Category: Institutions and Revolutions

Why 3D objects’ piracy debate just starts!

In the last months there has been an increased attention and writing about piracy for 3D objects, following the continuous success and spread of 3D scanners and printers. A good summary of the 3D piracy issue is available in this Quartz post. A good summary of the development of 3D printing and the associated issues is available on the Economist here (although it dates back Sept’ 2012 it is still a good paper).

A Do-it-yourself 3-D printer
A Do-it-yourself 3-D printer

Authorities start to get worried (see this link on the US Copyright enforcer’s concerns). Because the issue is about sharing the files that describe the 3D objects freely, it would be possible to enforce the same type of measures than the ones currently enforced by the music and video industries regarding copyrighted material. However it will certainly prove more challenging to decide whether the file is really an infringement. It is probably more difficult to figure out what the object really looks like compared to a music or video stream!

Anyway, once again we observe that the Fourth Revolution is challenging traditional, established industries and institutions in a new way. There will be a struggle, there will be a debate, and finally we’ll see emerge a new balance between the needs to the creator and the industry that supports it. Let’s watch how other institutions will change!

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How the music industry transforms through the Fourth Revolution

I would like to share this excellent summary of the economics and of the transformations of the music industry in the last few years: Who killed the industry – an interactive explainer. It is a brilliant example of the transformation and of the questions raised by the Fourth Revolution.

music industry revenue per year
The music industry total revenue per year, by type of support

The interesting point is that from the point of view of the artists, it was pretty tough to earn any money in the previous setup. All the money was flowing to the industry.(“[in 2000, she estimated that if a band made an album, sold a million copies, went on tour, and made two music videos, the band might break even, but the record label would take home $6.6 million”!.., [and the band owns none of the work])

It seems there are more opportunities now to be heard, to connect with fans, and to make a living. However, the new forms of music streaming seem once again to forget to compensate the musicians!

In any case, if you thought you’d become rich by becoming a well known musician or singer, that will make you think twice!

Hat tip to Mitch Joel/Alistair Croll in their fantastic weekly “Six links worthy of your attention” on Mitch’s blog

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Why you should first depend on trust… and still put it in writing!

Contracts and how to behave with them are one of the most frequent issues in many instances, in particular in professional activities. In my case, it applies particularly in the field of project management activities.

contract photoShould we have a contract? What should be in there? How should one behave with respect to the other party? Be extremely contractual and formal or be relatively informal and rely on the contract only as a last resort reference? Opinions on the matter vary, behaviors are tainted with cultural differences.

One of the best guidance I found is: “Get it in writing but depend on trust“. It is a quote from an excellent book by Gerald Weinberg, ‘the Secrets of Consulting‘.

It sums it all: those that are coldly contractual are wrong. Those who are all in talking and not in writing are wrong. Both won’t get anywhere.

In all instances I have found that whatever the contractual environment, the bureaucracy and the expectations of compliance, trust needs to be created, maintained and developed between parties for things to happen. And the best project managers and managers understand that. They will try to develop trust with their counterparts.

Depend on trust. You’ll go far. Just put it in writing too!

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How a Single Person Can Now Create a Product useful for Millions of Users

Maybe you have been using the ‘Instapaper‘ application. It is an application that allows you to bookmark webpages and read them later, even when you are disconnected, from any device (more on Wikipedia).

InstapaperWhat you may not realize, is that this application was developed single-handedly by one person, Marco Arment, during 5 years, from 2008 to 2013. With no full-time employee, this self-funded startup attracted more than 2 million users!

Marco sold it in April 2013 to allow it to grow and in a very humble blog post tat is worth reading explains how that was needed to allow the product to grow and tackle competition (he still remains involved and has only sold a majority stake).

Think about it: “If a multi-million dollar business can be developed and managed by one person with a laptop in an apartment, what happens to your business and your job as this rapid innovation and digitization continues to ripple through every industry“? This question by Mitch Joel in his last book “Ctrl Alt Delete” is worth considering for a moment. In the Industrial Age, such product development would have required a large staff and a huge investment. Not any more.

And I have personally met a number of entrepreneurs running very profitable companies from home with the help of part-time contractors.

Indeed, the Fourth Revolution is marching on! Are you in?

