Thomas Frey's Blog, page 47

Fastest Way to Create New Jobs? Automate Them Out of Existence!

 

Last week I was speaking at the MD&M West Expo in Anaheim, California on the “future of manufacturing.” With over 2,000 manufacturing exhibitors filling the convention center, there was no small amount of interest in this topic.

With China and the rest of Asia making massive inroads in manufacturing over the past couple decades and automation threatening many of the remaining industries, a huge underlying theme of this event was jobs. Where will our jobs in the future come from?

Job loss is not an idle threat. As everyone attending this conference knows, businesses have an obligation to hire the fewest number of people they can get away with, and when automation eliminates the need for an employee, the employee has to go.

However, while job loss is very real and happening all around us, job creation is also happening, in way that many have not seen coming.

To be sure, the transition period we are in will cause considerable collateral damage, but we will also experience a period of unprecedented opportunity provided we create the right systems for capitalizing on them. 

As I mentioned at the conference, the fastest way to create new jobs is to automate them out of existence. Here’s why!

Lifecycle of an Industry

All industries form a bell curve 

As with everything in life, all industries have a starting point and an ending point. Usually the starting point can be traced to an invention or discovery such as Alexander Graham Bell’s invention of the telephone or Henry Bessemer’s discovery of a process for making steel cheaply in large volumes. The end comes when new industry replaces the old, like calculators replacing the slide rule.

In addition, all industries form a bell curve. At some point along the way, every industry will experience a period of peak demand for their goods or service.

Many industry are entering the downside of the curve 

Many of our largest industries today are entering the second half of the bell curve.

To understand this, ask the simple question, “What goods and services that we buy today will we be spending less money on in the future?” The list you come up should include energy, transportation, healthcare, publishing, insurance, telecom, education, construction, mining, and many more.

Leading indicators that industries are entering their top-of-the-curve midlife crisis are a growing number of startups attacking key profit centers.

Prior to reaching peak demand for their goods or service, industries experience a period of peak employment. 

Peak Steel 

Using “Peak Steel” as an example, the peak employment for the steel industry was reached in the 1980s. The peak demand for steel itself is projected to happen in 2024. This is when composite materials will gain enough of a foothold and the overall demand for steal will begin to decline.

Many industries have already begun reducing headcount, partly because of automation, but primarily because they are about to enter their waning years.

The True Engines of Job Creation

Startup companies are necessarily sloppy in how they grow, requiring additional headcount to manage their still-to-be-defined business operations. Mature industries have well-defined processes and are better able to find efficiencies along the way.

Job Creation and Destruction

A recent Wall Street Journal article tried to correct the perception that this is a small business vs. large business debate. Instead, it’s a young business vs. old business issue.

Economists John Haltiwanger, Ron Jarmin and Javier Miranda showed in a 2010 paper, what really drives job growth is fast-growing start ups.

Their study showed that even before the recession, starting in 2006, government policy shifts caused a key turning point.

Young businesses created an average of 5.5 million jobs per month from 1992 through the end of 2006. Since then, they only created 4.7 million per month. This is appearing to be a long-term trend.

Since stable old businesses tend to be major campaign contributors, policymakers tend to favor them over young startups. While the writers suggest the key to more jobs is a good start-up lobby, the real path to job creation is more automation.

Demographic Shifts

Older Americans are continuing to work, primarily because they can’t afford to retire. The recession has impacted their household budgets, and particularly the value of their investments and retirement funds.

According to new U.S. Census Bureau data, 12.5% of the population is over 65 and that number will grow to 20% by 2040, possibly more if the birthrate continues to decline.

People age 65-69 who are still working grew from 22% in 1990 to 31% in 2010. For men working between age 70-74, the numbers grew from 16.6% in 1990 to 20.9% in 2010. For 70-74 year old women it was a similar pattern, increasing from 8.4% to 13.5%. 

Blaming Robots

Even before the real age of robots has begun, they are being blamed for stealing people’s jobs.

That’s the view of economists Henry Siu (University of British Columbia) and Nir Jaimovich (Duke University), who point out in a recent article, the reason for this structural change in labor markets is the rise of automation: 

“Automation and the adoption of computing technology is leading to the decline of middle-wage jobs of many stripes, both blue-collar jobs in production and maintenance occupations and white-collar jobs in office and administrative support. It is affecting both male and female dominated professions and it is happening broadly across industries – manufacturing, wholesale and retail trade, financial services, and even public administration.”

While that may be true for what’s happening to existing traditional jobs, they fail to account for the wide range of entrepreneurial and new work opportunities that the same technology is creating.

Job losses are easy to count. Startup businesses, however, are far more difficult to monitor because most tend to fly under the radar until they enter a serious growth phase. 

Finding the Seeds of Creation in Automation 

According to a May 2011 study by the McKinsey Global Institute titled “Internet matters: The Net’s sweeping impact on growth, jobs, and prosperity,” the Internet has accounted for 21% of GDP growth over the last five years.

They also concluded the Internet is a key catalyst for job creation. Among 4,800 small and medium-size enterprises surveyed, the Internet created 2.6 jobs for each one lost to technology-related efficiencies.

We are now transitioning from room-size automation, which only large companies could afford, to desktop automation that allows small and even one-person businesses to be part of.

In much the same way that the 1985 Apple LaserWriter gave birth to desktop publishing, the 2010 MakerBot’s Thing-O-Matic 3D printer gave birth to desktop manufacturing.

Automation is no longer to domain of the elite few, and the quicker we can make the transition to all industries, the quicker everyone can participate.

The Economics of Automation

Our economy is based on people. Humans are the buying entities, the connectors, the decision-makers, and the trade partners that make our economy work.

Without humans there can be no economy. So when it comes to automation, consider this:

A person with a toolbox is more valuable than a person without one.
A person with a computer is more valuable than a person without one.
A person with a robot is more valuable than a person without one.

Automation does not happen simply for the sake of automation. It’s intended to benefit people.

If we only look at what automation will eliminate, we’ll be viewing the world through a glass-half-empty lens.

Final Thoughts 

In Feb 2012, I made the prediction that over 2 billion jobs would disappear by 2030. We seem to be on track for that to happen.

Driverless cars will eliminate millions of driving positions. 3D printers will eliminate millions of manufacturing jobs. If we continue down the list, teacherless schools will eliminate teachers, pilotless planes will eliminate pilots, checker-less retail will eliminate checkout clerks, and so on.

Whenever jobs go away, politicians tend to have a kneejerk reaction trying to implement legislation that enables us to hang on to the past for a while longer.

But job losses will happen regardless of whatever overt attempts are made to stop the hands of time.

Contrary to popular opinion, automation creates jobs. As the McKinsey study has shown, we get a 2.6 to 1 benefit from jobs lost through digital automation on the Internet. Since the physical world is 5 times the size of the online world, we may create even more jobs with physical automation.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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Our Alarming Culture of Pill People and Future Trends in Healthcare

 

How many pills do you take on a daily basis?

According to a 2010 study by Colorado State University, about 68% of American adults take multivitamin supplements. At the same time the average American fills 12 prescriptions a year.

After spending the past few days with my aging parents in an assisted living center in Arizona, daily meds and supplements have become a critical issue for them to deal with.

Yes, every person is different and their daily “pill cocktail” will vary, but the notion that virtually every problem has a “pill solution” is still very much alive and well in today’s culture.

On one end of the spectrum is my colleague and fellow futurist, Ray Kurzweil who takes upwards of 250 vitamins a day, and on the other end are those who don’t take any.

To be sure, future generations will refer to us as the “pill people” because of our addiction to the quick fix. But as with all cultural memes, they have a beginning, middle, and end. Sometime in the near future, pill taking will peak and other types of cures, therapies, and self-healing techniques will begin to replace our need for pills.

The average American today takes slightly over 10 pills a day. By 2050, that number may very well be zero. If that’s the case, what will be the next big thing destined to capture the money we spend today on pills? Here are a few thoughts.

Popping a pill may seem like an easy fix, but when is it too many?

Understanding Today’s Pill Culture

Projections show that Americans today spend over $270 billion on prescription drugs vs. slightly over $34 billion for non-prescription alternatives and vitamins.

Although senior citizens comprise 13% of the total population in the United States, they account for over 30% of the prescriptions, and over 40% of all the money spent on drug. According to a study by the Institute for Families USA, the average number of prescriptions per year/per senior citizen grew from 19.6 in 1992 to 28.5 in 2000. Projections show the average number of prescriptions per elderly person will grow to 41.5 in 2013.

Naturally, having too many prescriptions causes a myriad of problems.

According to the Centers for Disease Control and Prevention, 14,800 Americans died from overdosing on opioids in 2008, the most recent year data is available—more than the number of deaths from heroin or cocaine.

Another recent headline cast an even darker shadow, “Prescription Drugs Kill 300 Percent More Americans Than Illegal Drugs.”

While there are still many issues with those who need medications and don’t have access to them, there are far more red flags being raised over excessive pill taking.

Multiple prescriptions tend to increase the risk of unwanted side effects and potentially dangerous drug interactions, especially among the elderly. There’s also a growing problem with “prescribing cascades,” where one prescription causes side effects and the doctor prescribes another medication to combat the side effects, which results in yet even more side effects, forcing another medication and on and on.

