Tag: productivity Page 5 of 6

Goldman Sachs: Bernie Madoff on Steroids

On November 30, 2009

(Editor’s note: in all fairness, the GS initiative does represent a fundamental shift away from the Friedman doctrine of amoral capitalism.)

Money does not represent gold, solver, or oil. Money represents human productivity – yours and mine. Goldman Sachs is about to award the greatest ANNUAL payout for its employees – over 700,000 dollars EACH.

The words “money” and “productivity” should be interchangeable. So, what exactly did Goldman Sachs produce in order to amass such astonishing amounts of “money?” Where is the corresponding astonishing productivity?

The line of fire is quite obvious; the productivity is really “future” productivity in the form of debt – yours and mine.

WSJ: Some of the largest shareholders in Goldman Sachs Group Inc. have urged the Wall Street firm to reduce the size of its bonus pool, arguing that it should pass along more of its blockbuster earnings to investors, according to people familiar with the situation.

Uhhmmm…15% of the shares are owned by the Goldman employees – sounds like the 2nd tier of the pyramid are getting anxious. Like a street gang, they battle for a piece of the turf. Perhaps Goldman should do something for the 3rd tier too.

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A Definition for Innovation Economics

By Admin

On November 26, 2009

In General Information

Innovation economics is an economic doctrine that reformulates the traditional model of economic growth so that knowledge, technology, entrepreneurship, and innovation are positioned at the center of the model rather than seen as independent forces that are largely unaffected by policy.

Innovation economics is based on two fundamental tenets. One is that the central goal of economic policy should be to spur higher productivity and greater innovation. Second, markets relying on price signals alone will not always be as effective as smart public-private partnerships in spurring higher productivity and greater innovation. This is in contrast to the two other conventional economic doctrines, neoclassical economics and Keynesian economics.

A Definition for Innovation Economics

Read More

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Fattest Cat Bets Against Dollar (and what we can do about it)

By Admin

On November 25, 2009

In General Information

In 2006 John Paulson (of no relation to Treasury Secretary Henry Paulson ) bet that the sub-prime mortgage market would tank and housing prices would fall on a national scale, according to a new book The Greatest Trade Ever by Greg Zuckerman. He cleaned up with 4 billion dollars in personal gains, 20 Billion for his firm.

Wonder where your money went?

“John Paulson took it,” wrote Peter Cohen of BloggingStocks. Want to know what Paulson is buying this year? Gold. Betting against the dollar is his latest ploy and so far seems to be working. Ummmm…this means that the rest of us are basically screwed, again.

Paulson’s investing lessons:

1. Don’t Rely on Experts
2. Bubble Trouble
3. Focus on Debt Markets
4. Master New investments
5. Insurance Pays
6. Experience Counts
7. Don’t Fall In Love
8. Luck Helps

Hey Kids, let’s learn from the master:

1. Don’t rely on Experts: They are the crooks. The Mexican Peso crisis was not caused by foreigners; it was caused by Mexican elite running away from their own currency and sparking a wider run. See Johnny Run….

2. Bubble Trouble: Further evidence is seen in speculative bubbles appearing in mundane fixed assets like land, minerals, and alternate currencies around the world.

3. Focus on Debt: If you have cash, you’ll lose it to inflation. But if you have debt, you’ll lose that too. If you have too much debt and you’ll go bankrupt. If you have too much cash and you’ll become equally broke. The trick is to hold just as much cash as you hold debt and when it’s all over, you’ll be no better or no worse off.

4. Master new investments: In the old system, if I trade a dollar for an apple, I lose the dollar but gain an apple. In the next economic paradigm, I share an idea but I still retain the idea; and currency multiplies – master the new investment!

5. Insurance Pays if you know how to play; if you can identify the peril, you know the probability that it will get you, and you know the consequences of the loss – you can “play” insurance. People must reorganize around an “insurance system” enabled by social networks that can influence these factors.

6. Experience Counts; While corporations are laying off older people, social media is capturing them in a knowledge inventory. We must develop, produce, and access this knowledge inventory.

7. Don’t Fall in Love: This means diversify and don’t be afraid to try new things. Innovation is the art of putting many different ideas, concepts or objects together and yielding new wealth creation. What better mechanism than social media.

8. Luck helps: Social media is like a cloud. Nobody can control and the only way to engage with it is to talk to the cloud. After a while the cloud will deliver rain, and your garden will grow. John Paulson calls this luck, we call it inevitable.

We, the people, need to introduce a new economic paradigm – nobody will do it for us. We may lose the dollar as a currency but we must not lose our personal ability to produce and trade our ideas, plans, and actions for the things that our families need to grow. Wealth is created by sharing. The Next Economic Paradigm shows us how we, as a society, can reorganize ourselves around an economy built upon social media. Sounds far out but it can be done today if we move quickly to understand the power – near absolute – that people can have in social media. If John Paulson were really smart, he would bet on us not against us.

