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How Public Services entered a Competitive Market with the Fourth Revolution

We used to think of public services as activities outside of the competitive landscape. That’s maybe true in a country, but the new situation brought by the Fourth Revolution is that’s not true anymore: public services are in competition between countries.

Tax rates OECD 1981-2012 — This schematics of effective corporate tax rates in the OECD shows the effect of competition between public services in the past 30 years (source: taxfoundation.org)

Effectiveness, performance of public services is today the most important competition parameter when it comes to economic performance. Countries that are not good at it do already suffer on the global market. In addition this competition puts a lot of pressure on tax rates (in particular at the corporate level) impacting further those countries which public services are ineffective.

The problem is that because this competition is somewhat remote, public services often do not realize this new situation. Finding a way to show them how competition is impacting the national welfare should be a great incentive for improvement. Unfortunately, defensive reactions against globalization often impede these discussions.

Yes, public services are now on a competitive market. They need to increase their effectiveness for the sake of national welfare. Let’s not shrink from it, and just realize that this situation will be even more real in the Collaborative Age!

Are We at the Edge of Another Spiritual Awakening?

Kevin Kelly notes about the birth of the religions we know today that they have all appeared around the same time, when agriculture was sufficiently developed to generate abundance.

“About 2,500 years ago most of humanity’s major religions were set in motion in a relatively compact period. Confucius, Lao-tzu, Buddha, Zoroaster, the authors of the Upanishads, and the Jewish patriarchs all lived within a span of 20 generations. Only a few major religions have been born since then. Historians call that planetary fluttering the Axial Age. It was as if everyone alive awoke simultaneously and, in one breath, set out in search of their mysterious origins. Some anthropologists believe the Axial Age awakening was induced by the surplus abundance that agriculture created, enabled by massive irrigation and waterworks around the world”

When the Industrial Revolution came with printing, these religions branched somewhat with for example, Protestantism for the Christians.

He continues: “It would not surprise me if we saw another axial awakening someday, powered by another flood of technology“. The conclusion of that observation should shake us. Is the spiritual awakening we can observe around us just a trend or is it a deeper movement linked to the Fourth Revolution? I tend to believe in the latter, and I am excited to see how that will materialize in the years to come as we move into the Collaborative Age.

Why We Underestimate the Change Brought by The Fourth Revolution

It all fits into an interesting quote by Bill Gates: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten“.

That quote takes a particular taste coming from a person that is deemed to have missed, when it comes to Microsoft’s strategy, many of the key changes brought by technology in the last decade.

Our forecasting ability is exceedingly limited. Change takes it time to transform the world, but it will roll on inevitably. Today, I believe we totally underestimate the changes in our daily life, our institutions, our organizations, that are being brought by the Fourth Revolution. These changes will be tremendous. As Gates says, let us not being lulled into inaction, but let us anticipate what is coming. It is only at this condition that we will benefit from it.

Change starts now. When do you start?

How Battery Technology is the Unrecognized Key Collaborative Age Enabler

We take for granted the small parts that power most of the devices we use – long lasting, rechargeable batteries. Still in some sort, battery technology is a key enabler of our modern way of life, and technology progress has been dramatic in that field. And more is to come as the total capacity of batteries increase and could change electrical power distribution overall.

Batteries power all our portable devices, giving us freedom of movement like never before. Our devices become increasingly long-lasting and powerful, allowing us to work, entertain ourselves, and communicate from wherever we are. In a way they enable the Fourth Revolution by removing the constraint of localization close to a wired network. In Africa they power mobile phones which are the only way to communicate effectively. Battery-powered cars also become increasingly a possible mainstream technology for moving around.