Adhering to a doctor’s regimen can become an issue as well. As with my mother, it gets complicated when someone takes a dozen prescriptions daily – some once a day, others twice a day, some with food, some without, some that can be taken together, others that can’t. It can be challenging to remember a routine like this one time, let alone stick to it day after day.

Even though we are living in a pill-oriented society, people don’t like taking them. On one hand, pills offer hope for a healthier or pain relieved body, yet recent studies indicate significant anxiety over side effects and drug interactions, plus many simply don’t really believe the drug was ever necessary.

Setting the Stage for What Comes Next

A new survey conducted by the Pew Research Center’s Internet & American Life Project shows that 69% of adults in the U.S. now track a series of health indicators both for themselves and/or a loved one.

60% of U.S. adults say they track their weight, diet, or exercise routine.
33% of U.S. adults track blood pressure, blood sugar, headaches, sleep patterns, or other health indicators.
12% of U.S. adults track health indicators or symptoms for a loved one.

That said, much of the tracking is done informally and simply committed to memory:

49% of trackers say they keep track of progress “in their heads.”
34% say they track the data on paper, like in a notebook or journal.
21% say they use some form of technology to track their health data, such as a spreadsheet, website, app, or device.

With this being the first national survey measuring health data tracking, which has been shown in clinical studies to be a tool for improving outcomes, particularly among people trying to lose weight or manage a chronic condition, the Pew survey went on to conclude:

46% of health trackers say that this activity has changed their overall approach to maintaining their health or the health of someone for whom they provide care.
40% of trackers say it has led them to ask a doctor new questions or to get a second opinion from another doctor.
34% of trackers say it has affected a decision about how to treat an illness or condition

Pills will soon be able to convey their effectiveness digitally.

Enter – The Internet of Things, Increased Awareness, and Super Precision

The Internet of Things will grow to an estimated 50 billion devices connected to the Internet by 2020, and many of these devices will be sensors that track our body functions.

Smart dust sensors, smaller than the tip of a pencil will soon be embedded in our clothes and shoes, giving us constant tracking information, and signal us whenever we reach a danger zone.

Along with having our bodies “radiating” health data, a number of tracking services will become available to make it simple for average people to live healthier lifestyles without waiting for that occasional emergency forcing a doctor visit to get back on track.

Here are a few likely outcomes we will see in the future:

Health fitness gadgets will explode over the coming years.
Pills will soon grow out of favor, switching from a positive to a negative in the minds of average people. In many circles, pills will deteriorate to the category of “bad” and “evil.”
Increased sensors will enable us to gain an augmented reality view of what’s happening inside us.
The “digitally aware” will be shown to have substantially better overall health than those who are not doing the self-tracking.
Growing levels of personal health data will lead to many “pill alternatives.”
Digestible cameras will become commonplace as people wish to gain perspective on their “inner health” as they watch the cameras pass through their digestive tracts.
Companies will begin marketing themselves as having a “no-pill solution.”
Pill taking will begin to decline. 

How much money do you spend on perscription drugs?

Final Thoughts

We are currently spending a bloody fortune on pills.

While Big Pharma would love nothing better than for this to continue, a number of disrupting forces are now in play, and over the coming years, revenue streams will begin to redirect, creating huge opportunities for what comes next.

New government healthcare policies will force downward pressure on pricing and spending, while at the same time drive a number of known efficiencies currently sitting on the sidelines.

Since healthcare is such a confusing topic, with constant competing claims and contrarian viewpoints, changes will take far longer than most are predicting. As always, the early adopters will lead the way, but not all early adopters will be following the same trajectory.

With a rapidly aging population, opportunities will be huge for the next decade and beyond in this massive business battlefield.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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Introducing the One-Person Business Empire: An Option Most VCs want you to Overlook

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What are the odd of you ending up age 65-70 and having regretted your entire life? As people edge towards retirement, reflective moments like this can be a gut wrenching experience. If you’re like most, the odds are well over 90%.

For many, the jobs world has transitioned from a lifelong career path to frenetic stints of work with amping levels of stress at the beginning and end of each new gig. Many are desperate to gain some control over their own destiny, but few know how. 

Launching a new business can be a terrifying experience, especially if you go down the old school path taught in most entrepreneurial schools. The process of writing a business plan, raising money, and hiring a leadership team has killed far more businesses than it helped. Death by 10,000 distractions.

People launching a business have limited resources – limited time, energy, money, talent, and intellectual bandwidth. Chasing after meaningless accomplishments simply because a so-called “expert” told you to do it is a sure path to failure.

The new Empire of One business model we’re developing at the DaVinci Institute starts by building the mindset of an entrepreneur, before overloading people with extraneous options. As an example, the one-person entrepreneur doesn’t need to know about raising money, SEC rules, investor relationship strategies, HR requirements, hiring policies, or any of ten thousand other details designed for explosive growth businesses that only represent a fraction of one percent of the ones that succeed. 

Once people learn to be successful as a one-person entrepreneur, without putting their family, house, and lifetime savings on the line, they can consider larger endeavors. Let me explain further. 

Empire of One Defined

An Empire of One is a one-person business with far reaching spheres of influence. Since its oriented around the lifestyle, needs, and desires of you, the person in charge, it can be as big or as small as you want it to be.

Running a solo business in the past most often meant that you had a one-person practice, offering a professional service such as a lawyer, accountant, dentist, or doctor.

Even though these are still viable options, the Internet, 3D printing, online storefronts, and other emerging technologies are opening up far more possibilities. Our approach will be to focus on this burgeoning category of “other possibilities.” 

The business you create can be formed around a product, a service, or a combination of both. It can be a for-profit, non-profit, domestic-only, international, have broad appeal, or only be for be for left-handed people in Armenia.

Best of all, you can keep your current job, keep your savings, and keep your family intact. You decide the level of risk you’re comfortable with. After all the decision-maker in any Empire of One is you.

That said, learning everything you need to know will involve a steep learning curve and it won’t come without hard work, trial and error, and several introspective moment where you feel like you’re beating your head against the wall. 

In addition, there’s no such thing as a totally risk-free venture. It will require a time commitment, a money commitment, and an emotional commitment.

The Announcement

Since we live in a world oriented around financial drivers, our worth as an individual is often tied to the salaries we earn. However, most people grossly underestimate their true earning potential. 

We believe this new way of thinking is best taught in a small synergistic group setting formed around passionate, driven people wanting to take control of their own destiny. Here’s what we have planned:

COURSE: Empire of One
LAUNCH DATE: March 26, 2013
SCHEDULE: March 26 – May 30 (10-Weeks)
CLASS DATES: Every Tuesday & Wednesday evening
TIMES: 6:00-9:00 PM
COST: $6,000
WEBSITE: http://empireofone.org
APPLICATION PROCESS: All who apply will be interviewed and evaluated. Many will apply but only a few will be chosen. 

Since this is a pilot program, all classes will be held in-house at the DaVinci Institute. There will be no webcast options for the first one.

Classes will be primarily taught by Dave Taylor, but an entire faculty of guest speakers, experts, and advisors will be involved to make this a truly remarkable experience.

In addition to normal class times we will be adding special one-on-one “ask an expert” sessions that will enable people to ask detailed questions about their specific situation.

The Empire of One Philosophy 

Businesses are living, breathing organisms, operating in fluid environments, constantly adjusting to every shift and change in the world around them. Money serves as its breathable oxygen.

And in much the same way nature feeds off the less fortunate, big animals eating smaller ones, all businesses are competing for the same revenue streams using superior acumen, prowess, and resources to feed off of the revenue streams of the little guys. 

However, just as lions have little concern for what ants are eating, big companies have little concern for the tiny markets that feed countless niche businesses currently cropping up on the horizon.

According to Chris Anderson, Author of The Long Tail, “Increasingly, the mass market is turning into a mass of niches.” And “all those niches, when aggregated, can make up a significant market.”

In today’s business world there is competition for every dollar spent, but in the end, consumer make the final decision. The beauty of the consumer marketplace is that all consumers are wonderfully erratic, creating literally trillions of variables that they use to make their decisions.

So even though major brands work overtime to infiltrate the minds of every consumer on the planet, there are still tons of tiny markets left untouched. That’s where the Empire of One comes in. The massive world of untouched opportunities is already huge, and growing bigger every day.

Three Key Misconceptions

There are many misconceptions about starting businesses and the life of an entrepreneur, but I’ll mention just three important ones here:

First, all new business start with an epiphany, a moment of rare insight into the world around us. In addition, all new products also start with an epiphany.

So it’s in our best interest to create more epiphanies.

However, successful businesses are never created with just one big idea. Rather they require tens of thousands of small ideas clustered together with enough momentum to drive the original epiphany forward.

Second, learning how to succeed also requires learning how to fail. In a best case scenario, failures can be minimized, deflected, or cauterized before they cause too much bleeding to occur, but there will always be another failure waiting for you to contend with. 

As an entrepreneur, your ability to deal with failure will define who you are and how successful you will ultimately become. Very often failures can be leveraged, turned around, and used to your advantage, but that can only happen once you become comfortable with failure. 

Finally, every startup is an emotional roller coaster ride. While we often hear the comment, “It’s just business!” …it’s NEVER just business!

Every successful business requires that you make an “all in” commitment. During the early stages you will eat, sleep, and breathe the business. It becomes part of you.

If someone says something negative about your product or business, it will feel like they are insulting you personally. If someone takes advantage of you in a business deal, it will feel like they are out to hurt you personally.

