Friday, March 30, 2012

Attention is the first resource that we will run out of

We create all this stuff, but we can barely find the time to use it – because we are so busy creating even more stuff.

And now the economy is crashing and unemployment is rising because we can’t consume fast enough to keep production growing.

It’s seems that the first resource, which we are running out of is attention. We can’t overcome to consume enough to keep up growth.

It’s a weird, backward logic – but it’s real, for now.

The more we have, the less we appreciate additional growth. It takes more to make us happier – while on the other hand, we need to run even faster and put even greater strains on the planet’s resources to increase consumption.

At some point it implodes, when gains are clearly losses.

Saturday, March 24, 2012

Quality is subjective, what is quality can change

Quality is subjective, what is quality can change. A few examples come to mind:

- It used to be that music lovers were really concerned with hifi sound quality. These days we gladly accept bad mp3 quality through lousy earbuds for the convenience of having anything we want anywhere, anytime.

- ”Handmade” used to be an indication that something was made in a more exacting way, but these days lots of stuff can only be made by robots. Humans don’t have the consistent precision required to make our gadgets.

- Price and quality are not necessarily correlated. Google is free, like Facebook, YouTube et al.

Friday, March 23, 2012

Looking for a new capitalism

A good quote – by Gary Hamel, from his foreword to Umair Haque's book “the new capitalist manifesto”:
“We know the future cannot be an extrapolation of the past. As the great-grandchildren of the industrial revolution, we have learned at last that the heedless pursuit of more is unsustainable and, ultimately, unfulfilling. Our planet, our security, our sense of equanamity, and our very souls demand something better, something different.
So we long for a kinder, gentler sort of capitalism – one that views us as more than mere “consumers”, one that understands the difference between maximizing consumption and maximizing quality of life, one that doesn’t sacrifice the future for the present, one that regards our planet as sacred, and one that narrows rather than exploits the inequalities in the world”.

Visions with a small "v"

Tired of big breathless visions. I don’t know where to start. I’m looking for a few small visions, visions with a small “v”.
Small steps, small bets, but real.

Thursday, March 22, 2012

Teaching for the future

You really need to see Salman Khan's TED presentation of his amazing Khan academy and the idea of flipping the classroom by making kids watch instruction videos on their own, and then doing what used to be "homework" in the classroom, assisted by the teacher.
The Khan academy has developed some great digital tools to track the progress of each student and to ensure that the student can learn a topic in a coherent fashion, rather than jumping on to new subjects before having the foundation of understanding that's needed.
Indeed, this seems to be a glimpse of the future.
And if you liked this; check out the "School of one" project in New York. Sort of similar, and apparently with great results too.

Friday, March 16, 2012

The solution will be shared

In my last posting I concluded that, on balance, sharing is becoming a more attractive strategy for growth than trying to conquer resources from others.

And so what?

Well, it has a number of consequences:

For one, defaulting towards sharing takes a different mindset than what most of us have been brought up with. The past three decades have been an era of individualism, classic liberalism, and a belief that greed is good because the invisible hand of the market will sort it all out.

Sharing is an act of individual surrender. You bet part of your resources and some of your sovereignty and control on others. You chose to trust that together you would achieve more, than you could have done on your own. You could be ripped off and cheated, the project may not work out, others can free ride and leave you with the bill… There are risks, and not necessarily any guarantees.

You lose some freedom by joining the community. You can be held accountable, you have to follow rules, others may not vote for your ideas.

If you are strong, it may not be obvious why you would want to depend on a community.

But, you may not really have a choice. In so many areas, our fate is shared, whether we like it or not. The global ups and downs are increasingly linked. As the global finances go, so will you. Likewise with social unrest, climate change, and a functional biosphere; you are affected by the actions of others, and you affect them – in ever larger and tighter connected systems.

Whether you are an individual, a company or even a nation state, you can’t go it alone anymore.

Sharing and co-creation is becoming ever cheaper and more powerful. Increasingly, those who chose to go alone, will not be able to compete and thrive compared to those who are capable of cooperating and creating community.

And ultimately, if each of us simply try to keep growing in a finite world with an increasing population, the system will crash for everyone. That possibility is uncomfortably real.

