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What is the face of a sustainable future society?

Posted By Felistus Mbole, Tuesday, November 12, 2019

Felistus Mbole a member of our Emerging Fellows program envisions sustainable future societies in her eleventh blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

What is a sustainable society? A sustainable society is one that ensures the wellbeing of human life and nature for present and future generations. It is a society that has the right balance of the economic, social-cultural, political, and ecological dimensions.

 

The economic system is one part of our finite ecosystem constrained by planetary boundaries. Economic growth is simply a translation of the social and natural capital within society into economic gains. The global economy has been growing for decades while the natural capital is continually being degraded at a rate well above its renewal. It is not possible for the economy to perpetually grow in this finite ecosystem.

 

Economic growth is a quantitative increase which does not necessarily lead to an improvement in the quality of life or equity and justice in society. The pursuit of continuous economic growth puts undue strain on the environment with total disregard to future generations. On the contrary, we need development which sustains the wellbeing of humans, cultural values, and the environment. What will a sustainable society look like? Can this be attained?

 

A sustainable society will be characterised by long-termism rather than short-termism. It will be a global society whose members are mindful of the global rather than the immediate local consequences of their actions. It will be a society with a shared economy that pursues development rather than mere economic growth and the common good. Otherwise, everyone will face the tragedy of the commons such as effects of climate change and societal ills.

 

It will be an equitable society in all aspects such affecting wellbeing and decision-making. It will not be a society where the more economically empowered make or influence policy decisions to serve their own interests. All calibres of society will need to be represented in decisions that affect their welfare, both locally and globally. The south will be as key in global decision-making as the north. It will no longer be a case of the economic powers making decisions that affect the globe. Government policies will discourage and punish behaviours that would lead to ecological degradation and hamper future sustainability of society through levies such as eco tax and economic sanctions.

 

The sustainable global society will espouse a paradigm shift in the value of life. It will be a society where members are valued for their very existence rather than their economic worth. This will drive a sense of equity and a desire to see one’s neighbour living as comfortably as himself. Members of the society will be oriented to change for the benefit of all.

 

Is a sustainable society possible? What will drive it? Who will be its custodians? As demonstrated by the ongoing global youth campaigns for climate change, maintaining the status quo is not an option. Attaining a sustainable society is a social-political problem. Economists have failed us. Building a sustainable society will require a political class that espouses societal values and does not merely serve capitalists. This will be a calibre of leadership that has the will to enforce the right values across all segments of society and to penalise those who act contrary to the tenets of this common good. It will be a political power that works to build society’s moral fibre rather than to erode it. One that is insulated from the current economic system that currently wields undue power over society and lives in present. A sustainable future society is one that includes everyone.

 

© Felistus Mbole, 2019

Tags:  economics  society  sustainability 

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Will a digital utopia finally come to pass for us all?

Posted By Paul Tero, Tuesday, November 5, 2019

Paul Tero a member of our Emerging Fellows program examines the feasibility of a digital utopia in his eleventh post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

In July 1893, 220 men and women from the relatively new settlement of South Australia decided to start anew and create a utopian society in Paraguay, South America. Although this “New Australia Co-operative Settlement Association” had some quick wins in clearing land, establishing a township and using cattle as one of their sources of nutrition it all fell apart within two years. Despite their efforts, the ideal that this assortment of well-meaning people sought for was beyond them. While examples abound across the globe and across the centuries of utopian projects that ended in disarray, there are others such as the Shaker communities in the 1830’s and the modern Tamera project in Portugal that have achieved success.

 

When it comes to a future digital utopia will the dream be realised like the Tamera case, or will it be another failed venture like the “New Australia” community? Driving these outcomes are answers to several questions. For example, what does this future state look like? What is attractive about it? Do we actually want to live in a society and operate within an economy where “digital” is more dominant than it is today? What of the relationships between business, government and the citizenry? And then there are global considerations – what structure will the interactions and governance frameworks at a geopolitical level take?