In the online world, people can be particularly rude and abrasive. 

The emotional side of business requires a thick skin. Your ability to manage your emotions and formulate a reasonable response is not an easy skill to learn. Those who are the best at it typically have a mentor network of like-minded entrepreneurs they can call at a moments notice.

As you enter the rollercoaster life of an entrepreneur will experience “higher highs” and “lower lows” than you ever thought possible. But in the end, you’ll feel like you’re truly living.

Final Thoughts

The Empire of One is a phrase I first coined in early 2008 after seeing the rise online tools and an emerging form of entrepreneurship taking place.

Now, after several years of watching this trend evolve, we’ve decided to take it to the next level and develop a formal training experience around it.

Here are the six primary tenants around which the course has been formed:

Traditional entrepreneurship training is far too complicated. It demands too many skills for any one individual to master.
Startups that requires investors and hiring a startup team have a very low probability of success. Most fail in the very early stages before they ever find a single investor.
It’s far more important for people to learn the “mindset of an entrepreneur” before putting everything at risk. This can be achieved by building a one-person business.
Many new online tools enable us to automate aspects of business that previously required hiring people.
Startup people love to hang out with other startup people. Mentor networks are an important part of the success variable.
People who master the fine art of one-person entrepreneurship are well positioned to launch other more sophisticated entrepreneurial ventures. Those who know how to control their own destiny are destined for greatness.

An Empire of One business puts you squarely in the captain’s seat of your own starship. We will help you set the stage, chose a starting point, surround you with experts, and build your own communities.

Most importantly, we plan to make it fun. But in the end, this is a journey that you’re in charge of.

Is this something you’d like to be part of? Since we are always looking for ways to do things better, Please let us know your thoughts.

Note:  We will be hosting an introductory event titled “Employee to Entrepreneur :: Shifting Your Mindset to Control Your Own Destiny” on Feb 25, 2013. It’s free, so please plan to join us to find out more.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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Micro Credits: A Tool for Self-Organizing the Complex World of Education

A recent TEDx talk about solving traffic jams started by asking the simple question, “Who is in charge of the daily bread supply for the city of London?”

Food supply chains have become enormously complicated, but as it turns out, there is no central “bread czar” for London or any other large city. The bread supply chain is a great example of a self-organizing system.

Most likely, if the City of London decided to appoint an official Bread Czar to oversee distribution, it would be fraught with daily bottlenecks and supply problems.

As society grows in complexity, how can we design systems that don’t require daily oversight, with self-regulating mechanisms capable of unleashing the true potential of humanity? 

Perhaps our most broken system, in dire need of reform, is education, and I’d like to start with college-level education.

So how can we put the right mechanisms, sub-systems with built-in checks and balances, monitoring points, and yet tweakable to make the complex systems used to govern colleges and universities self-organizing?

Admittedly, the world of academia is exponentially more complicated than the London bread supply, but I’d like to take a few minutes to explore this idea using the concept of Micro Credits as the entry point.

So, after spending the past few days consulting with Senior Fellows at the DaVinci Institute, here is what I’ve come up with. 

“Who is going to jump first into granting a degree that doesn’t have the seat time requirement that we do today that employers will see as credible? Where does the credibility come from?” – Bill Gates at the World Economic Forum 2013 in Davos, Switzerland

Micro Credits Defined

University of California researchers James Short and Roger Bohn determined that the average person in the U.S. in 2009 was consuming information 11.8 hours a day, the equivalent of 100,500 words every 24 hours. While much of this “learning” may be relegated to low-effect, background noise, a portion of it will naturally fall into the category of higher impact learning with significant formative influence. 

The question then becomes one of assigning credentialing to the learning moments that happen during any given day. With so many options, it becomes an exercise in “separating the wheat from the chaff.”

Learning experiences should not be based on the time spent learning, but rather on the value of learned skills that can be adequately defined by questions. 

Let’s begin with describing the smallest possible credentialing unit.

Learning experiences should not be based on the time spent learning,

but rather on the value of learned skills that can be adequately

defined by questions.

MICRO CREDIT FORMULA: 1 Micro Credit = 0.01 of a traditional college semester credit or, stated another way, 100 Micro Credits = 1 traditional college semester credit.

Micro Credits will be an assessment of learned skills, based on outcomes.

The granting of Micro Credit is based on testing, with a minimum of 10 questions for the first Micro Credit, and one additional question for each additional 0.2 Micro Credits.

All questions will be multiple-choice with four possible answers. Answers to questions must be 80% correct.

This will mean that for someone to achieve the equivalent of 1 college credit, they will need to answer well over 500 questions and get over 80% of the answers correct.

Once all questions have been answered, people will be asked to assign five words to describe the kind of skills developed through the learning experience. These words will serve as the foundation for the user-based skills classification system described later.

EXAMPLE: An 18-minute TED video may be filled with rich content, enabling 30 good quality questions to be asked about the subject matter. In this situation, the learning experience would be valued at 5 Micro Credits. At the same time, a 3-hour documentary may only warrant 10 questions, or 1 Micro Credit assigned to its content.

The Micro Credit system, as described here, has a series of built-in self-limiting checks and balance mechanisms. First, the content must have sufficient value to ask a minimum of ten questions. Second, all Micro Credit learning applications and questions will be evaluated by an independent third-party organization skilled in Micro Credit assessment.

Most importantly, users will have to feel the expenditure of time and energy to be worth the credits they receive. Since time is a precious commodity, the length of a test will be inversely proportional to likelihood that someone will complete it.

Here is a brief description of some of the other characteristics recommended for this system:

TEST LIMITS: Micro Credit Tests will be limited to granting no more than 10 Micro Credits on a single test.
EXPERIENCE AUTHENTICATORS: People who develop a Micro Credit Test will be referred to as Experience Authenticators.
TEST-TAKING MECHANISM: Testing will be conducted through a web-based online secure system that enables people anywhere to participate.
COSTS: All testing and the assignment of Micro Credits will be minimally priced for consumers, approx $1 per Mico Credit. Additional fees will apply to the test approval process, as well as storage and retrieval of records from the Credit Bank.
CREDIT BANK: All testing results and Micro Credits will be instantly assigned to a personal account in a Credit Bank, a service to be developed as the default repository for the Micro Credit system.
USER-BASED CLASSIFICATION SYSTEM: Past attempts to create a top-down classification system like the Dewy Decimal System in libraries have invariably grown out of control over time. Skills, and the words we use to describe them, naturally evolve over time. So, while its important to have an Experience Authenticator attach meta tags to an initial question set, the tagging mechanism will need to evolve over time. For this reason, users will be asked to add five words to describe the skills they learned to every test.
ANTI-HACKER MEASURES: To avoid the potential for people to game the system, a number of anti-hacking measures will be employed including a question order randomizer, an answer randomizer, and optional questions and phrasing.

Micro Credit Theory

Varying degrees of learning happen many times throughout every day. The process of validating the learning can take many forms. The Micro Credit system described above will not apply to all situations.

As a starting point, a pilot project should be formed around written and video content, involving books, movies, TV shows, video shorts, and other written documents. Once these forms of content are validated and a sufficient consumer demand is demonstrated, other forms of content can be added.

Here are of few other implications that may result from a well-functioning Micro Credit system:

REPLACING THE CEU: CEUs (Continuing Education Units) are a poorly implemented system for validating professional education based on hours spent sitting in a classroom or viewing courseware. This is a system in dire need of overhaul. Micro Credits are a better system for authenticating learning, easier to implement, and easier for professionals to fit into a busy schedule.


REPLACING THE RESUME: Employers who have relied on resumes in the hiring process know what a crude tool it is to describe the skills and talent of an individual. Micro Credits will create a far more granular description of the learning experiences, and over time, applicable talent, skills, and other life experiences. As the Micro Credit system evolves, a new generation of digital resume-replacement tools will be developed.


COMPETITION FOR COLLEGES: Currently the credit-granting authority of colleges and universities has no competitive, checks and balance, alternative. This is the primary reason why tuition prices have escalated over 400% since 1980.


CREDENTIALING FOR CURRENT NON-ACADEMIC PROFESSIONS: There are currently many occupations with no associated academic pathways for entering the profession. As a result, most game designers, aromatherapists, inventors, futurologists, social networkers, coaches, search engine optimizers, augmented reality specialists, broadcast engineers, and alternative health consultants are self-taught. At the same time, many new professions are being developed on a daily basis.


THE ADVENT OF MICRO COLLEGES: Along with Micro Credits comes the potential for a new breed of colleges that operate outside of the bounds of current academic institutions, based primarily on the emerging Micro Credit industry.


HYPER-INDIVIDUALIZED LEARNING: Colleges today are operated with a top-down mentality, which results in a very limited scope of options when it comes to course topics and possible majors. This approach is in direct conflict with the hyper-individualized, long-tail world developing around us.

Background Information on College Credits

College credits are based on the number of contact hours per week in class, with the assumption there will be twice as much time involved in study and homework.

From section 600.2 of the DOE’s regulations:

Definition of a Credit Hour: The minimum amount of work that is an institutionally established equivalency that is not less than one hour of classroom or direct faculty instruction and a minimum of two hours of out of class student work each week for approximately fifteen weeks for one semester; or ten or twelve weeks for one quarter hour of credit, or the equivalent amount of work over a different amount of time.