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Bovine Economics

By Admin

On November 23, 2009

In General Information

Money does not represent gold, silver or oil. Money represents human productivity – yours and mine – otherwise nobody would work (i.e., be productive) in exchange for it. Therefore, the words ‘Money’ and ‘Productivity’ should be synonymous and interchangeable – right?

Not so fast. The following headlines were produced from a ‘Google News’ Search that contain the word “money”. Next, I replaced the word “money” with the word “productivity”[in brackets]. The headlines don’t make any sense.

Yes kids, try this at home. If the headline still makes sense with the word swap, then you can enjoy the article in full confidence that you are being nourished with useful knowledge. If, however, the headline doesn’t make a damn bit of sense after the swap, then you are experiencing Bovine Economics – suitable only for mushrooms and methane

Canada [Productivity] launderer shows holes in Vegas casinos

GM to start paying back bailout [Productivity]

Some taxpayers may have to return [productivity] from a new tax credit

[Productivity] talks in Afghanistan, says army counter-insurgency manual

“Stimulus” [productivity] going to 10 Ohio congressional districts that don’t exist

Our government is minimizing breast mammography to save [productivity] not lives

Prisons, education feel [productivity] pinch

[PRODUCTIVITY] MARKETS-US rates futures gain on Bernanke remarks

On Healthcare, Don’t Follow the [Productivity]

(Editor’s note: This series is an experiment and we’ll get better at picking the gems. Let me know if this is interesting enough for a weekly feature article)

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Seeding the Clouds of Social Media

By Admin

On November 18, 2009

In General Information

OK, so what part of: Governments and industries have no intention of fixing things that they broke are we still having trouble with? The climate change summit ended in a draw after Kyoto ended in party pooper. You can count the financial crisis, endless warfare, world hunger, slave labor, forest-to-dump consumerism among the same pile of sun dried bullshit. Does anyone still trust the “leaders”?

There is a way out. People need to organize themselves around their a social media financial system. This is actually a relatively easy thing to do. Social media is like a big cloud – a big gray mass with no beginning, end, center or physical boundaries. The only way to engage the cloud is to talk to it. If you talk to it the right way, it delivers rain. If not, the well stays dry.

Now here is the trick. As social media applications continue to integrate, a correlation between conversation and rain becomes “diversified”, the randomness begins to disappear. Steady, consistent, and sustainable conversations across a wide array of social action will delivers steady, consistent, and sustainable rainfall across a wide area of social landscape.

At some point, someone will notice the similarity between the social media rainfall and the behavior of large diversified cash flows. They will develop a financial instrument to “capitalize” this value because it has become predictable. Predictable value flows can then be “securitized”. Unfortunately, the dollar is a debt backed currency and a productivity backed currency will need to arise in its place.

China accuses the weakness of the US dollar for driving speculation bubbles in anything and everything of “value” that is not a dollar. The problem is that the dollar is the only game in town. If there were an alternate currency with superior representation of human productivity, all dollar denominated assets will be converted to the new currency. The entire 50 Trillion dollar debt pressure on the US dollar will convert to a productivity backed currency forced to drive innovation at a comparatively astonishing magnitude – almost on the scale of the problems that face humanity.

A productivity backed currency means that those who are most productive earn the most money. Think about that for a minute, then go read The Next Economic Paradigm.

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Executing the News

By Admin

On November 11, 2009

In General Information

There are lots of questions about what constitutes news. Powerful editors decide what people read and what they don’t. Journalists decide what is worthy of investigation and what is not. Advertisers, special interests, lawyers and lobbyists defend the boundaries of inquiry against themselves or their industry. All this plays out in a delicate dance of “crowd sourced censorship” Whatever survives this gauntlet of execution becomes THE NEWS.

So, I took a snapshot of today’s news and ran it through the “History Test”:

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When Capitalists Are Really the Socialists

By Admin

On November 7, 2009

In General Information

Yikes…

Unemployment tops 10%. Add in the under-employed, part timers, young adults trying to enter the job market, the ones who have given up or otherwise marginalized, and we’re well into the 15-20% range.

Mediated Reality:

When will people come to the realization that a new financial system is needed to represent the new social order? When will people realize that they have in their possession the most important tool ever devised by humanity for the benefit of humanity? When will they shut off the TV and reject the barrage of mediated reality that blinds them with propaganda at every turn?

