Tag: productivity

The Next Global Currency

On May 26, 2009

Charging interest on money was at one time illegal. The concept of “interest” was legitimized by the argument that lenders needed to be compensated for the risk that they assumed. As such, currency is married to risk and not necessarily actual productivity.

Whoops.

Risk can never be negative because it is a measure of volatility where zero is the lowest possible value. There is such thing as good volatility (winning the lottery) or bad volatility (my 401K) or zero volatility, but volatility can never be negative; hence the term “Breaking the Buck” which is considered a failure of the monetary system. Interest rates respond causing inflation or deflation relative to other currencies, causing more volatility, thereby inducing more risk, etc.

Who wants to be a numéraire?

The dollar is a “numéraire” – the standard by which value is compared. Recently there has been a strong call for a global currency to change the numéraire to something else. Ideally, the numéraire should be able to manage negative interest rates to keep volatility pegged to real productivity and not speculative emotions. This would keep the system from crashing in a whirlpool of volatility that incessantly feeds on itself.

So what are the practical implications?

With a positive interest rate, I am penalized for borrowing currency since I need to pay the risk premium to a lender while I produce something with the currency. On the other hand, I am rewarded for lending currency because someone pays me the risk premium to borrow it.

With a negative interest rate, I am rewarded for borrowing currency (because the lender is deeply penalized for not lending it) so that I can produce something with the currency. Then I am penalized for not lending (or spending) the currency that I made from the thing that I produced.

Enter Social Media:

The whole idea of risk as the justification for interest does not make much sense any more. In fact, during periods of deep inflation or deflation, currency becomes divorced from actual productivity and people hold some other store of value instead.

People are flooding to social media because information, knowledge, and innovation are behaving like currency. Social currencies are perfectly suited to accommodate negative interest rates. For example: if information were a currency, I would be rewarded for giving it away and penalized for hording it. If knowledge were a currency, I would be rewarded for sharing it with others and penalized for withholding it when it is needed. If innovation were a currency, I would be rewarded for crowd sourcing and penalized for patenting. Does this sound familiar?

The Next Economic Paradigm

Conversation and relationship are two of many denominations of the new global currency called the ‘rallod’ which is allowed to float against the dollar. Continual development of social media tools, systems, economics and aggregation will facilitate the exchange of social currencies by increasingly enabling the ability to store, form, access, and exchange them. Social networks and communities of practice will allocate social currencies as factors of production: social capital, creative capital, and intellectual capital – for the production and dissemination of innovation.

The Next Numéraire; human productivity

Let countries compete in the economy where net human productivity is the standard by which all value is compared. With the constraint on land, labor, and capital, this is the game we all need to play now.

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The New Economic Paradigm; Part 5: The Entrepreneurs

By Admin

On April 9, 2009

In General Information

There is no shortage of entrepreneurs in this world.

6 Billion of them wander the Earth looking for assets that exists at a low state of productivity waiting to be elevated to a higher state of productivity.

The entrepreneur must first be able to identify an asset as an asset. Next they need to identify the lower level of productivity and they need to be able to imagine the higher potential level of productivity. The entrepreneur must identify and manage some risk, perform leadership tasks; and as a result, elevate the asset to the higher state of productivity. Profit is the difference between the lower and the higher state – minus expenses.

Unfortunately, today this process starts at the forest and ends at the junkyard.

This is how our economic system is organized. The next economic paradigm flips that idea over. Instead of accounting for natural resources as the tangible element and human knowledge as the intangibles element; the next economic paradigm must account for the natural resource as the intangible element and the human knowledge as the tangible element.

The current problem is not that knowledge is intangible; rather, knowledge is simply invisible.

The Ingenesist Project will make knowledge assets visible by provisioning all of the information that an entrepreneur now needs to identify the knowledge asset and the associated states of productivity. Entrepreneurs can then increase human productivity using knowledge assets applied to natural resources, instead of natural resources applied to consumption. The implications are vast.

Returning to the financial analogy:

With a financial bank, the entrepreneur assumes that they have the knowledge required to execute a business plan and the go to the Financial Institution to borrow the money.

With an “Innovation Bank” the entrepreneur assumes that they have the money to execute the business plan, and they go to the innovation institution to borrow the knowledge.

While this may sound trivial, the implications are vast:

1. A virtuous circle now exists between society and the financial system
2. Profit is derived from increasing human productivity not natural resource exploitation.

Economics is the science of incentives:

A financial Bank seeks to match a surplus of money with a deficit of money. It is in the best interest of the bank to find rich people who will not need their money for a while, and poor people have the best likelihood of paying the money back in time. The process assumes that the borrower has the knowledge required to execute a business plan when they seek to borrow money. However, that FICO score does not measure knowledge explicitly, so little incentive exists to make it tangible. All of the top ten reasons why businesses fail are due to failures of knowledge. The financial system is collapsing under the weight of failed knowledge.

By contrast, the Innovation Bank seeks to find people who have a surplus of knowledge and people who have a deficit of knowledge about what they intend to produce. The innovation bank then uses a series of statistical calculus (the same calculus as the credit/insurance/risk management professions) to match most worthy surplus of knowledge assets to most worthy deficit of knowledge assets. Here, the opposite assumption is made; everyone assumes that the borrower has the money required to execute the business plan and they go to the innovation bank to borrow the knowledge. People have an incentive to accumulate knowledge.

Simplicity that defies comprehension:

The business plan for the new entrepreneur is deceptively simple to do and nearly impossible to monopolize; anyone can do it not just the wealthy and their chosen few. The next 3 modules will outline how new enterprises will be constructed from the virtuous circle created between the financial bank and the innovation bank. This changes everything …. and did I mention that the implications are vast?

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The Next Economic Paradigm; Part 4: Institutions

By Admin

On April 7, 2009

In General Information

In part 1, we introduced a new paradigm of economic growth; the innovation economy. In part 2, we identified information as the currency of trade for an innovation economy and we defined that currency’s relationship to knowledge and innovation. In part 3 we demonstrated a structure for a knowledge Inventory that would enable an Innovation Economy. In this module, we will discuss the institutions in social media that could keep an Innovation Economy, free, fair, and equitable.

