Archive for the ‘Business’ Category

Launch Future Center Smart Systems

Thursday, February 27th, 2014

Wednesday the 23th of April 2014 13:00 – 17:00 we want to launch the Future Center Smart Systems.

The meeting will take place in the Living Lab of the The Hague Centre for Innovation, 2nd floor Campus Den Haag, Schouwburgstraat 2, 2511 VA Den Haag.

The Future Center is an initiative of LIACS, Leiden Institute of Advanced Computer Science and Constable Research BV.

A Future Center is a place of dialogue and innovation.

Scientific research needs complicated real-life problems to solve to improve their theories. R&D wants to use proven solutions to improve or innovate their products or services.

R&D and Science can easily work together if the long-term strategy of Science matches with the short-term needs of Industry and Government. That is why we need to have a permanent dialogue.

We want to start a dialogue about Smart Systems between Scientific Research and the R&D of big and small companies and government agencies.

Smart Systems are and will be everywhere. Smart Systems control the car you (still) drive and the planes you fly. Smart Systems trade on the stock market, diagnose your illness and design sustainable buildings.

Smart Systems will manage courts & lawyers, cities, logistics and food safety. Smart Systems will entertain you and will stimulate your imagination. Smart Systems will even help you to innovate.

They are a combination of Analytics (Big Data), Artificial Intelligence, Expert Systems, Process/Case-Managers, Robots, Sensors (The Internet of Things), Simulators, Games, Intelligent User-Interaction (Augmented & Virtual Reality) and Social Networks.

The Smart Systems Future Center aims to help you find out what is happening with new technologies and its applications, what is already possible and what will be possible in the future.

We also want to discuss the big impact Smart Systems will have on our society. Many experts believe Smart Systems will lead to a huge increase of unemployment not only on the level of the not educated people but also on the level of the highly educated.

Others believe that the Smart Systems (“the machines, the robots”) will take over the World. They believe that this moment called the Singularity is near.  It is certain that Smart Systems will disrupt almost every company in the world. 

To prepare you for the future we want to connect people, companies and government agencies. We want to participate in projects and start the development of new research, new services or companies. We can also help with the funding of these projects.

In the first meeting representatives of other Future Centers in the Netherlands (ABN AMRO, Tax Office, Ministry of Infrastucture) will share their experiences, we want to tell you about the state of the art in Big Data and have an interactive discussion about our future plans and priorities and how you want to be part of this dialogue.

If you are interested to come to the meeting or want to be informed by email about what we are doing please send an email to hans.konstapel@gmail.com. If you know people who could be interested to join our Future Center please forward this link to them.

About Autarky

Thursday, October 11th, 2012

The amount of local cooperative energy-companies in the Netherlands (in 2012) is increasing. It all has to do with the decrease of the price of solar-sells but there is more at stake.

Local energy-companies are part of a movement aimed at Autarky. Autarky is the quality of being self-sufficient.

The word Autarky comes from Greek αὐτάρκεια (autárkeia), itself from αὐτός (autós) = self and ἀρκέω (arkéo) which in its passive form means be satisfied, content or “Out of my own Power“.

Fractal Human Distribution Network

Fractal Human Energy Distribution Network

The need to become self-sufficient has certainly to do with the current economic-, ecological- and energy crisis. People are afraid that the supply of vital energy and food will suddenly stop or become priceless. This is not the only reason.

Some people think we are wasting our money, food and energy by producing nondurable throw-away goods in which the packaging is sometimes more important than the content. They want to create durable products and services. This is not the only reason.

Some people don’t trust the suppliers of their food and energy, their politicians and/or the caretakers of their savings, the banks, anymore. They believe that their food is intentionally manipulated, their savings are wasted, their country is sold out to the rich and their environment is polluted for just one simple reason, Greed, the opposite of “Being Satisfied”.

The people of the autarkic movement want to recreate the necessary functions (bank, energy, food, work, healthcare, government) themselves in a cooperative way in their own living context.

Atmospheric Energy Diagram

Atmospheric Energy Diagram

The local cooperatives  are now joining on a higher (mostly country) level and are  in need of a shared (real-time)infrastructure. The current infrastructure does not support flows that move between many participants (so called peer-to-peer-networks).

The current system is a Hierarchic Top Down System containing Huge Highways that are connected to Big Production-facilities. This makes it impossible to consolidate, share and distribute resources peer-to-peer on a local level.

The Electric Highway

The Top Down System has created Global Markets where the local production is sold  to the highest bidder.

The Global Markets are the playing field for advanced speculators that make a lot of money. After the deal is made the local production is transported to a far away destination. That is the reason why the Top Down Systems are integrated in world-wide Logistic Systems.

If we want to coordinate all the local initiatives we need advanced systems that Up- and download, control, predict, connect, share, balance and distribute vital local resources on the short and long term.

The Panarchy Cycle of an Ecology

The Panarchy Cycle of an Ecology

Examples of these systems can be found in “crowd funding“, “virtual power plants”  and “treasury management” (balancing many small amounts of Money at the short and long term).

In Nature we find comparable (Fractal) Distribution-Systems in the Lungs, the Arteries, Riverdelta, the Weather Cycle and Ecologies.

All of these fysical Flow Systems, that map 1 Resource-> on Many Resources or Many Resources->on 1 Resource,  are based on the third Law of Thermodynamics called Constructal Law.

Virtual Power Plant

Virtual Power Plant

In the philosophy of the Stoics and Cynics of Ancient Greece the perfect human was not only arete (“all-around excellent”) but also independent of every need. Arete was associated with a full life as a citizen of a city.

Later Spinoza (“On Human Freedom“), Rousseau and David Thoureau (Walden) have developed their own autarkic philosophy.

Autarky was the ideal of a complete man who needed no one and no organization. This ideal can also be found in Zen Buddhism, Taoist practise, Early Christians (Nazarites), the Catholic Order of the Franciscans and the Protestant Quakers.

In reality it is almost impossible to be completely self-sufficient as a lonely human being. We need others when we are young, sick and old and we need others because we are specialized (“Talented”). Autarky is a possible aim for a small community.

Resource Balancing in Nature (Lungs, RiverDelta)

Resource Balancing in Nature (Lungs, RiverDelta)

The religious, cultural and political movements at the left and the right aimed at living the “good life” (“Living Slow“) are converging in  the movement of the Cultural Creatives. The Cultural Creatives are the new Elite that is moving to the AND-state (Left AND Right).

They don’t believe in the old Competitive Ideologies (Socialist, Capitalist, Religious, Liberal, Nationalist, Conservative, Globalist, etc..) but want  to focus on the Shared Collaborative Values between all Humans. We all need Love, Food and Shelter.

The Stoic Zeno shows the Doors to Truth and False

The Stoic Zeno shows the Doors to Truth and False

Autarky has always been a major political aim of countries. Autarky is about the possibility to control your own future and to become independent of other powers that could use your dependency to tell you what to do to get what you desperately want.