 

What form will this anticipated mid 21st Century digital utopia take? Could we attain perfection in employment, in well-being and in society? Regarding employment, one can argue that the technologies of automation and machine learning are laying the groundwork for universal basic income. When it comes to health, advances in personalised medicine could lead to us living in trouble-free bodies. Likewise, with the social sciences, and with regtech and fintech, are we not marching toward more efficient transactions and services as well as removing impediments to social harmony?

 

The Western digital utopian vision may include a freedom to individually pursue creativity and education, but for those across the Asian or African continents the digital utopia may centre on social unity and shared economic activities. While either personal or communal achievement is at the heart of each of these potential future states, individuals motivated by power could well be disenfranchised.  

 

This is where our move to digital ubiquity may actually reconcile competing impulses and world views and realise a digital utopia. For the long-held and default perspective on our atom-centric economy is scarcity. It’s supply and demand. We pay a price in exchange for owning a thing. But in a bit-centric economy abundance is the dominant narrative. This abundance stems from the fact that there is relative little marginal and distributional cost associated with the production of digital goods and services.

 

For example, social media services don’t have limits on the number of people that can access their platform simultaneously. Likewise, there are relatively few limits that can be placed on sources for Internet of Things data. And with the relative price of computer power and data storage always falling, the opportunities of artificial intelligence influencing the natural and social sciences seemingly knows no bounds.

 

It is with this perspective of abundance in a fully digital economy that a digital utopia may well come to pass for us all. While not in the same format for everyone across the globe, but certainly with some common threads and with unique contextualisations dependent upon who and where we are.

 

© Paul Tero 2019

Tags:  digital economy  digital utopia  economics 

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In a digital world does being faster, better and cheaper still count in business?

Posted By Paul Tero, Tuesday, October 8, 2019

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

 

One of the dominant narratives of the business world is that in order to succeed the products you provide either need to be cost competitive, be differentiated in some way, or you need to be quicker to market than others. Will this narrative hold as the economy turns fully digital?

 

Consider what happens today. In order to maintain profitability an external improvement approach may be taken: variations of current products may be offered, or price discounting may take place to increase the quantity sold, or new markets might be opened up. Another approach would be to focus internally. That is to reduce costs and to streamline processes. And a third approach would be to go down the innovation route and develop new products for the same or for different markets. All of these are variations on the faster, better, cheaper narrative. A narrative that holds true in an economy based on atoms, but does it hold for an economy solely based on bits?

 

We can gain some insights into this future state from the transition that is currently underway. This shift can be seen in the increasing proportion of business, of the economy, of even work itself being categorised as digital. Consider some observations. First, the marketing of goods and services. No longer does the maxim hold of “not knowing which half of the marketing budget is wasted”. For with the analytics available from advertising campaigns using social media channels and search engines the marketing budget can be spent more efficiently.

 

And second. What about the potential of big data, machine learning and the internet of things currently being brought to bear on say manufacturing processes, the logistics sector, and on agricultural practices? Finally, not forgetting consumers in all this data processing potential: we can find what we want or need more efficiently among the increase array of choices available to us.

 

Another insight from this transition is the merging of values with business activity. No longer can a company opaquely distance itself from that which is socially unacceptable. Today’s consumers, and even employees, increasingly call out participants in the local, national and global economies for lack of transparency and corporate behaviour at odds with forward looking standards.

 

A final insight is with respect to legal and political matters. Until recent times, the digital economy could be regarded as this anarchic wild-west frontier where the scale of profits was beyond comprehension and regulation was an anathema to the full gamut of stakeholders. But now we are seeing serious discussions concerning appropriate taxation regimes, effective safeguards of personal and private data for business use, and a range of attitudes of governments when it comes to how they use their citizens’ data.

