Marcus Cake

We need to build the Web 3.0 online social, industry and political networks on the critical path to Web 4.0 and pull in the next stage of financial markets, economic development, environmental sustainability, awareness, life, work and global governance. We need five online networks to solve the worlds problems by 2012 or we decline into conflict for generations. A global community could transform the world in 365 days by building the Web 3.0 online networks on the critical path to Web 4.0.

Regulated capitalism is the last man standing. We have no choice but to make it work. We must, however, acknowledge that regulated capitalism has failed its citizens comprehensively. The failure of regulated capitalism is equal to the collapse of central planning. The communists recognised their system had failed and chose to implement something else. Will capitalists do the same? Or will we try to save the status quo at any price? Will bailouts move on to other “too big too let fail” activities that prevent the operation of creative destruction?

Web 1.0 delivered the internet and connected large numbers of people. Web 2.0 demonstrated the technology to assemble and manage large global crowds with a common interest in social interaction. Web 3.0 will apply online network concepts to industry, economic development, climate stability, poverty and democracy. Web 3.0 online networks allow people to see through the community or market and facilitate collective matching, learning and consumption in hours (not months). Web 4.0 achieves a critical mass of participation in online networks that deliver global transparency, governance, distribution, participation, collaboration in key industry, political, social and other community endeavours. Web 4.0 delivers community sovereignty to channels and information.

Our society is in transition. It is applying new technologies to create new structures. Proprietary information is no longer necessary to encourage innovation or distribution channels. The internet provides a virtually free distribution channel in a services based economy. Online social networks have redefined how we interact with large numbers of people adopting new behaviours. Online industry network will redefine industry. Online political networks will redefine politics.

The following is intended to provide a summary of how our society operating in a Web 1.0 world and the emerging Web 3.0 world. This is one of a series of concepts that explain the evolution toward Web 3.0. I recommend you review the visual overview of these concepts in the Marcus.cake overview presentation.

There is an opportunity for a Linux style online community to coordinate the individual contribution of scientists, government, corporations, philanthropists and the community to pursue/deliver climate stability. Virginearth.com would be an ideal forum for this initiative. Richard Branson and Al Gore could inspire an global online community and encourage government and corporations to contribute essential intellectual property to a solution and deliver climate stability.

The primary ego on the world stage today is the US - its excessive consumption, insolvency, military aggression and use of 60% of the world’s savings make it the world’s most gluttonous consumer. Its military acquisition of the worlds resources may be the greatest strategic move in history. It provides resources to pay back unserviceable debts and leverage other countries on the global stage. However, the destruction of relationships in the process will crowd out an opportunity to deliver a sustainable future for the planet. Unrelenting ego by the US may win the resource wars, but the destruction of global relationships in the process sacrifice the opportunity for a sustainable future. An online network may not save the world, but could a collective conscious network.

We need to deploy five online political, industrial and social networks to avert disaster by 2012. Existing structures that rely on proprietary ownership of information, distribution channels, institutions and regional approaches are unable to solve our most pressing problems. Even if they could solve the problems, they are simply unable to coordinate a global endeavour in a rapidly closing timeframe. I had previously written that online networks could be delayed for up to 50 years by three epic battles. In some aspects of our global community, we can wait 50 years (and there is only an opportunity cost). However, for some specific problems, online networks need to be built, acquire a significant audience, and achieve their objective by 2012.

The next phase of economic development will be driven by the freedom of information and innovation generated by enthusiastic open source communities. Microsoft is asserting its patent portfolio is being violated by open source community software. It seems determined to strike at the heart that may drive the next phase of economic development. That heart is information freedom and enthusiasm of open source communities.

We empower government with the responsibility of providing the framework to promote economic development. Proprietary ownership of knowledge is no longer necessary to encourage innovation, but it still form a key part of our economic system. Open source communities are being unleashed on a global stage. Our community has a choice - enforcement of the current system of private ownership of knowledge, or allow information to be free to make humanity wealthier. Microsoft probably can’t kill humanity’s opportunity to become wealthier, but the broader battle may. The key threat to open source and online networks is the government regulatory response to the battle between community knowledge and intellectual property.

