The extraordinary personal value of the web: $140 billion is the tip of the iceberg

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How much value do you get from the web? A lot more than you pay for it.

We may quibble about the cost of bandwidth and online services, and in some cases we should, but the reality is the value we get from connectivity and web-based services is massive.

Earlier this year McKinsey & Co released research titled The Web’s €100 billion surplus (registration required). The key findings are shown below.


Source: McKinsey
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Exploring new formats for music (and revenue): Björk releases inspiring “app album”

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The music industry has struggled for over a decade as it tried to push back against inevitable change and maintain the status quo. While there has been some good experimentation over the years, we are now reaching a phase where the old structures have pretty much died and all that remains is experimentation to build what will be a radically different structure to the music industry.

One of the most interesting experiments is Björk’s new “app album” Biophilia. The ‘mother app’ can be downloaded for free to iPad and iPhone, including the first song Crystalline, with the remaining songs (2 out so far) cost $1.99 to purchase. Each song includes rich interactive visualizations, scores, and sometimes even the ability to control the music. The individual songs can also be purchased on iTunes.

Here is the introductory segment, narrated in naturalist David Attenborough in his classic style, evoking the world of life expressed in the album.

For more details on Biophilia see:
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Applying scenario planning to portfolio and financial risk: 6 steps to better risk management

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Back in the late 1990s I did considerable work applying scenario planning to financial risk management, using qualitative approaches to managing risk as a complement to quantitative methodologies such as Value at Risk. However financial institutions were generally very slow to acknowledge the value of anything not fully quantified, so I shifted my attention to broader strategic issues. I wonder if the finance industry is now more ready for these kinds of approaches.

Here is an article I wrote in 1998 in Corporate Treasurer magazine in the wake of the Asian financial crisis of 1997. The article has not dated, and remains completely relevant today. Just replace Asia crisis with the recent financial crisis of your choice.

Did You Forecast Asia? Scenarios In Portfolio And Risk Management

Did you forecast and respond effectively to the ongoing impact of the Asian crisis? The debate continues on whether or not the crisis was predictable, however the reality is that it was not effectively predicted. One of the major reasons is the strong bias in financial markets to making single-point forecasts. By their nature these cannot encompass anything except what is perceived as the most likely outcome, and thus blind us to the unexpected rather than help us to prepare for it.
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Futurist conversations: Ross Dawson and Gerd Leonhard on the future of Twitter

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Continuing our series of conversations on the future with Gerd Leonhard of The Futures Agency and myself, here we discuss the future of Twitter.

Some of the topics we discuss include:
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Slides for Opening Keynote at Gartner Application Architecture, Development and Integration Summit

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Tomorrow morning I am giving the opening keynote, titled The Future of Living Networks and Organizations, at the Gartner Application Architecture, Development and Integration Summit.

Here are my slides for the keynote. As always, the slides are intended to accompany my speech, not to stand alone, so are provided for people who are attending the event, or who like nice images :-) (though note the videos are not embedded).

Keynote: The Future of Living Networks and Organizations

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If I get a chance later I’ll expand on some of the ideas from the keynote, but in the meantime here are a few of the core ideas:
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US equities: zero gains over the last 12 years, how about the next 12 years?

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In my misspent youth I worked in international equities sales for Merrill Lynch. That was when I was first introduced to the Capital Asset Pricing Model that still underpins investment analysis today. Aong other things the model suggests that the return on an investment needs to be commensurate with its risk to attract investors.

Through the last century the empirical evidence on equity market investment was that its returns relative to other asset classes was broadly in line with its volatility.

As shown in the chart below, for the last 12 years, since 1998 or 1999 depending on the index, there have been zero gains in US equity markets. It is important to note that this does not account for dividends, which currently yield approximately 2% annually for S&P 500. However there is an important psychological issue in zero gains in the index. And it is clear that dividend yields do not justify the exceptional volatility of equity markets over the last decade or so.


Click on the image for full size
Source: Google Finance
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The role of informal social networks in building organizational creativity and innovation

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For the last decade I have examined and applied social network analysis in and across organizations, for example in large professional firms, technology purchase decision-making, high-performance personal networks, and other applications.

The more time you spend with the analysis of social networks in organizations and those firms that have applied the techniques, the more evident the power of these approaches. In particular for high-performing organizations, applying social network analysis is one of the most useful tools in pushing value creation to the next level. This is evident in the California Management Review paper I co-authored on Managing Collaboration: Improving Team Effectiveness through a Network Perspective, in which we examined how to improve performance in sales, innovation, and execution.

Innovation is of course a particularly pointed issue today, with the increasing pace of external and industry change driving the necessity of effective, applied creativity. However this is often difficult in large, complex organizations.

To this point, the IBM Institute for Business Value has released a report on Cultivating organizational creativity in an age of complexity.

The report has some interesting insights and findings, including this chart of the opposites needing resolution in a creative organization.


Source: IBM Creative Leadership Report
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Where Google+ needs to go: Why we need to be able to follow parts of people’s personas

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The centrality and ease of use of the Circles feature means Google+ is a significant step forward in social networking. It has been a key platform in its initial success.

The Circles feature enables people to selectively share content. Someone can send work-related discussions to their public stream, photos of their children to their family, and information about a boating event to their yacht club friends.

This effectively addresses privacy issues in allowing us to share both public and private information on the one platform, and not have to divide ourselves across different profiles.

However even our public personas have many facets. One person can be a leading software developer, music enthusiast, food lover, skier, and overall a lovable person. All of that is public – there are no constraints on sharing in any of those spaces.

Some people will want to follow everything that person shares. Many may be only interested in their thoughts on software development, and not care about the rest. Yet they have no choice – either they follow everything that person shares or nothing.

Gartner analyst and VP Brian Prentice brought this into focus in a recent Google+ post:
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Futurist conversations: Thoughts on the future of television

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Continuing our series of conversations between fellow futurist Gerd Leonhard and myself, here is our session on the future of television.

Here are a few of the ideas we share in the session:
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Reality mining, pervasive data capture, and how Big Data can create value

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On Tuesday I gave the opening keynote on The Future of Information Infrastructure at the Implementing Information Infrastructure Symposium.

CIO magazine did a nice article titled IIIS: Big Data driving new trends which reviews my keynote and the one immediately after from Steve Duplessie, one of the world’s top analysts on data and storage. It says:

Speaking at the event, co-hosted by Storage Networking Industry Association A/NZ and Computerworld Australia, strategy advisor, author and futurist, Ross Dawson, said “reality mining” — the gathering of data based on the activities of people in a given environment — was a major trend to emerge out of, and contributor to, Big Data.

“If you look at an office environment there is an extraordinary amount of data to look at. For example, what gestures people are making, where are they looking, what conversations are they having, how much are they smiling when they speak to each other?” he said.

“You can literally get terabytes of data out of just a few hours of this. That data is being collected to drive productivity; to design new ways to enhance collaboration and create value inside organisations.”

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