At this moment the shortage of fossil fuels, especially oil and gaz, is used to influence the policy of other countries and is the cause of local conflicts in the Middle East.

China is buying all kinds of vital materials to make sure their economy will not become dependent on others. If they will succeed and nobody doubts about that, they will become the economic controlling power of the world.

Reaching a state of local autarky, being satisfied with what your environment provides you, has become the aim of the wordwide sustainability movement.

Total autarky is possible when you want to live as a stoic or a survivalist. Most people accept a more simple living, move off-the-grid and build autonomous buildings that make use of  renewable energy.

Allotment Garden

Allotment Garden

Others start to farm in their own backyard, join an allotment garden or move back-to-the-land and practice sustainable agriculture.  To handle their surpluses and shortages independent  local markets are created that make use of  alternative currencies.

A strive for (regional) Autarky pushes the need to innovate to a higher level because not all regions contain the right materials, knowledge or experience to realize everything everybody needs. To become fully Autarkic the Production and Consumption Systems in the Region have to be based on simple concepts and parts that are available everywhere. Simple concepts are concepts that are easely copied.

The only way to combine Simple and Complex concepts is to use the Concept of Self-Reference (Fractals). The only way to make use of parts that are available everywhere is to make use of the Simple Building Blocks of Nature. A good example is the use of algea in food processing.

The concept of Autonomy not only plays an important role on the many levels of human (personal, organization, country) and animal society (Competitive vs Collaborative (Ants)). It is also a major subject in the research of (Second-OrderCybernetics (Control Theory).

Self Reproducing Systems

Self Reproducing Fractal Systems

Second Order Cybernetics is concerned with the Control of the System of Systems (the Meta-System). Hierarchy is not the solution to this problem because it leads to the logical problem of Infinite Regress (“Turtles on turtles on … all the way down”).

The Meta-System is controlling, reproducing and balancing itself by a Fractal Feedback-Cycle that moves Backwards (Consumption) and Forwards (Production).

The concept of Self-Reproduction is called Autopoiesis or Autocatalysis. The Design Philosophy of Cradle to Cradle is a good example of Autopoiesis.

A System is an Autarky if all its Levels are capable of Self-Reproduction.

If a human wants to become self-sufficient he has to accept and develop his own talent and find complementary people so he is able to create a Self-Reproducing Unit.

The smallest Self-Reproducing Unit in Human Society is the Family living in one House. This House has to produce more than enough Energy and the Garden has to produce more than enough food to support the Family.

Garden City (Culemborg, the Netherlands)

Garden City (Culemborg, the Netherlands)

If we cluster all these Self-Reproducing Families/Houses & Gardens in a small City the chances are high that the combined talents of the families will be able to supply every profession needed if the people of the city want to Live a Simple Life.

It is also possible that the surplusses and shortages of the families can be compensated by creating a Market on the level of the small City or one level higher, the Region.

An Autarkic Movement becomes an Aggressive Competitive Nationalistic Movement when the Citizens of the Country feel that their Country is plundered by outsiders and their Leaders promise to get it all back by expanding the Space to Live (“Lebensraum“) to facilitate everything that is needed.

This happened when Germany was preparing for War after the enormous reparation payments of 132 billion gold marks to the Winners of World War I.

The Autarkic Movement could also become a Peaceful Cooperative Social Movement like the Movement of Gandhi in India when the people accept the Good Life they already live and want to share the surpluses with others who are in a worse state.

LINKS

Dutch Report about Local Energy Companies (in Dutch)

About the house that produces his own energy (Passive House)

The Complete Book of Self Sufficiency

About Close-Loops Systems

About Smart Grids

About Anti-Fragility

About Fractal Distribution Systems

Jerry Rifkin: About the Distributed Economy

The John Seymour School for Self Sufficiency

About Entrainment

About the EU Policy of Smart Specialization of Regions

About Darwin and Collaboration 

About Artificial Life

About Smart Technology

About the Thermodynamics of Living Systems

About Worldviews (How to find Complementary People)

A City is an Organism

About the Viable Systems Model of Stafford Beer

About Garden City

Gandhi’s view on Capitalism

The Autarkic Dreams of Germany

 

Over Veerkracht (Resilience) (in Dutch)

Monday, April 2nd, 2012

De leer van de thermodynamica is in de 19e eeuw ontstaan uit natuurkundig onderzoek dat werd uitgevoerd om de efficiëntie van de stoommachine te verbeteren. Inmiddels heeft deze wetenschap belangrijke wetten over het Universum ontdekt.

Volgens de thermodynamica beweegt de energie in het Universum op de lange termijn zich van een onmogelijke extreem hete situatie, de Big Bang, naar een toestand van extreme kou en een hoge waarschijnlijkheid, de Big Freeze, waarin alles netjes uniform verdeeld is. Het universum beweegt van extreme chaos naar extreme ordening.

Energie stroomt daarom altijd van hoge (chaos) naar lage temperatuur (orde). Vrijwel alle energie op aarde komt van de zon in de vorm van electro-magnetische straling. Met behulp van deze zonnestraling transformeren planten, algen en bacteriën simpele chemische structuren in complexe biomassa (chemische energie). Bacteriën en schimmels breken deze structuren weer af waardoor de cyclus wordt gesloten.

Biomassa wordt door de rest van de organismen op aarde direct of soms veel later (olie/gas/steenkool) geconsumeerd. Het consumeren van de primaire zonne-energie vindt plaats in voedselketens waarin de organismen ook zelf weer worden geconsumeerd.

Vanuit ons menselijk perspectief interpreteren wij het consumeren van de participanten in een voedselketen als een competitie (“survival of the fittest”) maar we kunnen het ook zien als een uiterst flexibele keten van chemische reacties die worden uitgevoerd in bewegende zichzelf reproducerende chemische fabrieken.

 Energie is de mogelijkheid om iets in beweging te krijgen of te houden. De opgeslagen (potentiële) energie in de aarde wordt soms in meerdere stappen omgezet in beweging (kinetische energie). Tijdens deze omzetting gaat er altijd warmte verloren (dissipatie, wrijving, weerstand, erosie).

De energiestroom van de zon wekt door de rotatie van de aarde stroom-systemen (flow-systems) op. Stroom-systemen hebben een boom-structuur als de stroom van een punt naar een oppervlak of een volume gaat. Een voorbeeld zijn het weersysteem en een meanderende rivier-delta. De longen en de bloedvaten in ons lichaam hebben precies dezelfde opbouw omdat hetzelfde proces ook in ons lichaam optreedt.

Volgens de Constructal Theory van Adrian Bejan verbeteren de stroomsystemen zich steeds opnieuw en dat doen ze door gebruik te maken van de permanente slijtage (dissipatie, wrijving, weerstand, erosie) die de stroombeweging veroorzaakt.  Uiteindelijk vindt er altijd weer ergens een doorbraak plaats in de meander.