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Community Currency; Ithaca Hours

By Admin

On November 6, 2009

In General Information

Editor’s note: I found this copyrighted piece from all the way back in 1995. I find such history enlightening. As a researcher it allows me to eliminate certain variables such as Social Media, 9/11, TARP, GWB, BHO, Global Warming, and a host of other firebrand influences on public opinion and action. That said, the clarity is remarkable. Take strong note of the intention of fulfilling social priorities. Today, as our corporations and government (federal, state, and local) continue to cut social programs in order to service interest on debt, the void on social programs will induce an inevitable condition; Community Conversational Currency.

by Paul Glover

Originally published in IN CONTEXT #41, Summer 1995, Page 30
Copyright (c)1995, 1997 by Context Institute

Many communities are giving up waiting on large corporations or government to invest or provide jobs, and are instead building on their own strengths and resources.

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Building The Social Economy

By Admin

On November 4, 2009

In General Information

The following summary from Hannah Del Porto does a great job in identifying the State of the Art in Building The Social Economy. Such “Thought Infrastructure” is essential to what will evolve into the next economic paradigm. For years, we have specified an Innovation Economy Built on Social Media platform. The thesis is published Here.

The key, we believe, is for the Social Financial System to emulate the critical components of the Monetary Financial Systems that support capitalization. Hence, “Social Capitalism” will emerge as a replacement for both Socialism and Capitalism. We are deeply excited in observing this integration of knowledge assets

Thanks Hannah!!!

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The Six Discovery Skills for Innovators

By Admin

On October 5, 2009

In General Information

Harvard Business Review contributing editor Bronwyn Fryer conducted a six-year study surveying 3,000 creative executives and conducting an additional 500 individual interviews. During this study she identified five “discovery skills” that distinguish them (reference article here)

The 5 Discovery Skills

1. The first skill is what we call “associating.” It’s a cognitive skill that allows creative people to make connections across seemingly unrelated questions, problems, or ideas.

2. The second skill is questioning — an ability to ask “what if”, “why”, and “why not” questions that challenge the status quo and open up the bigger picture.

3. The third is the ability to closely observe details, particularly the details of people’s behavior.

4. Another skill is the ability to experiment — the people we studied are always trying on new experiences and exploring new worlds.

5. And finally, they are really good at networking with smart people who have little in common with them, but from whom they can learn.

Encourage Childhood Curiosity

The study was further associated with an enriched childhood experiences and early development of the child’s curiosity. It is difficult to disagree with any of these findings and it is of dire importance to duplicate at any expense these conditions for our children the sake of their future and the world that they will inherit.

What troubles me is the following:

The persons interviewed in the study were all outliers – the top .01% of success stories. These are innovators who had performed according to prevailing business theory for a 20th Century American definition of “innovation”. The probability that any single person has all 5 skills in synergistic quantity is extremely low.

The 6th Discovery Skill; discovering the missing pieces.

Suppose that a person has a high surplus in skill # 1, #2 and #4 and but an extreme deficit in #3 and #5 ? The profile can then be just as easily associated with a sociopath destined for incarceration. So what do we do with the other 99.99% of people? Are they incapable of Innovation? Are they not the ones to “bet on” in the race for a cure from ourselves?

Mirror Mirror on the Wall…

It is not surprising that Harvard, the bastion of top .01% humans would, in fact, find themselves in the proverbial mirror. However, they do leave us a hint in skill #5; the ability to network with smart people who have little in common but from whom they can learn.

The great opportunity for an innovation economy built on social media is the ability to purposely match most worthy knowledge deficit to most worthy knowledge surplus so that teams of people can be designed to simulate the ideal top .01% human and thereby vastly increase the innovation and entrepreneurial capacity of society.

Let’s rethink this

Such as structure for an innovation economy built on a social media platform is specified by the Ingenesist Project and others. It includes a revised definition for innovation, a knowledge inventory, a percentile search engine, a system for matching knowledge assets, and a feedback system to capture and duplicate desirable outcomes – all integrated and securitized in a financial instrument. Will the secret sauce resemble the 5 discovery skills that made the morning headlines? Who knows? After all, that’s exactly how I wrote this article.

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What If The Dollar Fails?

By Admin

On October 1, 2009

In General Information

I have been hearing a great deal about an inevitable collapse of the dollar. Not today or tomorrow, but more likely over the course of the next 10 years. The failure will probably not be a stupendous crash since politicians would avoid this as a means of self-preservation. Rather, it would simply be a slow and grinding inability to “afford” many important things using cash. Note that this has little or nothing to do with your human ability to produce important things.

Few people disagree that a 50 Trillion dollar debt obligation cannot be paid back without at least 50 Trillion dollars in increased human productivity. Traditional productivity usually means taking stuff out of the ground, air, ocean, or the forest and making things that eventually wind up back in the ground, air, ocean, or the forest. Today, we are encountering constraints on the planet’s resources. Something has got to give.

The ONLY technological change that is happening at anywhere near the rate that can conceivably deliver a substantial amount of “increased productivity” is Social Media. But how do we turn it into dollars? Maybe we shouldn’t.