In civil society, there are laws and regulations that protect our constitutional rights; these are essential institutions.

The legal system of the United States is extremely expensive, however, the expenditure is necessary to keep the society upright, productive and prevent it from falling into chaos. Where a country’s legal system fails, so does its economy. Entrepreneurs do not invest in places without a good legal system and where property rights are not protected. It is that important. Investment abhors risk.

Arguably, the most important element of the Innovation Economy will be the vetting mechanism.

Fortunately, social media has the potential to serve this function; in fact in many cases it already does. A feedback system supports Ebay ($35B Cap), community flagging supports Craigslist (40M ads/mo), peer review supports Linkedin (150M users). These are not small numbers. All markets must have a vetting mechanism in order to operate efficiently and if done correctly, social vetting has vast economic implications for an Innovation Economy.

First, let’s return to our financial analogy.

In the old days, the banker was the person to know if you wanted to be successful in town. But with the emergence of the credit score, the “banker” became digitized; now a Saudi Billionaire can lend money to a young couple in Boise to buy their first home – and neither is aware of the other. The credit score is responsible for the creation of great wealth because many more entrepreneurs could borrow money to invest in enterprise.

The credit score is statistical in nature; it isolates about 30 or so indicators of your financial activity and puts them on a bell curve relative to everyone else. These include how much debt you have, how much your assets are worth, your income, etc. These ratings are run through the FICO Equation and out pops your credit score. Anyone can now predict the likelihood that you will default on your obligation.

All of the data that feed FICO are collected from public records, your employer, and the people who you borrow money from because these same organizations have a vested interest in a system of correct credit scores.

We are competing with ourselves.

It is interesting that you and I do not compete for our credit score because it is not a ranking system. On the other hand, with no credit, we are invisible and the system shuts us out. With bad credit, the system shuts us out. We lose some freedom and privacy, but we accept these terms well because they provides us with tremendous benefit to finance a business, automobile, or a home without needing to save cash.

Now we will draw the comparable analogy from the social media.

In the old days, the hiring manager was the person to know if you wanted to get a job. They would read your resume and compare it with “bell curve” in their experience about what has worked or not worked in their past. This worked great in the industrial economy, but it falls far short in the innovation economy. Innovation favors strategic combination of diverse knowledge where the Industrial economy favored identical packets of similar knowledge.

Not unlike the FICO score, the knowledge inventory is a collection of statistical variables and the social network is the reporting agencies who have a vested interest in a system of correct values. Unlike FICO however, the variables are infinite and it responds to positive event input.
Social networks are by far among the most exciting and important new technology for an Innovation Economy.

Social networks must now evolve to become the vetting institutions for knowledge assets.

All the pieces are almost in place; now we need to develop a new type of search engine.

The Percentile Search Engine is generic term for the ability to make statistical predictions about all types and combinations of knowledge Assets in a network. Conceptually, the percentile search engine is where all of the equations that we use to analyze financial assets are now applied to knowledge assets. The main characteristic is that the search engine returns probabilities for the entrepreneur to test scenarios.

For example; an entrepreneur may want to know if her team has enough knowledge to execute a business plan. Perhaps the team has too much knowledge and they should try something more valuable. Maybe the team does not have enough knowledge and they should attempt another opportunity or accumulate training.

The search engine can look into a network and identify the supply and demand of a knowledge asset. If it is unavailable or too expensive, the search engine can adjust for price, risk, or options that may emerge at a later date.

Talent will bid up to their productivity value, and brokers will bid down to their productivity value.

Competitors can scan each other’s knowledge inventory to compete, cooperate, acquire, or evade. If a key person retires, the entrepreneur would simulate the knowledge that is lost and reassign people strategically. All of these scenarios can be examines prior to spending money. They can be made during the project cycle, or after the project is completed. Lessons learned can be used to adjust the algorithm perfecting it over time.

For example: companies such as Disney and Boeing both use Engineers, each would have proprietary algorithm of knowledge that represents their “secret sauce” of success. These recipes can be adjusted and improved to reflect and preserve the wisdom of an organization.

When the innovation economy will catches fire….

Over time, these algorithms will far more valuable then the Patents and Trade Secrets created by them – this will allow technologies to be open sourced much more profitably and shared across more industries.

In the next module, we will talk about the entrepreneurs.

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The Next Economic Paradigm; Part 3: Knowledge Inventory

By Admin

On April 6, 2009

In General Information

Welcome back to the New Economic Paradigm Series. The objective is to develop an innovation system that emulates the financial system. In order to do this, we look for the social component that could best duplicate the function of the closest corresponding financial system component.

Part 2 discussed the currency of trade. Part 3 will discuss the inventory of knowledge assets.

Most companies have an inventory of every nut, bolt, rivet, or panel that they need to build something tangible. In innovation economy, we will need to have an inventory to assemble knowledge assets so that we can build something tangible and support the currency.

Your resume is like a book about you. Conversely, every book that you have read has become part of your knowledge inventory.

Every experience you have had, every conversation you have participated in, every new idea that tried, successful of failed, is part of your knowledge inventory. The things that you like to do, things that you do not like to do, and things that you do not know are part of this inventory and the way it is organized in your consciousness.

The Dewey Decimal System is a way to catalog information in books. Keep in mind that The Dewey System is archaic; however, it does provide us with some key insights:

From our earlier definition; to organize information is to organize a proxy for knowledge and innovation.

The decimal classification structure has a great advantage for the computer and mathematical analysis. Additionally, tens of thousands of librarians are fluent and most people in the US have at least a minimal familiarity with it.

For a quick review, the body of written information is divided into 10 main categories. Each main category is divided into 10 more categories and each of those are divided into 10 categories – and this can go on forever.

It is useful to note that the Dewey Decimal classification has a bias toward the three factors of production for the innovation economy; Social capital, creative capital, and intellectual capital:

Most resume reading programs just pick up key words, so why have any other words?

