media

Coase’s theories predicted Internet’s impact on how business is done

Curated on September 9, 2013August 3, 2018 by Stefaan Verhulst

Don Tapscott in The Globe and Mail: “Renowned economist Ronald Coase died last week at the age of 102. Among his many achievements, Mr. Coase was awarded the 1991 Nobel Prize in Economics, largely for his inspiring 1937 paper The Nature of the Firm. The Nobel committee applauded the academic for his “discovery and clarification of the significance of transaction costs … for the institutional structure and functioning of the economy.”
Mr. Coase’s enduring legacy may well be that 60 years later, his paper and theories help us understand the Internet’s impact on business, the economy and all our institutions… Mr. Coase wondered why there was no market within the firm. Why is it unprofitable to have each worker, each step in the production process, become an independent buyer and seller? Why doesn’t the draftsperson auction their services to the engineer? Why is it that the engineer does not sell designs to the highest bidder? Mr. Coase argued that preventing this from happening created marketplace friction.
Mr. Coase argued that this friction gave rise to transaction costs – or to put it more broadly, collaboration or relationship costs. There are three types of these relationship costs. First are search costs, such as the hunt for appropriate suppliers. Second are contractual costs, including price and contract negotiations. Third are the co-ordination costs of meshing the different products and processes.
The upshot is that most vertically integrated corporations found it cheaper and simpler to perform most functions in-house, rather than incurring the cost, hassle and risk of constant transactions with outside partners….This is no longer the case. Many behemoths have lost market share to more supple competitors. Digital technologies slash transaction and collaboration costs. Smart companies are making their boundaries porous, using the Internet to harness knowledge, resources and capabilities outside the company. Everywhere,leading firms set a context for innovation and then invite their customers, partners and other third parties to co-create their products and services.
Today’s economic engines are Internet-based clusters of businesses. While each company retains its identity, companies function together, creating more wealth than they could ever hope to create individually. Where corporations were once gigantic, new business ecosystems tend toward the amorphous.
Procter & Gamble now gets 60 per cent of its innovation from outside corporate walls. Boeing has built a massive ecosystem to design and manufacture jumbo jets. China’s motorcycle industry, which consists of dozens of companies collaborating with no single company pulling the strings, now comprises 40 per cent of global motorcycle production.
Looked at one way, Amazon.com is a website with many employees that ships books. Looked at another way, however, Amazon is a vast ecosystem that includes authors, publishers, customers who write reviews for the site, delivery companies like UPS, and tens of thousands of affiliates that market products and arrange fulfilment through the Amazon network. Hundreds of thousands of people are involved in Amazon’s viral marketing network.
This is leading to the biggest change to the corporation in a century and altering how we orchestrate capability to innovate, create goods and services and engage with the world. From now on, the ecosystem itself, not the corporation per se, should serve as the point of departure for every business strategist seeking to understand the new economy – and for every manager, entrepreneur and investor seeking to prosper in it.
Nor does the Internet tonic apply only to corporations. The Web is dropping transaction costs everywhere – enabling networked approaches to almost every institution in society, from government, media, science and health care to our energy grid, transportation systems and institutions for global problem solving.
Governments can change from being vertically integrated, industrial-age bureaucracies to become networks. By releasing their treasures of raw data, governments can now become platforms upon which companies, NGOs, academics, foundations, individuals and other government agencies can collaborate to create public value…”

Political Scientists Acknowledge Need to Make Stronger Case for Their Field

Curated on September 6, 2013August 15, 2018 by Stefaan Verhulst

Beth McMurtrie in The Chronicle of Higher Education: “Back in March, Congress limited federal support for political-science research by the National Science Foundation to projects that promote national security or American economic interests. That decision was a victory for Sen. Tom Coburn, a Republican from Oklahoma who has long aimed to eliminate all NSF grants for political science, arguing that unlike the hard sciences it rarely produces concrete benefits to society.
Congress’s action has led to soul searching within the discipline about how effective academics have been in conveying the value of their work to the public. It has also revived a longstanding debate among political scientists about the shift toward more statistically sophisticated, mathematically esoteric research, and its usefulness outside of academe. Those discussions were out front at the annual conference of the American Political Science Association, held here last week.
Rogers M. Smith, a political-science professor at the University of Pennsylvania, was one of 13 members of a panel that discussed the controversy over NSF money for political-science studies. He put the problem bluntly: “We need to make a better case for ourselves.”
Few on the panel, in fact, seemed to think that political science had done a good job on that front. The association has created a task force—led by Arthur Lupia, a political-science professor at the University of Michigan at Ann Arbor—to improve public perceptions of political science’s value. He said his colleagues could learn from organizations like the American Association for the Advancement of Science, which holds special sessions for the news media at its annual conference to explain the work of its members to the public.”