Here is the problem; the trends for monetizing social media actually slow it down. People use social media only because of the prospect for increasing their long term productivity as relationships prosper. Entrepreneurs trying to get paid for their innovations invariably need to introduce “friction” by attempting to convert “short term” user productivity into cash. There is no business case on short term productivity making their innovation nonviable. Therefore, the monetization problem introduces a threshold over which most great innovations simply cannot reach.

The purpose of this article is to consider what people will use for trade if the currency becomes ineffective AND their productivity does not. If the dollar does fail, people will attempt to meet their daily needs until a financial system is corrected. Many countries that have experienced currency problems and the most common result are the emergence of a black market where Levi’s, Cigarettes, or other commodities serve as a de facto tax-free currency.

While on-line gaming industry is pioneering virtual tax-free currencies with extraordinary results, back in reality, people will begin trading services. Plumbers will find dentists, farmers will find laborers, and teachers will find landscapers. Matchmaking will become a financial instrument. People will use Facebook and Twitter, Linkedin and many others in new ways in order to keep the game in play.

In fact, perhaps they already are.

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The Voice of the Youth

By Admin

On September 29, 2009

In General Information

Does One size fit all?

The 40+ crowd is flooding to Facebook. The 30+ massage their Linkedin profiles. The 20+ crowd is tweeting their hearts out. What are the kids doing? How are they organizing themselves? After all, they are saddled with a 50 Trillion dollar debt liability and a warming planet courtesy of their Tenants. I posted an article below about a High School Student from Issaquah Washington (read “Small Town USA”) with a head full of ideas.

Reading between lines:

Kids are looking for better ways to promote themselves to colleges, employers, and each other, with a twist; they want control and ownership of their data. They see it as an extension of a business card rather that a bill board branding channel. Yes, they are open for business and ready to produce insanely creative things. However, there must be some intimacy in relationships which other social networking sites cannot provide. They seek quality over quantity in the next economic paradigm. They seek simplicity and eschew the corporatism of their media.

They are consummate sharers always aware of their own productivity. Their new applications are a chain of productivity tools for other students creating a world where teenagers can find useful tips, tricks and products to get through the teen years successfully. They are passionate about engaging the world on their level. They are passionate about their role in providing value to others. I, for one, welcome the prospect of turning the world over to it’s rightful owners – the kids.

Students develop Web sites for peers

By Christopher Huber

Skyline Running Start student Adam Sidialicherif has a lot of ideas floating around in his head these days. The self-taught Web developer has so many, he even maintains in his bedroom a list of Web applications he wants to write to help his peers with numerous aspects of life, he said.

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Building a Better Entrepreneur; Google 10^100

By Admin

On September 27, 2009

In General Information

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

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YOU are MONEY

By Admin

On September 18, 2009

In General Information

Some HR bloggers are calling for a new profession called “Social Media Administrator”. While there are many opinions and wide agreement about the roles and responsibilities – most of which I fully agree with – I would like to add the following considerations:

The corporate social media administrator should have a direct connection, responsibility and accountability with other social media administrators external to the corporation. Not unlike a board of directors having diverse membership. The membership and reputation of member of a Social Media BOD is also on the line.

Social media is just that, social. It cannot be sequestered fully behind corporate walls and must be open and transparent in it’s message. The Social Media administrator must protect the voices of those who speak. While there is a constitutional amendment for freedom of speech in our government and the basis of democracy, none exists for corporations who use the information or the social media enterprise that hold “possession” of the information for eternity.

A market can only be efficient with adequate vetting mechanisms; the SEC vets Wall Street, The FAA vets Airlines, and the system of Checks and Balances vets government. When the vetting mechanism fails, so too does the market.

Few people can see why this is important largely because the reasoning lies in economics and market theory. Simply put, we are entering a new economic paradigm unlike anything we have ever seen or could imagine. The idea that each and every iota of knowledge, experience, and opinion that exists between your ears behaves like a financial instrument has not fully been explained. YOU are MONEY in every definition of the word. Your productivity supports the value of the dollar. You own your knowledge, it is your property – you can waste it, you can mint more of it, you can borrow it, and you can lend it – and you should be able to capitalize in any currency of your choosing.

The only thing missing is a financial system for your knowledge. If we are smart – and ONLY if we are smart, this system will arise with the continued convergence of social media. Among the KEY elements that MUST be in place is a public accounting system for Social Media Administration.

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Will Facebook Currency Intermarry with the US Dollar?

By Admin

On September 15, 2009

In General Information

Facebook is testing a virtual currency, because it’s cool and they can do it. They are not alone, the gaming industry has been at it for a long time for people who want to be more “productive” in the game space.

There is no mention, however, whether a Facebook currency could be used as a medium of exchange in the event of hyperinflation and the crash of the US dollar. I can find nobody, writing anywhere today, that is willing to cross this proverbial line in the editorial sandbox.

