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In a fully digital world will companies still need to account for the environment?

Posted By Paul Tero, Friday, July 5, 2019

Paul Tero a member of our Emerging Fellows program inspects the structure of business and the changing environment in a digital economy. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

There are a number of ways in which companies account for the environment. It could be a seasonal perspective in terms of the variations in goods and services brought to market, another is from an environmental perspective in terms of energy usage as well as production and packaging materials, and a third is from a shareholder and stakeholder perspective in terms of statutory requirements. In recent years the triple bottom line reporting framework has made its way into corporate practices. Where companies, for reasons due either to regulatory compliance or enlightened executives, report on profit, people and planet. That is in addition to their standard financial statements. Organizations are reporting on metrics related to their staff and their impact upon the environment.

 

Building on the acceptance of reporting on more than one performance parameter, there is a nascent movement to embrace the quadruple bottom line. Where this fourth performance parameter is "purpose". Defined as the ethics, culture and desires of the organization. The administrative policies and processes that are established by government bodies, and are used to govern companies and organisations, change over time. Long gone is the notion that business reputation is solely built on a profit and loss statement.

 

Into this governance implication let us now draw two threads of previous thought: the structure of business and the changing environment. First, we know that the process business engages in to make a profit will change in the decades ahead. Pervasive digitisation will drive an increasingly ubiquitous phenomena of process automation and forms of cognitive processing. Limiting the typical set of tasks available for the human workforce to those requiring people skills and/or thinking skills. Secondly, while this trend of digitisation gathers apace the climate and natural environment in which business and the digital economy is beholden to will still be changing. There are two responses to these macro changes. The first, described as a pathway of current and common ambition, is to succeed in humanity having a light footprint on the environment. On the other hand, the pathway of lackluster ambition necessarily leads to outcomes that are less than optimal for all life forms.

 

There is currently a broad acceptance of the concept of a global carbon budget. Therefore, one can envisage that, over the course of the time horizon we are concerned with, this principle of a global budget being established in corporate governance practices. Where economic entities are given a "profile" to work within. Thus, realising a transition from triple bottom line reporting through quadruple to quintuple. That is adding "profile" to the currently recognised profit, people, planet and purpose.

 

With respect to the triple and quadruple bottom line reporting the sense is that these governance outcomes are the result of internal motivations. The result of what the business decides to do. With the "profile" metric, the sense is that the reporting is on the outcomes with respect to the environmental budget that any business is given to work within. This "profile" metric, a response to a set of imposed environmental limits, is relevant to both climate outcomes. Through either an enforced collaboration upon all businesses to ensure a continued light footprint, or a set of rules to limit the damage upon our common habitat.

 

The image of this future for business, the government and the economy is where the operational milieu of business is characterised as an expanse of intensely interconnected entities that are data and computationally rich. Where the description has morphed from being called a digital economy into an intelligence economy. Where the wisdom of the quintuple bottom line enforces the boundaries of all behaviour.

 

In a fully digital world companies will not only need to account for the environment. They will be required to.

 

© Paul Tero 2019

Tags:  digital economy  economics  environment 

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March 13, 2030

Posted By E. Alex Floate, Tuesday, July 2, 2019

Alex Floate, a member of our Emerging Fellows program travels into the future and envisions the coming finance system his sixth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Late in the last century, the movie “Wall Street” introduced us to a world of men in three-piece suits vying for domination in the world of finance. ‘Greed is good’ was their motto and Wall Street was the magnet for the unending supply of MBA’s from elite American universities. With financial knowledge and a thirst for success, they became corporate raiders and white knights keen on dismantling what was left of American industry. They spawned dramatizations in the personas of Gordon Gecko and Edward Lewis in the movies “Wall Street” and “Pretty Woman”. Just like Hollywood at the height of the silver screen, this was a place where dreams come true, even if it was at the expense of blue-collar workers or lesser investors.

 

By the late 1990’s however, magazines were asking ‘where have the raiders gone’, and the internet was the new kid in town. Tech stocks were the rage and most of the action had moved west to Silicon Valley. It was inevitable, but not widely acknowledged that much of Wall Street would soon be run by computers and algorithms, and the big personalities that formerly would have been leading raids would diminish in size and importance.