Online networks which embody every facet of industrial, social and politcal aspects of our modern society are inevitable. They simply offer a superior way to interact and transact. The transition to a global community based around online networks will take six months, sixteen years or fifty years. The timeframe will depend upon the outcome of three epic battles. The battles are economic development vs geostrategy, community knowledge vs intellectual property, and online networks vs closed systems. Online industrial, political and social networks which are involved in these battles could be delayed for decades.

Online industry networks could develop pharmaceutical products using open source principles. The Tropical Diseases Initiative is an example of an “open source” online network developing drugs for tropical diseases. It operates in a niche that is uneconomic or unviable for the pharmaceutical industry. It has been allowed to survive as a result. It demonstrates the potential of online networks in the pharmaceutical industry. A description of the Tropical Disease Initiative is provided below.

Information technologies which capture, store, process or transmit information double in performance or halve in cost every 18 months. Moore’s law has been working patiently for 40 years. In an information economy, this should have had a dramatic effect. However, political, industrial and social structures largely remain the same. Advances in technology have not changed the fundamentally way that our society or economy has operated. The right information in the right place at the right time will transform the world. This transformation will only start now. This article will discuss why such a process should only begin now and what role information is likely to have.

What if we did have cars that cost $25 and got 1,000 miles to the gallon? What if the Moore law rates of innovation and improvement could be applied to the world’s problems. What if Moore’s law rates of improvement applied to aircraft engines, car engines, carbon dioxide emissions, industrial pollution, cures for disease, energy and minerals usage, education and leadership. Our world is evolving. Advances in technology present new ways to organise. Online networks are likely to be a step forwards. An expansion of intellectual property laws is likely to be a step backwards. If there was a new way to deliver greater rates of innovation, we have a compelling need to solve specific global problems. We need to question that our underlying assumptions of how to organise.

Dan Rather: Journalism has lost its guts, Cnet.com news, 12th March 2007
Extract:

• During his hour-long keynote address Monday at South by Southwest Interactive, Rather opined at length on the state of his profession, in which too many journalists have become lapdogs to power, rather than watchdogs.
• “I do not exclude myself from this criticism… By and large, so many journalists–there are notable exceptions–have adopted the go-along-to-get-along (attitude),” he said.
• Rather left CBS last year in the wake of a scandal surrounding questionable documentation for a story accusing President George Bush of being absent without leave during his military service. Today, Rather works as a journalist for entrepreneur Mark Cuban’s HDNet network.
• In his speech, he touched on the state of the Internet as a way to get information and news to people.
• “The Internet is a tremendous tool for not just news, (because) its potential is unlimited for that,” Rather said, but for “illumination and opening things up.”
• But he spent most of his time on stage talking about why he thinks many people have lost faith in journalists.One reason, Rather said, is that questioning power, especially at a time of war, can be perceived as unpatriotic or unsupportive of America’s fighting troops.That’s “a very serious charge in this country,” Rather said.”We’ve brought it on ourselves,” he added, “partly because we’ve lost the sense that (the) patriotic journalist will be on his or her feet asking the tough questions. My role as a member of the press is to be sometimes a check and balance on power.”
• Indeed, Rather’s ascent to the pinnacles of power in journalism came as a result of his reputation for asking very tough questions and–as Hampshire pointed out–not being afraid to ask follow-up questions, of powerful people like President Richard Nixon, the first President George Bush, current President Bush, Saddam Hussein, and many others.
• “In many ways,” said Rather to loud applause, “what we in journalism need is a spine transplant.”
• Rather reiterated the journalist’s role as a watchdog. “Not as an attack dog…But what does the lapdog do? He just crawls into someone’s lap,” he said. “A good watchdog barks at everything that’s suspicious. I submit to you, the American press’ role is to be a watchdog.”
• “The nexus between powerful journalists and people in government and corporate power,” he said, “has become far too close.”
• You can get so close to a source that you become part of the problem, he added. “Some people say that these powerful people use journalists, and they do. And they will use them to the fullest extent possible, right up until the point where the journalist says, ‘Whoa, that’s too far.’”
• It is incumbent on journalists to be willing to risk their access to power to seek out the truth behind a story, he said. And they shouldn’t be willing to water down the truth to protect their access to power.
• Rather also said that the consolidation of power in a small number of media companies has hurt the search for the truth in newsrooms across the country. As media conglomerates get bigger, the gap between newsrooms and boardrooms grows, and the goal becomes satisfying shareholders, not citizens, he said.