Adrian Bejan heeft de Constructal Theory volledig analytisch afgeleid uit de wetten van de Thermodynamica. Hij  beschouwt het principe van de verbeterende stroomsystemen (“construction”)  als een Hoofdwet van de Thermodynamica. Volgens hem is ontwerpen niet een intelligente actie maar een volstrekt logisch gevolg van de werking van ons Universum.

De stroom van onmogelijkheid naar uniformiteit, van hoge onwaarschijnlijkheid naar hoge waarschijnlijkheid gaat gepaard met allerlei tussenstadia waarin de bestaande structuren de nieuwe structuren de weg wijzen.

De doorbraken in de meanderende stroompatronen maken beter gebruik van de huidige mogelijkheden maar de oude paden behouden lange tijd hun functie. Hierdoor is een stroomsysteem niet afhankelijk van één pad en is daardoor ook bestand tegen calamiteiten (bijv. een sterk verhoogde regenval in het stroomgebied van de rivier).

Het systeem waar de stroomsystemen onderdeel van uitmaken bestaat uit Machines (Constructal Engines) en Barrières (Brakes).

De machines en de barrieres zorgen ervoor dat de aarde niet te warm of te koud wordt.

De machines zoeken de weg van de minste weerstand, optimaliseren de stroom, bouwen structuren op, slopen de barrieres, produceren kinetische energie en minimaliseren de slijtage. De machines slechten het pad naar de Big Freeze waarin alles gelijk zal zijn en alles stil zal staan.

De barrières bevatten potentiële energie, leveren de weerstand om de minste weerstand te vinden, slopen de machines, optimaliseren daardoor de dissipatie en produceren een maximale hoeveelheid straling met een hogere golflengte als de binnenkomende zonnestraling die de aarde weer verlaat.

Produceren (Machines) en Consumeren (Vernietigen, Slijten) houden het wankele evenwicht van Moeder Aarde in stand.

De evolutie van ecologieën, steden, organismen (wet van Kleiber), talen (wet van Zipf), organen (de longen, bloedvaten), sporten en technologieclusters voldoen aan de Constructal Theory.

In 2002 hebben Holling en Gunderson het boek Panarchy: Understanding Transformations in Human and Natural Systems gepubliceerd.

Panarchy bevat een integrale visie op de evolutie en de adaptieve cyclus van  de constructal engines die men ecosystemen noemt.

Panarchy is ontstaan door het combineren van ogenschijnlijk conflicterende theorieën. Die theorieën leken conflicterend omdat ze betrekking hadden op de verschillende fasen (Zie Plaatje Phase Space hieronder) van de adaptieve cyclus die een ecologie doorloopt.

De combinatie van de vier mogelijke fasenruimten levert een op-en neergaande cyclus op waarin op een zeker moment een sprong (bifurcatie) wordt gemaakt naar een compleet nieuwe ruimte. Nadat deze sprong heeft plaatsvonden stopt de dynamiek van de oude ecologie.

De meest herkenbare fase is de Exploitatie-fase (B).  Dit is de opgaande lijn waarin de ecologie een hoge mate van orde bereikt en overschotten (Potential) produceert.

De vier fasen van de Panarchy Cyclus voorgesteld als een landschap met een rollende bal

Aan het eind van deze fase neemt de potentie af en wordt er van alles gedaan om de levensduur van de ecologie zo lang mogelijk te rekken (C -Conservation). In deze fase zijn de structuren verouderd geraakt en zijn er op allerlei plaatsen reeds alternatieven (bypass) ontstaan die beter passen op de huidige vraag naar beweging.

De ecologie is in de conservatie-fase vrijwel tot stilstand gekomen en besteed al zijn energie aan het onderhouden  van zijn eigen structuur.

Tijdens de langzaam opgaande lijn van de Exploitatie-fase neemt de verbondenheid en vooral de afhankelijkheid (Connectedness) tussen de participanten onderling enorm toe waardoor de ecologie steeds kwetsbaarder wordt voor verstoringen.

De constructal engines in de ecologie gaan steeds efficienter samenwerken wat ten koste gaat van de diversiteit en de variatie in de ecologie.

De ecologie kan verstoringen opvangen totdat de  verschillende paden nog niet zijn dichtgeslibd maar een verstoring die alle paden tegelijkertijd raakt is dodelijk.

Op het laatst wordt de Veerkracht (Resilience) enorm op de proef gesteld en kan het gebeuren dat de Ecologie volledig ten onder gaat (Release) of na een grondige Reorganisatie weer aan een nieuwe levensloop kan beginnen.

De resilience van een ecologie wordt gemeten door de snelheid te meten waarmee een ecologie zich weer herstelt van een verstoring.

Volgens Panarchy beweegt een Ecologie zich op verschillende schalen en plaatsen en kan op die plaatsen in verschillende fasen verkeren waardoor er allerlei soorten van interactie mogelijk zijn. Hoe hoger de schaal hoe langzamer de cyclus verloopt. Hoge schalen dempen de fluctuaties van de lagere schalen.

Een snelle lokale reorganisatie kan zich plotseling heel snel verspreiden (een lopend vuur (Revolt)) terwijl een langzame geleidelijke ontwikkeling (een organisatie) een snelle ontwikkeling weer kan dempen of tot stilstand kan brengen (de organisatie van de Brandweer (Remember)).

Panarchy is een Zelf-Refererend Cyclus-Model dat bestaat uit Vier Fasen en (minstens) drie Schaalniveaus.  De panarchische golfbeweging bestaat uit twee stappen n.l. de  positieve weg Omhoog naar de Top (exploitation, conservation)  en de negatieve weg Omlaag naar het Dal (depressie, reorganization).

Op een bepaald moment kan de golfbeweging zich splitsen waardoor een nieuw (ander) niveau van organisatie optreedt. Deze sprongen doen zich volgens een vaste regelmaat voor.

Als we kijken naar terminologie en inhoud valt het op dat er een groot verband bestaat tussen Ecologische-, Economische- en Persoonlijkheidstheorien. De natuur, de economie en de mens lijken onderhevig te zijn aan dezelfde wetten.

De theorie over de Menselijke Natuur heeft erg veel weg van de Theorie die wij over de Natuur zelf hebben ontwikkeld. De mens is een zelfstandig bewegende ecologie, een stromend stroomsysteem waaraan een groot aantal participanten deelnemen.

Bacteria wisselen DNA uit

Die participanten hebben zich in de loop der tijd verenigd omdat een samenwerkingsverband veel efficienter bleek te zijn dan een solitaire ontwikkeling.

In het begin bestond het samenwerkingsverband uitsluitend uit simpele chemische fabriekjes, bacteriën, die genetische ontwerpinformatie (DNA) van hun fabriekjes uitwisselenden. De eerste fundamentele stap in de samenwerking van de bacterien was de statische spons. De mens heeft erg veel ontwerp-informatie gemeen met de spons.