 

MBA mills multiplied during the early part of the 21st Century, but the real action by 2020 was with quantitative analysts, or “quants” as they were called. Blending an understanding of finance with deep knowledge of mathematics and computer science, they were the minds behind the complex models that drove most of the pricing and trading of securities. Even though the suits with MBAs still held the top jobs, the people in white collars felt them slowly tightening around their necks.

 

The new digital collar belonged to a Millennial or GenWebster (someone born after the internet became widespread) wearing a t-shirt or hoodie, but fully versed in the internet and its ever-evolving abilities and culture. They were quants, cybersecurity experts, app developers, data specialists, and refugees from the banking industry. They had connections and financial knowledge to take on the task before them; bring financial applications and products to their generations without the costs of brokers, agents or physical storefronts.

 

New words describing finance were entering the lexicon – fintech, blockchain, appification and others that this time did not originate from Wall Street. Finance technology start-ups began popping up in areas such as the Silicon Fen in the U.K., Israeli’s Silicon Wadi, Bangalore India, and Shenzhen in China. Some were being bought up by larger traditional finance and bank companies as they wanted to position themselves for the digital future everyone was predicting. Usually the business siphoned some of the best ideas but neglected to further the primary idea behind it; lower cost, easy access with speed and efficiency.

 

At first the conventional finance organizations counted on their position in finance system as storehouses of money and trust, with the emphasis on Trust. The men and women with the digital collars kept at it though and advanced the technologies of blockchain and cryptocurrency. As the GenWebsters began to gain in financial clout they embraced the new finance products and eschewed traditional banks, brokerages and insurance companies. The white collars tightened again.

 

© 2019 E Alex Floate

Tags:  banking  economics  finance 

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Could a different form of capital be accumulated?

Posted By Esmee Wilcox, Friday, June 28, 2019

Esmee Wilcox publishes her sixth blog post in our Emerging Fellows program. In her view, a paradigm shift can be made if social capital looks more valuable than traditional capital. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

If what we say we want and need in society can’t be created within current parameters, then at some point we ought to rethink those parameters.  The second half of this century is far enough away for us to imagine changes in the organising units of society, and how value flows through the economy. We can step into the imagination of creating social value without the limitations of how we currently translate it into capital value. In this world, what might influence how we create value in the economy?  What might the reciprocal relationships be between corporations, communities and social entrepreneurs?  Would these create the conditions where a different form of capital can be accumulated?

 

We might think now of social entrepreneurs operating on the margins of power, seeking to make changes in social policies not through established political or corporate structures but through consumer behaviour, through mobilising latent community activism, by identifying and organising around emerging issues that matter but aren’t yet reflected in societal behaviour.  Digitally-enabled social influencers create followers and change without the prerequisite of access to capital or political power.  We might see well-funded campaigns to influence democratic and political processes.  But – much to the chagrin of institutional power – some of the recent transformative social movements haven’t been predicted or backed by external funders. 

 

These social movements exemplify the power of networks and help us imagine an economy where value flows not from the exchange of capital but from the collective ability to self-organise and create.  Presently we are limited by a capital system that creates friction in order to protect existing financial interests. The power of gatekeepers. The problem of entryism.   Might future digital currencies operating under ‘The Commons’ solve these problems?  If they were pinned to environmental and social resources, would they drive different patterns of behaviour?

 

We would also need to imagine a different relationship between communities, corporates, and social enterprises.  Presently, we can see that reciprocity is loosely based on commodifiable associated value.  Social entrepreneurs can have an enormous influence on the flow of capital from the trust that consumers and communities place in them.  Trust is hugely important as we wrestle with global technology enabled networks.  Corporations need trusted ‘network nodes’ and will readily trade their influence for capital.  There is much that social entrepreneurs can work to their advantage.  But in this scenario the balance of power still rests with traditional capital.

