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Linked Data is now officially on its way to the commercial world.  Google is creating the market incentive to drive it, one element at a time.

Google’s recent unveiling of google snippets and search options means its time to change how you display your products online.  Your products and any reviews of your products by customers will soon be found if you have displayed in one of several formats. The technical name for these are RDFa or one of several microformats.  Also using google, people can more easily look for reviews. Soon also they will be able to compare different products and extract specific information from your website using Google Squared.

What does this mean?  It is the beginning of a change in how the underlying code of websites is written.  It will mean that facts, social remarks  or other categories of information which the consumer deems is important will be more than keywords.  Keywords are not dead but they are now going to one element of the search equation rather than the only one.  Google will likely determine if people find well formatted information more useful and if they do, it is likely those sites will start to appear at the top of searches.

Of course this will not happen overnight but this announcement and the fact that yahoo already is doing similar with Search Monkey means the race to a Linked Data web of meaning has now started and will proceed in a step by step fashion probably based on what meaning the consumers are searching for.

But yes its time to change how your products are displayed online and time to start to reconsider social content in your website.  That is certain.

Economics, according to wikipedia, is the social science that studies the production, distribution, and consumption of goods and services.

Notice money is not mentioned. But the current theories of economics socio-economic (Kondratieff (Kondratiev), Schumpeter, Kuznets) , fiscal-economic (Keynesian / Monetarist) and political-economic (Libertarian/Austrian) theories are all based on monetary markets.

Well that makes sense because MOST of the production, distribution and consumption of goods and services in society has used money as a means to relate them to another for at least 200 hundred years.  Money was a great leap forward in human history because it allows independent  transactions of goods and services. You can sell to one person and buy from any other, instead of having to set up a complex barter network with multiple prosumers or grow/hunt/forage everything on your own.
In modern times, you can also manipulate the market by artificially altering the money supply like a throttle on an engine.

Even so non-monetary based transactions have always been with us and seem to take 3 forms:

1. Bartering. Exchange between 2 people or a chain of prosumers.

2. Reputation. People will do things so that others think of them differently (usually in a more positive light).

3. Common good.  Sometimes hard to distinguish from reputation.  A good example are for-profit companies which contribute to common open source code based so they all share an updated platform to build their products on.

These have not been considered when discussing economics this century, because these types of economies were usually limited to family and local neighborhoods for most people.   A couple of examples:

1. Entering a local pie contest. (production driven by reputation)

2. Helping family members to do home improvements. (service driven by reputation)

3. Taking of your lawn so it looks as good as the neighbors’ and keeps the value of the neighborhood high.  (service driven by common good).

These are not significant to a modern economic structure.  And while wealthier people have donated to causes driven by reputation,  it is usually lumped into the other economic theories because it involved money instead of services.

Most people have been limited in terms of the amount of goods and services they can produce for these non-monetary motivations because raw materials  bought with money were usually required and then it essentially becomes a donation with a small value add. (Purchase the ingredients for brownies and donate them to the bake sale.)

Services can more easily be offered for non-monetary motivations, but their significance has also  been limited in modern times.  Usually these involve some basic labor such as fixing the neighbor’s flat tire. When they get more complicated they start to compete with opportunities to earn income which tend to limit the amount of skilled service people are willing to donate.

The impact of services offered for non-monetary motivations have in the past have also been limited in there impact to the larger economy for three major reasons:

1. Monetary costs of distribution and replication.

2. Limited distribution limits the potential impact and thus motivation for common good, reputation driven services and good.

3. Modern demands for complex goods and services limits the impact of the individual.

Social media removes these all barriers in the case of information products and services. (see more detailed explanation below)

In social media, two types of phenomena have started to change the impact of non-monetary activity to the larger economy:

1. Crowdsourcing/Collaboration (distributed production/ distributed problem solving). The best example is in software: linux, drupal, and other significant software programs which other companies charge license fees for.

2. Information distribution and analysis. Blogging in short.  Reporting on events, spreading the reports of others and analysis of news events.

3. Social Networks.  These have made it possible to impact large numbers of people if you create or collect highly relevant services or information.

Social media is technology amplified social interaction and allows for broad free distribution of information products and services.  Linux now is starting to threaten Microsoft’s dominance in the server and device markets.  Blogging has now replaced a significant amount of the magazine and newspaper industry.  (Actually newspapers seem to be hanging on by getting story leads from the blogosphere.  Don’t believe this? Check the thickness of your favorite magazine and compare it with what it was 5 years ago.)

So the big question… What does  is the impact on people of a non-monetary social gain? How do you compare it against monetary based gains?

Do we need to now combine non-monetary and monetary economics into a more comprehensive understanding of the well being of society?

Broadcast media. Monetary loss?