IMHO we cannot go on like we have done so far. At some point, soon, we need to find some solutions. I think they will be based on sharing, on community – despite the imperfections.

Two ways of growing: Taking or sharing

It seems there a basically two different ways of growing:

- You can acquire more of something that already exists – in some cases by taking it from others – or:

- You can combine your resources with the resources of others, and, with a bit of luck, something extra and completely new will emerge through your interactions.

In other words: you can play a zero-sum game, where resources are finite, and your gain is someone else’s loss – or you can enter a non-zero-sum game, in which the entire pool of resources grows for all participants.

It’s a classic dilemma: Should you try to make the most of the situation for yourself, or should you share in the hope that you will be better off as part of a community.

My argument would be that we are moving towards more cooperation. It’s generally becoming a better deal to share.

Two trends in particular are changing the balance:
1)There’s a growing scarcity of resources, and 2) we’re increasingly connected.

Consequently, we are becoming much more interdependent – and I think that we are all becoming more aware of this reality.

We’re clearly approaching the limit to how much strain we can put on nature’s resources. The planet was once infinite for us, now it’s getting tight, so the battle for resources is evident - as the rising prices indicate.

This situation will only tighten. As we move along, we can either try to conquer from others – or we can cooperate to develop smarter ways of creating utility, expanding our possibilities through shared innovation.

One could argue that cooperation and sharing is how new true growth can happen. This is the amazing and hopeful insight of complex systems; that in the interaction between the elements of a system, something completely new can emerge – something, which is more than the simple sum of its parts.

It’s like magic, yet it’s completely normal, and it’s what drives this whole evolution onwards to new levels of complexity.

We need that kind of growth desperately these days, and luckily, it’s becoming much easier, cheaper, faster and efficient to share – not least because of digital networks, but also thanks to roads, shared language and culture, technical standards, trade agreements etc.

Furthermore, the fact that a large part of the value of our economy resides in bits means that in a great deal of our interactions, we don’t have to give up what we have when we share it with others. The cost of sharing is falling, as is the cost of connecting to others.

All told, there are strong indicators that sharing is becoming a more attractive strategy.

Is it productive to consume?

What does "productive" mean, anyway?

Friday, March 09, 2012

Value and price are not the same - we should keep it in mind

We often use “price” and “value” as if they had the same meaning. But when you dissect them, there are several areas where it’s important to keep in mind that they are different.

GDP is one. It’s almost banal these days to point out that measuring a society’s wealth in terms of GDP – simply the economic activity – is misleading. There are other factors, which contribute to the true wellbeing of an economy – there are other values than money.

In the industrial age, with its focus on physical objects – atoms – scarcity determined the price. Exclusivity made stuff expensive. These days the economy is increasingly based on information – bits. Bits are different than atoms. Their price may be low, but when bits are shared and widely distributed and used, their value increases.

When you recycle or reuse an object, value is created, but in purely economic terms it’s a loss, compared to simply throwing the old away and buying a new.

Many people can report about the rise in quality of life that comes from getting a job so close to their home that they can bike to work. When you don’t need a car, you spend a lot less, but in this case you experience an increase in utility and pleasure. This illustrates a decoupling between growth in value and growth in revenue.

Finally, price and value do not grow in sync. It’s the old 20/80 rule again: You can often get 80% of the value for 20% of the price. The last 20% of value is much more expensive. The higher you are already, the more expensive it becomes to achieve the next marginal increase in value.

This is colossal!

This is the most interesting and entertaining site I’ve come across in quite a while - Colossal presents art that is very close to my liking: modern, colorful, high tech, quirky, fun, beautiful. There’s just a lot of great stuff, day after day.

Colossal is the project of Christopher Jobson – based in Chicago. This is how he presents the site himself:

”I like to describe Colossal as a blog that explores the intersection of art, design, and physical craft. I enjoy artwork that is tactile, physical and non-digital in nature, especially sculptural work and installations that use impossible numbers of components, or sequences in a process. During the course of a week you’ll find roughly 30 posts on photography, design, animation, painting, installation art, architecture, drawing and street art. I share things that I feel are accessible to everyone, requiring little explanation or theory, so in that sense, I hope people not involved directly in the arts can also find this site engaging”.