Since most college classes are only 45-50 minutes and many classes require far less homework than the two-for-one studying ratio suggests, there is considerable grey area in this formula. 

Background Information on CEUs

CEU stands for Continuing Education Unit. A CEU is a unit of credit equal to 10 hours of participation in an accredited program designed for professionals with certificates or licenses to practice various professions. 

IACET (International Association for Continuing Education & Training) is the caretaker of the CEU.

Doctors, nurses, lawyers, engineers, CPAs, real estate agents, financial advisers, and other such professionals are required to participate in continuing education programs for a certain number of hours every year in order to keep their certificates, or licenses to practice, current. The annual number of CEUs required varies by state and profession.

The failure of this system is the onerous time and place requirements with scant attention paid to actual subject matter comprehension.

Final Thoughts

What I have described above is a self-organizing system.

Since most people still believe that education must take place in the classroom, and only educators can create new courses, we have placed a very constrictive valve on the inflow of new education options.

The notion that education can take place only in a classroom is similar to the notion that purchasing a product can only take place when you see it on a store shelf. Removing the classroom constraints to learning is similar to removing the shelf space constraints in the marketplace. 

The system described above for Micro Credits is intended to be every bit as rigorous and demanding as traditional college coursework, with the primary difference being the alternative pathways for both creating and assigning fractional credits. 

Keep in mind that the granting of a single college credit will require answering over 550 questions on a minimum of 10 separate tests.

This is a system that will instantly spawn new thinking, but may not develop the critical mass necessary to disrupt anything. 

When it comes to designing a new system like this, as much as we study ourselves, there is still much that we don’t know.

According to former Harvard President Larry Summers, “It’s important to remember that we’re not so good at understanding the subtleties of environments that make them attractive to people. Look at football for example. One way to watch a game is to sit on a cold bench with no good food and bad bathrooms. The other is in our own living rooms, with instant replay, and food you like at your convenience. And then ask yourself – which would you guess people pay for? Which do people cheer for? You’d get it wrong. There are aspects of bringing people together in groups that we can’t quite understand and judge. The working out of this will depend a lot on formulas for making it attractive and collaborative. And as the football example suggests, it won’t be immediately obvious what those models are.”

This entire column is intended to serve as a starting point, to initiate additional ideas and further conversation. So I’d love to hear what you think.

Is this a rational approach, and if so, how would you change it to make it better?

NOTE: This entire conversation is being closely monitored by a well-positioned state legislator who is considering drafting a new bill around these guidelines.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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The Rise of City Power

 

What, in your mind, will be the most powerful entity in the world 100 years from now?

As we look around us today, it’s easy to point to a single nation as being the most powerful. But will that still be true 100 years from now?

The most powerful entities in the future could be large multi-national corporations, giant associations of people or companies, religious groups, clusters of countries such as NATO, perhaps some new entity that controls technology like ICANN, or something else entirely?

Adding to the confusion of this question, what actually defines power? Is it money, clout, influence, an ability to control a large military, or some combination of all of these?

Will the notion of power be defined differently in the future than it is today?

These are all important questions to ask because powerful entities define who the powerful people are. And it is the underlying systems and technology that will determine status and clout.

Caught in the middle of all this influence-wrangling is the lowly city, an entity now subservient to states and countries, and often lost in the commerce of daily life. Are cities likely to remain at the lower end of the clout spectrum, or is there some new kind of power-shift afoot?

Here are a few thoughts about the rising influence of cities that may surprise you?

Demographic Shifts

Today there are roughly 498 metro areas in the world with over 1 million residents. According to the Martin Prosperity Institute, the world’s top 100 cities alone generate half of the world’s total economic output.

The world population has experienced continuous growth since the end of the Great Famine and the Black Death in 1350, when it stood at around 370 million.

As recently as 1800, only 3% of the world population lived in cities. By 2011, that number had risen to over 50% and projections show the urbanization trend will climb to over 70% by 2025. 

Cities have a disproportionate impact on global science research and innovation. They are often home to top colleges, government institutions, and research facilities. As in other fields, top researchers are drawn to cities for the opportunities to associate and collaborate with other leading scientists and institutions.

As an example, Beijing and Sao Paulo each contribute more than 20% of the annual production of peer-reviewed science publications in China and Brazil, respectively. Moscow accounts for more than 50% of Russian science articles. 

Seeking the Greatest Imbalance

Cities are very competitive. They compete for businesses, air traffic, tourists, conventions, sporting events, grants, talent, and media coverage.

Most are heavily invested in the rankings by major media outlets that show how they measure up against other municipalities with similar attributes.

Any city that demonstrates a successful new piece of infrastructure, attracts a major retail store, or builds a new library, airport, or convention center is quickly copied by other cities. 

This constant effort to achieve parity or balance with other cities is missing the true potential for achieving a radical imbalance. 

In the end, having the most well-balanced, well-functioning city means very little on a world stage where people only take notice of the anomalies

Great cities are never well-balanced. They only become great because of some huge imbalance.

Houston is well known because it is disproportionately weighted towards the oil industry. Los Angeles is famous because it is overly focused on Hollywood and the entertainment industry. New York, London, and Beijing all have an unusual emphasis on money and finance. And San Francisco has developed an extraordinary emphasis on the tech industry.

Amassing Talent Clusters

Once a minor imbalance has been achieved, a city can begin to attract the talent needed to perpetuate this unevenness. 

According to Richard Florida, author of The Rise of the Creative Class, “Creative individuals want to live in places that protect personal freedoms, prize diversity and offer an abundance of cultural opportunities. With the possible exception of Hong Kong, Asia’s cities still lack this level of openness and attractiveness, even though six of the top 10 economic powers are in Asia — Tokyo, Singapore, Hong Kong, Shanghai, Beijing, and Seoul.”

The key to global competitiveness lies in a city’s ability to attract the best and brightest from every corner of the globe. In our increasingly mobile society, these kinds of population shifts will become much more common.

Thoughts on the Honduras Private City Proposal

In September 2012, the Honduran government voted to allow for the creation of private cities, each with their own judiciary, laws, governments and police forces. They would have also been empowered to sign international agreements on trade and investment and set their own immigration policy.

Driving the proposal was the U.S. based investment group MGK who was willing to invest $15 million to begin building basic infrastructure for the first model city near Puerto Castilla on the Caribbean coast. They estimated the first city would create 5,000 jobs over the first six months and up to 200,000 jobs in the future.

However, the Honduran Supreme Court ruled the project unconstitutional. By 13 votes to one, its Supreme Court judges decided that the proposal violated the principle of sovereignty.

In this small country, with an average annual income of $4,400 and riddled with crime a corruption, the private city proposal was viewed as a quick fix for its current problems.

While this idea may have been fueled by good intentions, there is seldom a quick fix for bad government.

Final Thoughts

Cities matter.

While cities are limited by their geographic boundaries, the physical borders do not limit their global clout and influence.

As living breathing organisms, cities are better positioned to experiment and take advantage of their regional differences. While countries may come and go, cities remain as long term entities that will survive and thrive into the distant future.

With transportation becoming easier, making us a more mobile society, and with cell phones and the Internet speeding up our digital communications, our cities are becoming a more fluid environment.

Much like water that flows downhill using the path of least resistance, businesses and social structures have begun to move from areas we find less appealing to areas that are more appealing.

Future cities will be designed around fresh new ways for people to meet people, and they will be judged by their “vibrancy, their interconnectedness, and their fluid structures for causing positive human collisions.

Going back to my original question, the most powerful entity in the world 100 years from now will not likely be an individual city. However, that entity will be headquartered in a city, and the symbiotic relationship between that organization and its host city with be a major contributing factor. 

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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Tax Code 2.0: Is Extreme Complexity the New Simplicity?

 

When was the last time you used Google’s search engine? Were the results more or less relevant than the searches you did a year ago? 

Early on, after Google had developed its breakthrough search algorithms, they realized the Internet was a very fluid environment that would require constant monitoring and continuous changes to keep the people who were gaming the system at bay.

Currently Google is making changes to its main search algorithm roughly 40-50 times a month or slightly more than once a day. As the web evolves, this number will undoubtedly increase.

Now consider the possibility of a country using the same type of constantly evolving algorithms to determine its tax code.

Countries have similar problems with people trying to game the system to avoid paying taxes, so what if the IRS, or its equivalent in other countries, made similar algorithm adjustments to constantly close loopholes and determine the appropriate tax rate?

In case you’re thinking this is a ridiculous idea, the IRS is already making changes to the tax code at a rate of more than once a day – 4,680 changes since 2001.

But rather than thinking in terms of an income tax that is only filed once a year, what if it were applied to a national sales tax where literally billions of purchase transactions happen every day. Here are some thoughts on why this may or may not be a better way to go.

“Here in the U.S. we dedicate far too many brain cells to thinking about taxes!”

Current Tax Trends 

Over the past several decades, people and politicians in the U.S. have pushed for simpler taxes, yet the trend has always been in the opposite direction.