 

So, from one perspective digital technology is making the market more efficient. Perhaps even moving it toward that holy grail of it being a perfect market. Where there is perfect information, sufficient products are available for consumers, and where the lowest cost is the hallmark of all goods and services produced.

 

And from another perspective, digital technology is making the market more transparent. Where the ulterior motives of its stakeholders become clearer and the governance of data is weighted in the consumer’s favour. In other words, there is possibility that a defining characteristic of the market of the future is its integrity. That across the globe the economy operates with a high level of ethics.

 

A fully digital economy, then, has the potential to be described in terms of it being a perfect and ethical economy. And this potential will shape the current dominant “faster, better, cheaper” business success narrative. Where even if you are “faster, better, cheaper” due to the nature of perfect markets long lasting economic rents will be almost non-existent. Where even if your business succeeds by being “faster, better, cheaper” the rewards may well be short-lived if that path to victory was less then ethical.

 

The implication is that “faster, better, cheaper” is becoming “faster, better, cheaper, clearer”. For even if the systems involved in the current transition to an economy based on bits seem opaque, the potential is for all digital economy systems to be fully pellucid.

 

© Paul Tero 2019

Tags:  business  digital economy  economics 

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Can resources own themselves?

Posted By Tim Morgan, Tuesday, September 24, 2019

Tim Morgan inspects the ownership of resources by themselves in his ninth 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.

 

In April 2016 the world’s first decentralized autonomous organization was launched. This crowdfunded organization, aptly named “The DAO”, was a collection of interlocking digital smart-contracts designed to use the Ethereum blockchain to fund investor proposed projects. The only human interactions allowed were voting on new projects by shareholders. All other management activities were conducted according to its founding smart-contract rules. This organization worth US$150 million existed as a purely digitally managed company with no legal charter, no physical address, no board of directors, no CEO, and no human management. It was the world’s first stateless autonomous company. Though The DAO was shut down later that year after hackers compromised it, new frameworks like the Aragon project and DaoStack are actively being developed.

 

Decentralized autonomous organizations (Daos) represent a new stage in capitalism, one that embraces the idea of giving ownership control to non-human algorithmic entities. This is a continuation of a centuries old trend of owners progressively giving up more and more control of capital to managers, corporations, investment funds, and the like. This takes that progression one step further. A Dao controls itself and all the value associated with it. It can have investors. It can pay people for work performed. It could even own physical property if a government chose to charter a Dao as a corporation. We are one legal step from autonomous organizations getting personhood-like rights of a human-chartered corporation. Is it plausible we could take the next step? Can non-human entities have human-like legal rights?

 

The International Center for the Rights of Nature maintains a timeline showing the accelerating adoption of legal rights for nature. Ecuador wrote Rights of Nature into their constitution in 2008. Mexico City put language into its city constitution in 2017 that would “recognize and regulate the broader protection of the rights of nature formed by all its ecosystems and species as a collective entity subject to rights”. There are many other examples. However, one right seems to always be neglected: the right for nature to engage in commerce. That leaves even legally protected natural resources at the mercy of market pressure on governments and the court of public opinion.

 

What happens though if we put Daos and rights-holding natural resources together? What we get are autonomous resources that can become full active participants in markets and the legal system. These “deodands”, as futurist Karl Schroeder has named them, could protect themselves from exploitation by entering into commercial contracts for sustainable extraction of their resources, hiring security, funding scientists to monitor their health, and maintaining lawyers to sue contractual or rights violators. They could even hire programmers and engineers to improve their own decision-making algorithms and sensing technologies as the state-of-the-art progresses.

 

Can resources own themselves? They can if we let them. If we blend a bit of technology with a dash of nature and a smidgen of legal rights, then a whole new level of ecologically sustainable development will be unlocked. Best of all is that markets will be working for sustainability. Their new owners will demand it.

 

© Tim Morgan 2019

Tags:  economics  ownership  resources 

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The Bank of Facebook?