Your resume can be a series of Dewey numbers instead of words and computers can tag the numbers as they do key words today. For example:

302, 307, 330, 607, 17, 500, 519

If your mind were a library and you attempted to map it all out, one would see that everything is related in some way – intuitively, this is what defines you. If we looked into your world, we would discover a huge network of experiences, books read, lessons learned, and people encountered.

We would find a system of knowledge rather than random facts that you have organized. Your likes and dislikes would be reflected in what you do and do not want to do. Everyone is different – nobody is the same. Everyone innovates, everyone has knowledge, and everyone shares information.

If we add some mathematical symbols and Boolean logic, perhaps we could capture the system of knowledge a little better. Your resume may now look like this:

{20,12};[302 AND 307], (330):[607 AND 17] OR [500/519]

Now need to make this look like money. Before our knowledge can behave like a financial instrument we need to add one additional factor – the quality of the knowledge.

In American society there is a persistent ideology of winners and losers; there can only be one winner and the rest are losers. We rank things in a very linear way; 1st, 2nd, 3rd, etc. Our culture is to protect one’s position at all cost, shield away all attackers and decimate our competition. This way of thinking was effective in the industrial economy, but today it keeps us from understanding how knowledge actually exists in a community.

We need to switch to a bell curve distribution for knowledge assets because it better reflects reality and eliminates unproductive competition; there are no winners or losers, just different markets.

There is a perfectly legitimate market for a Porsche as there is for a Toyota.

Statistical distributions are used extensively in finance to value financial instruments; we need to do the same now for our knowledge assets. To make financial sense out of our random world, we must classify knowledge assets on a bell curve. Consider the following resume:

{20:95%,12:80%};[302 AND 330]70%:(607 AND 17)80% OR [500/519]90%

This person is a specialist in Social Interaction and economics at the 70th percentile related to educational research at the 80th percentile. She (or he) has a Background in applied mathematics and physics at the 90th percentile. She (or he) is a trained ethicist at the 75th percentile, philosopher, and artist specializing in musical theory and orchestration at the 50th percentile. Fluent English and Spanish

Now, we have a system of numbers and symbols represent the knowledge of the person in a tangible manner.

Keep in mind that this is only a demonstration, however, we see some key advantages:

1.    The Inventory is Infinite and expandable to any field of knowledge
2.    Paints a picture of knowledge and not simply a list of information about a person.
3.    Machine enabled, programmable, and readable.

Now, all of the tools, methods, and equations in the world of banking, finance, and insurance can be used to combine, amalgamate, and diversify knowledge assets in an innovation market.

Your resume can now be combined with other resumes to represent the collective knowledge of a community. This expression carries all of the information that an entrepreneur needs in order to estimate the probability that the community can execute a business plan. We will discuss predictive characteristics extensively in future modules.

In the next section, we will talk about the institutions that exist in our communities through computer enabled society which will keep this game free, fair – and most importantly, equitable.

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The Next Economic Paradigm; Part 2, Currency

By Admin

On April 5, 2009

In General Information

Welcome to part 2 of the New Economic Paradigm series.

In part 1 we determined that money represents human productivity and the only way to sustainably create wealth was to innovate.

Then we identified the flaw that money lives in a complex and integrated system while Innovation does not, rather, innovation is isolated, random, non-integrated and subservient to the financial system.

This module discusses the currency of the innovation economy.

A Currency is anything that serves as a medium of exchange, a stored value, and a standard of value.

We all know that Dollar denominated money is a medium of exchange – but it does not represent gold or silver or even oil, it represents human productivity. Money, and therefore all financial instruments store value related to human productivity.

When we look into society throughout history, everywhere people are trading information and ideas with each other at some velocity. The Internet and social media (machine enabled society) has sped this process up to incredible rates. All of this information adds up to something because obviously things get built and stuff rolls off assembly lines. Furthermore, people act on information obtained from each other to produce things.

The currency of trade for the next economic paradigm must represent this “stock exchange”

Intuitively we know that information, knowledge and innovation are profoundly related to each other. In fact, if you don’t have one, you can’t have the other two. Our currency of trade must represent all three; information, knowledge, and innovation. Therefore, we need to redefine these terms in a manner that relates them.

First we must define ‘information’. That’s easy, information is facts and data.

Next we need to define ‘knowledge’ in terms of information: Any good teacher can tell you that information must be introduced in a certain sequence and at a certain speed in order for the student to learn. Knowledge is therefore proportional to the rate of change of information.

For the purposes of this analysis, we will use the following definition: Innovation is defined by the rate of change of knowledge where knowledge is defined by the rate of change of information. For example; everyone has had an ‘Ah-Ha!’ moment during a brain storming session, or after making a mistake, or after witnessing a profound event. The AH-HA moment represents a very high rate of change in our knowledge that occurs in a very short period of time.

According to this definition, every idea, conversation, dream, design, sketch, or discovery experienced and shared between two or more people is an innovation.

Math students can see that this definition sets up a differential equation that we can use to model the innovation system computationally – something that cannot be done with the current definitions.

Now let’s look at the “economic outcome” part

The factors of production for the industrial economy are land labor and capital. Entrepreneurs allocate these three factors in different combination in the formation and growth of corporations. If any of these factors of production are missing, dysfunctional, or corrupted – the corporation stops producing.

We have learned that in the knowledge economy, the location of knowledge work is highly mobile – so “Land” does not have the same significance for making things as it did 100 years ago.

What about labor? Knowledge workers analyze situations, manage many variables, and create unique solutions. They do not really produce identical knowledge pieces like a machine operator or a production worker. Everything they see and do becomes part of their relevant knowledge set: 24/7/365. The idea of an 8 hour day and pay-by-the-hour are no longer relevant.

Capital is money needed to build future structures, buy machines and to pay wages. Today, money provides access to information. The current economic meltdown demonstrates that where the information is corrupted, the money is corrupted – and so becomes everything connected to the money.