According to National Taxpayer Advocate, Nina Olson, the U.S. tax code contains almost 4 million words. Since 2001, there have been 4,680 changes, or an average of more than one change a day. Here are a few other stats:

Roughly 60% of taxpayers hire preparers, and another 30% rely on commercial software to prepare their returns.
Most taxpayers don’t know how their taxes are computed or what rate of tax they pay.
Tax code complexity makes fraud harder to detect.
Because the code is so complicated, it creates an impression that cheating will also be hard to detect. Complexity creates a grey area between right and wrong and people rationalize “forgetting” about income and declaring excessive deductions because “all the millionaires are doing it.”
In 2012, the IRS received 125 million calls, but only answered about two thirds of those who were trying to reach a live person. Callers had to wait, on average, about 17 minutes to get through.

The current trend line here is unmistakable. Taxes are getting more complex at a far faster rate. 

However, what most people have been overlooking is the complexity enablers, the tools and technologies that enable us to work with far more variables and decision points. We have entered an era of automated complexity, giving us the ability to manage problem sets far beyond the normal scope of human capabilities.

“Making hundreds of tax code changes every year with our current

income tax system is tantamount to having Google wait until April 15th

every year and making all their software updates on a single day.”

Making a Case for Extreme Complexity

Since calls for simplicity fall on deaf ears, and the ability to control taxes lies at the heart of congresses’ power, the only logical approach may be to push for extreme complexity, with a living tax code that gets monitored and adjusted every second of every day. 

Much like Google’s ranking algorithm or a power company’s demand pricing structure, the tax code could evolve into the living, pulsing heart of our economic engine. 

Taking it one step further, what if this overarching economic engine could also adjust interest rates regionally and nationally, and instantly react to emergency situations such as national disasters or life threatening conditions.

As an example, when someone faces a medical crisis, has a new baby, gets evicted, or loses a job, the system could automatically adjust interest, abate payments, or adjust their taxes until the situation improves. 

Here are a few other features that could be built-in to this type of system: 

Industry Stimulus – As a way to stimulate a specific industry, congress could decide to reduce taxes or eliminate them entirely for a designated commerce category over a certain period of time.
Time-of-Day Pricing – Adjust taxes based on time of day.
Regional Rates – Tweak amounts on a region-by-region basis.
Disadvantaged Pricing – Create special classes of people who pay less until their situation improves.

With our current tax system, where income tax is filed once a year, we have very little understanding of how any one particular change will affect specific groups, regions, or the economy as a whole. If we moved to a national sales tax, where the system is constantly being tweaked and monitored, we could instantly watch the ripple effects of every alteration.

Most view government’s role through an adversarial lens, when the reality is far different. Every government relies heavily on the performance of its people and businesses. In a competitive global economy, the synergy between a country’s component parts has to be maximized in order for any administration to stay ahead of other countries nipping at its heals.

However, for a system like this to work properly there would have to be a number of checks and balances incorporated into its architecture. This would mean the IRS may be allowed to manage it but wouldn’t be allowed to make policy decisions, and operational metrics would need to be optimized for overall performance as opposed to favor-granting schemes or fine-tuning around someone’s personal interests.

“People in the future will look back at our time and laugh

at how insane our tax code is to deal with!”

Two Scenarios

Here are a couple brief scenarios to help expand your thinking:

Scenario 1: Any street with a high number of stoplights could either be optimized around creating the best flow of traffic or maximizing the amount of sales tax generated in local businesses. 

Impulse buying decisions are often made when life is put on hold, even briefly at stoplights, so would it be better to lean towards better flowing traffic or increasing revenue streams for neighboring establishments?

More importantly, how insane is it to think of having a tax system control our stoplights?

Scenario 2: Whenever taxes are added to the price of a product it becomes very difficult for consumers to calculate exactly what they’ll pay when checking out of a store. With a national sales tax, if we have to do the math ourselves, it will only get worse.

In a hyper connected world, smart tags could be developed with readouts that display a complete breakdown of a product’s price along with its associated taxes. Every store would these Internet-connected smart tags in front of each item they’re selling.

Whenever consumers have the complete picture, they are better equipped to make purchase decisions.

“Every complex system can become a breeding ground for power abusers

if its not properly designed and managed, especially if the natural state

of transparency is a complex fog of nano intricacies.”

But here’s where things can go wrong…

Every complex system can become a breeding ground for power abusers if its not properly designed and managed, especially if the natural state of transparency is a complex fog of nano intricacies. 

In a two party form of government, for instance, the party in power could build in specific disadvantages for those living in opposition districts or working in opposition industries.

A national sales tax could begin to distort the authority of state and regional taxes and overshadow their autonomy.

All complex technologies have flaws, and for the hacker crowd, security systems designed to protect money tend to come across like a bully yelling, “I dare you!” with little danger of being caught.

A system like this should in no way be considered a panacea for everything we have problems with today, because many things will go wrong. Yet, as governments evolve, it may be inevitable.

“Can extreme complexity guide us to a simpler, better life ahead?”

Final Thoughts

Here in the U.S. we dedicate far too many brain cells to thinking about taxes, and I’m sure it’s the same way in many other countries. 

Every hour we spend thinking about taxes is one less hour we can devote to growing our businesses, helping our families, or solving far more important problems in society. 

Those who are demanding a far simpler lifestyle are being drowned out by the complexity enablers, and ironically, extreme complexity may indeed be where authentic simplicity lies.

Governments have a vested interest in creating a better functioning country, and current systems rely heavily on guesswork with very few (and slow) metrics for making policy decisions.

Making hundreds of tax code changes every year with our current income tax system is tantamount to having Google wait until April 15th every year and making all their software updates on a single day.

A national sales tax can provide real-time data with the ability to make changes on the fly. It’s far more attuned to the fluid nature of society and our rapidly changing global economy. 

At the same time, many things can go wrong. Complex systems often spawn complex problems, and Big Brother paranoia will be rampant.

I’ve often said people in the future will look back at our time and laugh at how insane our tax code is to deal with. 

So can we actually achieve some sort of Zen state of invisible tax equilibrium? Can extreme complexity guide us to a simpler, better life ahead? I’d love to hear your thoughts.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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When Prisons Become Illegal

The first time I watched Star Trek and heard Captain Kirk utter the phrase – “Set your phasers to stun!” – it occurred to me that these future weapons featured a number of different settings.

While most people assumed a simple two-position switch with only “kill” or “stun” options, I found myself dwelling on the possibilities of an eight or ten-position switch and wondering what the other options might be. Perhaps they would include stun 1 (with pain), stun 2 (without pain), giggle (make them laugh uncontrollably), amnesia (forget what they’re doing), slo-mo (causing them to move in slow motion), suicide (making them take their own life), seizure (all muscles fire at once), overwhelming guilt (immobilized by guilt and self loathing), or overwhelming pity (suddenly they become your friend).

These may sound silly, but since today’s weapons only have one setting, we have a hard time imagining a technology with more choices.

Similarly, when people show up in court, judges only tend to have one setting for justice – incarceration. With our existing infrastructure built up around jails and prisons, we have a justice system that has a hard time considering other options.

With incarceration rates in the U.S. now reaching epidemic levels, I would like to take you through the exercise of envisioning a world where prisons are no longer an option. If judges no longer had ‘incarceration’ as a setting on their gavel of justice, what kind of world would we live in? Here are a few thoughts.

Our Current Incarceration Epidemic

The United States represents only 5% of the world population yet houses 25% of the global prison population. Nearly half of all prisoners in the USA are incarcerated for non-violent crimes.

During 2011, the total U.S. prison population declined for the second consecutive year, to under 1.6 million inmates or 15,023 fewer inmates than in 2010. This represents a 0.9 percent decrease in the total prison population.

The positive trend, however, is still only a small blip in a much larger problem. Statistics show the U.S. prison population rose by 708% from 1972 to 2008, a rate far outpacing that of general population growth and crime rates.

While 1 out of every 122 Americans is now actually in prison, 1 out of every 32 of us is either in prison or on parole.

This means that 7 million adult men and women — about 4.1% of the total U.S. adult population — are now very involuntary members of America’s “correctional community.”

According to the U.S. Bureau of Justice Statistics the United States still has the highest documented incarceration rates and most overcrowded prisons in the world.

Punishment Vs. Rehabilitation

Our current criminal justice system has been developed around several distinct stages, including arrest, prosecution, trial, sentencing, and punishment, which usually involves some form of imprisonment. This is a very expensive process that employs millions of people throughout the entire system.

Rehabilitation is the idea of transforming a person who has committed a criminal act so they won’t do it again.

Rehabilitation can take place at any stage of the system. As an example, when a police officer makes first contact with a criminal, they can impose on-the-spot penalties and warnings. However, the sentencing and punishment stages of the process are where most controversy lies.

Advocates of the status quo argue that there is great value in punishment as a deterrent and even greater value in removing disruptive personalities from society.

The counter argument is that punishment actually leads to greater degrees of criminality, and that prisons themselves become something akin to a college for crime, and people leaving prison are worse than when they went in.

While good arguments can be made on both sides, there is little argument over the cost of maintaining the current system. Not only are taxpayers picking up the cost of police, attorneys, judges, and prisons, but hidden many layers below is the overall toll this system exacts on society.

Prisons separate wage earners from their income, parents from their children, and self-sufficiency from state support. In a paycheck-to-paycheck society, incarceration almost always leads to bankruptcy, and a “felony” offense on your criminal record most often leads to a life of poverty.

The purpose of this column is not to argue the merits of the current system. Rather, it’s to imagine something different.

A Note about Restorative Justice

Restorative justice is an approach to justice that focuses on the needs of the victims and the offenders, as well as the surrounding community.