Dump the Prizes

Curated on September 5, 2013August 3, 2018 by Stefaan Verhulst

Kevin Starr in the Stanford Social Innovation Review: “Contests, challenges, awards—they do more harm than good. Let’s get rid of them….Here’s why:
1. It wastes huge amounts of time.
The Knight Foundation recently released a thoughtful, well-publicized report on its experience running a dozen or so open contests. These are well-run contests, but the report states that there have been 25,000 entries overall, with only 400 winners. That means there have been 24,600 losers. Let’s say that, on average, entrants spent 10 hours working on their entries—that’s 246,000 hours wasted, or 120 people working full-time for a year. Other contests generate worse numbers. I’ve spoken with capable organization leaders who’ve spent 40-plus hours on entries for these things, and too often they find out later that the eligibility criteria were misleading anyway. They are the last people whose time we should waste. …
2. There is way too much emphasis on innovation and not nearly enough on implementation.
Ideas are easy; implementation is hard. Too many competitions are just about generating ideas and “innovation.” Novelty is fun, but there is already an immense limbo-land populated by successful pilots and proven innovations that have gone nowhere. I don’t want to fund anything that doesn’t have someone capable enough to execute on the idea and committed enough to make it work over the long haul. Great social entrepreneurs are people with high-impact ideas, the chops to execute on them, and the commitment to go the distance. They are rare, and they shouldn’t have to enter a contest to get what they need.
The current enthusiasm for crowdsourcing innovation reflects this fallacy that ideas are somehow in short supply. I’ve watched many capable professionals struggle to find implementation support for doable—even proven—real-world ideas, and it is galling to watch all the hoopla around well-intentioned ideas that are doomed to fail. Most crowdsourced ideas prove unworkable, but even if good ones emerge, there is no implementation fairy out there, no army of social entrepreneurs eager to execute on someone else’s idea. Much of what captures media attention and public awareness barely rises above the level of entertainment if judged by its potential to drive real impact.
3. It gets too much wrong and too little right.
The Hilton Humanitarian prize is a single winner-take-all award of $1.5 million to one lucky organization each year. With a huge prize like that, everyone feels compelled to apply (that is, get nominated), and I can’t tell you how much time I’ve wasted on fruitless recommendations. Very smart people from the foundation spend a lot of time investigating candidates—and I don’t understand why. The list of winners over the past ten years includes a bunch of very well-known, mostly wonderful organizations: BRAC, PIH, Tostan, PATH, Aravind, Doctors Without Borders. I mean, c’mon—you could pick these names out of a hat. BRAC, for example, is an organization we should all revere and imitate, but its budget in 2012 was $449 million, and it’s already won a zillion prizes. If you gave even a third of the Hilton prize to an up-and-coming organization, it could be transformative.
Too many of these things are winner-or-very-few-take-all, and too many focus on the usual suspects. ..
4. It serves as a distraction from the social sector’s big problem.
The central problem with the social sector is that it does not function as a real market for impact, a market where smart funders channel the vast majority of resources toward those best able to create change. Contests are a sideshow masquerading as a main-stage event, a smokescreen that obscures the lack of efficient allocation of philanthropic and investment capital. We need real competition for impact among social sector organizations, not this faux version that makes the noise-to-signal ratio that much worse….”
See also response by Mayur Patel on Why Open Contests Work