Posted By E. Alex Floate, Thursday, September 12, 2019

Alex Floate, a member of our Emerging Fellows program devotes his ninth blog post to Facebook’s digital currency innitiative. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

When Facebook first premiered their idea for a digital currency Libra in 2019, the reactions ranged from eye-rolling to predictions of a vast conspiracy to control the world. Most pundits could not understand how or why a social media platform would create or need a currency. The calls for regulation or legal action to disallow the notion were immediate.

 

However, within just a few years of introduction, more governments turned to nationalism or authoritarianism, and the Trumpian trade and currency wars of the early 2020’s disrupted global markets. Despite their mutual needs for trade and economic growth, the use of national currencies became a point of contention as the world fragmented into tribes.

 

The group most affected were entrepreneurs in the countries once called the third world. For them, globalization had brought a connection to the wider world of consumers, especially as 7G broadband and localized electrical grids were built out. The initiatives began by the Chinese in the 2010s to build out transportation infrastructure in Africa were bearing fruit by the mid-2020s. Small companies and farmers found they could directly market and ship to global customers. Into this currency void stepped the technology companies that were enabling the global marketplace.

 

Although Facebook was the first to market with a digital currency, Amazon, Alibaba, and a few regional upstarts began using their positions as marketplaces to promote their in-house digital currencies as a means of global trade. They created means to earn additional currency, such as an exchange for personal information, reviews, actions as beta or market testers, or selling and buying on the marketplace. The member could earn additional Amazonians or Alibablers to spend within their respective marketplaces, and even at many outside venues.

 

As the reach of the tech companies expanded beyond supply chains and into services, the ability to negotiate paying for goods in services in their own currencies was greatly expanded. This allowed many companies to offer the option of being paid in corporate or domestic script. The corporate script became highly preferable as the companies offering it were able to better manage it for inflation and deflationary pressures. Additionally, by restricting it from most secondary markets the ability to manipulate the currency via speculation was taken away from those seeking to make money off other’s misery.

 

Companies also created a social scoring like the system China implemented in the late 2010s. This system was more reward than punishment and sought to incentivize behavior in line with the company’s values and social conscience. By allowing the company to track the individual throughout their day, including conversations and actions, the company could determine if they were acting as a good citizen of the planet.

 

When a person’s interactions were friendly, helpful, informative, and advanced civility or relationships, the score could potentially increase. Energy and water usage, recycling, using public or personally powered transportation were also monitored and properly rewarded. The opposite of these positive actions lowered the score. Higher scores were rewarded with extra currency, merchandise, or socially with offers of more prestigious jobs or responsible public positions. By 2040 these new scoring systems had replaced nearly all other methods of determining financial trust for an individual or organization.

 

By the year 2050, most smaller countries had outsourced their treasury functions to either Amazon or Alibaba. For most of these countries the new currencies offered access and stability and an opportunity to grow their economies. Entering the global marketplace on an equal footing allowed many countries to shake off the ‘third world’ label, and this was especially true on the continent of Africa.

 

© 2019 E Alex Floate

Tags:  digital economy  economics  Facebook 

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Who and what is holding us back from a fully digital economy?

Posted By Paul Tero, Friday, September 6, 2019

Paul Tero a member of our Emerging Fellows program discovers the future of digital economy by adding one more piece to a series of blog posts devoted to this topic. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Consider the fields of human affairs in which we are experiencing change. There’s environmental change, shifts in international and domestic politics, technological advances and the constant innovation in the health and human services sectors. Let us not neglect the spheres of finance, education, and governance. The list goes on. Trends, change and drivers of change. All threads in the dynamic tapestry of early 21st Century life.

 

In amongst all of these changes that we are witnessing this article is focusing on one thing. We are examining the unfolding phenomena of the digital economy. In particular, who and what is stymieing the realisation of a fully digital economy in the decades ahead. As we attend to this, we need to be mindful of our own responses to this particular phenomenon. Are we more sanguine, saying: “Yes, bring it on. We will be utterly enmeshed in a fully digital economy by 2050”. Or are we more phlegmatic: “Don’t know. We could be more reliant on the digital economy by 2050!