I personally witnessed a devaluation in Mexico. Like a tsunami, the “adjustment” happens relatively fast as values ’snap’ fluctuate relative to other currencies. Then very interesting things start to happen in the community. People will literally empty WalMart because most goods will be cheaper today than tomorrow.

As with other hyperinflation events, black markets form around various items such as gasoline, cigarettes, or Levis as people require some medium of exchange in order to buy necessities such as groceries and cooking fuel.

A Facebook currency may just be what communities will use to get through the event. However, a Facebook Currency would likely be temporary because it could not be used in Banks to capitalize assets – or, by government who can’t figure out how to tax it.

Now the question becomes, what type of social currency could be intermarry with dollars?

Here is a hint; the dollar is backed by debt which is a promise to be more productive in the future. Conveniently, “innovation” is also a promise to be more productive in the future. Two such currencies are of the same species and can intermarry yielding new economic life.

The degree to which any ‘virtual’ currency is interchangable with the dollar is the degree to which it represents human innovation. Chew on that, Facebook.

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The New Reverse World Order

By Admin

On September 9, 2009

In General Information

The New Reverse Order

If someone can track your spending, they can predict your behavior. It is also true that if someone can track your behavior, they predict your spending. The next economic paradigm is simply a higher order of the same.

On the next higher order, if someone knows your “Knowledge Inventory” they can predict how you will manage changing conditions – that is, how you will innovate. Likewise, tracking how people innovate exposes the development of new knowledge assets (the ‘gold-standard’ of conversational currency).

Everyday some new headline shows that we are getting closer and closer to that point – for better or worse – where humanity learns to manage an innovation economy.

Profound Issues Arise.

The following article about Wal-Mart adopting the debit card (Wal-Mart to Staff: Bye-Bye Paycheck, Hello Debit Card) as a means of issuing paychecks represents a quantum leap in the monetization of knowledge assets. We expect many more will closely follow in one of the most important financial developments in financial history – virtual currency. If food stamps can be delivered on a debit card, why not frequent flier miles, Disney Dollars, coupons, rebates, tulip bulbs, beanie babies, or a new global currency such as the Rallod?

A Vetting Zoo

The only questions that remain are related to Vetting. By all accounts Social Media is developing into the mother of all vetting mechanisms. Who controls the card? What system is it replacing? Who can pull money off? Who charges fees to whom and why? Who gets the business intelligence? What is the PR spin? Can advertisers interact with the card to apply discounts and rewards? What types incentives motivate what types of people and can it go on a debit card?

A Steep Departure

Each of these questions, and the companies they spawn, will live or die by Tweet and Blog – this is a steep departure from the past. For example; 30 years ago, if every American were told that their social security number would be tied to a credits score that is tied to their driving record, employability, insurance premium, health care, mortgage rate, and, yup, their debit card – the cities would have burned in protest.

Nobody could have seen this future except those who designed it. Today, the designers are you and I – see the future now, see the future here at Conversational Currency.

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Trust as a Social Currency

By Admin

On September 8, 2009

In General Information

The idea of trust as social currency is appearing in more articles, conferences, and books. This is all highly consistent with the TIP thesis on Innovation Economics which describes the necessity of a vetting mechanism among the knowledge inventory as a means for the emergence of a currency in a market – that is, a conversational currency. People need to trust the currency if they are to trade the currency.

Shefaly Yogendra provides some excellent insights below. Keep in mind that American Culture does not have a monopoly on the definition of trust. It should not be an American expectation to define the conversational currency in our own image. Indeed, convertability of such currency will be, and must be, global.

I kept the analysis sparse on this article because it is a valuable exercise to form one’s own perspective on trust prior to diving into someone Else’s opinion. After all, it’s your currency – you own it. Good luck.

******************

by Shefaly (please see her Bio here)

Trust is a non-negotiable essential in business. The post linked here refers to web-based business-to-consumer interactions. But as social currency, Trust is the most significant in interactions amongst organisations, customers, employees and regulatory bodies.

Definitions

Wikipedia defines social currency as “information shared which encourages further social encounters“. Social currency is different from social capital which refers to “connections within and between social networks and individuals“.

Social currency – some characteristics

a) No distinction between ‘physical’ and ‘virtual’ worlds

b) No distinction between ‘individuals’ and ‘corporate entities’

c) No distinction between validity of negative or positive normative labels

Determining the value of Trust as social currency

a) Verifiable Identity and antecedents

b) Consistency

c) Reliability

d) Peer recognition

e) Value of the network

f) Individuality and collaborative consciousness

The original article can be found here and it elaborates on each of the points above.

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You Can’t Eat Gold

By Admin

On September 3, 2009

In General Information

The following is a question and answer that I responded to on a Linkedin economics forum. This question still occurs in so many forms when it is also abundantly obvious that Social Media is driving so much value in so many directions. The irony is that the question is asked within the currency that it fails to recognize.