There is more: Industrial Age electricity generation technology did not involve storage of power which required to maintain at all times, equal production and consumption on power grids, leading to issues as daily consumption is highly variable depending on the time, weather and day of the week. This is today a limit to the development of ‘green’ power sources as wind and solar power is highly variable and somewhat unpredictable. Increasing their share on the grid leads to substantial issues for the grid managers – sometimes adding more windmills requires adding more fuel and coal power stations to have extra capacity to cater for peaks in demand and slumps in production!

tesla battery — Batteries in everything – the Tesla car battery

With ambitions to build megafactories for batteries, that may change as well. Elon Musk’s announced strategic move to build a ‘Gigafactory’ is controversial. But the fact that the idea to increase production capacity (one single factory to produce more battery capacity than the current total worldwide production!) to lower the cost of batteries is in the air – and, provided the availability of raw material follows, will change significantly the landscape of power generation as well.

Batteries – the small, discrete technology that is changing our world more than we would ever realize!

How Nature Always Reminds Us That Rare, Short Catastrophic Events Shape the World

In many natural science domains, we increasingly become conscious that in nature, 95%+ of the change we observe comes from short and intense phenomena such as storms, floods, earthquakes.

For example in the study of erosion, rivers shapes and material that is then transported by rivers such as boulders, it is very clear that rare storms and floods are the main contributors to the shaping of the riverbed (and sometimes, to the destruction of some man-made structures that tempted to tame it). While most textbooks still present erosion as the continuous work of air and water over millenniums, in reality, most of the work has been done during much shorter periods -days- of intense flow.

It does similarly happen in the world that surrounds us. Most of the changes come from unpredictable, short and intense moments, which we often call crisis (or also, in the field of society, revolutions). Crisis create the conditions for re-shaping our society, our economy, our organizations. Our duty is to protect ourselves and our loves ones against those crisis, and also to take advantage of them when they happen – because ultimately it is those rare events that shape our environment.

New Africa Mobile Phone Statistics – Expect the Fourth Revolution to Spread Like Wildfire

Gallup published some extremely striking statistics of mobile phone penetration in Africa. In most African countries, more than two-third of the households have a mobile phone in 2013!! And in a number of countries that can be considered to be quite poor (Uganda, Ivory Coast etc.), more than 75% of the households have one!

This is an incredible penetration rate which shows that today, owning a mobile phone is probably considered to be a basic need by most of humankind.

It is also a sign of hope that access to significantly better communication capabilities will foster the development of Africa economies.

The other statistics that is extremely interesting in this paper is the following:

This confirms that mobile phone ownership is considered a must even by the poorest and that it is not just a fancy equipment for rich people. A Revolution has started. We probably have not seen its consequences yet, but it is coming. And it will surprise us.

How the Fourth Revolutions Enhances the Power of Weak Ties

The Fourth Revolution value creation is all about releasing the power of weak ties. In our social environment we have strong and weak ties, depending on how frequently and tightly we maintain our relation to other people.

strong-weak social ties representation Apparently the statistics is that we maintain on average a dozen very close contacts, about 150 medium to strong ties, and about 500 to 1,500 weak ties. Identification of this structure of our social network is not new, for example this paper on ‘The Strength of Weak Ties’ in the American Journal of Sociology in 1973.

The paper is a bit lengthy but the conclusion is clear: “weak ties […] are seen indispensable to individuals’ opportunities and to their integration in communities; strong ties, breeding social cohesion, lead to overall fragmentation“.

Weak ties create opportunities. This is repeatedly demonstrated for example by people looking for new work as testified for example in this post “the power of loose ties“. Or by our common experience that often, opportunities come from people with whom we are only remotely connected.

The successful social networks that define the Fourth Revolution are all about making the usage of weak ties easier, quicker and more frequent. Think about Facebook, Twitter, LinkedIn. Their power lies not in the direct connections but in the “friends of our friends”.

The Collaborative Age is the Age where we leverage our weak ties.

More information? Link to a general discussion of Interpersonal ties and social networks structure on Wikipedia.

Reunited with his Family 26 Years Later: Another Testimony of the Power of the Fourth Revolution

“Everything is at the tap of a button, but you need to have the will and the determination to wanting it“. This is the final quote from Saroo Brierley in this great video. It is a true story of an small Indian boy lost in India, adopted by an Australian family (he also adopted the accent!) and finally figuring out where he came from through his recollections and long searches on Google Earth. The fact that Google used the story to advertise their products does not change the inspiring nature of the story

The full story of Saroo Brierley is accessible on in this long and emotional article on Vanity Fair, ‘A Home at the End of Google Earth’.