The objectives of open source will change over time. As open source evolves and proves its capability, it will move beyond technology, beyond specific industries, to all other aspects of our society. This has been suggested in the past. However, existing organisations are not sufficiently motivated to apply advances in technology to promote development. Business, social and political entrepreneurs that establish online networks are likely to be the primary force for change.

This article outlines the first four stages of the development of online networks and the .Net boom. The objective of the online network in each stage is identified.

The next evolution in economic development and the evolution of the internet is likely to be user generated industries. This will move beyond user content to valuable industries which distribute valuable information. Online industry networks will facilitate collaboration and distribute information. Small groups may specialise in the manufacture of information. They will rely on online networks to distribute it. Consumers of information will increasing source their products from online networks.

A user generated industry combines user generated content and user generated infrastructure to distribute products and services from individual manufacturers to individual consumers. There are significant economic and social benefits for the individual manufacturers and consumers of information. Individuals can focus on their unique speciality, work from home and be their own boss. Customers obtain the convenience of online delivery and lower costs. Organisations that have only served the community by distributing information are likely to be rendered redundant by technology advances. These will need to find other means to add value to the global community if they are to survive. Some will not.

My definition of the word hacker has evolved. From programmers cracking computer security (called crackers) to my modest efforts to improve my golf and, now, to skilled people contributing to online networks that reflect their passions and interests. A hacker has the tenacity and persistence to solve problems, often for the sake of solving it. They have the vision of architects, the skills of engineers and empathy of a mother with her upset child. They make significant sacrifices in pursuit of their goal. They navigate around, or though, barriers in their path. They do not rest (if inspired) until the problem is solved, or the challenge is overcome. If only my golf, could be described in these terms.

Online networks will be an essential tool of hackers. The will capture and focus the unique contribution of other hackers. Collective talent, energy and innovation will reshape industrial, social and political frameworks over the next decade.

The potential of open source software, open source principles and collective innovation is significant. They could change the world. They should, at the very least, change information intensive industries. These assertions are largely an intellectual argument. The thoughts of an individual. The compelling value of open source and collective innovation as a solution needs to be demonstrated.

Companies in developed countries will need access to the 33 million university educated professionals working in the developing world. Immigration can only solve a proportion of the problem. Online networks will be an essential tool to find and coordinate delivery of talent from the developing countries to global projects. This international talent pool will deliver services to every industry on every continent. Organisations will need to know how to participate in, or build, an online network to access this resource.

The problem with the world today is that there is not an convenient and effective means to aggregate and distribute the unique contribution of each individual. This is particularly true where problems may rest with government and large corporations which are perceived to have unlimited resources for “public relations”. Without an effective and convenient means to contribute, each individual quite rightly assesses any contribution to be futile. It is highly unlikely their activity will result in the desired outcome.

The internet offers a new means to overcome the futility of contribution. The rise of online industry, social and political networks will provide all individuals with the opportunity to make a contribution. We will be surprised at the phenomenon that will reshape the world over the next twenty years. As the real underlying problems of the world are publicised, collective communities will assemble to solve them.

My previous article, Could an online social network deliver a virtual Silicon Valley to non-US economies? , I concluded that online social or industry networks could deliver the people and chain reaction that could spawn a new Silicon Valley. Financial centres currently specialises in specific niches. The rise of online industry networks and the rise of global capital markets will result in the rise of specialist financial centres. to an unprecedented scale. These centres will offer a specific regulatory environment tailored to specific companies in specific industries.

The repatriation of capital from the US over the next five years is a once in a 200 year event. Financial centres will need to determine their strategy and execute unequivocally if they are to secure a niche.

The patent system emerged to motivate business to organise people to develop new technology. Without providing an exclusive opportunity for profit, business would not assemble the structure and people necessary to create new technology. Technology means ways of doing things. This includes information technology, biotechnology and healthcare. If the global objective is the creation of new technology, then there is another way to organise.