Crime is a larger issue than just how government deals with criminals. Since crime victims and the community bear the brunt of the crime, they too must be actively involved in the criminal justice process for a true change to occur.

Currently, many victims feel re-victimized by the criminal justice system itself because it excludes them from most of the process. Using a different approach, restorative justice victims take an active role in the process, while offenders are encouraged to take responsibility for their actions, “to repair the harm they’ve done—by apologizing, returning stolen money, or community service”.

Restorative justice asks that victim’s concerns be considered throughout the process. Victims need help regaining a sense of control over their lives, and they need to be compensated for their loss.

Rather than simply warehousing offenders, restorative justice system holds offenders personally accountable. They need to confront the pain they have caused to their victims and take the steps necessary to overcome their criminal behavior.

While restorative justice offers a positive step in the right direction, let’s take some of these ideas a few steps further.

The Death Row Question

Question: You find yourself on a jury, deciding the fate of some heinous criminal, such as Ted Bundy or Josef Mengele. You have the choice of either sentencing him to the electric chair or to total amnesia. Which would you decide?

Total amnesia involves wiping the brain clean and the people will have to start over from scratch, relearning how to walk, talk, and even how to feed themself all over again.

The question is a good one because it gets to the essence of what we value in human life. Do we value the life itself or the personality that exemplifies it?

I’ve asked this question of many groups, all of whom gave me different answers and different reasons for justifying their thoughts.

My favorite answer came from my son Kyler when he was 11 years old. After thinking about it for a while, he said, “I don’t think that amnesia thing is a good idea because people would still hate him and he wouldn’t know why.”

Envisioning a World Without Prisons

Let’s start with the simple question, “If prisons were removed as an option for working with criminals, how would we deal with them?”

In much the same way we considered different settings on a Star Trek phaser, how could we develop different ways of managing criminal offenders? As technology progresses, here are a few possibilities:

Automated Monitoring: With drone technology progressing quickly, we will soon have the ability to assign a small inconspicuous hovering drone to 24/7 surveillance on an individual. Over the next few years drones will be able to lock onto a specific digital signature (perhaps a heat signature combined with tracking brain and energy waves) for every individual. Once we can track an individual, the next step will be to auto-analyze the person’s actions and take measures instantly whenever a violation occurs.
Automated Correction: As we move into an increasingly transparent society, deviant behaviors will be increasingly easy to detect. As an example, pocketing merchandise in a store, breaking into a house, or hitting/killing someone will be very easy to track. For someone who is a habitual offender, the same drones that are used to monitor someone can be used to dispense warning shocks, Taser jolts, or other forms of stopping the aggression.
Automated Punishment: When dealing with more violent individuals, people could be sensed to “electronic canings” where a drone randomly shocks someone a designated number of times over a certain period of time. One caveat for resorting measures like this would be that the punishment couldn’t put the person in harms way or cause problems for their family or friends.
Punishment Matching the Crime: In the future we will have the ability to painlessly alter the function of the human body to closely match the punishment to the crime. As an example, a person who is a pickpocket will lose their ability to use their right arm for the next six years, or a burglar will lose their ability to use their legs for the next 8 years, or a rapist will experience a constant state of erectile dysfunction for the next 20 years.
Brain Wipes: In extreme cases, as in the Death Row Question above, the only viable option may be to wipe the brain clean and start over.

The advantage of most of these approaches is that the offenders can still remain productive members of society and the costs will be trivial compared to incarceration today.

Yes, technologies like these will lead to many abuses. But as we peel away the onionskins of transparency and add new layers of technology, our options for auto-monitoring, auto-correction, and automated forms of punishment will yield unusual new alternatives for righting the wrongs of deviant people in society.

Final Thoughts 

This morning as I was scanning through headlines in the Denver Post, and came across: “Denver man, 85, with cane faces assault charge on security guard.”

Reading further down the article, the older gentleman became enraged after a security guard seized his handicapped-parking permit because it had expired.

Few cases, in my mind, are as worthy of hiring attorneys and spending time in a courtroom in front of a judge than this one. Of course I’m being facetious.

Incarceration is a system that breeds failure. People coming out are worse than when they go in.

At the same time, we live in a flawed world filled with flawed people. So some action needs to be taken.

I don’t believe it will ever be possible to find an actual “cure” for the excesses of human nature, nor should there be. But there is always room for improvement, and it’s very obvious that our current checks and balances are not adequately reining in the excesses of today’s bureaucracy.

For this reason, I’d love to hear your thoughts. Is the current effort with restorative justice enough, or is there something better?

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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Entering the Era of Global Mandates

The year is 2018 and the Norwegian Nobel Committee, the organization charged with selecting the winner of the famous Nobel Peace Prize, has changed their process. They’ve decided to host a global election to allow the people of the world to decide which of the candidates is the most deserving.

Two months before the election, a slate of four possible candidates is announced. The election itself takes place over a 24-hour period and a secure online voting system allows voters to make their selection from any computer, tablet, or cellphone.

As a way to push voters to learn more about each contender, they are given a short test consisting of eight simple questions, two about each candidate, before the official vote is cast.

Peace advocates around the globe are anxious to participate, and once Election Day formally clicks to an end, a total of 740 million voters from 50 different counties have selected the winner.

With spotlights blazing and countless news cameras poised to capture the moment, the winner is formally announced. However, unlike previous winners, this person suddenly becomes the most famous person in the world, more celebrated than any king, president, or prime minister on the planet.

While on the surface this may appear to be nothing more than an ingenious PR stunt for selecting prizewinners, it is indeed much more. Voting software that crosses country lines fall into the category of “catalytic innovations” with the potential of creating new global mandates. Here’s why.

Catalytic Innovation

Unlike “disruptive innovation” that disrupts an existing industry, “catalytic innovation” has the potential to spawn entirely new industries.

Any technology that becomes a catalyzing agent for opening doorways into a world never before seen, falls into the broad new category of Catalytic Innovation.

Electronic voting has long been touted as a more efficient way to conduct an election. But the technology will offer far more than just a new face to an old process.

Possible Scenarios

Early forms of global elections are already in play with shows like American Idol and the Eurovision Song Competition. But moving past the music scene, in what situations do global elections become an appropriate tool for influencing the future?

Certainly there are many relatively harmless scenarios that could be envisioned:

Selecting the Time Magazine “Person of the Year”
Determining the location of the next Olympics or World Cup
Re-designating the official “Seven Wonders of the World”

There are also many ways that a global election could be overreaching, pushing past our present limits of acceptability. Here are a few examples global elections that would likely get censored out of or disallowed in many countries:

Selecting the official leader of the world
Deciding who officially owns the moon
Attempts to globally override the results of an individual country’s election
Designating an official religion for the world

At the same time there are huge grey areas where the appropriateness of this kind of election is unknown.

Should there be a global ban on plastic bottles that are not biodegradable?
Should we place limits on the amount of fishing, mining, pollution, or deforestation that takes place around the world?
Could there be a global code of ethics, bill of personal freedoms, laws of right and wrong, privacy policies, etc?

Many of our national systems are becoming part of new global systems. As such, we could use global elections to determine the official policy for:

The Internet
International airlines
GPS – Global positioning systems
Global currencies
Intellectual property
Global passports
Central banks

Many people have predicted we will someday enter an era of e-democracy where citizens can weigh in on far more issues than those that end up on a ballot. Since it circumvents the power of elected officials, e-democracy will likely only have limited application in the future.

But going beyond country borders, we circumvent far more than a few local power brokers.

Global Mandates

In the context of a global elections, at what point will the results be large enough and representative enough to influence, even supersede, the authority of an industry group, individual country, or even a group of countries?

As an example, would the participation of 20 million people from 5 countries constitute a global mandate? Probably not.

How about 500 million people from 80 countries? Or would it require a certain percentage of the world’s population, say 10%, which translates into 700,000 people?

Every industry or topical area has its own “affected population.” Should the vote require a minimum percentage of an affected population?

If the results of an election were only separated by 1% of the vote, is that still too close to be considered a global mandate, or will it require some sort of “obvious will of the people” supermajority such as 60-70%?

At this point, there are far more questions than answers. But that will not stop people from using global elections to influence the world.

The Coming Battle of the Mega-Influencers

There are several people who have the ability to sway world opinion.

As an example, if a global election were being orchestrated by someone like Mark Zuckerberg, Jack Ma, Larry Page, Jimmy Wales, Mark Cuban, Reid Hoffman, Marrisa Mayer, or Peter Thiel, most of the whole world would take notice.

Companies like Facebook or Google, with over a billion users worldwide, may be the perfect platform for both promoting and conducting early elections for testing the limits, but these are not the only ones.

While the motivations behind a Facebook or Google-led election may seem completely altruistic on the surface, their behind-the-scenes plan may be to influence China, in a way forcing it to open its doors to tech companies or face being “left out” of key global decisions.

Any election with an obvious hidden agenda like that will be destined to fail.

Final Thoughts

So far we’ve only scratched the surface of how the Internet can be leveraged to influence the entire world. Pushing beyond the current playgrounds of photo sharing, online games, and social networks are apps with far reaching implications. Electronic voting is one of them.

The first wave of global elections will be orchestrated by people of power and influence who want to test the limits. Most of the first wave of elections will be poorly conceived, attract a “too-small-to-notice” following, and will be considered by most to be a failure.