 

If we might imagine a reciprocal relationship that moves beyond this power imbalance. We may see agents of social change being essential to creating value in the economy, where new value is based on collective use.  The value of capital resources in infrastructure projects – 4D printers, bio-tech networks, trains – rests in the myriad of impacts experienced by communities that is dependent on being amplified by the communities themselves.  In the latter half of this century the scarcity of environmental resources, with a high ‘old’ value, may make this redefinition of value, based upon the impact of collective usage instead of individual ownership, more likely.

 

Social entrepreneurs may be able to position themselves as progressing this movement away from underlying atomised behaviour and binary commodification of social influence, by promoting the value of what we create together as increasingly important for the society we want.  Straddling both the realities of our present systems and the need to trade social influence for capital, whilst foreseeing the greater net future value of social capital, is no easy task.  However, social influencers are already operating in this way to create the society we want whilst disrupting the current parameters of capitalist systems.

 

A system where social capital is more valuable than traditional capital would represent a paradigm shift from our present system.  A plausible version might be the greater valuing of social capital as an essential prerequisite for achieving value from traditional capital.  In this imagination of the future, social entrepreneurs might have far greater influence.   Accumulation would be imagined differently as flow and impact would displace ownership, with influence – the version of accumulation – manifesting in the ability to create and catalyse self-organisation.    Public institutions that are theoretically able to take a long-term view on investment ought to be similarly considering this net future value of social capital.  Where they are, the accumulation of social capital ought to be an opportunity they can grasp.   As with corporations, there are opportunities for social entrepreneurs to consider their future relationships with public institutions.

 

© Esmee Wilcox 2019

Tags:  capital  economics  social capital 

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Can human rights preserve liberty?

Posted By Ruth Lewis, Monday, June 24, 2019

Ruth Lewis a member of our Emerging Fellows program asks if human rights can preserve liberty in her sixth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

How do we regard human rights and liberty now and in the future? Can our current understanding of human rights and values guide us toward a better understanding of the challenges that we face every day to our free choice and will, preventing harm to society?

 

Our current notions of individual liberty and human rights were developed through the Enlightenment in response to the separation of church and state, and in the mid-20th Century, in response to the terrible atrocities committed during World War 2 and beyond.  They reflect our growing awareness and action to remedy our appalling treatment of minority ethnicity, disabilities, women, refugees, and children, to prevent acts such as torture, unlawful incarceration and genocide. These principles were laid out in the Universal Declaration of Human Rights (1948), the International Covenants on Civil and Political Rights and Economic, Social and Cultural Rights (1966), and in regional instruments like the European Convention on Human Rights (1950).  They lay the foundation of minimum protection of individuals and groups from the worst of humanity’s barbarism and to promote human life with freedom and dignity that is conducive to our physical, mental, social and spiritual welfare.

 

Our personal liberty is to be bounded only by these international and regional agreements for the purpose of respecting other people’s right to freedom, civil order and the welfare of society. This includes of the right to privacy, protection of freedom of thought, conscience and religion, opinion and expression. These agreements prohibit any propaganda for war, or advocacy of national, racial or religious hatred that provides incitement to discrimination, hostility or violence. 

 

The International Declarations and Covenants protections came into force in 1976, ensuring legal enforcement by all signatory parties. Together with the United Nations Sustainable Development Goals for 2030 (2015), these agreements show the most noble aspect of human values that we aspire to uphold and promote for current and future generations’ rights and liberty. In this context, this includes the right to economic, civil, cultural, political and social development.

 

Yet despite these intentions, in today’s society we see outcomes of commercial or State enterprise that undermine the intentions of our human rights.  These outcomes subvert the free will of the individual and promote hatred, racism and violence within society.

 

For regular Internet users, our access to vast amounts of information promotes our sense of liberty, and amplifies the reach of our free speech and commercial opportunities.  However, covertly our online presence is tracked and inundated with incentives to buy products, and to think or behave in a certain way. These incentives are curated through computer algorithms that follow our online entries, forming a profile as a basis of commercial business models that look to inform or change the way we would otherwise entertain our free will or action.  Through lack of active prevention, these algorithms also foster online prejudice, racism and hate, drawing followers of like mind toward vilification, creating bullying, intimidation and racist propaganda which spreads throughout the online and physical world.

