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.

Price Waterhouse’s Technology Forecast (Summer 2008) provides some commentary on the emergence of Web 2.0 type online social networks in the enterprise. The report offers an insight into the elements that drive Web 2.0. It does, however, not identify compelling reasons for the enterprise to adopt the principles of Web 2.0. I have expanded on the concept of Web 2.0 and offer an insight into what Web 3.0 and Web 4.0. A survey in the report also states that 51% of the Global 2000 are buying Web 2.0 solutions. However, it would be interesting to understand the proportion of these projects that are small solutions like “wikis” or disruptive platforms that deliver enterprise innovation or industry innovation.

IBM conducted a survey of 1,130 CEO s, general managers and senior public sector and business leaders from around
the world. I read with interest the comments that highlighted the potential application of online social and industry networks in facilitating collaboration, participation and information distribution in industries. We turnkey online networks for the financial markets and are also keen to contribute to open source software community that maintains an “Online network Solution” open source software project for any entrepreneur or organisation. I have extracted some interesting comments and recommend you read the full report.

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.

The era of online networks which manage information of no value is ending. The era of online networks that manage valuable information and reshape industry is beginning. The foundation for online networks has been building for decades. The most recent milestone may have been 90% broadband penetration rates in the major economies. The next generation of online social, industry and political networks will deliver unprecedented transparency, liquidity and accessibility in all aspects of society.

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.

Recent market turmoil is likely to eliminate the growth on stock exchange trading volumes. This growth had driven the growing revenue of stock exchanges in the last five years. Cost cutting has also contributed significantly to profitability. With growth unlikely and further opportunities for cost reduction minimal, stock exchanges will now seriously consider other strategic initiatives. Collaborative hubs are likely to be at the top of the list.

At its simplest, the business of stock exchanges is the matching of buyers and sellers of quantities of shares. At its more complex are important functions of settlement and custody. The industry could, however, run on a single computer anywhere in the world and offers a very narrow niche of functionality for the equity market. Most of the stock exchange infrastructure in the world is obsolete. It could also be suggested that much of the software that runs enterprises is also obsolete. If the software is not obsolete, it could be replaced or rebuilt at a fraction of the cost. Stock exchange consolidation may just combine redundant technology, declining customers bases and a redundant business model. This legacy may prevent new initiatives to provide greater access to the equity market for smaller companies. We may have a larger organisation with the same redundant business model with limited access to a niche of potential market participants. Will this new organisation provide greater access to capital markets for all market participants?

Grant Thornton conducts an annual review of global growth markets. The report confirms a number of key trends. Capital markets are becoming more global and less regional, financial centres and specialising and certain stock exchanges are growing strongly. The most popular growth exhanges are in UK (AIM), Singapore, Hong Kong and Canada. Companies are becoming increasingly comfortable listing on foreign exchanges. This is contributing the the rise of specialist financial centres and global growth stock exchanges. The internet provides investors with transparency and direct access to information. Many stock exchanges and their closed information networks will struggle to find a niche in a globally connected world and free flow of information. Globally distributed online networks are likely to support growth companies and growth exchanges. Online networks will deliver the international companies, advisers and investors necessary to deliver liquidity to small exchanges that have been historically restricted to local business.

Regional stock exchanges are deprecated. They will be superseded by new structures in a global market. These new features include online industry networks, global and specialist stock exchanges and a global private equity industry that can provide capital for any size of transaction - small and large in any market. Companies will need time to change their approach and use these new features of the global equity market. Regional stock exchanges are likely to throw up a lot of deprecation errors, or public relations messages, as they struggle with emerging global exchanges and online industry networks. The pace of industry consolidation has rapidly increased in the last 18 months as the global stock exchange is created. With economies of scale, a global stock exchange may be able to provide access to the equity market for companies which previously could not get access. It is unclear whether the global exchanges currently being created will improve access to the equity market by smaller companies.

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.

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.

Amazon web services are pioneering essential building blocks for economic development. These blocks will provide a foundation for the next phase of online networks which will pioneer new structures. They reduce processing power and information storage to basic utilities, just like telephone, gas and electric supply. The storage service (S3) and web hosting service (EC2) cost less than 50% of traditional approaches and are more flexible and simpler to use.

Hackers can design their online network at home and simply drag and drop it onto the Amazon cloud. The conventional approach would require a large number of employees or consultants to deliver equivalent functionality. Ofcourse, a significant amount of time was required to raise capital from investors to pay for it. Today, a hacker can create an application on the (free) Linux desktop and an open source development platform. A major ebusiness could be built by a hacker with less than US25k in external development. If you are not a hacker, then you will need to raise some serious capital because you will need significant support to navigate unfamiliar ground and achieve your outcomes.

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.