Broadcast media is irrevocably changing now that anyone has the power of mass information distribution.   And it is being replaced in part by largely non compensated product. The more organized the blogosphere gets, the more crowdsource news sites will popup and probably dominate.  The power of news analysis will be with in the hands of the most trusted analysts (bloggers)  rather than media distributors which many would view as a more just world.

The most significant loss related to media would seem to be the loss of an advertising based which we have relied on to drive consumer demand in the western world for the past 50 years.  If people listened to their friends, they might buy what they need, rather than be convinced to buy what they should want.  Will sidebar advertising on facebook, google and the like replace this as a consumption driver.

The power of social networks to set behavior standards and norms should not be underestimated. The July 07 New England Journal of Medicine had a 30 year longitudinal study which showed that obesity can be spread through social networks.  The messages sent through social networks are powerful.  Broadcast media for the last 50 years has supplemented social messaging with profound effects on society.  From the newness of the car you drive to the size of the house you ‘need’ to live in and has greatly affected consumer demand and is largely responsible for the ‘need’ now to have 2 earner households in the US. (IMHO.. havent had time to do the research yet).

Software and the long tail. Monetary gain?

Linux is growing rapidly as both a server and desktop operating system (though desktop adoption is still small).  IBM one of its biggest supporters though sees an advantage in linux as well as a significant number of its own patents being freely available for anyone to use and innovate on.

The advantage lies in the power of the long tail when it comes to technological innovation.  It turns out inviting people who should know very little about the core of a complex project, often know something very significant about an aspect of the project which is critical or at least important to its overall success.  The one guy who contributes one thing which turns out to be a critical patch against a hacker attack adds tremendous value to the project.  The more complex technology becomes, the more important the long tail is.   And on the opposite end, the less successful closed door efforts are in creating complex solutions.

Skeptics will say that Linux was paid for with money, that it is just a service based model. And for the most frequent contributors that was true to some extent. But the majority of the long tail contributions do not seem to have been paid for and while some programmers may have done the work on company time, it seems clear others worked on their own time. In either case a contribution to something accumulative and distributable to people who were not their clients is clearly a non-monetary contribution, even if services were paid for one time. The net result is a paid short term service plus a freely distributable enhanced product.

Overall win or loose?

The death of mass media while significant in the short term, means that people will more in touch with the reality of others in the world, rather than having vision created for the purpose of selling product.  I argue that mass media is in some ways a result of technological limitations because natural human communication is 2 way with all parties having the ability to choose to broadcast or  listen.  Hopefully this more tightly knit online world community can help prevent the potential damage which could occur as we go through the current deflationary cycle.

According to socio-economics, we need a significant technological innovation in order to bring about the next economic boom. While some have assumed this would come from nanotechnology or robotics, I think it may come from the development of a knowledge or semantic web. A semantic web could be brought about more quickly by using crowdsourced techniques to create the necessary underlying ontologies or definitions in a ‘Linked Open Data’ model.

So if social media can be utilized to bring out the next economic boom based upon a crowdsourced knowledge web platform, it would definitely result in an overall economic gain.

Look for more soon on why a knowledge web would lead to the next economic boom.

Why social media removes barriers to impact of non-monetary goods and services.

In business when you offer a skill, you create mechanisms to make it repeatable or widely distributed to multiply it’s economic effect.  Repeatability and distribution mechanisms have normally been costly in time, labor or infrastructure,  so were not used normally utilized in non-monetarian economic transactions.  And because they have lacked these features,  non-monetarian economic productivity contributions have normally been considered insignificant.  Also the limitation of distribution and replication have also limited the motivation to produce these goods and services.  Social media has removed the cost of distribution and replication for information based products and services.

The need to complex services for greater impact has also limited the economic impact of these non-monetary distributions.  Traditionally it has been difficult to collaborate on voluntary efforts because the small amount of time people have had to put into non-monetary efforts.

At lunch Friday, I jokingly asked the question, what would be the economic impact of google mail going down be?

But after thinking a lot about cloud computer and semantics this weekend, I started to wonder if that is a serious issue.  Someone at the table did mention that google mail did go down for 2 hours recently.

In the next 5 years or so in the commercial side as well as federal, there will be a massive shift from single server to cloud computing as well as an increasing reliance on everything being always up because of the interwoven nature of the semantic web.  Websites and webservers will no longer be individual and isolated but exist on the ‘cloud’ or rely on it in one way or another.

By definition the cloud is supposed to be more reliable and more redundant than a single server. But is it more reliable and redundant than millions of individual servers?

I don’t pretend to understand cloud architecture, but I did note that Vivek Kundra a few months ago, said that any data with a national security requirement, would not exist on the new federal cloud.  So what are the implications for  massive civilian clouds from Google, Amazon and Microsoft that business email, websites and data services would rely on?