We now see that many old economic principles do not work quite as well in the new economies. Yet, the Land, Labor, and Capital theory is still the foundation of much of today’s corporate, academic, government, financial, and social thinking.

Using our definition for innovation, we can see that the innovation economy will emerge from the rate of change of the knowledge economy. Today we are witnessing an astonishing growth in social media and a breakdown of traditional media for the dissemination of information.

The factors of production for the new currency are Intellectual Capital, Social Capital, and Creative Capital.

Intellectual Capital is also called Human Capital – and suggests that concentrations of educated and motivated people attract investors to employ them and invest in the communities where they reside. This investment attracts other intelligent people who in turn attract more investment thereby creating a cycle of economic growth

The Social Capital Model suggests that people acting in communities can create better solutions, greater accountability, and more economic growth than management, governments, or bureaucracy can induce on their own. Examples of Social Capital include Civil Rights Movement, community watch organizations, Democratic Government, Social Networking, and notably, recent political changes events.

The Creative Capital model, suggests that engineers and scientists think more like artists and musicians than like production workers – their ideas come 24/7/365 – and that an environment of tolerance, diversity, and openness promotes creative output.

A Currency is anything that serves as a medium of exchange, a stored value, and a standard of value.

In the current financial economy, the currency is a dollar. The rate of change of the currency is called appreciation, depreciation, or “interest”. The rate of change of interest is the growth rate or compounding. These are very familiar conditions in finance and the basis for a company’s stock price.

In the innovation economy, information is the currency. Knowledge is the rate of change of information, and innovation is the rate of change of knowledge.

This will become a very familiar and useful relationship in the innovation economy.

For example, innovation is difficult to measure directly. However, we can measure the rate of change of knowledge as a proxy for innovation. It is difficult to measure knowledge. However, we can measure the rate of change of information as a proxy for knowledge.

In finance and calculus, these are called derivatives.

In the next module we will discuss the inventory and accounting system for an innovation economy.

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The Global Financial Crisis; The End Game

By Admin

On February 18, 2009

In General Information

The year is 2024, no burning cities, no mass hysteria, no bread lines; the economy is on an exponential growth curve. It took a while, but the financial crisis of ended in an anticlimactic sort of way. Sure, lots of hedge fund bankers became unemployed, some went to jail, and many companies once deemed titans of industry have disappeared, but nobody seemed to notice much anymore.

Government debt has been eliminated and Wall Street has become the steward of what has become an Innovation Economy rising from the ashes of debt economics. The transition, in fact, was surprisingly smooth. Social Network applications such as Facebook, Linkedin, G+, and many more, developed a clever way to make knowledge tangible outside the construct of Wall Street and the traditional corporations and people began trading knowledge like currency.

When inflation hit, the dollar started to fall in value, people began trading a different currency called the rallod (dollar spelled backwards). The rallod was backed by future productivity resulting from innovation rather than future productivity supporting debt. When the dollar finally crashed, it pegged to the rallod and the economy began to grow again with an astonishing, yet peaceful, transfer of wealth and power to open sourced self-regulating communities; i.e., society in general. The vicious cycle of debt economics was reversed just in time. It’s still hard to believe what happened.

Today the engines of economic growth are tens of thousands of hot new start-ups that exist in the form of “Value Games” related to specific technology areas rather than the old corporation model. They automatically cluster around a technology and spin off other start-ups at an incredible rate in a strange nesting arrangement called the “tangential innovation” market. Most innovation is open sourced because the “Patent” (and protectionism in general) is no longer the center of the innovation finance universe, rather, the “secret sauce” of social, creative, and intellectual capital is the most valuable asset today.

About 15 years ago, something resembling the human genome project mapped all knowledge in the form of social, creative, and intellectual capital that exists in society to a very high granularity. An API standard was created to represent knowledge assets like packets of code that are processed by a community algorithm. The CV/resume is an old bar joke now. Thanks to a visionary government, 1st amendment protections were built into this inventory with anonymity laws and privatized TOU; creators own what they create.

An open source percentile search engine was created to enable entrepreneurs to build unique collections of knowledge assets and predict the probability that various combinations of these assets could successfully execute a business plan. High diversification induced hyper-innovation around technologies and the resulting innovations are spun out to be reabsorbed by different and diverse communities of practice in continuous iterations forming a virtuous vortex of new systems, methods, and solutions. Sketched out, these arrangements looked like electrical “integrated” circuits. Wealth creation is intense.

Since the knowledge inventory has mapped all knowledge and the Percentile Search Engine calculated probabilities and scenarios, the Innovation bank formed to make most worthy and optimal matches between knowledge surplus and knowledge deficit in a community. Since the probability of innovation success has become predictable, innovation risk is now diversified away. Innovation insurance products abound. With near-zero innovation risk the cost of venture capital has approached 5-7 % instead of 500-2000% of less than a decade ago. Banks now issue innovation bonds on the public market to finance innovation in society. For an investment of such high return and such little risk, participation is near universal. This created another virtuous circle; the more innovation that occurs, the more money is created. The more money that is created, the more innovation occurs.

Instead of having jobs, many people in a geographic area are pinged by the Percentile Search Engine which calculates the likelihood that their interaction together will increase the probability of successful execution of a business plan when combined with other knowledge assets. Instead of earning wages, people collect micro-royalties specified by contracts on capital asset sub-sections. These micro-royalties add up to substantial residual income enjoying a multiplier effect as their work continues downstream over their lifetime. The government funds social security through it’s own innovation ventures. Service workers such as police, teachers, fire fighters, nurses, local merchants, etc., are key beneficiaries because of their impact on the community is directly associated with productivity.

Many of the senior knowledge workers have determined that they can earn more money by taking an equity position in their students, and the students of their student. Unlike a decade ago, pyramid schemes in innovation economics are sustainable and generate astonishing profits. Mentors have entered the landscape in vast numbers and apprenticeships have become abundant. The income potential for the “creating creators” boggles the imagination. Again, a virtuous circle has formed between the mentor and the student. In aggregate, wisdom is being retained, refined, and transferred efficiently throughout social networks.