Art credit

Question:

Fiat money is the cause or always the main cause of financial crisis. Reverting back to gold standard can give stability. How can this be implemented?

Answer:

It cannot. Everyone agrees that money needs to be backed by something tangible. However, gold has a host of problems as well that are discussed extensively on-line and cannot be ignored.

A successful and stable currency must be backed by the productivity of the [citizens of a country] users. So these two words should be interchangeable; i.e., a country spends productivity to fight a war. A country spends productivity to fund universal health care, etc.

The cause of financial crisis is when the money becomes divorced from the productivity. Debt is a transaction that exchanges current productivity for future productivity – assuming that productivity will increase at least by the so-called ‘risk’. CDOs and other exotic financial instruments further obscure true productivity until money becomes driven irrationality and emotions completely separated from productivity.

If people lose trust in the currency, they will no longer trade it – they will find something else. Your hope is that they will find Gold.

Note clearly that innovation is also a transaction that exchanges current productivity with future productivity (due to the innovation). As such, a currency backed by innovation is of the same species as a currency backed by debt. Therefore, the entire financial system does not need to be torn down and rebuilt to serve a new non-debt backed currency.

The answer to your question is to look toward the places where extraordinary innovation is occurring today, right now. It is clear that social media is developing this new currency. The problem now is fairly simple; making human knowledge tangible. This is where the innovation is. Here are some resources of people working on this problem:

http://ingenesist.com

http://relationship-economy.com

http://conversationalcurrency.com

Our deepest concern should be to feed the Goose what’s been so good to the Gander all these years. Of course one argument in favor of gold is it’s scarcity. However, it is difficult to imagine that in an era of scarcity of so many resources, the basis of a currency ought to be more scarcity. Knowledge, conversation, and innovation are scarce relative to the problems that they must be deployed to solve. We’re in this together.

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Does Social Relevancy Matter?

By Admin

On August 18, 2009

In General Information

The Ingenesist Project Community concerns itself with the value of social reach since this will most certainly impact he relevance of those conversing as well as the relevance of the conversation to some business activity. Obviously, innovation is about having the right team in the right place at the right time.

Furthermore, business activities such as marketing and advertising need to make their communications more relevant and less wasteful of their audience’s limited bandwidth – lest they risk being perceived as “anti-social”.

Stated somewhat more clinically; the most worthy knowledge surplus must be matched with the most worthy knowledge deficit in order to produce the most valuable outcome.

Brynn Evans offers the following observation:

The future of search involves social networks, social graphs, or social filtering in some capacity. Companies will live or die by whether they get the “social” part right: creating the right level of intimacy, trust, reliability, social connectedness, and accuracy in their results listings. Of course, this specifically means that their user experience must at least meet or, preferably, exceed that of Google’s.

To achieve this, we must first stop arguing over the different flavors of search.

Real-time search. Social search. Semantic search. These distinctions are essentially meaningless, especially when we can’t even agree on definitions and when each of their boundaries remain undefined. Instead, we should recognize that they’re all part and parcel of personalizing and contextualizing search for individual users. Let’s stop playing the “name game” and start thinking holistically about how each (and all!) affects and improves what we think of today as “search.”

Defies analysis, defies control:

Ms Evans’ excellent analysis continues to identify numerous problems with attempting to classify Social Relevance – each system is merely trumped by new issues related to semantics, context, and proximity. It seems as if the more you try to “control” social media, the more it defies control. The more you try to study it, the more it shows you a mirror of yourself. Introspection is the irony of extroversion.

The great big Sucking Sound

While nobody, including Ms. Evans can tell you how to increase your social relevancy, we can probably all agree on what does not. If your message sucks, your social relevancy will also suck. If you are trying to sell a product that does not actually save people time and increase their net productivity, your product will fail and your social relevancy will suck. If you are in any way trying to match unworthy knowledge surplus with unworthy knowledge deficit, your social relevancy will suck.

Give up Control in order to gain control:

Business intelligence is the science of knowing what sucks and what does not. Let Social media carry your message wherever it wants to carry it. The sooner the market tells you what it wants, the sooner you can adapt your products and services to meet the needs. Things happen fast in social media space and the corporation needs to be faster. This may mean corporations need to give up control in order to gain control of both the threats and opportunities of the future. After all, even by the playbook of Corporate America : survival of the fittest is the only relevant social rank.

(Ed: Brynn Evans is a PhD student in Cognitive Science at UC San Diego who uses digital anthropology to study and better understand social search)

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The Social Media Resolution; From Monet to Blue Ray

By Admin

On August 14, 2009

In General Information

The Convergence of Knowledge

The Ingenesist Project and related blogs such as Relationship Economy and now Conversational Currency have long predicted that the resolution of social media space will vastly increase from “Monet” to “Blue Ray”. The segmentation and convergence of social media space will happen on two fronts: Knowledge Inventory and Proximity.