 

However, asking questions is the key to the examination of the digital economy. Questions like: Who benefits from the status quo and who loses if we go fully digital? What are the social, political, economic, legal, environmental or technological barriers to realising a fully digital economy? Are cultural worldviews and belief systems the obstacles in the path to building an economy that is fully digital?

 

Turning firstly to the status quo. Benefiting from the status quo are those whose influence, power and profit are founded on the world of atoms. If these attributes of prominence do not translate to the world of bits, change is resisted. Remember the retailers of a few years back? To them the internet was but a passing fad. They saw no need to embrace the digital economy.

 

Our reference point for an examination of the social barriers could be the introduction of Facebook. Once Metcalfe’s law kicked in, ordinary people could see the inherent value in sharing their lives online and overcame their reluctance to enter their personal and private details into the Facebook database. Turning to one potential aspect of life that could be with us in the time ahead: personal artificial intelligence assistants (we do have Alexa, Cortana & Siri now don’t we?). Our uneasiness with being second guessed ahead of time by artificial intelligence may be rendered moot because of the value and ease these new machines bring to our lives, relationships and careers.

 

And what of the governing class and the way political life is conducted. Is it because of the Machiavellian dictum “never attempt to win by force that can be won by deception” that political barriers will remain? For with this category of barrier the perspective that “a fully digital economy is equivalent to full transparency” may well be the non-negotiable impediment raised by its stakeholders. An anathema to the political class.

 

And what of legal barriers? Consider the difficulties presented by cryptocurrencies, the machinations we have with privacy in a digital world, and the conundrums with copyright. And let us not forget the implications of RegTech, the jurisdictional challenges faced by taxation authorities in this digital world, and the quagmire at the interface of human bodies and technology.

 

Finally, there is who we are as individuals, as members of families, communities, tribes and nations. All revealing a rich and complex global panoply of worldviews and belief systems. We can conjure images of dystopia, pockets of doomsday preppers, and activists driving the techlash movement. All as symbols of resistance to a fully digital economy. And similarly we watch the countervailing forces of progressives and conservatives. Progressives seeking a better way, conservatives seeking to only incrementally improve the way things are. And then we have the reactionaries who are bent on impeding any forward movement that the forces of improvement show.

 

Given all this, is it any wonder that we have so far been able to thread the needle of change. Is it any wonder that the quality of so many parts of our daily life for so many lives is better than what it was decades ago? There is no single “who” or “what” holding us back from a fully digital economy. But there is this: a multitude of challenges that are to be overcome on our collective arc of accumulation.

 

© Paul Tero 2019

Tags:  digital economy  economics  finance 

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Is automation the commons of the future?

Posted By Tim Morgan, Friday, August 23, 2019

Tim Morgan investigates automation as the new commons in his new 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.

 

Elinor Ostrom is the only woman to win a Nobel Prize in Economics. She showed how the combination of shared governance and social feedback loops create stable resource management systems. She identified eight design principles which every stable local common pool resource organization follows. These promote shared social management of an economic resource, preventing the so-called “Tragedy of the Commons” of resource depletion.

 

Modern computing infrastructure is founded on use of openly shared code and community created protocols. This Free & Open Source Software (FOSS) ethos quickly expanded with the rise of the Internet to include writing, art, music, videos, and designs. Each license legally protects copying, modification, and use; but only if the resulting works also stay under the same open license. This guarantees that selfish actors can be legally punished if they try to hijack the works. It creates in-toto a classic self-governing common resource pool, ala Ostrom.

 

The infinite copiability of digital knowledge promotes a set of social values which govern the growing global knowledge commons. They assure that its value is always accessible to anyone with network access. Because data is cheaply and infinitely copiable, strong feedback loops reinforce using knowledge technologies for problem solving. This increasingly seduces the private sector into greater dependency and sharing arrangements instead of traditional ownership. The Public sector similarly becomes more permeable and malleable as it becomes more interconnected.

