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Archive for November, 2009

Dubai’s demise and some basic questions about debt

Monday, 30 November 2009 20:57 Written by Eric Garland 1 Comment

BURJ-AL-ARABThe endless oil-soaked financial Bacchanal known as Dubai, home to air-conditioned ski parks, seven-star hotels, the new headquarters of Halliburton, Roger Federer’s income, and a army of foreign servants supporting a few ultra-wealthy is now officially out of wine, the band gone home, the hangover beginning . It turns out that like so much, Dubai, or at least Dubai World, is leveraged to the edge of its financial capabilities and has ultimately defaulted on the interest payments.

In the streets of Washington and on the Internet, we hear murmurs about the crisis of confidence in sovereign debt, questions on whether Dubai is really a country, really a city-state, really real enough to matter. So many questions about future bond ratings, the effect on gold, a retreat to commodities-backed currencies, the impact on equities. Also, there is speculation on the cause: is it real estate, peak oil, an overestimation of the global ultra-wealthy, the instability of the financial services industry?

In addition to those questions, I have a few basic questions first :

  1. How is Dubai any different from the United States, France, or Japan, countries swimming in massive debt?
  2. Has debt as a concept somehow morphed? Is sovereign debt really expected to be repaid? If not, are the bonds issued from such debt legal financial instruments, or some form of fraud?
  3. How is it that countries basing their fiscal health on debt expect the future to be so much more fruitful, profitable and taxable? Which strategic trends are they seeing to value the future performance of their assets so highly?

Basically, how is it that all these banks, companies, pension funds, and nations can be so extended, engorged on debt? Does anybody run black ink anymore? Why is the future perceived to be of greater value than the present?

I think the answers may be simple. Painful but simple. Better to make money than to owe money.

Now, who is making money out there?

Auto-Tune, Internet memes, and future trend analysis

Wednesday, 25 November 2009 09:38 Written by Eric Garland 0 Comments

It’s Thanksgiving week here in the United States, and I am very grateful to have found a video clip that features three of my favorite things:

  1. Music technology
  2. Weird Al Yankovic
  3. Analytical tools to understand trends

You’ll admit, the Venn Diagram of such varying interests have a tiny intersection, so personally I’m going to enjoy it.

Here’s why the story of Auto-Tune is of interest to intelligence and decision making types. There’s nothing particularly universal about the software itself – it’s a “plugin” used for digital music production for the correction of vocals. If you sing out of tune, Auto-Tune drags you back into A440 pitch, using effects that range from imperceptible to robotic. As of 2009, the term “Auto-Tune” is a verb, and adjective and an Internet meme, for the reasons given in the video below. Unbeknown to the masses who know the effect through artists like T-Pain and The Gregory Brothers, the effect has been in use since 1997. Only now has it come to the cultural forefront. Why?

  • Evolution of Auto-Tune from hardware to a software plugin usable with digital audio workstations
  • Drop in price of Auto-Tune
  • Increase in processing power and bandwidth of computing and the Internet in general
  • Proliferation of free social media sites such as YouTube and MySpace

In short, the technology got cheaper, easier to use, and easier to distribute. This has led to the proliferation of an “Internet meme,” an idea that virally spawns a burst of creativity around the world on the same theme. What I love about this video from Rocketboom is their description of the four stages of an Internet meme, offering us a certain level of predictability for future memes. The stages are:

  1. Introduction
  2. Overexposure
  3. Parody and remix
  4. Equilibrium

You may not connect Lolcatz or dramatic chipmunk with economic forecasting or product management, but at Competitive Futures, we see significant similarities. Short-term fads and memes regularly invade the public consciousness, and as a decision maker you must understand their dynamics. Is green business a meme created by the media, or is it driven by structural factors? What about “ethical business,” is that just a popular reaction to the scandal in the financial world, or a development in the world of management? Is “collaboration” a marketing meme to describe the same old information technologies, or is it truly a driver of business value in the next decade?  We recommend that you collect a variety of data-driven trends to help your analysis – preferably trends that are under-reported and thus immune to the dynamics of Internet- or media-driven memes.

While you consider such heady stuff on the way into a long weekend, think it over with the Gregory Brothers, the world’s most awesome political-remix-Auto-Tuners:

Communicating major trends with computer visualization

Monday, 23 November 2009 14:06 Written by Eric Garland 0 Comments

Whether you love history or a world beyond PowerPoint, check out this wonderful visualization of the world’s naval powers over time.

The revolution of algorithmic authority

Monday, 23 November 2009 10:55 Written by Eric Garland 3 Comments

Clay Shirky recently began exploring a significantly important idea in Intelligence 2.0, that of algorithmic authority, a new form of trust that befits the complex informational environment of the 21st century. For those of us who assemble large amounts of data for decision makers, authority is critical, and it is under major stress due to the Internet. Until recently, you could help leaders make the most informed decisions by assembling the most authoritative sources, interpret the implications of that data, and go forth understanding several potential courses of action. Today, we must also add a new dimension – evaluating the validity of the information as the barriers to entry fall in the world of printing and distribution. Shirky’s theory helps us in this regard:

Algorithmic authority is the decision to regard as authoritative an unmanaged process of extracting value from diverse, untrustworthy sources, without any human standing beside the result saying “Trust this because you trust me.” This model of authority differs from personal or institutional authority, and has, I think, three critical characteristics.

First, it takes in material from multiple sources, which sources themselves are not universally vetted for their trustworthiness, and it combines those sources in a way that doesn’t rely on any human manager to sign off on the results before they are published. This is how Google’s PageRank algorithm works, it’s how Twitscoop’s zeitgeist measurement works, it’s how Wikipedia’s post hoc peer review works. At this point, its just an information tool.

Second, it produces good results, and as a consequence people come to trust it. At this point, it’s become a valuable information tool, but not yet anything more.

The third characteristic is when people become aware not just of their own trust but of the trust of others: “I use Wikipedia all the time, and other members of my group do as well.” Once everyone in the group has this realization, checking Wikipedia is tantamount to answering the kinds of questions Wikipedia purports to answer, for that group. This is the transition to algorithmic authority.

Arik Johnson on the organizations of the future

Thursday, 19 November 2009 09:56 Written by Eric Garland 0 Comments

The most important implications of any strategic trend is usually not that your organization must do something drastic, it is that your organization is obsolete and can’t respond effectively at all.

Case in point: newspapers and the Internet. It’s not so much that newspapers could have done something to maintain their business model of classified advertising, it’s that they need a brand new business model and structure to survive. If that is the major implication of the trends we track as strategic analysts, then we almost must develop skills to help organizations change quickly and painlessly.

On that note, check out this talk from Aurora WDC’s Arik Johnson on the future of organizations, recorded at last month’s Intelligence Collaborative meeting in Washington.

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This is the official trend blog of Competitive Futures, a management consultancy that provides trend research and analysis for business and government around the world. Here, we update you on interesting trends we see as part of our work for our clients.


For managing partner Eric Garland's new author and speaker blog, please consult and bookmark http://www.ericgarland.co

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