University “degrees” have disappeared in favor of unique combinations of knowledge assets that are continually SEO’d for best Percentile Search Engine Placement. People do not compete directly, rather, they compete with the Percentile Search Engine in the local market place by cooperating among each other. As owners of their knowledge assets, the entrepreneurial spirit is ubiquitous. No individual has either a monopoly or an identical knowledge set as anyone else. Everyone has perfect information about the knowledge assets in a market. People are pinged for different reasons at different times for different rates depending on supply and demand. Continuous education is a social event in itself, often mistaken for recreation!

Even the poorest areas of the planet are getting into the action because, by definition, the parts of an economy with the highest potential for technological change correspond to opportunities that return the highest dividends in an innovation economy. Arbitrage opportunities between master and oppressor have disappeared worldwide.

Like a neural network, the economic system of tangible knowledge is self-correcting, fault tolerant, and self-regulating. Governments across the globe tried to stop the social network driven innovation economy – but they eventually gave up. It was like trying to stop water; it flowed between the cracks and simply eroded the barriers. The most incredible outcome is that innovation now reflects long term social priorities instead of short term Wall Street priorities.

Oil production has been replaced by superconducting wind turbines, global temperatures have stabilized, all cars are electric or “water leakers” (as the hydro’s are affectionately known), many diseases have been cured, and the list goes on. It is hard to believe this happened in only 12 years. Then again, the Internet had only been widely used 15 years prior to 2009. Did I mention, we’re finally sending a multinational expedition to Mars…

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Oh, What a Semantic Web We Weave

By Admin

On February 5, 2009

In General Information

Innovation Economics:

is the conscious practice of investing in innovation as a method for driving economic prosperity. Innovation is the science of change and economics is the science of incentives.

Money is fictitious:

Money does not represent gold or silver, it represents your productivity. The value is held in the productivity, not coins or bank notes. Debt represents future productivity and savings represents past productivity. It’s very simple.

So if the word “money” and the word “productivity” mean the same thing, they should be interchangeable. Right?

As a test, try the following:

Every time you hear someone use the word “money”, simply insert the word “productivity”. Try it with the kids, your boss, the news broadcast, or your favorite politicians. If their statement still makes sense, then it is likely a logical statement. If the statement is confused, reversed, or makes no sense whatsoever, then this is where we need Innovation Economics.

The Reversal:

“Mom, can I have some [productivity] to buy an ice cream cone?”
“We don’t have enough [productivity] to invest in R&D”
“There isn’t enough [productivity] in the budget so we must cut education programs”.

The Confusion:

“It concerns me that Facebook has yet to find a [productivity] model that seems likely to secure its future.”
“Icelandic [productivity] collapse is heard around the world”
“Global Warming costs too much [productivity] to solve”

The Ridiculous:

“Wall Street Executives earned excessive [productivity] in 2008”
“State of Washington opens more liquor stores to raise much needed [productivity]
“Lawmakers from both political parties have criticized banks for failing to use the taxpayer [productivity] for lending to help stabilize the hard-hit U.S. economy”.

It’s really fun to play this game when you start getting bored with the endless dribble of spin. You can even go backwards; hear “productivity” and insert “money”. Pour yourself a glass of wine, sit back to the nightly news and you may start noticing some interesting trends.

Discussions related to engineers, infrastructure, airplanes, teachers, doctors, police and firefighters, etc., tend to get The Reversal. Discussions related to innovation industries such as social media, environment, and social causes tend to get The Confusion. Discussions related to gambling, marketing and advertising, money shuffling, law suits, Wall Street, and various forms of speculation, are simply The Ridiculous.

It will make you wonder why we would need a Web 3.0 Semantic Web. We really need a Web 3.0 de-Semantic Web.

(Picture from Charlotte’s Web; a story about a dinner pig who makes friends with a spider who comes up with a plan to save the pig by writing words in her web. All the town’s people thought that the pig was special and his life was spared. The farm animals knew that it was really the spider who was special – she was an innovation economist)

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To Awaken a Giant

By Admin

On January 23, 2009

In General Information

“Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished”.

– Barak Obama

The gloves are off:

Mr. Obama’s statement is profound; in a single stroke, he liberated social capital, creative capital, and intellectual capital from the oppressive arm of the financial markets. This sends a strong message to entrenched and corrupted financial operatives that they no longer hold a monopoly on American productivity.

The factors of production carried over from the last century; land, labor, and capital, can be now be challenged by social capital, creative capital, and intellectual capital as factors of production for an Innovation Economy.

The third option:

Q. So how exactly does a country meet a 50+ Trillion dollar obligation?
A. It depends on the social agreement.

First, we could default and let the system crash. Second, we could endeavor to pay it back by committing the next several generations to servitude of the debt. Or, there is the third option that nobody talks about.

Create a new currency.

Almost every country has done it. Mexico replaced the old “Peso” with a “New Peso” (worth 1000 old Pesos). Europe created a new common currency. Chinese Yuan is a “bridge currency” that gets them from point A to point B. Each of these examples is different, but they have one very important element in common; they are utterly dependent on a social agreement.

People must agree to exchange the new currency on the streets. Social agreement, creative agreement, and intellectual agreement drives entrepreneurship and all must be achieved completely or “black markets” will form undermining the entire system.

The Tipping Point

We know a few things about currency outcomes. If inflation occurs, people with “cash” will lose it, while people with “debt” will see it deflate. The US can erase the deficit by inducing inflation and deflating the debt if production capacity remains undiminished. People, organizations, and governments that have exactly as much cash as they have debt will see no net loss or gain. In fact, the entire world’s financial system is worth exactly as much as it owes to itself – minus the value of social capital, creative capital, intellectual capital and natural resources – now, set free.

Social Agreement

As inflation progresses, there will be a point where a critical mass of the “social agreement” will hold the same amount of cash as they hold debt – their net loss will be zero. That’s when the system can reboot. obviously there will be serious consequences to any of the options, but this time, unlike any other time in history, social media will be the vehicle upon which the social agreement is catalyzed and not necessarily mandated by policy makers.