Public Open Data: The Good, the Bad, the Future

Curated on September 5, 2013May 29, 2019 by Stefaan Verhulst

Camille Crittenden at IDEALAB: “Some of the most powerful tools combine official public data with social media or other citizen input, such as the recent partnership between Yelp and the public health departments in New York and San Francisco for restaurant hygiene inspection ratings. In other contexts, such tools can help uncover and ultimately reduce corruption by making it easier to “follow the money.”
Despite the opportunities offered by “free data,” this trend also raises new challenges and concerns, among them, personal privacy and security. While attention has been devoted to the unsettling power of big data analysis and “predictive analytics” for corporate marketing, similar questions could be asked about the value of public data. Does it contribute to community cohesion that I can find out with a single query how much my neighbors paid for their house or (if employed by public agencies) their salaries? Indeed, some studies suggest that greater transparency leads not to greater trust in government but to resignation and apathy.
Exposing certain law enforcement data also increases the possibility of vigilantism. California law requires the registration and publication of the home addresses of known sex offenders, for instance. Or consider the controversy and online threats that erupted when, shortly after the Newtown tragedy, a newspaper in New York posted an interactive map of gun permit owners in nearby counties.
…Policymakers and officials must still mind the “big data gap.”So what does the future hold for open data? Publishing data is only one part of the information ecosystem. To be useful, tools must be developed for cleaning, sorting, analyzing and visualizing it as well. …
For-profit companies and non-profit watchdog organizations will continue to emerge and expand, building on the foundation of this data flood. Public-private partnerships such as those between San Francisco and Appallicious or Granicus, startups created by Code for America’s Incubator, and non-partisan organizations like the Sunlight Foundation and MapLight rely on public data repositories for their innovative applications and analysis.
Making public data more accessible is an important goal and offers enormous potential to increase civic engagement. To make the most effective and equitable use of this resource for the public good, cities and other government entities should invest in the personnel and equipment — hardware and software — to make it universally accessible. At the same time, Chief Data Officers (or equivalent roles) should also be alert to the often hidden challenges of equity, inclusion, privacy, and security.”

Innovating to Improve Disaster Response and Recovery

Curated on September 5, 2013August 15, 2018 by Stefaan Verhulst

Todd Park at OSTP blog: “Last week, the White House Office of Science and Technology Policy (OSTP) and the Federal Emergency Management Agency (FEMA) jointly challenged a group of over 80 top innovators from around the country to come up with ways to improve disaster response and recovery efforts. This diverse group of stakeholders, consisting of representatives from Zappos, Airbnb, Marriott International, the Parsons School of Design, AOL/Huffington Post’s Social Impact, The Weather Channel, Twitter, Topix.com, Twilio, New York City, Google and the Red Cross, to name a few, spent an entire day at the White House collaborating on ideas for tools, products, services, programs, and apps that can assist disaster survivors and communities…
During the “Data Jam/Think Tank,” we discussed response and recovery challenges…Below are some of the ideas that were developed throughout the day. In the case of the first two ideas, participants wrote code and created actual working prototypes.

A real-time communications platform that allows survivors dependent on electricity-powered medical devices to text or call in their needs—such as batteries, medication, or a power generator—and connect those needs with a collaborative transportation network to make real-time deliveries.
A technical schema that tags all disaster-related information from social media and news sites – enabling municipalities and first responders to better understand all of the invaluable information generated during a disaster and help identify where they can help.
A Disaster Relief Innovation Vendor Engine (DRIVE) which aggregates pre-approved vendors for disaster-related needs, including transportation, power, housing, and medical supplies, to make it as easy as possible to find scarce local resources.
A crowdfunding platform for small businesses and others to receive access to capital to help rebuild after a disaster, including a rating system that encourages rebuilding efforts that improve the community.
Promoting preparedness through talk shows, working closely with celebrities, musicians, and children to raise awareness.
A “community power-go-round” that, like a merry-go-round, can be pushed to generate electricity and additional power for battery-charged devices including cell phones or a Wi-Fi network to provide community internet access.
Aggregating crowdsourced imagery taken and shared through social media sites to help identify where trees have fallen, electrical lines have been toppled, and streets have been obstructed.
A kid-run local radio station used to educate youth about preparedness for a disaster and activated to support relief efforts during a disaster that allows youth to share their experiences.”

The Political Web: Media, Participation and Alternative Democracy

Curated on September 5, 2013December 11, 2018 by Stefaan Verhulst

New book by Peter Dahlgren: “As democracy encounters increasing difficulties, many citizens are turning to the domain of alternative politics, and in so doing, making considerable use of the Web and other new communication technologies. Clearly this is having significant impact, and we see that new modes of political participation and even political cultures are emerging. Yet, we would be foolish to expect some simple ‘techno-fix’ for democracy; its problems are more complex than that. This volume analyses various factors that shape such Web-facilitated participation, including features of the Web itself as well as broader societal realities. Avoiding simplistic optimism or pessimism, the discussion highlights the tensions and force-fields that impact on participation. The presentation also addresses several key topics in regard to citizens’ engagement, such as civic subjectivity, web intellectuals, and cosmopolitanism. While anchored in an extensive literature and wide theoretical vistas, the book is written in a clear and accessible style.”

Assessing Zuckerberg’s Idea That Facebook Could Help Citizens Re-Make Their Government

Curated on August 29, 2013August 3, 2018 by Stefaan Verhulst

Gregory Ferenstein in TechCrunch: “Mark Zuckerberg has a grand vision that Facebook will help citizens in developing countries decide their own governments. It’s a lofty and partially attainable goal. While Egypt probably won’t let citizens vote for their next president with a Like, it is theoretically possible to use Facebook to crowdsource expertise. Governments around the world are experimenting with radical online direct democracy, but it doesn’t always work out.