But much like Peter Diamandis’ effort to catalyze global prize competitions, someone will emerge as a thought leader to pioneer a new global election industry.

Inside what may start out as a playful way to get more people involved in selecting the winner of the Nobel Peace Prize is something far more serious – methodologies for establishing new global mandates.

In best-case scenarios, global mandates will serve as everything from a temperature gauge for global opinion to a checks and balance system for over-reaching countries. They may also be used by people in first world countries to impose their will on the less fortunate.

Do global mandates pose a treat to our current way of life, or do they fortell better times ahead? This is a topic that everyone should have an opinion on, so please add your comments below. I’d love to hear what you’re thinking.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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Four Unexpected Macro Trends for 2013 and Beyond

There is great value in the unknown.

My good friend Jeff Samson put it this way. “If I am ignorant of something and it is suddenly presented to me, I may find it innovative. The other option is that I will be annoyed by it, but eventually when enough others have accepted it, I will buy in and consider it innovative. So ignorance is as important to innovation as knowledge!”

Ignorance is also a valuable part of the future. Once a future is known, we quickly lose interest. For this reason, our greatest motivations in life come from NOT knowing the future.

So why, as a futurist, do I spend so much time thinking about the future?

Very simply, since no one has a totally clear vision of what lies ahead, we are all left with degrees of accuracy. Anyone with a higher degree of accuracy, even by only a few percentage points, can offer a significant competitive advantage.

Using this as a backdrop, here are four unexpected macro trends that I see dramatically influencing our future.

 1.) The Shift to Natural Gas Vehicles

Every year we hear the predictions about changes in the energy landscape, but we are finally seeing hard evidence that the shift has already begun, but in far different ways than most have predicted.

Here are a few recent headlines:

“Coal to challenge oil as top energy source” – Global coal demand will rise 2.6 percent annually in the next six years and challenge oil as the top energy source, according to the International Energy Agency.
“U.S. to overtake Saudi as top oil producer” – Projections show the U.S. will overtake Saudi Arabia and Russia as the world’s top oil producer by 2017.
“Japan Commits to Eliminating Nuclear Power” – The Japanese government is making plans to eliminate nuclear power by the 2030s.
“All Roads Lead to Natural Gas-Fueled Cars and Trucks” – Royal Dutch Shell plans to invest heavily in liquefied natural gas.

The last headline talks about a topic I’ve been following closely for the past year.

With the recent boom in natural gas production, Shell is taking the lead on creating an infrastructure to offer a natural gas option at its fueling stations.

It’s important to understand the two different kinds of natural gas – liquid natural gas (LNG) and compressed natural gas (CNG).

LNG is being rolled out at truck stops for long-haul, heavy-duty trucks with the advantage of longer driving ranges while not impacting tractor weight and other incremental costs.

CNG is primarily used in cars, buses and smaller trucks.

Here are some of the key trends driving this change:

Shell projects global demand for LNG to double to 400 million tons by 2020 and to potentially as much as 500 million tons by 2025.
Clean Energy Fuels recently bought two plants for producing liquefied natural gas for long haul trucks from GE. These plants have the capability of producing 500,000 gallons a day. The company currently has 70 stations up and running with plans for another 64 in the works for next year.
In 2013, four major manufacturers will introduce a 12-liter LNG engine, which is the optimum size for heavy-duty 18-wheeler trucks.
LNG costs the equivalent of a $1.50 gallon.
About 112,000 natural gas powered vehicles are already in use in the U.S., mostly delivery trucks and other “local” vehicles.
Fed Ex and UPS are continually switching more vehicles in their fleet over to CNG.
Waste Management announced it is converting 80% of its trash trucks to CNG.
Only 540 CNG fuel stations are currently open to the public in the U.S. but that will soon change.
Eaton Corp. and General Electric are currently in development on a $500 home refueling station for CNG.

The Phill CNG refueling station

A Note About Phill – In 2004, Toronto-based Fuelmaker worked with Honda to develop a CNG refueling station for the home. The product they developed was called “Phill,” a small compressor appliance mounted on a garage wall that would enable someone to refuel overnight. It was priced around $4,500.

However, Honda pulled the plug on this venture in 2009 and the company was sold to Fuel Systems Solutions. New efforts in this space by Eaton and GE will force a dramatically lower price point.

Hurricane Sandy showed us how unreliable our current systems can become in the event of a natural disaster. We now know that we have too many choke points and natural gas cars and generators that can be refueled at home will dramatically change that equation.

The transition, however, will be slow because we’re dealing with the physical world. Building momentum will take time, but this train is already rolling.

2.) The Great Insourcing Movement – The Pendulum Swings Back Again

In the 1970s and 1980s strikes by union members were a commonplace occurrence. Fights between management and workers were very contentious, causing business owners to plot out ways to circumvent union influence.

As companies grew more multinational in scope, it became an easy decision to move factories overseas. Dramatically lower salaries, increasingly competent workforces, and the elimination of in-house labor issues made it relatively painless to send jobs to other countries.

But those days are quickly coming to an end. A recent article by Charles Fishman in The Atlantic titled “The Insourcing Boom” identifies some of the key changes that are driving many companies to rethink their outsourcing strategies.

Here are some of reasons why “insourcing” will become the next macro trend in business:

Between 2000 and 2010, over 6 million factory jobs were lost in the U.S. Between 2010 and 2012, 500,000 new jobs were created.
Oil prices are three times what they were in 2000, making cargo-ship fuel and transportation cost far more expensive.
A weaker U.S. dollar against a stronger Chinese Yaun makes China less competitive.
The natural-gas boom in the U.S. has dramatically lowered the cost for running a factory. (Natural gas now costs four times as much in Asia as it does in the U.S.)
Wages in China are five times higher than what they were in 2000, and are expected to keep rising 18% a year.
American unions are changing their priorities. GE’s Appliance Park’s union was so divisive in the ’70s and ’80s that the place was known as “Strike City.” That same union agreed to a two-tier wage scale in 2005—and today, 70 percent of the jobs there are on the lower tier, which starts at just over $13.50 an hour, almost $8 less than what the starting wage used to be.
U.S. productivity continues to find gains through efficiency, and labor costs have become a smaller and smaller proportion of the total cost of finished goods. It’s far more difficult to save money by chasing wages anymore.
Shipping products from overseas requires 1-2 months worth of inventory in the pipeline before it reaches a customer. With rapidly fluctuating consumer demands, pipeline inventory can be very expensive and hard to manage.
Product development cycles have grown increasingly impatient. The additional time involved in working with foreign manufacturers makes companies less competitive.
The rise of the American craftsman. Engineers who work directly with manufacturing personnel are able to build a far better product. In one example, Fishman describes how a design team was able cut the work hours necessary to assemble a water heater from 10 hours in China to two hours in Louisville, KY.

Look for “insourcing to be a long term trend. It certainly won’t work in all industries, and it may not even work in most. But the playing field has shifted, and those who aren’t paying close attention may soon end up as little more than a footnote in the annals of business history.

3.) Multidimensional Literacy – The Evolution of Consumable Information 

Contrary to what most academics think, literacy is not just about reading and writing. It can be, but that becomes a very narrow-minded way of looking at the world.

People in the U.S. are consuming information 11.8 hours every day, and they are doing it in many different ways:

Photo Literacy – Currently over 250 million photos are uploaded onto Facebook every day.
Video Literacy – Google recently announced that videos are being uploaded to YouTube at a rate of 48 hours of video every minute.
Coding Literacy – With over 8,000 coding languages currently in existence and new ones coming into play faster than old ones are going away, people who are “code literate” are in huge demand.
Game Literacy – The video game industry is expected to grow from $67 billion in 2012 to $82 billion in 2017 with game playing in 70% of all households.
App Literacy – Between Apple and Android, over 1.5 million apps are currently in existence and this number is climbing rapidly.
Device Literacy – The “Internet of Things” is growing exponentially, and Cisco estimates the number of devices connected to the Internet by 2020 will hit 50 billion.
Social Media Literacy – One out of every five pageviews on the web is on Facebook. With over 1 billion registered users, Facebook is leading the pack, but there are many other brands of social media like Twitter, Pinterest, Google+, and LinkedIn nipping at their heals.

In addition to the ones listed above are streaming music, podcasts, audio books, movies, courseware, and many more.

Only a small percentage of the information we consume is the written word, and this percentage will continue to decline as we develop newer, faster, and better ways to package information.

Yes, we still need to know how to read and write, but trying to exist in a world without being able to create videos, edit photos, download music, operate devices, or write code will be increasingly difficult.

Competing for jobs in the future will require people to be broadly literate, with the advantage going to those who are the most multidimensional.

4.) The Legalized Marijuana Movement – Nudging the Snowflake that Started the Avalanche

People have been predicting the legalization of marijuana for decades. To say that legalization was highly anticipated is something of a gross understatement.

The problem is that everyone was predicting California would be first. In fact, most of the secret laboratories at the tobacco and pharmaceutical companies for testing and refining pot are based in California. But it was Colorado and Washington that decided to go first.

Unbeknownst to most, these companies have already begun leasing space in Colorado and Washington to better position themselves for the first wave of business opportunities.

While both states are wrestling with an entirely new type of “controlled substance” legislation, lobbyists on both state and federal levels are being put into place to help “guide” people’s thinking.