The Obama Factor

“Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America”

Mr. Obama is right – the outcome depends on us. We cannot expect government or corperations to attend to all of our needs because we are the ones who individually and collectively own and control the factors of production that will support the next currency. The road to opportunity has been cleared and the invitation has been cast. We must now reach deep into our imagination and define the new business system where social capital, creative capital, and intellectual capital are directly tangible in a new global economic imperative; the Innovation Economy.

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The Relationship Economist

By Admin

On January 21, 2009

In General Information

The Office of the Relationship Economist of the United States:

President Obama said in his inaugural address;

This is true; so what changed?

Mr. Obama’s statement is profound; in a single stroke, he divorced human knowledge, talent, creativity, and intellect from dependency on the financial markets. In one short statement, he reversed the old world order where economic growth drives relationships rather than relationships driving economic growth. Mr. Obama has made people tangible as financial instruments in their own right. The language needed to change, only then could the relationships change and therefore, the economics.

Calculus: The Science of Change.

Change is everywhere. The only thing certain is change itself. We vote for change we can believe in, we are aware of climate change, and we see the world constantly changing all around us. Each of these sentiments is an expression of the mathematical discipline of Calculus

Calculus got a bad rap with most of us in High School. Calculus has boring charts, funny symbols, strange sentences, and objects flying around in a frictionless space – nothing could be further from reality, so it seemed. In reality, however, nothing could be simpler. Early civilization noticed that seasons change over time. Farmers noticed that plants changed over time. Isaac Newton noticed that the speed of the apple changed over time as it fell. Copernicus noticed that the location of the planets changed over time, etc. We all notice and respond to change.

Economics: The science of Incentives:

Bankers noticed that the value of money could also change. To lend money out for future repayment, there is a likelihood that something will change; good change, bad change, or no change. So, in order to avoid bad change and to keep good change, the lender charges “interest” on the money. Interest represents the change of money over time – but not the reality of the change itself. Consequently, the change of money induced incentives for people to behave differently and this changed reality. For better and worse, reality reflected the incentives rather than the incentives reflecting reality.

The Language of Change:

Today our language is changing at an incredible speed – most words associated with the human condition have changed in definition over only a few decades ago. The words “relationship”, “society”, “marketing”, “innovation”, “media”, “democracy”, “productivity”, and many others, all have expanded meanings. Now we need to create new words to describe new realities; Computer enabled society, Social Capitalism, Web 3.0, relationship economy, innovation economy. What is the incentive?

Relationship: The Science of Communication

Now here is where Calculus gets complicated: If words are changing and communication is connected to the words, then communication is changing too. If communication is changing, and productivity is connected to communication, then productivity is changing too. If productivity is changing, and the economy is connected to productivity, then the economy is changing too.

The Relationship Economy:

Just like money, the change in our relationships induces an incentive or disincentive to behave a certain way. For better or worse, incentives will reflect reality rather than reality reflecting the incentibes. That’s a game changer.

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Out of Cache; Will Work For Bandwidth

By Admin

On December 31, 2008

In General Information

We can measure the time in minutes, we can measure distance in miles, and we can measure mass in grams – so how do we measure Innovation? Am I missing something or is this possibly the most stunning omission in the history of civilization? Who is keeping score? Where’s the referee? This is serious business, folks – the fact, factors, and factories of innovation should be in laser sharp focus to everyone right now, here is why:

The total US liability is estimated at 53 trillion dollars. Every US citizen must become more productive by $175,000 each to cover the invisible mortgage. Government and corporations are not going to fix this problem – they will leave it to the kids to figure out how to make, mix, and measure innovation.

Natural Resources of Bandwidth

It is official; the United States has run out of bandwidth and we need to create more. The only way to accomplish this is an extraordinary expansion in the breadth, depth, and scale of innovation. This is a situation that cannot be rationalized by any conventional school of thought – starting with our definition for innovation.

The accepted definition for innovation is “something novel and useful”. I hope that I am not insulting any B-school professors or innovation guru’s but “something novel and useful” is already bankrupt as a definition for the only thing that can pull us out of this flaming tailspin of debt economics.

So let’s try something that the kids can do well (because they get to pick up the tab):

Innovation = Bandwidth Created / Bandwidth Expended

So there it is: a simple, clean, and effective: If the number is greater than 1 we have a creation of wealth. If the number is equal to 1 we have a transfer of wealth, if the number is less than 1 we have the creation of more debt.

It should not matter how one defines bandwidth as long as the top number and the bottom number are measured the same way. If the kids can increase the top number, or lower the bottom number for anything anywhere by using their social, creative, or intellectual ability, alone or in groups, then they can become successful innovators.

Business case

There is a clear and rational business case for bandwidth – people will pay for it at a price relative to their own available bandwidth. Let’s give the kids a game they can win. Let’s give them a score that they can keep. Let’s show them how entrepreneurs work, think, and play.

For the same amount of bandwidth expended, they can create more bandwidth for 10 rich people or more bandwidth for 1000 poor people. Let the kids decide. If they give some people more bandwidth at the expense of the bandwidth of others, they lose. If they find synergies that act as a bandwidth multiplier, they win. Let the kids figure it out.

All we need to do is help develop standards to measure bandwidth.

It’s the least that our old people can do and a much simpler problem for our feeble minds to solve. The Ingenesist Project specifies 3 web applications which if deployed to social media will allow social capital, creative capital, and intellectual capital to become tangible outside the construct of the traditional corporation – we believe that this may do the trick. There may be others working on the problem too, we don’t care – at the end of the day, we all work for bandwidth.

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Social Media; The Central Bank for Knowledge Assets?

By Admin

On November 20, 2008

In General Information

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

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

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

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

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

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

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

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

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

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

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2008 Financial Crisis – The End Game

By Admin

On November 11, 2008

In General Information

The year is 2020, no burning cities, no mass hysteria, no bread lines; the economy is on an exponential growth curve. The financial crisis of 2008 ended in an anticlimactic sort of way. Sure, lots of hedge fund bankers were unemployed for a while and many companies once deemed titans of industry have disappeared, but nobody seemed to notice much.