Spons

Later gingen de organismen bewegen en waarnemen. Hierdoor gingen ze als individuen samenwerken met andere organismen die genetisch op hen leken (zie Genetic Similarity Theory).  Het uitwisselen en combineren van ontwerp-informatie ging gewoon door (sex).

In volgende fasen ontstonden er hogere ordeningen, zoals lichamen die lichamen konden bevatten (huizen, steden, vliegtuigen, onderzeeboten en auto’s).

Op dit moment is de (grote) stad het hoogste niveau van koppeling maar niets houdt de “Constructal Law” (of de Entropie) tegen om een ordening te gaan scheppen op  het niveau land of aarde.

Dat betekent dat er nieuwe slagaderen moeten komen om de ontwerp-informatie en de energie die tussen de grote steden gaat stromen te faciliteren. Overduidelijk is dat het Internet de basis vormt van het zenuwstelsel van de aardse informatievoorziening.

De thermodynamica is een statistische theorie. De kansverdeling van een Systeem wordt de Entropie van het Systeem genoemd.

Om een kans te kunnen berekenen moet je de kansruimte (de Phase Space) bepalen. Die bestaat uit alle mogelijkheden.

Het aardige is dat je niet hoeft te beschikken over kennis van alle combinaties van alle componenten van een specifiek systeem om erg veel te weten te komen over een kansruimte.

Je kunt gaan spelen met willekeurige componenten (a,b,c,d,e,….), de combinaties in een matrix stoppen, gaan tellen en patronen zoeken in de getallen die er dan worden gevonden. Je bent dan bezig met de statistiek van de statistiek of beter de waarschijnlijkheid van de waarschijnlijkheid. De mogelijke patronen worden beschreven in de Driehoek van Pascal.

Wat dan blijkt is dat er achter het patroon van Pascal weer een patroon zit (zie plaatje).  Dat patroon bevat wederom driehoeken en het is zeer waarschjinlijk dat er achter de driehoeken weer driehoeken zitten. Driehoeken in driehoeken in driehoeken in…. noemt men een fractal, een zelf-herhaling.

De  (on)waarschijnlijkheid is eigenlijk heel mooi en vooral ook simpel geordend en komt voort uit een zichzelf herhalend patroon, de Drie-Eenheid, dat in iedere godsdienst op aarde voorkomt.

Wetenschap en Godsdienst gaan uiteindelijk over hetzelfde.

LINKS

Over de Big Bang

Over Thermodynamica

Over Constructal Theory

Waarom een stad een organisme is

Waarom de genen bepalen wie we aardig vinden 

Over Pan en Anarchie

Over de Wet van Kleiber

Over de orde achter de wanorde (Over de Driehoek van Pascal)

Over de Uitgebreide Driehoek van Pascal

Over de drie-eenheid.

About Combining the Combinations

Monday, May 30th, 2011

 

steam_engine

Evolution means the creation of larger and larger islands of order at the expense of even greater seas of disorder in the world. In the process of evolution, each succeeding species is more complex and thus better equipped as a transformer of available energy.: Jeremy Rifkin, Entropy: A New World View (1980).

You wouldn’t enjoy a perfectly ordered universe. A wholly ordered universe would be at perfect equilibrium and would be dead. There can arise no Order unless there is a Flow of Matter and Energy which decreases in intensity as a system moves toward equilibrium. Motion, change or evolution in the Universe is driven by fluxes of energy and energy-rich matter flowing from sources of high potential to sinks of lower potential.

During the road from Being to Becoming Cyclic Auto-Catalytic Systems are created that Re-Create themselves until they Die. Islands of Order Appear and Disappear in the Sea of Chaos.

About Thermodynamics

Thermodynamics is the Science of the Transfer of Energy.

In strict Scientific terms Energy is classified into two main forms: Kinetic and Potential energy. Kinetic Energy is defined as the energy of a moving object. Potential Energy is defined as the energy in matter due to its position or the arrangement of its parts. The various forms of Potential Energy include gravitational potential energy, elastic potential energy, chemical potential energy, and electrical potential energy.

The First Law of Thermodynamics says that the total quantity of Energy in the universe remains Constant.

The Second Law of Thermodynamics states that the quality of this energy is degraded irreversibly. The Second Law predicts that our Universe will end when the Explosive Motion of the Big Bang wil stop and we will reach the Absolute Zero.

Nicolas Léonard Sadi Carnot (1790-1832) detected the Second Law of Thermodynamics when he tried to find the most efficient heating engine.

According to Carnot the Efficiency of an Engine is (T1T2)⁄T1, where T1 is the highest temparature. The Higher the Difference between the two Temperatures of the Engine the Lower the Efficiency. The Bigger the Step the Higher the Waste. If you want to build a highly efficient Engine, the Engine has to make very Small Steps when the Engine is heated.  This principle is known as Adiabatic Expansion (and Compression).

Physical, Chemical, and Electrical energy can be completely changed into Heat. But the Reverse (heat into physical energy, for example) cannot be accomplished without a loss. The irreversible increase of this nondisposable, useless, energy in the universe is measured by the abstract dimension  called Entropy (from the Greek entrope, change).

The Entropy measures the degree to which the probability of the system is spread out over different possible states. If all the possible States of the System are the Same, the System is in Equilibrium and the Entropy, the State of Order,  is on its Maximum.

In the Beginning of the Universe Every Thing was Different. In the End State Every Part of the Universe will be the Same.

About the History of Innovation

The central actor in the 19th century model of cultural innovation is the Artist, conceived, as an individual creator of works of art. Art is produced only by a handful of exceptional individuals.

The process of technical innovation in the 19th century was seen in terms similar. The central focus was on the work of individual inventors and researchers, commonly with little or no specifically scientific training.

By the early 20th century, this model was displaced by an industrialized process of innovation.

The first major step in this process was the rise of the Research University and the development of a large class of technically trained workers. In the 20th century, pure scientific research had become the preserve of universities and specialist research institutes.

The second major step was the development of corporate forms of business organization, which allowed Research and Development to become an organized business activity, operated on industrial lines.

The pattern of innovation in the 21st century is radically different. In most sectors of the economy, the rate of technological progress has slowed down substantially. Technological progress is characterised largely by Incremental Improvements to mature products.

In Computing and Telecommunications, the rate of progress has accelerated dramatically since the late 1980. The convergence of Computing and Telecommunications in the Internet has fundamentally transformed every activity it has touched. Everything that can be formalized will be formalized.

The Internet makes it possible that disjunct Networks of Isolated Innovators connect and share their Knowledge and Experience.

The Artist,  now connected with many other “exceptional individuals” all over the world,  is on its return.

About Incremental and Disruptive Industrial Innovation

There are two types of Industrial Innovation called “incremental”  and disruptive” innovation.

Japan (and now China) has made incremental improvement the cornerstone of  Technical Advancement. After months and years of gradual (adiabatic) changes, products look radically different, as happened with semiconductors, solar cells and batteries.