We now have at our fingertips much more power than we realize. Power to discover and observe the world in a way that was not available a few years ago. Power to find our way in the world, by ourselves. It is available. We just need the determination. What if we used that power as we could?

How the Fourth Revolution Reaches every Corner of the Planet

“A Masai warrior on a cellphone in the middle of Kenya has better access to knowledge than President Reagan did 25 years ago.” – Peter Diamandis.

Masai on the phone

Striking.

And does not need any comment!

Quote from the post “How the United States is reinventing itself yet again” on Washington Post.

Don’t Underestimate How Easy it is to Start a Business Today

The cost and effort to start a business has dramatically floundered in the past few years with the advent of the Fourth Revolution. I believe this fact is still not fully understood by the mainstream. It could comes up to the point where even Venture Capital, which was so important to the development of new technology start-ups in the 1990’s, might not be so relevant today in the field of innovation.

A typical start-up business plan framework from ‘Business Plan Generation’

Some relevant stories and posts by Vivek Wadhwa include Beat the GMAT, a 32,000$ start-up that was valued millions in a few months, or this Quartz post ‘Anyone, anywhere can now build the next WhatsApp or Oculus‘.

With the advent of cloud services, it is very cheap to have a professional level infrastructure at your disposal almost immediately and for a few thousand dollars a year, as I am also experiencing with my own ventures. It is also very cheap to develop mobile applications, websites and other web-based software based on existing free, open source basis. The importance of strong financial backing is thus delayed in the development process of new start-ups to the point where they can demonstrate revenue and whether their business model could be viable.

This of course removes lots of excuses not to start following your insights and ideas and create value to the world!

For more insight into business models I strongly recommend the Business Model Generation book, a collaborative book that created a framework that is now used throughout the start-up business community.

How True Innovation Requires a Business Model Transformation

Tesla Motors (an electrical car-maker) is one of the hottest hardware start-ups in the US at the moment. The CEO Elon Musk is one of the stars of the new economy. Apart from the innovative quality of their product (if you have the opportunity, visit one their showrooms!), and of the underlying technologies (some say that the battery technology is going to be even more important than the cars themselves) the most interesting part of this long term experiment is how Tesla has to upend the well-set business model of car selling to be successful.

It appears that there are strong regulations in the US about the fact that cars would need to be sold through franchised car-dealerships and this creates all sorts of weird market effects. Tesla is currently battling to topple these old-fashioned regulations, and might well eventually win at that game, although that will take long consistent efforts (see Bloomberg’s paper on “Can Tesla Topple the Car Dealer Monopoly” and this post “Tesla versus the rent-seekers“). In the meantime there are strong legal cases based on old-fashioned regulations that prevent the start-up to effectively deploy its business model.

The more general question is: can there be real innovation without disruptive existing business models? Or, is a technical innovation that does not disrupt an existing business model a real transformational innovation?

We can take this question further: can established players really be innovative, because real innovation would challenge their existing business model? For example, in Tesla’s market, could conventional car makers really lead a transformation into electrical cars, because they also need to protect their conventional business and modes of distribution?

I am more and more convinced that true innovation is not technical. It is innovating at the business model level. Look for innovations in that space, because that is really what is changing the world.

Why We Reject Inconvenient Truths – an Impediment to Change

We reject inconvenient truths – as long as they stay remote enough not to disturb too much our lifestyles. And so we stay in our comfort zone while disaster is looming further away, and although the consequences might be much more dire in the future.

inconvenient truths vs reassuring lies Change is about looking at reality in the face. Not to over-dramatize, but to be aware of what really happens outside there.

It is not easy and it is not natural. And it is why those that describe the reality of things are often rejected. And why those that create and transmit reassuring messages are popular.

The only way to overcome this hurdle is to create visible change in the life of the people that strike them at the emotional level. There is unfortunately no other way.

Want change without some dose of suffering? That won’t be possible. Just make sure that it is bearable and that measures are in place to overcome the challenge when it will have been noted by the group.

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