ECONOMIC DEVELOPMENT 4.0
- Economic Development 4.0 outlines a strategy which applies the lessons of social networking and 2 billion people connected to the internet to move beyond social participation (2.0) to national collaboration (3.0) and international integration (4.0). The UN has called for revolutionary change to deliver this in ten years, rather than 100 years.
- Economic Development 4.0 is how the world works after applying Web 3.0 (or Facebook) networks to social, industrial and political endeavours
- Web 3.0 person to person networks overcome the design limitations of Web 1.0 hierarchies to deliver global transparency, meritocracy, productivity, accessibility and better decision making
- We can create the Web 3.0 networks on the Critical Path to Economic Development 4.0 in 90 days. We will need the world’s entrepreneurs, philanthropists and statesmen to engineer and inspire their use
- One global Web 4.0 network can replace local Web 1.0 hierarchies. Examples include Democracy 3.0, fueling the growth of SME’s with Equity Market 3.0, Climate Stability 3.0, UNITED (International Governance 4.0) and Health Industry 3.0 plus patient health record.
- Other potential Web 4.0 networks include Education, Resources, Food, Energy and Oil. Peace may be an outcome of UNITED (International Governance 4.0), Democracy 3.0, Education 3.0, and Equity Market 3.0.
- :Openletters: Google.org (fueling SME’s in the third world), Richard Branson (Climate 3.0), George Soros (Democracy 3.0)
- My 5 day ‘Central Brain’ template (Lightning Strike) delivers an Economic Development 4.0 network
I can provide a 5 day ‘Central Brain’ template (Lightning Strike) that delivers an Equity Market 3.0 or Economic Development 4.0 network to a partner for customisation and launch within 90 days.
Web 3.0 and Web 4.0 are simply the next stages of the information revolution. These two stages present the community the opportunity to revolutionise financial markets and economic development.
According to Wikipedia, “Economic development is the development of economic wealth of countries or regions for the well-being of their inhabitants. Public policy generally aims at continuous and sustained economic growth and expansion of national economies so that ‘developing countries’ become ‘developed countries’. The economic development process supposes that legal and institutional adjustments are made to give incentives for innovation and for investments so as to develop an efficient production and distribution system for goods and service.”
Economic Development 4.0 is the next stage of economic development. It integrates a critical mass of Web 3.0 social, industrial and political networks. Web 3.0 networks offer the community unprecedented access, innovation, investment, transparency, information distribution (Web 1.0), community participation (Web 2.0), improved collaboration (Web 3.0) and more effective prioritisation of community outcomes. The community can accelerate our evolution toward the next stage of economic development by deploying Web 3.0 networks which complement or replace hierarchies in social, industrial and political endeavors.
Convention dictates that the hierarchy is the best way to organize and private ownership of community information and distribution channels is necessary to encourage investment and innovation. The resulting Web 1.0 structures are opaque, accessible only to Tier 1 members of the community and have resulted in outcomes which have compromised some broader community objectives.
Web 3.0 present new structures to drive economic development without the necessity to grant the private sector ownership rights to encourage innovation and investment.
According to (some of) the worlds scientists, humanity has a 50% chance of surviving beyond 2100. What proportion of the 50% is caused by opaque Web 1.0 channels? Can our chance of survival be increased with greater transparency, accessibility, productivity and improved resource alloocation of Web 3.0 networks?
We need to build the Web 3.0 online social, political and industrial networks on the path to Web 4.0 and pull in the next stage of economic development, environmental sustainability, awareness, life, work and global governance. The global integration of these Web 3.0 online may be considered Web 4.0.
Web 3.0 networks are simply a global software update to a better social, political and industrial structure. The basic principles of Web 3.0 networks apply to all human endeavours. The collaborative function of a Web 3.0 network simply involves tagging people and content within a specific community of common interest in a web based content management system. I have completed some initial work toward 5 day “Lightning Strikes” to ignite networks in the Equity Market, eDemocracy, eHealth (including the health record) and a National Application Network.
I am sure that you have heard about the acqusition of Skype by EBay. There is extensive commentary on the internet and I do not plan to reproduce that content here. I would like to highlight the valuation paid for this company. Is this the start of a technology boom?