The US claims that it is the Champion of Disruptive Innovation.  Their “Internet”-entrepeneurs like Amazon, Google and Facebook believe in a “Statistical” model of Innovation, A Portfolio or an Innovation Ecology.

One of the many “Trials and Errors” will result in a big breakthrough that will Disrupt the Market. Behind Disruptive Innovation lies the Concept of Evolution, Survival of the Fittest, the Essence of Capitalism.

Disruptive Innovation uses Incremental Innovation to improve the Parts of the Portfolio.

Incremental Innovation (“Proces/Product/Business Model Improvement”) takes place  when an Innovation is improved until the Limits are reached.

Incremental Innovation could use the Efficient Small Steps of the Adiabatic Process to reach the Goal of the highly Effective.

Most of the time Proces/Product Improvement (“Standardization”) is not a Structured Process because People believe Innovation is about “Thinking Out of the Box”. If People “Think out of the Box” the proces will move into a Chaotic State and will Die.

Creative Incremental Innovation will produce a Lot of Waste (“Heat”, “Fuzz”) and accomplish Nothing. Managed Incremental Innovation has to remove the Waste and the Constraints.

With every step that is taken the System has to become more probable so the results of the proces will be more predictable. When the Limits are reached, we have to Restucture the System to move on.

The Second Law of Thermodynamics shows that Closed Systems finally Converge to a State of Equillibrium with a High Probability, a High Entropy.

Systems that are Isolated by a Boundary behave as Closed Systems. Systems that are Open to other Systems Merge and become Closed.

Most of the Time people don’t understand the Boundary of their System and Act in a Shared Boundary. In this Shared Boundary Competition takes place. Competition is a waste of Energy. If People could define their Boundaries they could Cooperate.

People Communicate. They  Share their Ideas, Problems and Solutions.  When a Process is well understood the Improvements of the Process are disseminated through the Human Networks and widely Copied.

Human Networks are Closed Systems that are connected to other Networks by Boundary Spanners.

Most people don’t understand that there are other people in other Networks who are doing the Same thing they are doing. They think their activity is Unique and don’t understand that the State of Uniqueness was only there at the Beginning.

Secrecy slows down communication between the People in the Network. The result of Secrecy is that People are unable to learn from others so they are unable to reuse the solutions of others. Secrecy is again a Waste of Time.

In the end the Competitive Advantage of the Innovation is completely gone and the Entropy of the System is at its Maximum.

At that moment every Process in every Part of the System will be the Same and the Companies will Merge or will be taken over by other Companies. Winner Takes All.

The Temperature of the Industry will move to Zero and every Movement (and Innovation) will stop.

About Creativity

There are two Views on Creativity. Creativity is a Combinatorical Game and Creativity is a Spontaneous Eruption of Ideas forced by High Pressure.

At such a moment, “the Aha-Erlebnis“, two or more Frames of Reference Fuse and a new Innovative Combination is created.

The last view has a lot to do with the theory of “Self-Organized Criticallity“.

The Metaphor of this Theory is the Disaster, the Avalanche or the Sand Pile that Suddenly moves when the critical grain of sand falls. At that moment a Significant Part of the Collection of individual grains Combines and moves on its own.

When a System is reaching the Boundaries of Proces Improvement and a Huge Pressure to Innovate is experienced,  two or more Systems (“Frames of Reference”) Fuse (Combine).

When the Systems are in Equilibrium the Fusion is easy (“Connecting”) otherwise the Fusion could become a Disaster, a Disruption, a Creative Destruction and a Huge Amount of Heat (Waste) is produced.

About Managed Creativity

If Innovation  is a Combinatorial Game we have to restructure a System into a “loosely-coupled”  System of Components and combine the Components with the “well-articulated” Components of other Systems.

A Loosely Coupled System is a System where each of its components has, or makes use of, little or no knowledge of the definitions of other separate components. The components act as Black-Boxes“.

A Component is “well-articulated” if it contains Just Enough Functionality to do the job. An Under-Articulated system is Rigid. It contains Not Enough functionality to Adapt to the Changing environment. When Systems grow old they become Over-Articulated because the Designers want to add new functionality without looking at the Boundaries of the System. Over-Articulated Systems overlap and it becomes very difficult to find the Essence. Designers always want to Solve every problem with their Own System.

Genrich S. Altshuller was a Russian Patent Officer who tried to find a Pattern behind Patents.

Altshuller screened over 200,000 patents looking for Inventive problems and how they were solved. Of these only 40,000 (20%) had somewhat Inventive solutions; the rest were straight forward improvements.

Altshuller defined an Inventive problem as one in which the solution causes another problem, a Contra-Diction or Conflict,  to appear. He found that the same problems had been solved over and over again using one of only Forty fundamental inventive principles. Altshuller  named his method  TRIZ.

Humans are prone to reivent the Wheel many times because they only look for Solutions in their own Frame of Reference. The Solution of their Problem is almost all the time already available in another Domain.

Roni Horowitz has analyzed the Principles of Althuller and found a deeper structure behind TRIZ which he called ASIT.

ASIT is about Thinking Inside the Box instead of Outside the Box. The so called Closed World condition, forces the thinker to find a creative solution by heavily limiting his or hers Space of Possibilities.

The Qualitative Change Principle looks for solutions in which the influence of the main problem factor is either totally eliminated or even reversed. The System has to become Perfect. Every Component has to fullfill just one Task  (“Well Articulated”) and the Functions of the System have to create a “Closed World” which means that the System has to be Closed in Itself.

About Combining the Combinations

The Second Law of Thermodynamics shows that it is Almost Impossible to move back to an old solution when the Solution is widely used.

Nature Solves its Problems by Experimenting but the Experiments are not completely at Random. Nature uses an Established Infrastructure and Plays with all the Possible Paths that Emerge out of the Existing Infrastructure, The Adjacent Possible.

Before life emerged on Earth, the planet was dominated by a handful of basic molecules. Each of these molecules was capable of a finite series of transformations and exchanges with other molecules in the primordial soup.

According to Stuart Kauffman Life  started when the Chemical Parts of early life  started to Re-Create themselves in a Cyclic Process  called AutoCatalysis. Re-Creation of the Same Structure is one of the most important principles of a Living System. Our body is recreated all the time in an endless Cycle until we Die.

If you could Play with all the Primordial Combinations, you would end up with the Components of Life but it is impossible to create a mosquito, or a sunflower, or a human brain.They were created when the Combinations started to Combine Again and Again.

Innovation in Nature is an endless Cyclic Expanding proces of Combining the Combinations.

This process moves on until the Limits of the Expanding Space of Possibilities are reached. These Limits are reached when there is not enough “useful” Energy available.

Combining the Combination happens in Nature but also in our Culture. Old infrastructures are used in a new way and a complete new field of Combinatorics appears.

Johannes Gutenberg took the older technology of the screw press, designed originally for making wine, and reconfigured it with metal type to invent the printing press which made it possible that new ideas, concepts and procedures were better dissiminated through the Human Networks.