What most people are missing is that marijuana is already one of the most researched substances in all history. There is already a proven market with proven demand.

Yes, other countries have had legal marijuana for years. But when the U.S. changes its mind, it generally creates an entire new global standard.

The legalization of marijuana will cause the U.S. to rethink its entire “war on drugs” policy, a war that has resulted in far more casualties than most wars. This will result in an abrupt shift in enforcement, legal and justice policies, incarceration rates, and related kinds of legislation.

Remember, any human act is only illegal if humans say its illegal. As history has shown, we often change our minds, and this is one of those times.

As Napa Valley is to the wine industry, Colorado and Washington will be to the emerging marijuana industry. While many will take a wait-and-see approach to how the industry develops, major fortunes will be won and lost starting with the early players in 2013.

Final Thoughts

Speaking about four macro trends is but a drop in our current ocean of change.

However, discussions around these topics have been rather limited and opening them up for a broader discussion seems very appropriate.

At the same time I’d love to hear your thoughts about these and other macro trends that we’ll be confronting in the future. We won’t be able to cover everything, but take a few moments to let me know what you’re thinking.

Very often the first discussion on a topic is the most important.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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Eight Shocking Quotes from 2012 that will Redefine Our Future

When is the last time you heard a statement that caused you to stop dead in your tracks?

It doesn’t happen very often, but for each of us, there are a few unusual sound bites that will permeate our senses and sway our thinking.

On these rare occasions, it’s usually a statement by someone we trust, with the power, authority, and credibility to make such a declaration.

However, inside all of the statements the world finds important are the crème de la crème, the Richter scale shifting assertions that really stand out. These are statements so insightful and memorable that they have the power to change the course of history.

For this reason, I wanted to focus on eight shocking statements made in 2012, and discuss briefly how they will invariably shift our outlook on the future.

Here are the eight statements we’ve judged to be trend-setters for 2013 and beyond.

1.) “When you come to the end of the innovations that business and government are willing to invest in, you still find a vast, unexplored space of innovation where the returns can be fantastic. This space is a fertile area for what I call ‘Catalytic Philanthropy.’” – Bill Gates

People donating money to charities are often frustrated by the results, but none more so than the king of philanthropy himself, Bill Gates.

For this reason, Bill has spent considerable time and energy rethinking how to make his charity count, and in doing so he’s hit upon a novel approach. Catalytic Philanthropy is a collaborative effort between funders working together with service organizations, governments, and corporations to solve large, societal issues.

According to Gates, “Catalytic Philanthropy has the high-stakes feel of the private market but can transcend the key market limitations because investor don’t need a share of the benefits–those go to poor people or sick people or society generally, all of whom stand to gain earth-shaking returns from the kind of innovations that business and government likely won’t pursue unless philanthropy goes first. And once you’ve found a solution that works, catalytic philanthropy can harness political and market forces to get those innovations to the people who need them most.”

2.) “We have ability to solve almost all of man’s grand challenges within the next 30 years.” – Peter Diamandis, Founder of the X-Prize Foundation.

In his recent book Abundance – the Future is Better Than You Think, Diamandis explains, “Our brains have been conditioned to think in linear terms. Most of us only see the future as linear extrapolations, but technology often surprises us with exponential growth curves.”

Scarcity is nearly always relative, but there is an unlimited supply of creativity, ideas, and solutions to today’s problems given enough time, proper focus, and the right kind of competition.

With his research, Diamandis concludes that many new technologies are already helping to mitigate challenges related to health, education, and food. He goes on to explain how small teams, prizes, and incentive-based competitions can quickly provide solutions to some of the world’s greatest problems.

 

3.) “Big data will replace the need for 80% of all doctors” – Vinod Khosla, 
Co-founder of Sun Microsystems and VC at Kleiner Perkins

Khosla made this statement at the Health Innovation Summit hosted by Rock Health in San Francisco.

Never one to mince words, he started by sharing his dim view of the industry. “Health care is like witchcraft and based largely on tradition. Entrepreneurs need to develop technologies that enable doctors to move away from practicing like ‘voodoo doctors’ and act more like scientists.”

He went on to say, “Health care must be more data driven and about wellness, not sick care. Over time, eighty percent of all doctors will be replaced by machines.”

Khosla believes that being part of the health care system is a huge disadvantage. To disrupt an industry like this, entrepreneurs need to attack it from outside the current status quo.

Even though his caustic remarks yielded a firestorm of controversy, for the most part, the reactions failed to refute Khosla’s main point about big-data dramatically changing healthcare.

4.) “Software is eating the world.” – Marc Andreessen, Inventor of the Browser, Co-founder of Netscape and the VC firm, Andreessen Horowitz

We all know about the growing demands of the online world, but creating a visual image of the software industry eating the world adds a new dimension to this pronouncement.

According to Andreessen, “More and more major industries are being run on software and delivered as online services—from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.”

Why is this happening now?

Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago. Software programming tools and Internet-based services make it easy to launch new global software-powered start-ups in many industries—without the need to invest in infrastructure and train new employees.

With lower start-up costs and a vastly expanded market for online services, the result is a global economy that for the first time can be fully wired digitally.

Click here to view the embedded video.

5.) “3D printing will be bigger than the Internet.” – Chris Anderson, Former Managing Editor, WIRED Magazine and author of Makers: The New Industrial Revolution

With 3D printing still mostly happening in the hacker fringes, few in the general public are grasping the true level of innovation happening in this space. Entire car bodies, fully functional bicycles and even perfectly flyable drone airplanes have all been brought to life with 3D printers.

The fact that the revolution is physical puts it directly into the ‘bigger than the internet’ category. While the web has had an enormous impact, it’s primarily focused the digital end of the spectrum. But once we change the way everything is made, it begins to impact our lives as much as the Industrial Revolution did.

Yes, the Maker Movement is far more than 3D printing, but over time, the printers have the power to dwarf all other aspects of it.

According to Anderson, “The world’s factories are now increasingly open to anyone via the web, creating what amounts to ‘cloud manufacturing.’ And huge Maker communities have grown around sites such as Kickstarter and Etsy. In Silicon Valley, the latest mantra is that “hardware is the new software.”

The power of the web can now be applied to making real stuff. As a result, we’re going from the “tinkerer” phase of this movement to entrepreneurship.

6.) “Denser cities are smarter and more productive” – Richard Florida, author of the landmark book, The Rise of the Creative Class.

“In general, more productive people are attracted to more productive places,” says Florida.

Density plays an important role in economic growth. Density brings people and firms closer together which makes it easier to share and exchange information, invent new technologies, and launch new firms.

However, increasing population density is not always beneficial. With his research, Florida draws three important conclusions:

Density plays a considerable role in the productivity of metro areas. Specifically, doubling density increases productivity by an average of two to four percent.
Density plays a bigger role in cities with higher-level skills and superior human capital.
The effects of density are greatest in industries like information, finance, arts and entertainment, and professional services—sectors that place a high premium on creativity and sharing of ideas.

Click here to view the embedded video.

7.) “By 2030 over 2 billion jobs will disappear.” – Futurist Thomas Frey, author of Communicating with the Future

Whatever you may be thinking when you apply for a job today, you can be sure your prospective employer is thinking, “Will this person add more value than a robot, a computer, or a worker in India?”

We all know that jobs are disappearing. In fact the newspaper headlines are full of downsizing companies and the toll it’s taking on society. But no one attempted to quantify the looming size of this problem until my keynote at TEDxRESET in Istanbul in Feb 2012.

The prediction of 2 billion jobs disappearing wasn’t intended to be a doom and gloom prediction. Rather, it was intended as a wakeup call, letting the world know how quickly things are changing, and letting academia know that much of the battle ahead will be taking place on their doorsteps.

8.) “Not only CAN anyone be an entrepreneur, but they MUST be.” – Reid Hoffman, cofounder and executive chairman of LinkedIn Corporation, and author of The Startup of You.

All of us are entrepreneurs of our own lives. We must act as CEO of our careers, take control of our professional future, and become globally competitive.

“The Startup of You” identifies three steps to expand your strategies for this new world of entrepreneurship.

Plan to Adapt – Plan ABZ – Plan A is the current implementation of your competitive advantage. Plan B runs in tandem, and if plan A is no longer working, then a pivot to Plan B can be relatively painless. Plan Z is the “lifeboat” option for when neither A or B are working.
Nurture your networks and relationships – The best way to strengthen your network is to keep a robust mix of collaborative partners, alliances, likeminded individuals, but also, loose acquaintances.
Take intelligent risks – This doesn’t mean you should turn every decision into a life-or-death situation. Rather, the idea of intelligent risk-taking has more to do with “leaning into” risks to better yourself and your career.

Final Thoughts

Yes, I’ll admit it was a bit self-serving to add my own quote to this list, but it ends up being an important statement, and it ties in nicely with Reid Hoffman’s thinking about everyone needing to entrepreneurialize their life.

It’s important to understand that there is a constant battle being waged over the needs of the present vs. the needs of the future. It’s very easy to place short-term profitability ahead of long-term strategies.

At the same time, the future cannot be our only priority otherwise we lose our ability to function in the present.

It’s easy to look around us and see what exists today, but the true visionaries are looking for what’s missing.

The voids and empty spaces around us will have people stampeding to fill these vacuums once they can be defined and understood. Shocking statements like these do exactly that.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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