Author Harry S Dent suggests “Large and small cap growth stocks, especially technology, are going to take the stage again and lead the next bubble driven by the second stage, or maturity boom, of the S-Curve technology cycle in Internet, wireless, broadband and digital devices. “
The Open Source model of building software harnesses the collective knowledge of a group of volunteers to build complex software. Over the next few years, collective knowledge networks like the open source movement will move beyond developing open source software, to manufacturing and distributing products products and services in other industries.
The Government of Malta has announced framework discussions with Tecom Investments of Dubai on the setting up a new Ã¢â‚¬ËœSmartCity@MaltaÃ¢â‚¬â„¢. The Government of Malta has agreed to invest the land into the project whilst Tecom is expected to undertake an investment of approximately US$300 million over the coming 8 years. The first deliverables from this project are expected by 2008. This is a very exciting development. It may establish a cluster of IT companies in the EU, just like Dubai Internet City has done for the Middle East. It is also a visible sign to Middle East economies to establish new sectors and reduce their dependence on dwindling oil reserves.
Moore’s Law is forecast to continue. If the rate of improvement continues, technology will be 128 times more powerful in ten years, and over 4,000 times more powerful in 15 years. Will it be possible for a single laptop capture, store, process and transmit information for entire industries? Could a single laptop replace the global music industry, a stock exchange or provide voice calls for the world? There are billions of dollars of historical investment, hundreds of years of history and tens of thousands of people being challenged by new companies. Starbucks may have enough bandwidth to run a bank, but you probably would not want to live there 24 hours a day, seven days a week, 365 days a year.
Existing industries have billions of dollars of historical investment, hundreds of years of history and employ of tens of thousands of people. These industries are being challenged by more innovative players that apply new business models to reduce costs. Challenges to the introduction of the railroad included “Rail travel at high speed is not possible, because passengers, unable to breathe, would die of asphyxia.” This article offers a brief insight into the emerging responses of industry and their efforts to lobby government. Will government “asphyxiate” the people on the information superhighway? Will we be forced to travel by canal? Will we be forced to use the telephone?
Online social networks will drive a significant lift in productivity over the next decade. The internet will be essential to coordinating these networks. Online social networks are likely to be more efficient at manufacturing and distributing information. Consumers may be offered more convenient means to purchase, at lower cost using open source philosophies that may deliver greater customer satisfaction. Government can allow people to benefit from economic development, although some industries may perish or need to evolve in the short term.
“Power will shift from the traders who have benefited from merely facilitating transactions to the buyers and sellers who take positions on either end of the trade, and that which is most highly prized in financial markets Ã¢â‚¬â€œ the ability to create value Ã¢â‚¬â€œ is likely to experience a renaissance as transformational as anything the industry has ever witnessed.” – IBM report. The opportunity for online social networks in financial markets is becoming clear.
On the 1st April 2006, the World Bank released a policy paper titled “Promoting access to primary equity markets : a legal and regulatory approach”. The report is available from here.
““Abstract: This paper examines legal and regulatory measures that can be taken to promote access to the primary market in emerging market economies. While capital market development depends on many factors including, primarily, a favorable macroeconomic environment, an appropriately designed and effective legal and regulatory framework can help to encourage market growth and to increase access to finance for all companies, including small- and medium-sized enterprises. In this paper we identify the basic necessities that underpin a regulatory regime that is cost effective and strikes an appropriate balance between, on the one hand, laws and regulations that may be too restrictive to achieve a supply of capital and, on the other, those that may be so relaxed that investors feel that there is an unacceptable level of risk and do not care to venture into the market.…
I recently read a series of articles by Paul B. Farrell at Marketwatch.com . I will extract a paragraph from each article to encourage you to read them. “The Planet of the Apes is a perfect metaphor for the way America’s 95 million investors are being psychologically manipulated and controlled by a small cartel of less than one million people in and around Wall Street. For both that 95 million and the one million the stakes are huge, because $8.6 trillion is invested in mutual funds alone.” “Research from critics like Vanguard’s Jack Bogle have longed warn that Wall Street and the financial-services industry are “skimming” one-third off the top of investors returns, substantially reducing your retirement assets. Some critics like Boston research firm Dalbar go further: Most investors make less than inflation, but are clueless because they’re brainwashed to think otherwise.”
Business 2.0 published an interesting article which profiles 25 internet companies “whose approaches help illuminate where the Web is headed and where the opportunities lie”.
