to the US.  But many US engineers saw that Mexico needed everything that engineers make – roads, bridges, infrastructure, etc. The needs were endless and the objective was clear; to increase human productivity in Mexico was to create real and sustainable wealth.  Maybe then, the citizens would not need to fly away.

These infrastructure projects could have been funded because the Professional Engineering License behaves like a financial instrument mitigating project risks (so that nothing “disappears”). Only then banks would lend and insurers would insure.  The transfer of knowledge and accountability to Mexico would have been extraordinary; the relationships, profound; their development progress, astonishing.

The Disappearing Economy

But the MRD died by clipping.  Mexican Engineers would have been required to take the same engineering examinations as US engineer.  The government refused citing concern that they could not pass. So, in 1994-1997, this author directed a large comparative education project sending over 250 engineers to the US professional engineering examination (EIT).  The Mexican Pass rate was extraordinary – they were easily comparable to the US pass rate in most subjects and flat-out superior in mathematics.  There was nothing wrong with Mexican engineers, or the culture; there was something wrong with the financial system that keeps them invisible.

Knowledge is Power

As the story goes, Mexico has a family oriented culture where hierarchy is often based on seniority; a common examination may favor recent graduates.  It would be inappropriate for a young engineer to have authority over a more senior engineer.  Dig a little deeper and the real problem was power. In Mexico, power is concentrated among very few people.  It would have been unacceptable for transparency to exist.

We are facing a similar situation in America today.  Power has been steadily consolidating over the years.  A huge and fast stimulus package will enter a financial system with a shortage of vetting institutions. There is a strong pull toward ‘business as usual’ – creating J-O-B-S; not necessarily more entrepreneurs, engineers, or mentors, and certainly not empowering whistle blowers.  In the knowledge economy, Americans salaries are pegged to off-shore outsourcing. This is a game that we can no longer win playing by the rules.

Social clipping

As we have seen with less developed nations; when people are held below a certain economic level, they fail to organize for innovation, social change, entrepreneurship, and value creation because they are too busy trying to pay off debt and feed their families.  Social capital, creative capital, and intellectual capital are muted; that’s when the magic of innovation disappears. That’s social clipping.

America must move on to the next level of economic growth.  The Innovation economy is a game we can win playing by new rules. Government must trust the people, empower social media, and not clip our wings with an outdated economic model.

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Pride, Prejudice, and the Relationship Economy

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On January 3, 2009

In General Information

Fifteen years ago, I found myself at a remarkable crossroad of social networking.  I had just delivered a paper on the NAFTA Mutual Recognition Document (MRD) for Engineering Professionals at an academic conference at a University in Mexicali, Baja California, Mexico.  Those were exciting times; the MRD was the first modern attempt to treat knowledge like a tangible financial instrument.

My paper was well received and after so much preparation, I decided to take a walk to unwind.  It was a warm evening and I hiked briskly down a side street drifting deep into contemplation about the possibility of a great new international social network.  Engineers from both developed and less-developed countries could build the infrastructure for real economic growth against the forces of oppression and cheap labor.

Soon, the pavement turned to dirt and I realized that I was very lost.  I looked up through the haze of smoke and dust casting awkward shadows from a lonely street lamp through the tangle of power lines. Nearby, a group of Cholos sipped their Caguamas from various crouch positions.  In the distance the sound of Mariachi music, dogs barking, a televised soccer match, and a crying baby droned on in a muted cacophony. The smell of Carne Asada combined oddly with musty earth, car exhaust, and a distant sewer vent. The world suddenly became surreal as my enthusiasm for social networking gave way to foreboding anxiety.

In the corner of my eye, I caught the shadow of a figure limping toward me from behind a brick wall long under construction.  Old, torn and stained ranchero style clothing hung from the frame of the dark figure that approached.  His boot heals were worn to the ground and his broad dark bandito mustache hung low contrasting with groomed hair.  His weathered face, expressionless, relayed his many years of life in the parched desert.

My anxiety turned to terror as my worst fear appeared before my eyes. This dark stranger raised his hand to reveal the shiny barrel of a very large handgun.  I was too scared to move.  My mind raced as my heart screamed out “DEAR GOD, PLEASE DON’T LET IT END LIKE THIS”.  Then, in a smooth reverent motion, the dark stranger held the pistol flat with both hands as if presenting a gift.

He calmly spoke in simple Spanish, “Would you like to buy my pistol?” After an long pause, I found myself stuttering back in my broken Spanish “You have a very nice gun sir, but I am not in the market for one today, thank you”.  He returned the weapon to his pocket and offered a sincere salutation of good health to me and my family before walking back into the darkness.  At that moment, he reminded me more of my late grandfather who I missed dearly rather than evil presence I so feared a mere 20 seconds earlier.

My heart raced as I retraced my steps back to Campus.  Suddenly it occurred to me:  If this old man thought that I had enough money to buy his gun, why didn’t he use the gun to take my money?  I asked a local colleague about my experience to which his response was, “The old man saw that you looked respectable.  He knew that you could be trusted with the responsibility of owning the weapon and not present a threat to his family, children or community (i.e., HIS social network)”

I realized that this poor dark stranger of the night paid me the highest professional compliment I have ever received.  I can only hope to find in myself the humility to live up to his prejudice and to live down to my own.

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