 

Human rights and values are supplanted with short-term exploitation of human liberty for profit gain, for manipulation and misuse.  Our freedom to make personal choice and lifestyle is eroded or falsified, and those who may do harm seem incentivised.

 

Our Human Rights of the present and future must be based on custodial governance over our present liberty and resources in order to preserve our humane society for current and future generations. We must govern our commercial and State enterprises for social benefit as well as profit, and protect the community and individual in accordance with our Human Rights and societal values. 

 

Global Human Rights commissions and various standards associations are now beginning to recognise these online violations, and seek to redress this gap by defining emerging codes of conduct for our online service providers and developers. These new conventions seek to make the latter accountable for the ‘unintended’ consequences of their business models, and to include human values in the design of online innovations.

 

Commercial enterprise innovation and growth is now being incentivised by global standards towards developing long-term commercial goals and non-financial societal measures for which they may be held accountable and protects Human Rights. Society is endorsing through positive investments in sustainable enterprises. This facilitates the path toward liberty in the face of challenges brought about by our modern world. But how will our governance and policy mechanisms evolve in the future to ensure liberty?

 

© Ruth Lewis 2019

Tags:  liberty  rights  society 

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Who authors the automation?

Posted By Tim Morgan, Thursday, June 20, 2019

Tim Morgan published his sixth blog post in our Emerging Fellows program by checking the possibility of building intended and unintended governance into automation. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Quis custodiet ipsos custodes? Who watches the watchers? This question penned by the ancient poet Juvenal may have more urgency in the current automation age than it did two thousand years ago in the palaces of Rome.

 

Our money is stored as data and flows digitally at the speed of light. We socialize online. We play online games and stream movies. Apps record our exercise, sleep, and heartbeats. News comes via feeds customized based on our observed interests. Search engines return ranked results based on more than just the keywords. All of it is done via algorithms written by someone for a specific reason. Even self-learning AIs are ultimately built to fulfill a human desire or need. Automations are systems which embody someone’s values.

 

What values are being intentionally and unintentionally encoded into the automated backbone of current society? What intended and unintended governance is being built into automation? As automation advances and becomes ubiquitous, what we develop and how we apply it becomes critical.

 

Most automation is developed to meet specific requirements. Quality Assurance professionals analyze and validate software via requirements-based testing and analysis. Automations are systems, be they games or banking apps or robots.

 

Complex systems have complex behaviors. Complex systems create and reinforce values consistent with that system. Systems promote the values embedded into the software, whether or not the developer intended to embed them. Testing rarely goes beyond the mere functional requirements to measure the systemic impacts of automation against the larger world. The current Institutional and Market watchers are insufficient to that task.

 

Proactive policing software promotes racially biased patrolling patterns when systemic biases have been unintentionally embedded into data and code based on existing policing practices. Voting rolls are purged of legal voters because of erroneous, and sometimes intentional, partial name matches with convicted criminals. Traffic light cameras are used more for automated revenue enhancement than for protecting public safety. Social media and news media both use dynamic consumer metrics to automatically amplify attention-getting divisive stories ahead of socially uplifting ones. Successful games exploit known psychological triggers to promote compulsive game-play, even when embedding those triggers were not a conscious programming choice. Successful games, news, and social media have quickly evolved into attention predators via market selection. Automation is evolving, but market and institutional selection mechanisms are not necessarily socially benign.

 

The future holds some interesting values questions around advanced automation. Could we go beyond normal Don’t-Hit-A-Pedestrian safety programming in self-driving cars, adding in Good Samaritan assistance behaviors for the roadside stranded or injured? Will consumers ever get a Make-My-Life-Better setting on their social media? Will we find ways to create new Social Awareness algorithms and new Social Quality Assurance testing standards for commercial and institutional automation?