So if most commercial data will be on the growing commercial civilian clouds, doesn’t the economic impact of large outages, start to pose in itself a national economic security risk?  Especially if an outage could include data loss?

Of  course the temptation is to say the companies themselves will make sure that doesn’t happen because they have such a large financial stake in reliability. That seems reasonable.  After all look how well that approach worked in banking.

Note: I have no education in economics but economics is beginning to trump all other concerns primarily due to a lack of trust in financial markets, so I am trying to pay attention.  Since one use of social media is to engender trust, can social media play a role in mitigating the damage from the current deflationary cycle we are in?

PS I am certain the educated economic people will tear me apart on my simplifications/misunderstandings of economic theory…but here goes..

Some background from Wikipedia:

Joeseph Schumpeter was “an economist and tried instead to integrate sociological understanding into his economic theories.”  He has some interesting predictions which seem to be playing out in the current news.

Creative Destruction:

“In Capitalism, Socialism and Democracy, the Austrian economist Joseph Schumpeter popularized and used the term  to describe the process of transformation that accompanies radical innovation.[2]  “

“In Schumpeter’s vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power.”

Sounds familiar? Social media as disruptive/transformative? Linux vs. microsoft?  It seems there are 2 social media issues which intersect with the economy.

1. Social media as a both a social and technology innovation which has the potential for significant creative destruction. (I will deal with the creative destruction power of social media in another post because I already have a headache thinking about economics and social media at the same time.)

2. Social media as a tool which is able to spread sphere’s of trust faster and wider than they could normally be spread.

But how about this on the trust issue.. According to Schumpeter as interpreted by Roger Arnold, former radio talk show host and macro economist, the reason a recession becomes a depression is due to irrational decisions which start to occur when leaders frantically try to find a quick fix to stop the downward trend.  They listen to the economic models which promise the faster fix rather than the ones which have most predictive.  They also tend to turn inward as they make the decisions.

The depth and length of the deflationary cycle will be determined by whether cooler heads prevail and on rebuilding confidence of INFLUENCERS in markets, NOT the confidence of markets. (Social media axiom:  people trust people not organizations. Therefore markets cannot trust. People in markets trust and are trusted.  Also financial markets are notorious for being led by their influencers, so an influencer map is incredibly important.)

So the real risk we run, is that irrational decisions further corrode trust among financial influencers with the administration.  That leaders will loose the market’s confidence even further by thinking they will pander to constituencies with a quick fix and ignore the concerns of the financial influencers who are expected to come back to the market.  The fact is the rescue will be slow and will need the help of those same finance guys who got us into the mess in the first place. People don’t like that but there it is.

So how do we prevent further loss in confidence?  We need to address economic issues which matter to financial influencers and convert them to evangelists for the administration’s economic policies.  Yes, talk with the a…holes who got us here in the first place.   Also we need to make sure Treas/Fed have a broad economic theory outlook rather than a narrow set of Friedman economic assumptions taken as fact even though they don’t seem to be good predictors any longer.

Is this happening now? It seems the opposite is the case.  There seems to be a trust gap between Fed/Treasury and market leaders right now.   Neither trusting the other to act to work towards a mutually beneficial outcome.

If  ever we needed collaboration where all parties are trusted to act to achieve the best outcome and make sure diverse opinions are heard, the time is NOW and the place is the financial  sector.

An electronic privacy wall would allow citizens to collaborate with, get services from, and find relevant information from governments but protect the citizen against intrusion by government.

I would love to have a page which I could go to and look at all of my interactions with governments, federal, state and local.

My my.gov page would have:

A personal section. To let me know if my kids can eat tuna without getting mercury poisoning, the latest science on issues related to my family’s health etc etc, when I495 would have scheduled delays because of Metro construction.

A Must Do section.
Where I could do my taxes, check license requirements, pay federal taxes and local parking tickets.

An events section. I could see what is happening locally at public meetings, town concerts or of a webstream debate on a bill which interests me.

A professional interests section.  Showing legislation and information important to my business and profession, even government grants which might apply to me.

A sound off area. My opinions and concerns could be directed to the right set of ears.

Government is too large and complex to put this together manually.. We would need to rely on a intelligent ‘relevance’ agent or service to bring to us what might be of interest so we can select from it. The relevance agent would need a profile of me so it would know what to look for.

But Wait!

For that to happen, I would have divulge a lot of information about myself, my family, my business. Most people including myself start hesitating when they realize this and would rather put up with the wildly disperse and hard to understand services, requirements, and information offered by the multiple governments each one of us is involved in than give up privacy to government!

So what if we created a privacy wall which on side we could put our information so a ‘relevance agent’ could search for and give us a selection of services to choose from to make my My.gov page.