From Strategis:

“As Facebook balloons to over 250 million users, many voice their appreciation for Facebook’s small social network feel. Unlike its so-last-year counterpart, MySpace, Facebook has successfully maintained a very personal feel, finding hundreds of ways to link the most relevant people, in the most relevant ways.

Even so, because Facebook has so many interesting people, useful content, and relevant apps available, many users would appreciate a broader search option that would enable the to quickly search ALL of Facebook’s content. Thus, Face says: “your wish is my command”. And so it is. Facebook has now announced that it will soon make the change allowing users to search the entire site, not to mention, do new things like share status updates with everyone, rather than just confirmed friends. Expect to see these changes in full effect some time within the next two months”

What’s in store for the next 2 years?

While the coolness of Social Media is still riffing through society as the late adopters drive huge growth, nothing “economical” happens until people actually get together and build something. In order to build anything, there must be an inventory of parts. All these parts need to be in physical or virtual proximity to each other. A financial system must support the initiatives of the entrepreneurs in any market.

The United States of Mind

We’re about 3% into this new paradigm today. At 20% the corporate structure will become increasingly mushy as many corporate functions are now handled in Social media space. At 30%, cooperation will “compete” with competition as a business model. At 40% a new currency emerges to hedge debt backed dollar with productivity backed “conversational currency”. At 50% people convert general dollar backed holdings to ‘conversational currency’ holdings. At 60% social priorities dominate corporate priorities. At 70% the Innovation Bond dominates financial markets. At 80% international borders become fuzzy as knowledge flows as easily as, say, avocados and T-shirts do today. At 90% global currency backed by productivity, dollar, Euro, Yen all expire. At 100%, the president is elected to a “State of mind”.

Hold on, not so fast….

OK, so that’s the problem with predictions, it’s hard to survive with one’s credibility intact. Kudos to Strategis for showing us the future!!

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If it Quacks like a Buck…..

By Admin

On August 13, 2009

In General Information

If it looks like a buck, and talks like a buck, and quacks like a buck – it’s probably a buck.

So when your money gets “free will” and starts walking out the door door, that’s bad enough. When flies out the window en mass enabled by the same social media that brings money in the door – serious management issues arise. Should organization choose fight, flight, or cooperation?

Battle lines are being drawn:

“Among large U.S. companies, 33% have employees on staff to monitor e-mail messages — up from 15% last year, one survey found. The Proofpoint study also found that 31% of companies had fired workers who breached confidentiality via e-mail, and 8% had fired someone over a social-networking leak. The survey found 41% of respondents are worried about potential leaks via Twitter. ZDNet (08/10)”

“Marines banned social networking sites from their computers Tuesday due to security concerns, and the Pentagon announced a policy review. But Pentagon’s top officer will still tweet (Christian Science Monitor 08/05)“

“A great way to keep up with the latest Navy news is through the MyNavyMyFuture Twitter handle: https://twitter.com/mynavymyfuture. Just FYI for anyone who’s on Twitter. The handle is based off the Navy Officer site www.mynavymyfuture.com. (NavyNima – recruiter)“

The New York Times reports, “The N.F.L. has identified the enemy and it is Twitter.”

There are literally thousands of articles on this subject but none of the few that I read came to any conclusion, so I will:

Money is becoming intangible (cannot be contained) and Social Media is becoming tangible (has become the container)

The very structure of organizations is changing. Trying to control the temperature of the room when the windows have been blown out will only destroy existing controls faster. A completely new economic structure is emerging complete with new factors of production, incentives, institutions, accounting, and currency.

Swap or swamp?

Easier said than done? Not really; all we need to do is swap the same methods that we use to manage tangible assets with those same methods that we use to manage intangible assets. There are in fact people and organizations trying to do this (specifically this author) but you won’t find then in corporations anymore.

Companies have no choice but to understand migration patterns, flock actualization needs, motivation, and environmental issues. Going from an economy where the corporate charter is only “to deliver shareholder value” to one of safeguarding the health and welfare of people and their property” is a huge leap.

The discussion of Conversational Currency is required to understand the underlying economic forces that drive social media and the emerging institutional structure for corporations to create value in a computer enabled society.

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The 1.6 Trillion Dollar Waste of Time

By Admin

On July 15, 2009

In General Information

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.

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Social Media Staffing: $3 Trillion Opportunity

By Admin

On July 1, 2009

In General Information

As the World Churns:

The cost of placing an employee approaches 30% of that employee’s salary. In fact, most head hunters charge roughly 30% of the employee’s salary to find the right person to fill the job opening for a client company. Sometimes the employee is recruited from a competitor causing a net productivity loss in a market due to disruption or “churning”.