 

Failure to anticipate the untested social impacts of new automation before it is deployed turns the entire world into an increasingly bug-filled, chaotic, free-for-all of externalized impacts and socialized costs. How technology is applied is a choice. How to encourage development of future automation which balances profit or control with social good is an epic challenge of our current era for both developers and users alike.  Who authors the automation? Who watches the watchers? Ultimately, we all do if we want a better world.

 

© Tim Morgan 2019

Tags:  automation  governance  technology 

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Have we had enough of experts?

Posted By Robin Jourdan, Tuesday, June 18, 2019

Robin Jourdan examines the issue of expertise in our world today through her sixth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Sage advice; knowledge is power; Plato's Noble Lie; the 10,000 hours’ goal. Such phrases describe experts and expertise since the 1300s. Often citizens reject experts as an objection to power that has become centralized in government or among distant leaders. Over decades there has been an idea that the people in charge, whether they're railroad barons or the government, ignore ordinary folks. Additionally, some further confuse rejecting expertise for showing their independence of thought. Is this a pre-emptive rejection of anything that implies their own opinion may be flawed?

 

Certain societies have romanticized grassroots efforts or the plain nerve to get the job done. Thus, the confidence of the dumb. This aspect of human nature is called Dunning-Kruger. When taken to the extreme, it can show itself through demonizing experts who disagree with our ideological views. Who is the expert? What gives him/her the right to speak on this matter? Is the expert using wiggle-words? These are words that skirt the truth by bending language against the listener. As we hear them, we feel twinges. Learned heuristics can cause even the most open minded to shut down. This lays the foundation of why political discourse is currently so distasteful.

 

This is different from skepticism. Skeptical but level-headed people are why nations achieve great heights in science, diplomacy, the arts and more. They never displace ordinary voters as the deciding voice in affairs of state. Skepticism does not rely on continual assurance that popular views, no matter how nutty, are virtuous and right.

 

These aspects combat today's "Expert Revolution" with economic value correlating to expertise. The democratization of knowledge and broader spheres of open conversations muddle the thinking. Expertise is further complicated by the myth that every opinion is equal. Regardless, it's essential that open discussions continue, as an ingredient for stable governance.

 

What happens when expertise is politicized? Use of leaded gasoline, IQ tests, smoking tobacco, and others show links between experts and political decisions. Such fuel counter-expertise controversies. It's essential in democratic decision making for the people to understand the issues of the day. What's needed is especially deep understanding to address approaching wicked and complex problems. As such, counselors rely on the evidence of expert analysis. Biased experts undermine public confidence in technocratic evidence. When trust in expert advice is damaged, decisions made are less optimal.

 

Experts in any government model must remain servants not masters to the system. Such distinction is needed as non-biological entities are becoming containers for expertise. Machine expertise, AI, and deep learning will increasingly factor in our decision making. Some say the rise of artificial intelligence will make most people better off toward the end of this century. Still, many have concerns about how AI will affect what it means to be human, to be productive and more.

 

Going forward we will struggle with ever more complex wicked problems never seen before needing more intelligence than ever. Today, innovation success tends to come from generalists, not only from specialized experts. What if we look at experts by the relative strength of their expertise? A proposed range of possibilities follows, each critical in light of the world's challenges.

 

First up, "Armchair Experts" can be convincing, but conversational. This jack of all trades is a master of none, but generalists have a role. The ability to cross-boundaries is often an ingredient for economic innovation. Next in the continuum: "Appliers" meet their curiosities by tinkering with new ideas, technologies, and other skills. Shortages of these educated workers result in higher demand. "Authorities" add experience to the equation and carry responsibility for the growth of an idea, technology, or other skill. Inclusion and innovation spur economic growth, including new jobs for this persona. Such people are held responsible for long-term systemic solutions. The final level adds accountability, real subject depth is met by the "Ace."  The Ace is a master of independence, capability, and invention.  They have the longest-view of approaching issues and are the fewest in the population.