Is there an End to Human Innovation?

The Universe is Expanding and is Creating New Combinations of Combinations all the Time.

The Law of Kleiber shows that the Combinations of the Combinations Fuse. The Law of Kleiber is just like Self-Organized Criticallity represented by a Power-Law. Power-Laws are independent of a Scale and therefore applicable on every Level of the Universe. They show that One Principle (“a Fractal“) Repeats itself on every Level.

Every time when the Combinations Fuse they are better equipped as a Transformer of Available Energy but the Creation of larger and larger islands of Order happens at the Expense of even greater seas of Disorder. Humanity is Wasting resources at an increasing rate, and that will lead to the destruction of our civilization.

The Combinations become Bigger and Bigger AND the Big Structures Attract Each Other. The larger group of possibilities will always be the Dominant Attractor.

This is the main reason for the success of Google, Facebook and Twitter. They have aquired the Power to Control their Market by Giving away their Products for Free so the Amount of Users would grow Exponentionally. They make money by letting other companies pay for the Use of their Huge Attractor.

The Small Auto-Katalytic Chemical Factories, the Bacteria,  that were created in the beginning are now fusing into Very Big Cities and the next Step will be One Mega-City covering a Huge Area of the Earth.  These Mega-Cities will be extremely Efficient and Effective. When this happens Nature will be replaced by a Human Made Technological Structure that has to use completely new ways to produce and use energy.

The next Step is easy to imagine. The Human Race will start to create new Mega-Cities on other Planets that will fuse into Mega-Planets.

The Big Problem will of course be Energy. We have to find new Sources all the time to support the Human Need to Expand and Discover. Every time when we create a new and Bigger Source of Energy the Amount of useless Heat will increase and the End of the Universe will get closer and closer.

Human Invention is Speeding Up the End because in the End Humans want to become One with the Whole.

According to the Second Law of Thermodynamics the Universe is moving to an Equilibrium State and not to an Extremely Impossible Innovative Configuration. At a Certain Point of Time Human Innovation has to Stop because we will reach the State of Absolute Zero Temperature and every Movement will Stop.

In the End the Universe will move into a State of Infinite Sleep.

What to Do?

The most important thing you can do when you want to Innovate is to create a Deep Understanding of just One Frame of Reference.

You have to become an Expert in Something and you have to have the attitude to create the Perfect Frame of Reference.

Every time when the System is not performing you have to solve the problem Inside the Box but you have to make use of Solutions that are Outside the Box.

Every Time when you are Satisfied,  remove a Constraint and Force Yourself to Solve the problem.

At a Certain Moment your Frame of Reference will Explode and will produce many Fragments. They are the Basic Building Blocks of Your Domain.

Start to Play with the Building Blocks and new Possibilities will appear that you have never Thought off.

You now have entered the Adjacent Possible.

LINKS

About Creativity and High Pressure

About Self-Organized Criticallity

About Self-Organized Criticallity and Innovation

About Complexity Theory and Innovation

About Loosely Coupled Systems

About Boundaries

About Triz

Stuart Kaufmann about Radical Emergence

Advanced Systematic Inventive
Thinking

About ASIT (Advanced Systematic Inventive Thinking)

How Nature Plays

About Constructal Law

About the Origin of Good Ideas

About the Adjecent Possible

About the Law of Kleiber

Why Cities are Organisms

About the Beginning of the Universe

About  the End of the Universe

About the Productivity of Knowledge Workers

Monday, August 10th, 2009

blue collar workerIn the 19th Century The Blue Collar Workers were replaced by Machines operated by White Collar Workers.

When the White Collar Workers were replaced by the Software of the Programmers a new Type of Work was created, called Knowledge Work.

It is very difficult to measure the Productivity of the Knowledge Worker.

In this Blog I will show you that the Problem of the Productivity of the Knowledge Worker can be solved when you Realize that the Business Cycle is a Self-Referring Object (A Fractal).

Work is a Process and is part of a Business Cycle. Work has a Result and it uses Resources.

When the Result of the Process is accomplished somebody has to Use the Results. The process of Use is called Consuming.

When a Requirement is Transformed into a Result and the Result is Sold (Sales) and Used somebody starts to Think, gets Ideas, about Adapting the Requirements and the Cycle of Work is Closed.

When the Requirements are Satisfied we call the process Effective. The process is Efficient when Waste is minimized.

In the Business Cycle the Four “Organs” of the Human, Control, Desire (Consume), the Emotions (E-value-ate) and the Imagination (Create) are Dominating a Phase. The task of the fifth Organ, Conscioussness, The Monitor, is to Balance the Four Organs to make sure that one Human Faculty is not dominating the Cycle. The Business Cycle is Self-Referring.

This means that we are able to apply the Business Cycle in every part of the Business Cycle. A Salesman makes the Requirements of a Sales Plan, Executes a Sales Plan and Improves his Sales Cycle when he gets new Ideas about the effect of his efforts.

What we see is the process of Specialization resulting in the Division of Labour.

Every time when a new specialization of the Business Cycle is created the Level of the Process changes and the Speed of the Movement of the Cycle, the Periodicity, changes. Every Time when a new Division of Labour occurs the Business Cycle Speeds Up.

The Division of Labour not only Accelerates the Business Cycle. The New Roles in the Cycle behave like an Independent Unit. They want to Dominate Cycles on other Levels and most of all they want to expand their Activities.

The Personal Assistant who was helping the Manager to Hire and Fire Personnel transforms into a Human Resource Management Department.

At some point in time the specialized Units disconnect from the Whole and start a Life of their Own. Designers start Design Bureaus. Teachers unite in a School. Scientists cluster in Universities.

All of them are still payed by the Primary Processes in Society (Agriculture (Food), Industry, ..) but the Secundary (or higher order) processes don’t want to hear that. They think they are the Most Important Processes in Society.

When the new Wholes are created they start to Divide again and again. The Result of the Split of the Work Cycles, the endless Division of Labour, is an Incomprehensible, not Effective, Inefficient Network of Competing Work Processes Clustered in many Institutions.

The Business Cycle is Breathing.

When the process of Splitting has gone too far, the process of Union and Integration starts.

Splitting, Expansion, occurs when the Economic Cycle is going Up.

Integration, starts when the Economic Cycle is going Down.

We are now again in an Integration Phase which means that many secundary and higher order processes will be destroyed until the Essence of Society is visible again.

What is a Knowledge Worker?

A Blue Collar Worker works in a Factory and is doing Manual Labour. The people who are part of the Staff Departments of the Factory (Sales, Planning, Design,) are called White Collar Workers. White Collar Workers are more Educated as the Blue Collar Workers. They Earn more money and are doing Intellectual Work. The Knowledge Worker Uses and produce Knowledge. Examples are: Programmers, Systems Analysts, Lawyers, Teachers and Scientists. Examples of processes are: planning, acquiring, searching, analyzing, organizing, storing, programming, distributing and marketing.