‘The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) today announced that Internet advertising revenues reached a new record of $3.9 billion for the first quarter of 2006. The 2006 first quarter revenues represent a 38 percent increase over Q1 2005 at $2.8 billion and a 6 percent increase over Q4 2005 total at $3.6 billion. These are key indicators of the growing acceptance of the internet by consumers and business.’
Web 2.0 was a phrase to describe new web companies that emerged over the last year. I could not understand how many of them were going to make money. Crash 2.0 may become the reference to the failure of these companies over the coming year. Companies will always fail as a result of poor execution. Investors that fund companies with bad ideas, non-existant revenue strategies or in unattractive markets may also fail. It is all part of the capitalist system which ultimately moves capital from those that pick losers, to those that can pick winners. The coming .NET, or Nextnet, boom is likely to based upon greater substance than the .COM boom. Crash 2.0 may be one of the early chapters in the .NET boom, or could it be the final chapter?
Offshore: What? Who? How? Where? Why? Onshore reaction? Tax competition? Pitfalls? The collapse of income tax systems?
Approximately, 33-40% of the worlds financial assets and 50% of financial market transactions occur in offshore jurisdictions. In recent years, onshore countries have collaborated to stamp out “harmful tax competition”. The offshore jurisdictions are, and will remain, a critical part of the financial system. The internet and standardisation of offshore “products” has made offshore accessible to all. The onshore economies may continue “enforce” existing laws which seek to tax residents on world wide income. They may engage in “tax competition” or restructure misunderstood and unworkable tax systems. Whatever happens, the internet is likely to play a significant role in facilitating change.
Ebay has formed an alliane with Yahoo to counter initiatives by Google. The pace of change has always been fast. I get the feeling that the pace of change is accelerating. Perhaps, the prediction that B2B Ecommerce will penetrate/change 90% of industries by 2010 will come true.
The British Virgin Islands (BVI): an insight into the principles underlying regulation in the leading offshore financial centre
The BVI has incorporated over 700,000 companies, which by some estimates represents approximately 40% of companies registered in “offshore” jurisdictions. It has achieved its leading position by offering a specific mix of corporate law, investor protection, simplicity and privacy that others have since copied. The BVI has unique attributes that mean it is always considered as a place to incorporate. It has a cost-effective regime that has been recognised by the British government, the International Monetary Fund, the Organisation for Economic Cooperation and Development (OECD) as being compliant with the relevant international standards. Although, these same organisations also demonise offshore jurisdictions to discourage their use and protect domestic tax bases. Eleven BVI companies are listed on the the AIM stock exchange including an E-Gaming company.
“A true sea change is taking place in the capital markets industry worldwide. Driven by sociological, regulatory and technological developments, this wave will completely alter the face of the industry and the roles of current market participants over the next 10 years.”: Bearingpoint. Stock exchanges will move beyond order execution, to providing investment banking services and enhanced clearing and settlement. Smaller firms will follow Google’s IPO example and approach the public directly rather than through intermediaries.
“Offshore” encourages lower global tax rates, boosts global economic performance and channels the worlds capital into the United States
“Low-tax jurisdictions play a valuable role in the global economy. Economic research indicates that so-called tax havens provide a tax-efficient platform for cross-border investments, help boost saving and investment, and thus increase global economic growth. Tax havens also encourage good policy in non-haven countries … The United States is the world’s largest beneficiary of tax havens and tax competition, both because the U.S. is a tax haven for foreigners and because tax havens facilitate the flow of capital to the American economy. “
The first few steps in the marathon battle for the search user will transform into the battle of online social networks toward 2010
The “battle for search” users is likely to move very quicky to a battle of online social networks in key market verticals. These verticals will be based around information with intrinsic value in existing industries.
The United States also driving companies away from their home market. Sarbanes-Oxley Act, increased regulation and complexity have increased the cost of raising capital and the risk of non-compliance. Offshore centres are attracting companies away from the United States. “23 of the 24 firms recently looking to raise more than a billion dollars in capital chose to list overseas rather than in the U.S.”