 

Have we had enough of experts in the world? The simple answer is no. While the use of experts can be exploited and admonished, there is a role for experts that cannot be denied. Inclusion and diversity often make for successful enterprises throughout human history. What's needed is a greater understanding of the degrees of expertise, accountability, and the value of each. Wicked problems march forward whether experts are available or not. All things considered, the best approach to solve wicked problems is to create equally wicked but wise solutions.

 

© Robin Jourdan 2019

Tags:  expertise  professionalism  professionalization 

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Is globalization fuelling inequality?

Posted By Felistus Mbole, Friday, June 14, 2019

Felistus Mbole a member of our Emerging Fellows program investigates the impact of globalization on inequality in her fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The wind of globalization has been blowing for decades and digital technology is fuelling it. The world is more interconnected today than at any other point in history. There has been a significant increase in free trade and cultural exchange. Cross-border trade deals between both private sector players and national governments form part of everyday news. What are the economic implications of this massive level of interconnectedness? What does globalization mean for inequality?

 

Technology has created a connected world where opportunities are shared. Globalization is the integration of markets. National boundaries have become more porous to goods, services, capital, and people. While some boundaries remain physically closed, this does not hinder flow of capital, services, and data. Social media applications like Twitter has particularly accelerated movement of information. The last couple of decades have especially seen a marked growth in cross-border exchange of human capital. The increasing use of sophisticated technology has generated need for specialised skills which are globally limited. Organisations are able to hire such technical services globally. Supported by internet connectivity, technical service providers do not need permits to work in particular countries. They can permeate national boundaries by providing their services virtually.

 

Who are the winners and losers from globalization? Globalization doesn’t seem to be benefitting everyone. Currently, there are an anti-globalization campaigns and policies in countries that view themselves as benefiting the world at the expense of their national interests. Offshoring of certain aspects of business to developing countries has enabled them to participate in global supply chains, positively contributing to their economic growth. On the other hand, labour has tended to flow from the less developed to developed countries and capital in the opposite direction. Developing countries have therefore benefitted most from globalization compared to the more developed ones. The effect has been decreased inequality between the global north and south.

 

Nevertheless, it is only the economically productive developing countries that benefit from joining global supply chain. The less productive ones that are simply an end market for goods manufactured in other countries. For instance, India and China are big beneficiaries of globalization currently. However, many countries in Sub-Saharan Africa continue to lag. The less skilled segments of the population, both locally and globally, are being left behind economically, widening the inequality divergence. Globalization is clearly a tide that is not lifting all boats.

 

What does this mean? The perceived inability of globalization to create mutual benefits could lead to political tensions between countries as seen currently between the United States of America and China. Trade wars and related conflicts could emerge if these perceived imbalances are sustained.  Trade has been shown to be the greatest driver of economic success and thus the convergence between developing and developed economies. Policies aimed at enhancing human capital through broadened access to quality education and healthcare, and reducing barriers to trade could reduce global inequality.

 

Globalization is a good thing. As the ageing economies such as Japan and parts of Europe start to fall short of the labour that is needed to drive their economies, Africa will be experiencing its demographic dividend. The world’s labour can be developed and effectively harnessed and distributed to benefit everyone. This is only possible if the wind of globalization continues to blow unabatedly.  

 

© Felistus Mbole 2019

Tags:  economics  globalization  inequality 

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What’s Cash?

Posted By E. Alex Floate, Tuesday, June 11, 2019

Alex Floate, a member of our Emerging Fellows program examines the concept of cash in a global digital economy through his fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Adam Smith suggested over two-hundred years ago that all money is nothing but a matter of belief. Even with the complexity of today’s economic and monetary systems, it still appears that Smith was right. We believe money has value and that value will be accepted by others. Even commodity-based money systems, such as the gold standard, relied on belief that the commodity is of value and exchangeable for other goods or services. Belief, value and trust is what composes our money.

 

Currently governments serve the function of guaranteeing trust that money is worth the face value printed on it. That as legal tender it is exchangeable for other items of value. This trust and value placed in currencies is based on the belief of the economic and political stability of the country. Some currencies, such as the US Dollar have greater belief entrusted to them and are used more widely than others for both legal and illegal transactions; the USD accounts for more than 85% of currency conversions on any given day. Despite predictions of impending doom of the US Dollar due to quantitative easing during the 2008 recession, those moves by the US Treasury bolster the status of the dollar as it demonstrates the willingness of the government to protect the Dollar based economy.

