Sunday, March 30, 2008

Capital markets evolution

A confluence of factors is impacting capital markets: first, the repeated failure of traditional financial markets (“Fed puts lipstick on Bear Stearns’ pig”) to provide capital and accurately-represented non-fraudulent investment products and their subsequent bail-out by taxpayers, second, the great shift in cultural attitude towards sustainable and socially responsible capital use (“Global 100 Most Sustainable Corporations” and “Beyond the Green Corporation”) and third, the inexorable expansion of technological capability and the entrepreneurial ideas that exploit it.

Business Model Spectrum
The expansion of technological capability is allowing business models to evolve and expand and is the topic of long-tail meme-founder Chris Anderson’s new book, Free. Digital business costs such as bandwidth and storage have become so inexpensive that it is essentially free to provide an increasing number of web-based services. Some of the new business models include:

  1. Alternative monetization - competitive pressures suggest offering services for free and monetizing other aspects such as attention (traffic) and reputation (links).
  2. Freemium - a combination of free plus premium services. It may be in the open source software model (free software, fee-based up-sell for implementation, customization and support services) or the flickr model where the small group of paying customers (1%) subsidizes the free offering for the others (99%).
  3. Indirect model – a wider application of third-party supported offerings (formerly TV and radio, now search engines, website content and sponsor and gambling-supported free Ryanair flights).
Consumer Financial Services 2.0
Context, culture and appropriateness are important properties of social networks. FaceBook, MySpace, LinkedIn, Pownce, Jaiku and Twitter are not the place to talk about money but financial social networks are.
It is quite possible in the future that social networks will be the accompanying community feature to any website or topic area.
Finance 2.0 websites offer financial services and a venue to create and interact with the user community around them. For example, Wesabe, Expensr, Mint and Geezeo provide expense aggregation and management. NetworthIQ, Boulevard R, and Zecco provide investment and financial planning services. Several of these Financial Services 2.0 companies are being featured at conferences such as O'Reilly Media's Money:Tech, BarCampBanks and Finovate. As with many technologies, age-tiering is apparent as under 30s enjoy the benefits of aggregated financial services while those over 30 await a higher level of security. Yodlee and BITS are working to establish industry standards for financial information access via tokens and credentials, similar mechanisms will be needed for digital health information.

Sunday, March 23, 2008

Post-scarcity economy

The long-term future economy is a post-scarcity economy (PSE), where substantially all human material needs are easily met at low cost or for free. The term post-scarcity economy is a bit of a misnomer since only the scarcity of material goods is likely to recede. The economy itself and scarcity as an economic dynamic will probably persist, for example, scarcity of time, energy, processing power and creative ideas.

The future economy will likely be realized in phases. Some material goods would be replaced or provided at near-zero cost at the outset, perhaps certain classes of items or goods like fuel, then more items such as food, then substantially all material goods. Fancier items like high-end designed objects and medical treatments would probably not be available in the earlier phases.

What will happen to services as material goods are increasingly provided at minimal cost? Initially services would be unchanged, but over time, nearly all current services could be replaced by technology-advanced near-zero cost alternatives. As Josh Hall suggests in Nanofuture, nanobots could provide daily hair-trimming and nano-foglets could create new hairstyles on demand. Robots are already available for lawn-mowing upkeep (Robomow). Telemedicine could be used for medical diagnostics and treatments. Artificial Intelligences (AIs) may be consulted for tax and stock advice.

Over time, public services such as police and fire protection could be provided by trusted AI networks and other mechanisms. Wireless sensor networks and cams may shift the nature of crime and policing activity. Future building materials may be impervious to fire and possibly self-reconstruct following earthquakes or other damage.

New virtual and other non-traditional services requiring intelligent attention from AIs or human minds, particularly in providing entertainment, learning and means of interesting and productive engagement, will probably be a growth area. The future economy will likely be transacted with multiple currencies, a variety of monetary currencies and additional supplementary currencies such as time, attention, intention, reputation and ideas.


Sunday, March 16, 2008

L'art et la science

One third of the attendees at this weekend’s SciBarCamp in Toronto were visual artists and musicians. The aim of the event was to not only be the first Science BarCamp but also to bring together artists, scientists and technologists.