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The End of Ownership

The Fourth Revolution is about the end of ownership as we know it traditionally. At least it is the trend for may of the amenities that we use on a day-to-day basis. Instead of owning, we rent. When we own, we share.

rentWe don’t own any more our music, our films – we rent them. In many towns people rent on an as-needed basis their transportation means: bicycles and cars – instead of owning them. In electrical cars we will probably rent the batteries instead of owning it – and exchange it instead of loading it. We won’t probably even own the car but lease it and share it.

When we don’t rent, the trend is to share in an effective manner – hence the services such as Airnb (sharing apartments or couches), or services that propose to share cars during the day instead of leaving them in the office parking…

This is all made possible by the online platforms made available by internet, powered up by mobile ubiquity. The number of these platforms is increasing at a rapid pace. Those that can offer a great quality of service thrive. These platforms lower the time and cost for coordination with other users. Our preferences can be known that optimize what’s available and even offer useful suggestions.

Not only will this trend decrease the number of items we will need collectively, it will result in less waste. It also means that our choices increase dramatically – owning, sharing or renting.

There are still certainly a lot of still unidentified opportunities in renting instead of buying, or sharing those amenities we use on a day-to-day basis. Any idea?

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Why Large Modern Organizations are Handicapped when it Comes to Adaptation

An interesting short e-book from the Boston Consulting Group, ‘Adaptative Advantage: winning strategies for uncertain times‘ by Martin Reeves, addresses the issue of adaptation (and innovation) in large organizations.

board-meetingLarge organizations need to be especially aware of the challenges they are likely to encounter in developing adaptative capabilities. Classical approaches to managing scale – delegation and specialization – can be highly efficient under stable conditions, but the hierarchical structures they produce are too rigid for the rapid learning and change required in turbulent environments.
A narrow focus on leanness, too, can impede adaptability. Under pressure from competition and capital markets, some large companies have squeezed out not only inefficiency but also the diversity and variation needed to adapt to rapid change. What’s more, once adaptative capabilities in highly structured and specialized organizations have atrophied, they can be challenging to recreate.

In summary, the search for maximum optimization and scalability is bad for adaptation because it squeezes out all the resources and organizational levers that would be needed for adaptation.

This is just why so many large organizations and institutions will not survive the Fourth Revolution. This is why successful organizations will seek to be sub-optimized, to remain reactive, constantly changing and adaptative.

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A glimpse into the developing world of online freelancing

ODesk, one of the online marketplaces for freelancers, released an interesting figure of the ‘long tail’ of freelancers, based on its database of job openings vs skills.

ODeskFreelanceLongTail smallWhat this figure shows is that although the web-related specialties obviously dominate, a number of other skills are now visible on these marketplaces. What’s even more interesting is the emergence of more specialties including Engineering and Architectural Design.

An other interesting source of information on the freelance market is the ‘state of the freelance‘ study by Elance (an other freelance market place) in Sept 2012. Some of the data needs to be considered with caution as it is somewhat an infomercial, but there are some interesting observations:

  • lots of on-line freelance (38%) are from generation X, and not all are millenials!
  • most online freelance are full-time
  • overall, all these freelance marketplaces see a healthy grow in jobs and freelance revenue transiting.

It will be interesting to see how much this trend will spread in the next few years. While the number of skills will expand, my prediction and experience is that online freelancing is somewhat limited to simple tasks and cannot replace the need to organize a project team, which will remain the key competence, in particular if it comes to organize a project team of online freelancers!

More on the figure data origin and interpretation on the ODesk blog.

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Why would “profits without production” be bad?

In a column in the International Herald Tribune “Profits without Production“, Paul Krugman explains how the world is changing and how corporations like Apple is the highest valued company in America and employs only 0.05% of the workforce, to be compared with GM in the 1960’s – also the most valued company in America but employing 1% of the workforce and thus spreading wealth much more through society. And that it is a problem for economic growth because of less redistribution of value throughout the economy.

stack of cashIndeed as we defend in this blog, with the Fourth Revolution the value is moving from manufacturing into creativity. For Apple, manufacturing is a (low cost) commodity. The value lies in the creativity, the design and the service; in summary, in the experience. Marketing then takes care of selling us that experience at the right price – the price we are deady to pay for it.

Yes, we have a problem now of large corporations not reinvesting in the economy their huge profits; yes, we have a problem of the share of employee compensation shrinking compared to executives’ and shareholders compensation, thus slowing down consumption and growth. Yes, we have a problem of monopolies being created in new economic arenas that will need to be tackled.