What is Productivity?

The Concept of Productivity implies that an organization works as a Physical System with variables and their inter-relationships amenable to precise definitions. The basic reliance is on the acceptance of a Stimulus-Response model of Causality that an Input causes an Output.

Productivity is the ratio of Outputs (Goods and Services) divided by one or more Inputs (Labor hours, FTEs, Capital, Expenses). Using money as a measure of value makes it possible to compare dissimilar inputs and outputs.

Productivity is only applicable in the Production Phase of the Business Cycle. In the other Phases other Measures are used like Customer Satisfaction in the Consuming Phase. Customer Satisfaction is a measure of the Effectiveness of a Production phase.

The Business Cycle is a Self-Referencial Object. Every Phase of the Business Cycle can be divided in the Phases of the Business Cycle. This means that the Productivity of the Knowledge Worker can be Measured when he is Producing Something (A Design, A Research Document, A Plan).

If the Knowledge Worker is not Producing anything there is nothing to Consume in the next Phase. In this case the Knowledge Worker is not Effective. If this happens the  Knowledge Worker has to Reflect, Use his Consciousness, to detect his Added Value to the Whole he is part of.

To Define the Productivity of a Blue of White Collar Worker, the Process has to be Standardized. To standardize a process you have to define the Flow of the Components (Bill of Materials) and of course the Product, the Result.

If the Process is Standardized it is very easy to get rid of the Waste in the Process (Process Improvement). When this happens the process becomes more Efficient (now called Sustainable).

Standardization results in a Decrease of the Workers, a Lowering of the Waste (Costs) and an Increase in Rules. The Process Rules are implemented in Machines and Software.

What are Knowledge Workers Really Doing?

The Designers and Implementers of the Rules, the Knowledge Workers, are the people who are Destroying the Work of the Blue and White Collar Workers in a Factory. They are also the Creators of New Factories (Business Development) and connect Old Factories (Value Chain Integration).

How to Measure the Productivity of Knowledge Workers.

Knowledge Workers are part of the Business Cycle. They Analyze Work Processes to minimize Waste, Evaluate the Results of the Consuming of the Result of a Work Process (the Product) , Imagine and Test new Ways to Satisfy the Needs of the Consumer, Design New Work Processes or Change Existent Work Processes.

The Business Cycle is Self-Referring. This means that you can organize the Work Processes of the Knowledge Workers just like the Work processes they Analyze.

If you measure the Productivity of the Work Process of the Blue and White Collar Workers in a certain way, it must be possible to measure the Productivity of the Knowledge Worker in the same way. Knowledge Workers also have to make plans and have to evaluate their own products to Learn and to Improve their Performance.

This approach has a great advantage. If you treat the Knowledge Workers just the way you treat the Blue and White Collar Workers they will understand that some day the Controller will Standardize Knowledge Management, Reduce the Waste, Focus the Process on a Clearly Defined Target, Eliminate the Knowledge Workers and Replace them by a Very Intelligent and Creative Software Program.

These Software-Programs are already there (Expert Systems, Artificial Intelligence, Pattern Recognition) and are constantly improving their behavior. One of the most interesting examples is Wolfram Alpha.

When the Fractal Pattern Recognizers are fully operational the Knowledge Workers will Realize that the White and Blue Collar Workers are also Humans. They will know that every Human has the ability and the need to Control his own Process of Life.

They will see that Every Human has Desires, Emotions and Imagination.

They will become Aware (Consciouss) of the Fact that every Human is Able to Improve his Own Work Processes.

fractal

Many Reasons to Believe that the Economy will not Recover in a Short Time

Wednesday, June 24th, 2009

The Unemployement and the Stock Market are rising for some time now. A new Stock Market Bubble is building up and will explode in the near future. The biggest Bubble is certainly the US Deficit Bubble.

The Stock Market Bubble and the Deficit Bubble will explode as soon as the major creditors (China, India, …) of the US will move out of the Dollar. This is happening already.

The Customers are the backbone of the Economy and the Leaders understand very well that the Economy is governed by Psychology. So Bad News is hidden en Good News is exaggerated. The Expectations of Analysts are always beaten and the downfall is falling slower than before.

The Economy is still in a terrible state and this state is getting worse every day. The unemployement is still rising and will rise for a very long time because companies are getting broke or are rationalizing everything that is possible.

They replace their employees by IT-Technology and Cheap Labor. The customers are not buying, they are saving more and more money for a rainy day or are paying back their debts.

Saving money will not stimulate the economy. It stimulates unemployment. The rising unemployement results in more foreclosures and problems with credit card debts. The Economic Downturn is just at its beginning.

Economist John Williams says that– if the unemployment rate was calculated as it was during the Great Depression the unemployment figures for July 2009 rose to 20.6%. According to an article summarizing the projections of former International Monetary Fund Chief Economist and Harvard University Economics Professor Kenneth Rogoff and University of Maryland Economics Professor Carmen Reinhart,… unemployment could rise to 22% within the next 4 years or so.”

The Scenario of the Current Downturn is highly comparable with the Scenario of the Great Depression with one exception. The current Downturn is much deeper than the other. We are approaching the Biggest Global Economic Crisis in Human History.

The current investors base their policy on positive news and ignore the bad news. They believe the economy will rise when the customer-confidence is rising or when the downfall of the economy is “slowing down” or “bottoming”. They don’t see that a slowing down of a downfall is still a downfall.

The investors, the Doves, act just like the behavioral economists predict they will act. They read the headlines, believe the Hawks and are not aware of the (Money) Illusion the Government, the Media and the Banks are creating. The Hawks know better. They buy Silver, Gold and certainly the best investment, Oil.

Nouriel Roubini has a more realistic view on the economy. In his article Ten Risks to Global Growth he analyses the risks that could block the recovery of the economy and his conclusion is highly pessimistic.

According to Roubini the major cause of the crisis is overspending. Overspending is a normal activity when the Kondratiev-Cycle is in the state of Autumn. The debts are always repayed in the next phase, Winter. In the Kondratiev Winter the economy is purged and cleansed. This phase started around 2000 and will be finished around 2013. In the Winter-State you have to stay in cash or invest is Gold and Silver.

At this moment the investors don’t know what currency they have to chose for their cash-reserves. Usually the Dollar was a Save Heaven but the current policy of the FED to expand the amount of Dollars to an almost unbelievable amount is seen as a huge risk.

The Creditors (China, India, ..) of the US are already creating an alternative currency and are secretly and slowly moving out of the Dollar. If the Trust in the Dollar has gone the US Economy will go bankrupt.

The big problem with the current Cycle is that we have moved to the Level of Earth. In the last downfall of the Kondratiev Cycle other parts of the world were decoupled. They moved in a complementary mode. The Down of one part of the Earth was compensated by an Up somewhere else.