Impetus for Collaboration
Some assumptions about art and science seemed to underlie the conference sessions. The main assumption was that artists and scientists should collaborate, not just inform and inspire each others work, but collaborate. There was also the assumption that artists are interested in science and technology and in being involved as science and technology become more pervasive in society. Another assumption was that art-science collaboration is somehow quite obvious, necessary and desirable in ways that art-politics, art-economics, art-markets, art-education, art-sports, etc. are not.

Why would collaboration between art and science be obvious and natural? Abstractly, there seems to be some overlap in the goals of art and science regarding the need to create, explore, probe, understand, explain and inspire. Both also have a degree of inherent universality, a need to communicate and a use of concept and metaphor.

Concretely, there are other reasons why a collaboration of art and science would be natural:

  • To provide useful information display of scientific results, even if only to scientific audiences, particularly given the very large and very small scales at which contemporary science is conducted
  • To respond to the hastening pace of science and technology change making the role of artists as interpreters, translators, experiencers and arbiters more imperative. Artists have a key role in the discussion of science and technology’s impact on life and culture
  • To facilitate the increasingly audio-visual multimedia world of today with streaming video, 3d web and virtual worlds all seeking innovative data display tools and metaphors

Towards meaningful collaboration…

Would an art BarCamp work? ArtBarCamp could be a standalone event or co-located at BarCamps or SciBarCamps. ArtBarCamp could have an emphasis on doing art in workshop formats, experiencing different kinds of art and talking about art. TED and SciBarCamp include artists and the audience has an opportunity to experience art, it would be wonderful to create art as well.

Sunday, March 09, 2008

Amores circuitos

The potential replacement or supplementing of humans by advanced robots or androids for love and sex is not shocking, it is preferable. It could be more satisfying for everyone, sexually and emotionally. Just as the simultaneous relationships of polyamory require a more mature level of self-knowledge and interpersonal communication, so too could synthetic partners take human skill sets to a whole new level. What would it be like to have a relationship with an AI that knows you better than you know yourself?

Sex with robots is far more efficient, it avoids the whole search problem and many other problems. Randomness, variability, and exploration are lauded, applauded and possible, not shunned and shamed. Not to mention far more acceptable than being gay or non-mainstream sexually in any way in current society.

Adios taboos. How could sex with robots be avoidable in a society demanding ever higher levels of self-expression and fulfillment?

There are too many other dynamics in interhuman relationships for ongoing sexual fulfillment, a quick glance at craigslist will easily confirm this. Sex could become like going to the bathroom, something most people prefer to do alone without other humans around. It is very personal.

Sunday, March 02, 2008

Future of market mechanisms

Information is increasingly free. This is causing well-established economic paradigms to reshape, expand and be supplemented to reflect this shift. One example of a new market norm is the open-source software model of free software and fee-based services to implement and maintain the software.

Free access to information pushes the bottleneck higher up the scale to a less entropic, higher resolution value point. What is now valuable is how information is used, and the creation of new information.

Value Creation
An increasing level of productive activity is coming from the many activities people do that have value but are unrelated to their compensated activities. This productive activity is starting to impact and deliver value to others in unprecedented ways. It has not been measured and is outside of the traditional economy. How can these activities be explicitly valued and exchanged via monetary or non-monetary currencies?

Complementary Market Mechanisms
Non-monetary currencies for attributing value initially started with reputation. Now they are becoming more rigorous in their assessment of value and are being used for exchange. Some of the new market mechanisms include attention economies, open money (related event: unMoney Convergence), time banks, social capital markets (related event: Social Capital Markets), open capital and prediction markets.

Transition to a post-scarcity economy (PSE)
A rich pathway to the future involves creating a multi-currency culture to support the different areas in which value is and will be created: finance, ideas, time, information, action, etc. Financial or non-monetary derivatives could be created on top of the new currencies. Imagine a call spread on community cleanup time!

Having multiple currencies would not only reflect the current and near-future state of the world more accurately but would also be good defensive positioning for future volatility and uncertainty regarding technological development and adoption.

Evolving to a multi-currency culture could ease any potential future transition to a post-scarcity economy (PSE) as traditional money will be only one recognized store of value.