However it serves nothing to complain that value is moving from tangible manufacturing into intangible creation. It is the sense of history. What we need to do is to find solutions so that this shift is accompanied by an appropriate balance in the distribution of value throughout society. We have not found the recipe yet but let’s continue to experiment and observe!

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Launching the Innovation Renaissance, About the Law of Diminishing Innovation

Alex Tabarrok is economist and has written a short essay on ‘Launching the Innovation Renaissance‘. In this highly recommended book he analyses the current issues related to innovation – such as patents, education system and corporate rewards.

The Tabarrok curve of decreased innovation when patent protection exceeds a certain level
The Tabarrok curve of decreased innovation when patent protection exceeds a certain level

Alex Tabarrok is also known for the Tabarrok curve of decreasing innovation when patent protection increases beyond a certain level. Not dissimilar to the Laffer curve of diminishing tax returns when the tax burden increases!

His view on patents and how the increase in patent protection in the 1990’s in the US, in particular in the field of software patentability, is actually diminishing innovation instead of fostering it, is very interesting, and quite aligned with what we exposed in some early blog posts such as ‘How patent litigation cost half a trillion dollar inefficiency in the last 20 years!‘

It is quite a short book, very easy to read, and to the point. One small issue though is that it is very US-focused and would gain to be broadened more globally looking at the innovation issues world-wide. Issues are not the same everywhere, but at the end of the day innovation does benefit everybody.

Add it to your summer reading list!

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How a Paradigm Shift is Happening in Management

Forbes maintains an interesting column by Steve Denning about the paradigm shift in management.

paradigm-shiftSteve Denning believes that there is a deep change happening right now, from a shareholder-driven organization towards a customer-centered organization (read: ‘Don’t Diss The Paradigm Shift In Management: It’s Happening!’). According to him, this will require change from a bureaucratic organization towards new management models that are more flexible, agile, and customer-focused. As readers of this blog you’ll know I even believe the change is much more fundamental as it is related to customer collaboration, nevertheless Steve Denning’s view is quite useful for organizations nowadays.

As with all paradigm shifts it will be tough and take time – read his excellent column comparing that change to the Copernican revolution – ‘Why The Paradigm Shift In Management Is So Difficult‘. This is entirely applicable to the Fourth Revolution changes.

A paradigm shift is certainly happening, that will take time to be realized by all those that are still in the Industrial Age mindset. Be a Fourth Revolution precursor and see how the new approach of business has the power to change the world!

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Are You Ready for the Impact of Government Open Data?

“Information is a valuable national asset whose value is multiplied when it is made easily accessible to the public“.

US Executive order on Open DataEarly May, President Obama released historical new rules for US government Open Data: from now on, data generated by the US government is to be made available in open, machine-readable formats. A new portal is setup to make the data available to those that want to use it to enhance its use.

To clarify the impact of that decision and how it will change things for the citizen, this excellent paper by the Canadian David Eaves, an eager supporter of Open Data, gives further insights: ‘Thoughts on the White House Executive Order on Open Data‘

No doubt that this US initiative will span similar initiatives in a number of other countries. Crowdsourcing the usage of government data to create meaningful information is in its infancy. Watch as incredible usage will be made of this data and how it will change public policies for the better!

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How the fight against Patent Trolls continues: The White House in action!

The issue of Patent Trolls is now tackled at the highest level with, early June 2013, a White House communication on how it expects to address the issue of impediments to technology due to these nefarious actors: ” The White House issued five executive actions and seven legislative recommendations designed to protect innovators from frivolous litigation and ensure the highest-quality patents in our system“.

White House speaker with a patent troll folderThis comes in the general action to try to phase-out patent trolls (see our previous post on How Intellectual Property is Changing – Too Slowly but in the Right Direction). Now a number of comments on these executive orders from the White House imply that they are too weak and will not be efficient to curb the patent troll development.  See for example this post on Quartz: “Why patent trolls will laugh in the face of the US government’s weak attempts to fight them“.

This issue of excessive patenting and undue burden on the economy will certainly remain very high on the agenda for the next few weeks and months. Let’s continue to observe how this institution will need to transform to deal with the changes of the Fourth Revolution!

 

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