The privacy wall would essentially act a smart ssl certificate. It would use our OpenID or some central login and create a private profile for us, but it would at the same time prevent the government side on the other side of the wall from seeing what we put in our profile. Some information might be allowed to have 2 way access such as ‘first name’ or even better ‘user name’ when dealing with most agencies, but except for a few select fields and then only if they are directly relevant to the task. So on IRS inquires they could see your tax information for that inquire (personal SSN but not business info during a personal inquiry).

This is similar to how facebook application permissions work except that allowed information for an application is traceable back to a public profile. We would have a more opague wall and while a statistical service which might see most fields, a government agency or agent would be restricted from putting together even a nearly complete profile without our express permission and even then the additional information would only be available for that transaction. It could even allow for anonymous inquiries which would be completely opague in cases such as terrorist tips etc.

The privacy wall would also have a role in making government more transparent. More records could be released about government decision making and services if all transactions automatically were linked to the privacy transaction rather than having, in the record, all specifics talked about during a single transaction.

This is a complex task. But there are some parts which are obvious. A government official doesnt need to see my IP address or track the number of times I use My.gov, so that could be masked. But a statistical analysis should be able to see how many times ‘an entity with some of my profile characteristics’ visited and so it could improve services such as the relevance agent. But no one in the government need know that Ken Fischer has an interest in mercury in the rivers and has done a consulting gig for X company which might be reported on a 1099 filing.
Of course the privacy wall is not only a technical hurdle. It is a legislative and policy hurdle as well. We would have to convince a lot of people who are not immersed in social media of the value of a profile which could be used to improve service immensely to citizens, help improve the accessibility of information by learning what is relevant to citizens of a certain profile type but also a BRICK WALL of privacy safeguarding the citizen from the government becoming overly intrusive.

Not only would this be good for citizens to be able to collaborate with and interact with their government, it would allow government agencies to answer requests and questions without the 5-10min or even multiple day task of re-verifying information every time we interact with a government agency.
So that’s idea for the day…Any thoughts?

Thinking about KIDFAD, Surowiecki’s requirements for successful collaboration. Also his Ted talk where he questioned whether the blogosphere is a good collaboration environment.

Also thinking about communities and communities structures. Get the influencers on board, make them evangelists and you can get a lot of people participating in your social media campaign or effort.

But they are at cross purposes right? Communities offer us a structure to pass information, change standards and behavior which relies on the relationships in the communities compromising the independence of the majority of the audience. While successful collaboration requires independence of thought, decentralization and diversity of opinion.

The influencers seem entrusted by the community to think for them when it comes to certain things such as what clothes are in fashion, what car to buy, some political opinions etc? And according to the New England Journal of Medicine, how much to each and exercise.

Social media strategists prefer to obtain participation by getting communities on board (it’s easier to get a few influencers on board and let them amplify our efforts than it is to talk to everyone right?) . And its hard to imagine how mass social media efforts could work without relying on this community structure and viral spread.

But then how do we separate participation mechanisms from collaboration mechanisms, so that we can have successful collaborations with members of participating communities?

In the DARPA Grand Challenge which was a highly successful contest to create self-driven vehicles, whose 2005 winner now sites in the American History Museum at the Smithsonian, collaborations were done in small teams, whereas participation of the teams is what DARPA acheived. The mechanisms of collaboration were left up to each team.

In the case of @GeoSteph’s LRO
effort which collected 1.5 million names in 3 months to send to the moon, participation was the final goal, so in this corrupting the independence and diversity wouldn’t matter. (In other words, lets assume that the majority of participants were NASA enthusiasts which is perfectly reasonable but does limit the diversity in the group).

But how about if we want to get the public to way in on how to improve the economy, stop foreclosures, how do we invite individuals to collaborate without inviting groups to participate? Or if we invite groups to participate how do we then create a collaborative environment where they are willing to shed some of their group identity for the sake of a successful collaboration?

In James Surowiecki’s Wisdom of the Crowds he argues that for a collaboration to be successful it must have 6 elements:

Knowledge must exist in the audience
Independence of contributors
Diversity of opinion
Focused on compatible goal
Aggregation of information
Decentralized Process/Local Knowledge

I thought KIDFAD is a good way to remember since there are still people who think that is what social media is.
Not sure if he mentioned the focus on the compatible goal explicitly but I thought it was implicit in his argument. What I mean by compatible is that the individual goal must line up with the purpose of the aggregation. So in prediction markets, the win of the individual is compatible with the market obtaining an accurate prediction, because the determinant of the win is the same as the goal of the market (accurate prediction).

In the case of google mining the behavior of searches, it is reasonable to presume that individual searches want to find what they are looking for quickly and the purpose of the search engine is to provide it.

Anyway it helps me remember, hope it helps you.