Government debt has been eliminated and Wall Street has become the steward of what has become an Innovation Economy rising from the ashes of debt economics. The transition, in fact, was surprisingly smooth. Social Networks figured out a way to make knowledge tangible outside the construct of Wall Street, the central banks, and the traditional corporations.

When the dollar started to fall, people began trading a different currency called the rallod. The rallod was backed by future productivity resulting from innovation rather than future productivity supporting debt. The vicious cycle of debt economics was reversed just in time. When the dollar finally crashed, it pegged to the rallod and the economy began to grow again with an astonishing, yet peaceful, transfer of wealth and power to self-regulating communities, society is general. It’s still hard to believe what happened.

Today the engines of economic growth are millions of hot new start-ups that exist in the form of “Communities of Practice” related to specific technology areas rather than the old corporation model. They automatically cluster around a technology and spin off other start-ups at an incredible rate in a strange nesting arrangement called the “tangential innovation” market. Most innovation is open sourced because the “Patent” (and protectionism in general) is no longer the center of the innovation finance universe, rather, the “secret sauce” of social, creative, and intellectual capital is the most valuable player today.

About 10 years ago, something resembling the human genome project mapped all knowledge in the form of social, creative, and intellectual capital that exists in society to a very high granularity. A programming language was invented to represent knowledge assets like packets of code that are processed by a community algorithm (The CV/resume is a bar joke now). Thanks to a visionary government, 1st amendment protections were built into this inventory with anonymity laws.

Part of Google was democratized in a public takeover and spun off to design an open source percentile search engine to help entrepreneurs build unique collections of knowledge assets and predict the probability that various combinations of these assets could successfully execute a business plan. These unique combinations then induce hyper-innovation around a technology and the resulting innovations get spun off to be reabsorbed by different and diverse communities of practice in continuous iterations forming a virtuous vortex of new systems, methods, and solutions. Sketched out, these arrangements looked like electrical circuits. Wealth creation is intense.

Instead of having jobs, many people in a geographic area are pinged by a Percentile search engine which calculates the likelihood that their interaction together will increase the probability of successful execution of a business plan when combined with other knowledge assets. Instead of earning wages, people are paid with micro-royalties specified by contracts on capital asset sub-sections. These micro-royalties add up to substantial residual income enjoying a multiplier effect as their work continues downstream. The government funds social security through it’s own innovation ventures. Service workers such as police, teachers, fire fighters, nurses, local merchants, etc., are key beneficiaries because of their impact on the community is directly associated with productivity.

Many of the senior knowledge workers have determined that they can earn more money by taking an equity position in their students, and the students of their student – such pyramids are in fact sustainable and generate astonishing returns. Mentors have entered the landscape in vast numbers and apprenticeships have become abundant. The income potential for the “creating creators” boggles the imagination. Again, a virtuous circle has formed between the mentor and the student. In aggregate, wisdom is being retained, refined, and transferred efficiently throughout social networks. Universities have begun doing the same forgoing tuition in exchange for an equity position in students.

University “degrees” have disappeared in favor of unique combinations of knowledge assets that are continually SEO’d for best Percentile Search Engine Placement. People do not compete directly, rather, they compete with the Percentile Search Engine in the local market place – although virtual work is becoming popular again. As owners of their knowledge assets, the entrepreneurial spirit is ubiquitous. No individual has either a monopoly or an identical knowledge set as anyone else. Everyone has perfect information about the knowledge assets in a market. People are pinged for different reasons at different times for different rates depending on supply and demand. Continuous education is a social event in itself often mistaken for recreation!

Even the poorest areas of the planet are getting into the action because, by definition, parts of an economy with the highest potential for technological change are the same places that return the highest dividends in an innovation economy. Arbitrage opportunities between master and oppressor have disappeared worldwide.

Like a neural network, the economic system of tangible knowledge is self-correcting, fault tolerant, and self-regulating. Governments across the globe tried to stop the social network driven innovation economy – but they eventually gave up. It was like water; it flowed between the cracks and simply eroded the barriers. China learned to show it’s sense of humor exporting some of the funniest jokes ever conceived.

Oil production has been replaced by superconducting wind turbines, global temperatures have stabilized, all cars are electric or “water leakers” (as the hydro’s are affectionately known), many diseases have been cured, and the list goes on. It is hard to believe this happened in only 12 years. Then again, the Internet had only been widely used 12 years prior to 2008. Did I mention, we’re finally sending a multinational expedition to Mars…

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The Balance Sheet for Knowledge Assets

By Admin

On November 6, 2008

In General Information

Innovation economics has a way of forcing us to look at the mirror image of conventional wisdom. This article will look at knowledge assets as they might appear on an accounting balance sheet. You may be surprised at what happens at the bottom line.

Wall Street will often reward a company that has a large backlog of orders. This can appear in the eyes of most observers as an asset. After all, who would not want a backlog of orders? However, in the world of social media, a huge backlog causes a serious problem – it represents commitments made that have not yet been delivered. An unfulfilled promise in a social network is a liability and not an asset. By extension, a backlog in an innovation economy is a liability and not an asset (note: climate change).

Applying conventional wisdom to an innovation economy, we find that most companies have an excellent inventory of the “liability” but a poor inventory of the “asset” that will execute those promises. All of their plans, specifications, blueprints, job descriptions, policies and procedures, etc., are liabilities in an innovation economy because these define the promise that is unfulfilled, not the asset that will fulfill them.

Until recently, companies assumed that the right knowledge assets will always be available – an assumption that for a long time has limited the level of productivity that humans can achieve, specifically, the sustainability of natural resources. The absence of a knowledge inventory limits the complexity of problems that humans can solve much like industry was limited to custom machinery before Eli Whitney demonstrated the concept of interchangeable parts less than 200 years ago.