Shareholders may sacrifice $2.50 for every dollar they pay in taxation. Tax competition may encourage lower levels of global taxation. Structural changes could include simpler systems and an alignment of income and corporate tax rates. Of equal importance will be how government spends every dollar it receives. Some government are better than others in balancing social needs, long term infrastructure investments and immediate needs of business and tax payers. Government’s may not receive $1 of value for each dollar they spend. Whoever receives the dollar, it must be spent wisely for the greatest social or economic benefit in a mix endorsed by the community.
“The Semantic Web (or Web 3.0) promises to organize the worldÃ¢â‚¬â„¢s information in a dramatically more logical way than Google can ever achieve with their current engine design.” The lack of metadata around information and closed information systems ensure financial markets remain a highly profitable industry. In Web 2.0, the information could be organised into structured databases from a single location made available over the internet. Web 3.0 must still be organised, but intelligent distributed agents could answer your question – “Which corporate adviser should I use to list my Web 3.0 company in Bermuda?” and “What are my chances of getting liquidity?”. It will be very interesting to see what type of answers Web 3.0 gives us?
The Isle of Man is a world class financial centre. I recommend the Isle of Man Finance web site for more information. It is a very competitive offshore offering, but may have been less flexible and more expensive than other “offshore” jurisdictions. Amongst other requirements, an Isle of Man company had to have at least one resident director and a resident company secretary. This is about to change. The Isle of Man is about to introduce the “New Manx Vehicle” (“NMV”) company structure. The NMV has many of the attributes of the International Business Companies of the BVI and other offshore jurisdictions. With the NMV, the Isle of Man is a compelling offshore proposition (particularly for European E-Business). The opportunity to use “meeting rooms earmarked for use by Manx companies” in the Isle of Man’s London office is an innovative marketing tactic.
Markets of buyers and sellers will come “full circle”. Thousands of years ago, “transactions” between buyers and sellers were negotiated “under a tree” and face to face. As markets became larger and global, industry constructed proprietary and closed systems to match buyers and sellers. In an era of the internet, much of this infrastructure is redundant. A global internet displaces regional and proprietary communications systems. The internet will significantly impact many industries. We are likely to return to negotiating “under a digital tree”. The internet and the emerging “semantic” web will bring the people together in the global market place.
Friday, August 11,
2006 ~ 8:34 a.m., Dan Mitchell Wrote:Article explains the valuable role of tax competition.
Western European politicians hate tax competition, and an
article on the Globalpolitician.com website provides an excellent
The Flat Tax Revolution in Eastern Europe
presents a challenge to Western Europe, as companies are bound to move to
neighboring states to avoid paying the near-confiscatory taxation (especially
when you combine the income tax with corporate, capital gains and dividend
taxes) levied in the “Old Europe” to support the Welfare State system.
Furthermore, whereas hiring an employee in the Old Europe more closely resembles
a Catholic wedding, where no divorce is possible except in the most extreme
cases (and even then, companies face union strikes and negative media
attention), in the formerly Communist states, one can hire an employee without
the fear of being stuck with someone who’s incompetent, lazy, unqualified (e.g.,
lied in the resume about qualifications) or simply obsolete.…
Striking a balance between consumer protection, compliance costs and maintaining an effective market to raise capital for companies is very difficult. The following two articles suggest that the balance is skewed heavily toward consumer protection to the detriment of companies. Companies are simply moving to new markets where capital is easier to raise and costs are lower. If the balance is not right, the migration of companies will result in lost jobs and lost tax revenue to other financial centres.
What strategies do countries need to adopt to enjoy higher levels of consumption and retirement in one generation? What short-term sacrifices would each citizen need to make? Which countries have leadship that could formulate and implement the required changes? Would the citizens tolerate the short-term sacrifices?
Yaleglobal recently published a concise article on the status of the world’s food production and consumption. It is a very similar situation to “Peak Oil” that I discussed here. In both the food an oil industries, the law of diminishing returns has resulted in a peak in food production, consumption grows strongly with population growth and ultimately exceeds supply. In both markets, market forces are distorted and do not operate efficiently to promote longer term changes that increase supply, reduce demand, encourage greater efficiency and improve resource allocation on the demand and supply side.
Dubai is spending Ã‚Â£140bn to transform itself into a capitalist powerhouse. The strategy being pursued in Dubai is unparalleled in history – a integrated and focussed strategy with unparalleled resources to make it happen. Dubai can build the hard infrastructure, but will the will the people, industries and businesses come? The comprehensive approach may deliver.