 

Exchanging money can be simple when the other person is standing in front of you and can be easily handed the preferred legal tender. Try to transact across distance, or with large sums, and gatekeepers to the money will necessarily become involved. These include the treasury that issued the money and create the rules for the currency, the banks or institutions that will carry out the transaction, and the institution that receives or sends the money depending on whether you are the buyer or the seller. 

 

Each of these institutions, in addition to having the mechanisms and expertise to conduct the transaction, are also part of the trust mechanism that ensure the belief in the currency remains intact. However, all these gatekeepers create friction in the system that increase the costs of transferring value. Technology can be key in removing those frictions, but current financial interests who profit from this friction will do their best to maintain the status quo. Smokescreens that create the illusion of digital currency will become more common, but the call will most likely remain for the US dollar to remain the universal currency.

 

But in a global digital economy who will be the new gatekeepers? Though legal tender is the property of the issuing country, value stored in the money is not the property of the government. Value can be exchanged by other means, such as digital currency or credit in exchange for value. A future where Alibaba or Amazon trade in their own currency, with employees and contractors exchanging their value for credits on account, is not that far outside the realm of possible.  

 

A threat to both traditional means of exchanging value and potential new universal currencies are the rise of nationalist and tribalistic movements across the globe. If these movements win out physical and digital borders will become hardened, networks will be splintered, and markets fragmented. In this situation where will innovation come from, and how will value be held and exchanged? Those organizations and individuals with technical knowledge and savvy will be in the best position to navigate and profit from this situation. Those outside of this group may find themselves with either diminished ability to easily transact with the new digital currency or be at the mercy of a new set of gatekeepers, who have ‘digital collars’ instead of white ones.      

 

© 2019 E Alex Floate

Tags:  cash  digital economy  economics 

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In a digital economy will the abundance of data fuel a golden age of wisdom?

Posted By Paul Tero, Thursday, June 6, 2019

Paul Tero a member of our Emerging Fellows program examines the possibility of building an age of wisdom in the digital economy. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Knowledge in action. Sagacity. Percipience. Having experience, knowledge and good judgement. These words and phrases all describe and define wisdom. But will an abundance of data lead us to a golden age of wisdom? Will a richness of facts and figures, statistics and evidence lead us to a never-ending harvest of good judgement?

 

If we give credence to the DIKW (data, information, knowledge, wisdom) information science hierarchy, the answer leans to the affirmative. For with this framework, the following is the pattern: firstly, an abundance of data certainly leads to a wealth of information, or descriptions, about a plethora of matters. Which should, in turn, facilitate a breadth and depth of knowledge that is available for teaching and mentoring at a level unsurpassed in human history. Where the fruits of expertise, of mastery and of prowess collectively form this knowledge. And where this teaching and mentoring is an enabler to all people across the world regardless of the strata of society in which they sit. Where all of this upward flow of data, information and knowledge leads, finally, to a culmination in a golden age of wisdom. A time of good judgement and wise action.

 

But is the preceding flow true if we use a different time horizon? This piece you are reading is written for a timeframe of several decades into the future. What if you and I were to wind the clock back several decades to a time where “today was that tomorrow of several decades into the future”? Comparing this “back-in-time today” to the “current-time today”, is the latter enriched with an abundance of data? Do we, in the “current-time today” have a wealth of information about a plethora of matters compared with the times past. And thirdly, with respect to the current times, do we not have the ability, through information and communications technology, to teach and to share the fruits of expertise globally?

 

The argument can be made that we are better off today than yesterday. That we are wiser, that we have made sound judgements. While there is so much more to do, we can point to improvements in economic and physical health across the globe. We can make mention of the reduced rates of nation-state armed conflict and of improvements in education. But as we cast our eyes forward, will the teenage grandchildren of today’s teenagers be enveloped in, and benefit from, a milieu of experience, knowledge and good judgement? Consider the following two scenarios.