The US consumer has driven much of the world economy for decades. It has been the perceived centre of the world for many industries. This is shifting. The primary source of global growth is likely to be Asia and Europe. This is a demographic reality as hundreds of millions of people in Asia enter the middle class. We only need to survive the shift from US centric to global.

Global capital will need to be looking for investment opportunities in Asia and Europe. Some markets are too small or have insufficient experience to deliver efficiency. The internet is likely to play a greater role in making the global capital market more efficient. Online industry networks will have an essential role to play in improving the allocation and efficiency of the capital allocation process.

There have been concerns that Moore’s law may not continue. Recent innovations have solved problems in manufacturing, power consumption and heat generation. It appears that a further innovation may not only see that Moore’s law continues but introduce a revolution in computing. In simple terms, it is the ability to put 80 cores on a single chip.

Industrial use of the internet is at an early stage. Existing corporates have used the internet to reduce costs by distributing information in a lower cost means. However, there are few examples of industries that have been completely transformed. The primary purpose of some major industries is distribution of information between market participants. They have significant economic rents for taking information from one market participant, mildly transforming it and delivering it to another market participant. The internet offers free (almost) distribution and the ability to find other market participants. These significant economic rents for distribution seem redundant in an age of the internet.

The next wave of internet companies are likely to target the distribution of information with a commercial value. These are Online Industry Networks. These networks will simply break down existing labour intensive interactions and coordinate them in the internet. They will rely significantly on user generated content and each user assuming responsibility for the distribution of that information. The current intermediaries are unwilling to sacrifice the high economic rents for distribution by adopting new business models. Only new entrants will apply new business models to take advantage of the internet to deliver products and services at significantly less cost, in less time and without needing to visit a specific retail location. These businesses will facilitate the exchange of information from people to business. Freelancers from all around the world will manufacture the information and deliver it directly to the end user. An online industry network promote products and services of the community. Service providers can find customers and customers can search for service providers. The consumers of the information may have access to products and services previously denied by closed distribution channels.

Demographic shifts are the primary force that drive fundamental change. One billion consumers of US standards are to emerge. The United States will be an important market, but not the primary consumer or financial market in the world. Fiscal mismanagement by the United States will exacerbate the decline of the United States, but it is demography that will result in a more global market. The world will be “better” if the world can evolve from unsustainable debt funded consumption for the benefit of one country to global markets which share the benefits of economic development.

If Moore’s law continues, then the cost of hardware will continue to decline and the ability to run a bank from a desert island a reality. The ability of software to take advantage of these hardware advantages may be limited. The advances in hardware and emergence of Utility computing will overcome much of the limitation. The result will be unpredented opportunity for entrepreneurs to create applications to global audiences in an increasingly service oriented world. Linux is likely to be best placed to take advantage of advances in hardware.

Skype made internet telephony popular. It added video functionality to Skype last year. It has now added remote desktop or application sharing. As the worlds most popular internet telephone software, this will have a significant impact on the number of people that work together over the internet. Could Skype make application sharing popular just like it did for internet telephony?

The electronic distribution of shareholder information will reduce costs and provide immediate delivery of information to shareholders. Electronic delivery may bypass established channels for information delivery and may accelerate disintermediation. However, the change is likely to be a universally positive for market efficiency with more direct communication between a company, its shareholders and advisers. It may also be possible that reduced transaction costs could lead to improved access to capital markets by smaller companies.

There have been a few acquisitions of internet or technology companies at conventionally unjustifiable valuations. These have been the prominant aspect of a narrow technology boom (see .Net boom category). The price of oil and speculation in the oil market has, however, acted as a dampener on the extent of the technology boom. Higher oil prices have raised global growth concerns generally and speculative capital has been focussed on oil and resources. Speculation in oil has rewarded investors until recently. The recent “crash” in crude oil prices may reduce concerns about growth and speculative capital may look beyond oil investments. The technology boom is likely to gain further momentum as a result. I have extracted a few quotes to provide an insight the recent price decline and the delicate geostrategic and political balances in the market for oil. I encourage you to read the original article.