Very briefly, Zuckerberg laid out his broad vision for e-government to Wired’s Steven Levy, while defending Internet.org, a new consortium to bring broadband to the developing world.

“People often talk about how big a change social media had been for our culture here in the U.S. But imagine how much bigger a change it will be when a developing country comes online for the first time ever. We use things like Facebook to share news and keep in touch with our friends, but in those countries, they’ll use this for deciding what kind of government they want to have. Getting access to health care information for the first time ever.”

When he references “deciding … government,” Zuckerberg could be talking about voting, sharing ideas, or crafting a constitution. We decided to assess the possibilities of them all….
For citizens in the exciting/terrifying position to construct a brand-new government, American-style democracy is one of many options. Britain, for instance, has a parliamentary system and has no constitution. In other cases, a government may want to heed political scientists’ advice and develop a “consensus democracy,” where more than two political parties are incentivized to work collaboratively with citizens, business, and different branches of government to craft laws.
At least once, choosing a new style of democracy has been attempted through the Internet. After the global financial meltdown wrecked Iceland’s economy, the happy citizens of the grass-covered country decided to redo their government and solicit suggestions from the public (950 Icelanders chosen by lottery and general calls for ideas through social networks). After much press about Iceland’s “crowdsourced” constitution, it crashed miserably after most of the elected leaders rejected it.
Crafting law, especially a constitution, is legally complex; unless there is a systematic way to translate haphazard citizen suggestions into legalese, the results are disastrous.
“Collaborative drafting, at large scale, at low costs, and that is inclusive, is something that we still don’t know how to do,” says Tiago Peixoto, a World Bank Consultant on participatory democracy (and one of our Most Innovative People In Democracy).
Peixoto, who helps the Brazilian government conduct some of the world’s only online policymaking, says he’s optimistic that Facebook could be helpful, but he wouldn’t use it to draft laws just yet.
While technically it is possible for social networks to craft a new government, we just don’t know how to do it very well, and, therefore, leaders are likely to reject the idea. In other words, don’t expect Egypt to decide their future through Facebook likes.”

Index: The Data Universe

Curated on August 22, 2013September 6, 2019 by admin

The Living Library Index – inspired by the Harper’s Index – provides important statistics and highlights global trends in governance innovation. This installment focuses on the data universe and was originally published in 2013.

How much data exists in the digital universe as of 2012: 2.7 zetabytes*
Increase in the quantity of Internet data from 2005 to 2012: +1,696%
Percent of the world’s data created in the last two years: 90
Number of exabytes (=1 billion gigabytes) created every day in 2012: 2.5; that number doubles every month
Percent of the digital universe in 2005 created by the U.S. and western Europe vs. emerging markets: 48 vs. 20
Percent of the digital universe in 2012 created by emerging markets: 36
Percent of the digital universe in 2020 predicted to be created by China alone: 21
How much information in the digital universe is created and consumed by consumers (video, social media, photos, etc.) in 2012: 68%
Percent of which enterprises have liability or responsibility for (copyright, privacy, compliance with regulations, etc.): 80
Amount included in the Obama Administration’s 2-12 Big Data initiative: over $200 million
Amount the Department of Defense is investing annually on Big Data projects as of 2012: over $250 million
Data created per day in 2012: 2.5 quintillion bytes
How many terabytes* of data collected by the U.S. Library of Congress as of April 2011: 235
How many terabytes of data collected by Walmart per hour as of 2012: 2,560, or 2.5 petabytes*
Projected growth in global data generated per year, as of 2011: 40%
Number of IT jobs created globally by 2015 to support big data: 4.4 million (1.9 million in the U.S.)
Potential shortage of data scientists in the U.S. alone predicted for 2018: 140,000-190,000, in addition to 1.5 million managers and analysts with the know-how to use the analysis of big data to make effective decisions
Time needed to sequence the complete human genome (analyzing 3 billion base pairs) in 2003: ten years
Time needed in 2013: one week
The world’s annual effective capacity to exchange information through telecommunication networks in 1986, 2007, and (predicted) 2013: 281 petabytes, 65 exabytes, 667 exabytes
Projected amount of digital information created annually that will either live in or pass through the cloud: 1/3
Increase in data collection volume year-over-year in 2012: 400%
Increase in number of individual data collectors from 2011 to 2012: nearly double (over 300 data collection parties in 2012)