 

While matters of family are a common thread, that young woman in Asia, on the cusp of adulthood, may well have a personalised AI avatar to guide her through career and social choices. Offering her advice that could be heeded. And what-about that young man? A product of his Western heritage, looking to develop a career in the physical trades, finding his options don’t include the routine work he desires. Just like he was told throughout his schooling years.

 

In both cases, wisdom is offered but not infused. The prospects are that tomorrow will be just like today. Today we have that abundance of knowledge and the capacity for wise outcomes. And tomorrow? Our knowledge will have grown, we’ll have intelligence on hand and our capacity for delivering wise outcomes will be enhanced, but whether or not our results reflect these well-developed inputs is surely debatable.

 

These same arguments can be made regarding the generation of these teenager’s parents. Regardless of whether they live in Africa, the Sub-continent or in the Global North, one can imagine these parental pillars of society having responsibility in business or in policy making. Where the leaders in business are bound to a then long-established fiduciary duty to consult digital oracles. Where the policy makers can freely receive a finely curated harvest of good judgement.

 

Again it plays out in these two cases, decisions not quite fully imbued with the wisdom on offer. For across all four of these vignettes witness a surfeit of data, of information and of knowledge ripe with judicious potential. But where the consumption of this particular fruit is not universal. And the common denominator? What stands in front of this golden age of wisdom is surely our inherent human nature.

 

© Paul Tero 2019

Tags:  data  economics  wisdom 

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Can a Company with No Assets Attract Investment?

Posted By Charlotte Aguilar-Millan, Monday, June 3, 2019

Charlotte Aguilar-Millan checks the possibility of attracting investment in the Information Age through her sixth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The 21st Century has long been coined The Information Age. There has been a dramatic growth in the use of information technologies. A benefit of the new technologies is that there is a lesser need for tangible assets. Companies can now be successful with only the use of a laptop and an innovative idea. However, for most companies, whether they have assets or not, funding is required at some point within their lifecycle. How has funding changed with the rise of companies with no assets? Take Facebook, Alibaba, Uber and Airbnb as an example. They each do not hold on their balance sheets the assets from which they generate revenue.

 

A small to medium company (SME) can see many routes to growth through funding, but how many of these are open to companies that do not hold assets? The quest for funding of a company with no assets is likely to contain many refusals. The most obvious route for an SME is to take out a bank loan. This, however, requires collateral which a company with no assets does not have. A bank manager cannot reclaim the loan if the SME defaults as there are no assets to sell off. This provides a risky investment for banks. In the US, for example, only 1 in 4 small business loans applied for were accepted in 2018.

 

The two ways in which a company can raise cash is through debt or equity. Therefore, the next option is to look at listing, be this on the main stock exchanges, FTSE 100 for example, or exchanges designed for smaller companies such as AIM.

 

However, in order for a company to list on an exchange, they will likely need an appointed Nominated Advisor, financial and legal assistance. All of this requires cash which is what the company with no assets is seeking to find; not what is already has.

 

An alternative to the company with no assets attracting investment is for their owners to take out personal debt to put into the company. This could be in the form of taking out a mortgage against their personal home. Not only is this route extremely risky; if the company fails then they might end up homeless. This also is only an option when the owner has a home without an existing mortgage. Within the UK, the average age of first-time buyers were 31 years old in 2017 nearly 10 years older than a generation ago. 

 

A final way in which a company with no assets can attract investment is to speaking to that long lost rich Aunt. This itself speaks of rising inequality within the economy. The Information Age has enabled entrepreneurs to discover their vision without the high purchasing costs of tangible assets. However, finance has not kept pace.

 

Finance is restricting the mobilisation of companies with no assets. If the SME owner is not already established with a pot of savings or a house which the banks are willing to re-mortgage, growth can be limited. To the question, can a company with no assets attract investment, the answer is dependent upon the Company’s socio-economic background. This inequality is limiting innovation. 

 

© Charlotte Aguilar-Millan 2019

Tags:  economics  finance  investment 

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