 

This growing automation-created knowledge commons is creating huge social, political, economic, and technological upheaval. We see authenticity and quality of experience replacing material ownership and cost as core product values. We see it using social pressure and economic engagement to solve problems like increasing ecosystem damage or socio-economic inequalities. We see it merging virtual and physical reality in the form of augmented reality, Internet-of-Things, haptics, robotics, A.I. knowledge assistants, and neural prosthetics. We see it spurring development of new materials, technologies, and processes for an emerging sustainable Circular Economy.

 

What we see is the emergence of an adaptive automation-enabled socio-economic system which uses all the levels of society together as an integrated whole. It is a new social ecology. It is rapidly iterating around its connections and knowledge space, trying to find complementary trophic-like flows between communities, institutions, markets, and the networks themselves via automation. Each sector is refocusing itself back into its core area of expertise in response. The Civic sector is increasingly refocusing on supporting families and local concerns. The Public sector is sluggishly refocusing on shepherding slower layers of society like infrastructure, public health, safety, and economic stability. The Private sector is reluctantly refocusing on creating customer value within a changing social context. The newest sector, the Social Commons, is emerging as the response mechanism for identifying and connecting areas of concern within the other sectors. It is the social governance arm of the global knowledge commons.

 

This rebalancing is moving civilization towards a biologically, socially, and technologically integrated system of systems. As each new sustainable niche evolves, we get closer to a globally sustainable whole. Our new global knowledge commons is not a single thing. It is an adaptive, integrated whole. Is automation the new commons? It is, but one we have never seen before. It is one that wants to look and act like nature itself: balanced, dynamic, adaptive, and evolving. It wants to be a new thing: an Abundant Commons.

 

© Tim Morgan 2019

Tags:  automation  commons  economics 

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Has an Aging Population Impacted Corporate Shareholding?

Posted By Charlotte Aguilar-Millan, Monday, August 5, 2019

Charlotte Aguilar-Millan inspects the impact of aging on corporate shareholding in her 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.

 

Corporate shareholding is affected by what ideologies generational cohorts have. In the current year, 2019, we see Baby Boomers, those born between 1946-1964, at their peak corporate shareholding. This is because they are now at, or near, retirement age. Once retirement age hits, corporate shareholding starts to unwind as individuals cash in shareholding for retirement income. This is likely to peak for Boomers in the early 2030s. With this peak enters a new phase of corporate shareholding by Generation X, those born in 1965-1976, but more prevalently by Millennials, those born in 1977-1995. However, with this new phase of investing comes a different ethos. 

 

The term “ESG” - environmental, social and governance - was first coined in 2005 as a result of growing expectations that Corporates need more transparency and a documented moral compass. These new requirements ensured that Corporates had to demonstrate transparency including how they are responding to climate change as well as how they treat their workers. From 2005, this has grown to represent roughly 25% of all investing activities. Corporates have incorporated ESG into their operating model. An example of this can be seen from Tomás Carruthers, former CEO of Interactive Investor, who launched “Project Heather” in 2018. His aim is to build the first regulated investment exchange to be focused on businesses that are making measurable positive social and environmental impact.

 

The rise of ESG investing has not meant that the format of investing has remained consistent. Public trust between generations is in decline. Where Boomers were happy to select individual stocks from a stock exchange, Millennials do not invest in this manner. With the average age of homeownership increasing, in the UK it is currently around 32 years old, the point at which a Millennial can start investing in stocks and shares has shortened by a decade to their previous generation. As a result, Millennials seek to locate trustworthy investments given they have a shorter period than previous generations to save for retirement.