The company also has a choice of hiring with the internal HR department. In this case, they are paying HR personnel to place ads, review resumes, check references, and conduct interviews. These costs can also run into a substantial percentage of the new employee’s salary. From previous articles, The Ingenesist Project suggests that these methods may not even result in the best employee selection:

The Unnecessary Market Friction

Text only Résumé is no longer adequate in our complex business environment due to subjectivity, semantic inconsistency, and the time and resources required for fully interpreting the content. The cost of delivering a résumé has been decreased by computers and the Internet while the cost of reviewing the résumé has remained constant. Keyword search programs often eliminate excellent and creative candidates based on criteria not related to the candidate. Managers tend to hire what reminds them of themselves – from world that no longer exists.

Estimated wasted productivity:

Suppose that 50 Million professionals; doctors, lawyers, engineers, professors, administrators, managers, and directors are employed in the United States. Suppose that the average salary is 70,000 per year. Suppose that they change jobs 3 times in their career and that the cost of placement is 30% of salary, or $21,000 dollars per placement.

The total cost is $ 1 Trillion dollars multiplied by 3 placements in a career equals nearly 3 Trillion Dollars. Now, divide this by 30 years in a career and we can see that 100 Billion dollars worth of human productivity are spent every year not necessarily matching the most worthy employee to the most worthy employer. This does not include moving expenses, salary increases, disruption costs, or inflation.

The probabilistic electronic résumé system

The Ingenesist Project specifies a vetted knowledge inventory that resides in Social Media. The knowledge inventory, probabilistic electronic résumé system, and innovation bank together would make the paper and language Résumé obsolete. The percentile search engine would scan the knowledge inventory of the corporation and scan the knowledge inventory of the labor market and seek matches with high probability of increasing net productivity – not unlike Amazon.com predicts what book you would like to read next.

Options, options, give the market its options

election criteria can be adapted to reflect social priority such as reduced traffic congestion or to reflect strategic objectives such as incremental or blue sky innovation requirements. Trades across companies and industries can occur opportunistically not unlike interdepartmental transfers or even like trades in professional sports are conducted today.

Companies can manage peaks and valleys in employment by trading across diverse industries. avoiding layoffs all together. Employees that can stay productive in diverse industries transfer new ideas and discover transferrable efficiencies. Experience gained would be added to the knowledge inventory to enhance the probabilistic résumé inventory available for continuous improvement and tangential applications of innovation enterprise.

A virtuous circle? … A 3 Trillion Dollar opportunity nonetheless.

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Social Media Strikes Back

By Admin

On June 26, 2009

In General Information

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.

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Collateralized Innovation Obligations

By Admin

On June 9, 2009

In General Information

Collateralized Debt Obligations (CDOs) are a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets. In the case of the current financial crisis, the underlying assets were home mortgages. It is not necessary for the CDO buyer or seller to know who lives in the home and what they produce; the asset is a contract backed by future productivity.

CDOs vary in structure and underlying assets, but the basic principle is the same. To create a CDO, a corporate entity is constructed to hold contracts as collateral and to sell packages of predictable future cash flows to investors. The more money handed out in home loans, the more money could be collected in CDOs

You are a liability.

While corporate leaders proclaim that people are the greatest asset, corporate accounting practices specify otherwise. Employees are an expense and their salaries, benefits, and pensions are liabilities to be reduced any time the opportunity arises. So what’s the problem? Liabilities can’t innovate.

Suppose for a moment that people were in fact an asset on the accounting sheet and their salaries, benefits, and pensions were “investments”.

Collateralized Innovation Obligation (CIO):

The CIO would obviously be a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets, specifically, the output of productive and motivated people.

Like the CDO, a CIO would vary in structure and underlying assets, but the basic principle is the same. To create a CIO, a corporate entity is constructed to hold assets as collateral and to sell predicted future cash flows to investors. It is not necessary for the CIO buyer or seller to know who is innovating or what they are producing; the asset is a contract backed by future changes in productivity. The more money handed out in innovation loans, the more money could be collected in CIOs. For all practical purposes, we could call it an Innovation Bond.

Enter Social Media:

Social media is teaching us an important lesson about innovation. Every time you get a diverse group of people together to share ideas, new ideas form. Every idea is useful as long as it is shared; thousands of bad ideas must expire before the good one appears. Conversational currency is the vetting mechanism of all ideas. While not every good idea becomes a great invention, every great invention is built from good ideas. Machines cannot produce ideas and no single company, country or person holds a monopoly on ideas. Innovation and the creation of all wealth arise from the social, creative, and intellectual interaction of people.

Conversational Currency: The underlying asset

The underlying asset that supports both the Collateralized Debt Obligation and the Collateralized Innovation Obligation is a person and their ideas; one is an asset and the other is a liability. Both types of people go to work every day to interact with other people. They both share ideas and create better ways of doing things. People increase human productivity through fault tolerant networks and support systems. They transform information into knowledge and innovation – and both pay their mortgage.

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