Virtues of the formal economy: There are reasons for having taxes and regulations

The ideas of the ”mesh” economy and ”collaborative consumption” are to create services built on shared access and shared maintenance of goods. Lots of businesses are based on this: Hotels, rental cars, car sharing, and airlines… What’s new is how digitization, urban density and a tight economy makes it possible to share many more things: Tools, sports equipment, car rides, little chores like shopping or assembling IKEA furniture.

In a sense it is a very efficient market: if someone has idle capacity, it can be offered to others and used easily and quickly and with a minimum of regulatory hassle and paperwork. Wonderful!

However, there are a few dilemmas that arise as the exchange becomes less formal, and you start doing a lot of peer-to-peer exchange and bartering.

In many ways it's the good old moonlighting economy, but digitally enhanced – and the trouble with moonlighting is that you can’t collect taxes from it, and there’s no way to enforce society’s normal regulation.

So, if you believe in having a well functioning and adequately funded public sector, good roads, public healthcare and education – or if you believe in regulation to keep track of pollution and unsafe working conditions – or if you believe in trade unions to protect decent wages and blatant exploitation of those who are too weak to negotiate – well, then you might feel that a growing informal sector is undermining the rights that others have fought hard to ensure over the past century.

It’s a paradox that the mesh economy is seen as a way of strengthening local communities and building stronger social interaction – but at another level, you can argue that it short-circuits the building blocks of society as a whole.

I have no doubt that the current commercial system, and our current way of regulating business and interactions is too rigid and often counter productive. Mesh-style initiatives are needed to challenge and explore.

But going local shouldn’t mean ignoring your obligations to contribute to society at the greater level.

Monday, March 05, 2012

Business models for wired objects

It strikes me, that as every object gradually becomes equipped with computing power and net connectivty, we can extend to all industries, the distinction used in the computer industry between hardware and software, and within software between the operating system (OS) and the specific applications.

In hardware, new products and features are quickly copied and adjusted, and over time a product tends to become a commodity, where the only differences between makes are in the price. Also, despite the talk about mass customization and 3D printing, physical manufacturing belongs to the industrial age of mass production. High volume of identical stuff means lower prices – for now.

Software is different. Bits are live, fluent. It’s in their nature to be modified, recombined, individualized etc. The bit business is about processes rather than products. Value comes from change, and from matching the user’s context exactly.

But there are different types of bits: Some software is the OS: The protocols, standards, interfaces and basic functions, that the more specifics apps can run on. Crucially, the more devices use the same OS, the more diversity you can achieve in the apps that will be available.

So there is a progression: The physical device is a platform, which supports an OS, which in turn supports the apps.

As more objects are equipped with computing power and network connectivity we will see the same progression in every industry. Whether it’s cars, classrooms, hospital beds or thermostats, there will be a physical platform of objects that functionally are very similar. There will only be a handful of manufacturers on the market, and their margins will be razor thin.

Even though end-users have more or less the same physical equipment, they will have very different experiences, because the processes that are running on their devices are very different. We all have the same smart phone, but the feel of each phone is very personal.

This is a useful observation, because it allows you to understand better how there are different business models and different logics at play in the market – not just in computers, but generally.

When we think about the trend toward mass customization, we need to distinguish between the physical object and the processes it supports. Physical objects can be customized by running different applications on them. Physical products are cheaper when you produce them in large volume, but the software they are running can be individualized at very little cost. For manufacturers, these are very different games.

The OS layer is particularly interesting, because this is where the most power and profits reside.

There are very powerful lock-in effects at this level. Everyone benefits from standards, so once one system is established as the dominating solution, there will be a strong trend towards monopoly – witness Microsoft, Google, Facebook.

The problem with monopolies of course, is when the benefits to users from standardization and mass production are outweighed by high prices and lack of innovation when the dominating brand isn’t kept alert by competition.

… And you could go on to describe the relations between producers of apps and those owning the OS, or the relative importance of the physical device and the OS…

The main argument is to point out, that this division of roles and business models will extend to almost any kind of objects, as everything becomes wired.

Sunday, March 04, 2012

The City of Samba - tilt shift movie from Rio Carnival

A nice little video shot at the Rio Carnival. The tilt shift technique makes you aware how unreal it all is.