 

The growth in private equity is providing Millennials with this platform. Private equity backed companies in America grew by 300% between 2000-2018 while individual stocks declined by 43%. Millennials see that with private equity, an opportunity is given to smaller companies for growth without the time and expense drain of becoming listed. This in turn can stimulate the economy with innovative ideas that might not be realised without funding. Millennials have also seen the rise of the “unicorn” within private equity where a company is valued at over $1billion making it an enticing return opportunity. 

 

For markets to expect Millennial’s investing strategies to be the same as that of the Boomer’s is complacent. Millennials have grown up with a higher scepticism and lower trust environment than their previous counterparts. They are not expecting a golden retirement. Instead, they look to impact investing to create an ethical environment. With an aging population brings forth a new phase in those accumulating and investing wealth. This in turn will have a significant impact on corporate shareholding.  

 

© Charlotte Aguilar-Millan 2019

Tags:  aging  economics  shareholding 

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Will Fintech Change the World of Finance?

Posted By E. Alex Floate, Thursday, August 1, 2019

Alex Floate, a member of our Emerging Fellows program checks the possibility of changing the world of finance by means of fintech in his seventh blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Fintech was coined as a phrase in the early 21st Century that described the internet enabled finance technology that began to appear. Later it came to describe the whole of the financial technology sector, and a buzzword analogous to ‘invest in us – we’re on the cutting edge’. Others then began to see fintech as a gateway to a post-capitalist system in which fintech will democratize finance and save the world in the process. These enthusiasts were literally banking on fintech igniting the forces of creative destruction that would bring down the old order of labor, land and capital and replace it a distributed tech model based on individuals, information and abundance.

 

Creative destruction is a concept dating back to Marx that capitalism will continually destroy the existing order to create new value and wealth. Creative destruction is caused by innovation which undermines the status quo, and de-values anyone or anything that continues following the old order, including skills, desires, function and capital. During Marx’s time this was the new industrial barons destroying the value and wealth of the landed gentry through commoditization. More recently technology entrepreneurs have unseated the established industrial conglomerates by expansive use of information.

 

Obsolescence and replacement are not confined to direct replacement of the new technology but can endanger whole systems. For example, the inefficient neighborhood grocery store within walking distance of its customers fell prey to the technology of the auto; it was now easy to drive to efficient and cheaper supermarkets. Now we see even those supermarkets and stores falling prey to the technology of the internet. Creative destruction in action. Is fintech a technological revolution causing the next evolution of capitalism?

 

That is the hope of those who see fintech as the democratizing influence on finance and capitalism. The use of fintech allows individuals around the globe access to information, platforms, cheaper capital, and stores of value without needing expensive intermediaries or even beholden to any one currency. By breaking the back of the old finance system, the new decentralized one will be distributed across the population. Fans of Austrian economics will rejoice as fintech skirts around regulations and allows individuals to choose where they access and store capital, at what interest rate they want, and in whatever electronic currency that best suits their needs.

 

But, fintech fans appear to underestimate the reaction that vested interests of governments, financial institutions and current technology leaders have in either blocking, slowing or hijacking this new round of creative destruction. Governments especially will see this new order as a threat that previous iterations of change lacked, as it will challenge their ability to regulate and exercise financial authority over their own economies. We are already hearing the mumblings about regulation of Bitcoin or attempts to thwart Facebook’s plan to create a digital currency. The fintech wars will truly be unleashed once a digital currency appears at enough scale to challenge the largest currencies. That most likely will be the Rubicon that needs to be crossed before governments fully assume a war footing.

 

Before that occurs though, the most likely scenario is an alliance of current financial powerhouses, tech companies and both groups pocketed lawmakers stepping in to create conditions that allow much of fintech’s promise to be purchased and assimilated. Until then fintech will be a race, not a war, to see how fast it can advance. The race will be to provide people the power of its promise before a behemoth financial Borg assimilates it and leaves the people as powerless as they were before.     

 

© 2019 E Alex Floate

Tags:  Economics  Finance  Technology 

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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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