Further, if the product line is expected to have a life cycle of more than a few years, the knowledge inventory must extend beyond the doors of the company and into the surrounding community. Therefore, the knowledge inventory must take on the taxonomy of the community, not the taxonomy of the corporation such as skill codes, levels, titles, etc. The requirement is now clearly in the domain of social networks. Yet, I still hear grumblings in the blog sphere that social networks cannot be monetized – nothing should be further from the truth.

So, let’s talk about the bottom line. For example, Boeing announced today that their greatest future challenge would be the availability of engineers. Boeing has a market capitalization of $34B and a $300B backlog. Money has a 10:1 multiplier as it travels through and economy. For a balanced accounting statement, what would be the real value of a social network that can capture the correct knowledge inventory to support Boeing; 34B, 300B, or 3T?

In general, valid estimates of the bottom line can vary by 2 orders of magnitude depending on the point of view of Wall Street, corporate management, or the social network community. Who would be the better steward?

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The Ingenesist Project – press release

By Admin

On October 21, 2008

In General Information

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.

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

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

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The Ingenesist Project

By Admin

On October 17, 2008

In General Information

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>

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A Few Predictions for the Innovation Economy

By Admin

On September 18, 2008

In General Information

Here are a A Few Predictions for the Innovation Economy

Social Network will become the corporate structure of the future. They will spit out start-ups at an astonishing rate.

The “resume system” will be banished forever possibly earning the title of the cruelest human invention since the lobotomy.

The University System will be challenged – the relevance of the college degree will be questioned in an economy that favors unique combination of knowledge assets rather than everyone having the same “degree”.

Everyone will have visibility of supply and demand for knowledge assets meaning that employers and employees will have equal information about cost, availability, and demand.

Creative knowledge workers will earn micro-royalties for their participation in thousands of brainstorming sessions and product development discussions. Earnings will be shared openly and the percentile Search Engine.

The new Patent will be the “Secret Sauces” – the algorithm that entrepreneurs will develop to select their knowledge assets when producing specific innovation.

Teachers will forego salary in favor of an equity position in their students. The best teachers will make the most money. Universities will forego tuition in favor of an equity position in students; the best students attract the best mentors and universities. Apprenticeship will become commonplace.

The knowledge inventory and Percentile Search Engine system rewards people for doing what they are most passionate about. The dominant strategy for all players in an Innovation Economy (that which produces the most revenue) is for participants to pursue what they are naturally good at and passionate for – as long as there is a market for it.

Innovation bonds will return 80% interest or more with near-zero risk. Institutional investors, insurance reserves, and foreign investors will flood the market with venture capital.

Knowledge workers will outsource management.

The Fed will peg the dollar to productivity, not gold or silver – interest on deposits will track productivity increases due to innovation.

Social priorities will impact what gets invented or what stays on the shelf; Global Warming, Alternative Energy, Sustainable environments will have net positive business cases.

The flaw in market economics will be reversed. Technological change will precede economic growth eliminating the economics of debt (ref video). The financial system will be restored to a sustainable condition.

We know that innovation is the engine of all wealth creation and it will live in an integrated system. Knowledge will be reformatted to emulate a financial instrument.

A good article from business week

A great Blog: Jay Deragon and the relationship economy

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The Capitalization of Knowledge – Innovation Bonds

By Admin

On September 18, 2008

In General Information

With a computer readable knowledge inventory, local communities of practice, a percentile search engine algorithm, and the virtuous circle of finance, then future innovation cash flows can be predicted much more accurately and with far lower risk than with, say, the venture capitalists acting alone.

Were risk is predictable, cash flows are predictable and the portfolio of innovations can be diversified so if one business fails there is an equal chance that another will succeed and the risks cancel each other out. The cash flow of all the innovation enterprises can be combined into a single large steady cash flow. Just like companies do to raise money for expansion, the innovation bank can issue innovation bonds on the open market. The revenue from selling Innovation Bonds can return to the community to finance innovation and fund wealth creation at very low interest rates compared with venture capital today.

With a lower cost of venture capital and a system that supports open source innovation an astonishing amount of innovation will be unleashed in society.

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Social Networks and the Multiplier Effect on Innovation

By Admin

On September 18, 2008

In General Information

If we combine the parallel transaction with the series transaction we have what now looks like a neural network. In practice, we know that strong networks of people freely exchanging ideas make organizations better, smarter, and more efficient. Networks are where knowledge and wisdom is literally stored. A network is fault tolerant, if one person leaves, the network survives. For a relatively small input into a network, we can produce a large output of new knowledge – we have a learning organization.

However, in society, these interactions are largely accidental; people meet at Church, Starbucks, and Social Events or by word of Mouth. Other times, these interactions are concentrated inside a single community of very similar people such as a technical conference, group meeting, or lunch buddies and are often not well diversified.

Suppose the interactions among people were not random, instead, they could be designed by the entrepreneur to produce a unique outcome. The Innovation Bank will combine people of complementary knowledge assets in a calculated manner in order to arrive at specific business approaches and applications.

A special case of the above business method and resulting social network is called the Multiplier Effect. A financial bank enjoys a multiplier effect with the ability to lend the 10 times more money than they hold in reserve. Money changing hands has a multiplier effect on an economy. Again, financial analogies hold.

Suppose that a company owns composite material technology for use on aircraft. Since they specialize in airplanes, they have no intention of pursuing other applications such as recreational equipment, energy production, or health care products.

Suppose that the company could deposit this asset in a bank and collect interest. The Search Engine can scan the business landscape to find companies with a knowledge deficit in the area of your technology and make loans of your technology. As the originator, you have the option to see what those other companies invent and you hold the right to use their new ideas in your aircraft application.

With an innovation Bank, you can reduce your Research and Development costs and create additional revenue in a tangential innovation market. With reduced cost and risk of innovation, you are likely to specialize more and more in innovation as your enterprise. In the event of a cyclic downturn in the business of an originator, instead of “laying off” knowledge assets, people can work in tangential industries where they will continue developing – literally putting “Knowledge in the Bank” – to be called back when market conditions improve. A mobile knowledge asset increases in value becoming smarter and more productive over time.

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