At this moment the complementary parts are synchronized and act and react according to the same rhythm. This rhythm is related to a longer term cycle that almost nobody is aware of. This cycle with a periodicity of 250 years is called the Secular Cycle.

The current level of integration of the World Economy is very dangerous. The production-processes of the Earth are highly rationalized and integrated. When one process stops the rest of the processes also has to stop.

The very high level of rationalization causes cascades or avalanches. The fast and slow avalanches generate sudden bursts of unemployment and financial disasters. The Car Industry and the Financial Industry are good examples. At this moment the avalanches start new avalanches in completely different branches of the tree of the World Economy.

The Crisis in the Banking Industry puts a large part of the Corporate Sector under severe financial stress. Firms that in the past would have been able to roll over their loans, bonds and debts now face a liquidity crisis that may lead them into costly debt restructuring.

This will affect the Banking Industry and will also put a high strain on the Bailout capacity of the Governments who are not able to leant money or inflate money until eternity.

The only solution that is left is to Rationalize even more than the Companies were planning to do. Their only solution is to speed up the use of IT (Use the Internet) and fire the employees. It is very clear that the use of IT in Companies is still in its infancy. Many manual activities can be replaced by software. The total effect will be a worsening of the current crisis.

To stop the cascades governments are starting to Protect and Regulate their Economies. The Worldwide Cooperative Institutions are losing their grip and the Free Market Economy is on its return.

Big Companies are splitted according to the old Boundaries of Power. The expansion and integration of the EG is blocked because the member states suddenly have conflicting objectives. The Rich Countries don’t want to help the Poor Countries because the Rich Countries are getting poorer with the minute.

Not only the poor member states of the EG are getting into big trouble. The same applies to the Underdeveloped Countries. The poor Countries of the World are on their own. Everybody is in the Survival mode and The Fittest, The Rich, will as always Survive.

The world is not only hit by a Economic and a Cultural crisis. The world is also hit by a Climate Crisis. Although human activity plays an important (negative) role the Cycle of the Climate related to the activities of our Sun and the Movement of Earth in our System (the Precession Cycle) is much more important.

The current change in Climate is irreversible and will have a major effect on the world economy. Climate change and ecological misuse are the major factor why Societies collapse.

The last factor and perhaps most important factor is the Energy Consumption of the World. This consumption is not only affecting the Climate but it also facilitates a huge highly integrated Transport-System.

This System is the Backbone of the Integrated Value-Chains of the Western World. The Western World is completely dependent on the transport system for its Industrial Production and the Supply of Food.

The Transport System has a devastating effect on the poor countries in the World. To make enough money to survive they have to export their products to the Western Markets ignoring their own needs.

It is certain that the supply of oil and gas is lower than the increasing demand. The resources all over the world are going down. The total effect of this all will be a dramatic rise in price. This will affect the rich countries and in particular the US. They are already the major importer of energy in the World and when you import something you have to export something else to keep the financial balance in order.

As you already know the deficit of the US is spectacular and the only reason the US is not broke is the special role of the Dollar. If the economy recovers the demand and the prices will rise and the US Economy will slow down immediately.

What is Going to Happen?

Every scenario leads to a long term decline of the Economy, our Culture and our Civilization. The theory of the short term and long term cycles is right and it is very stupid to ignore these theories.

According to the Panarchy Model the world is too connected and this leads to an increasing rigidity in its goal to retain its state. The rigidity reduces resilience and the capacity of the system to absorb change, thus increasing the threat of abrupt change. The world is unable to cope with the changes of climate and culture that are happening now. Therefore we will see the collapse of the accumulated connections and the destruction of bound up knowledge and capital.

The highly integrated structures of the Earth (the Cooperative Institutions, the Big Companies, Governments AND the Transport System) are bound to desintegrate. The impact on the local structures is immens. Communities will have to grow their own food, manufacture and repair their own tools, create their own currency etc etc on a local level again.

Most of these structures have outsourced these functions to places far away and don’t have the skills nor the resources to do this. The fittest, the Haws, will survive but it is unclear if the Doves will accept this situation forever. A Rise of the Masses just like the French Revolution in 1789 (almost 250 years ago!) is possible.

The world is moving to a very fast transformation. The only thing that can be said when we use the Panarchy Model is that it will move back to a stable state before the expansion started and start all over again. The Wisdom of the Old Civilizations that survived earlier Collapses is very valuable. These lessons are very easy to comprehend.

Civilizations die because the humans don’t want to Move with the Cycles, don’t Cooperate and don’t Respect Mother Nature. When Civilizations Collaps even the Hawks lose Everything!

LINKS

Peter Schiff, Why the US Economy will Collaps this Year

How the Fed is cheating the citizins. About Deflation.

Why the Labormarket is Much Worse than we Think

Why the Current Crisis is comparable with the Great Depression

About Behavioral Economics, Why Hawks always Win and Doves always Lose

Nouriel Roubini, Ten Risks to Global Growth

About The Kondratiev Winter and the Generations Theory

About the End of the US Dollar

Why the US Defense Budget will Destroy the US Economy

Peter Turchin, About Secular Cycles

The Complete Text of the Book of Turchin

About the Problems the Real Estate Market is Facing

Why Rationalization is the cause of the current Crisis

About Cascades and Avalanches

Jared Diamond, Why Societies Collapse

About the World Food Crisis

Jeff Rubin, Why Your World Is About to Get a Whole Lot Smaller

About Peak Oil, The Model that Predicts the End of Oil and Gas

About Behavioral Economics: Why Hawks Always Win and Doves Always Lose

Friday, May 29th, 2009

horusThe belief in Rational Decision Making has been the focus of Economic Theory for a very long time.

Although everybody knew that Humans are Highly Impulsive and Emotional, Economists based their theoretical models of the Market on a Rational Human Being who is always able to Calculate the best Alternative possible. This Theory is wrong. The Economic Behavior is controlled by the Emotions.

The current economic crisis shows that the old Rational Theory is not applicable and the attention for alternative theories of Economic Behavior is rising. These theories are called Behavioral Economics.

An important paper in the development of behavioral economics was written by Kahneman and Tversky in 1979 (Prospect Theory, Analysis of Decision Under Risk). Kahneman was awarded the 2002 Nobel Prize in Economics for his research in Prospect Theory.

According to Prospect Theory, Humans attach much greater weight to future losses than to future gains related to their personal reference point. When you expect a certain gain in the future and this gain is lower than you expect the gain is experienced as a loss.

Kahmeman and Tversky became the experts on Cognitive Bias. A Bias is a “not-rational” mostly fast response to a stressful situation. In this case the Human System uses old structures (The Reptile Brain) that were created a very long time ago when the human lived in a completely different environment. The Reptile Brain uses many shortcuts to save time.

Social and cognitive psychologists have identified a number of predictable errors in the ways that humans judge situations and evaluate risks. Biases have been documented both in the laboratory and in the real world. For example, people are prone to exaggerating their strengths: About 80 percent of us believe that our driving skills are better than average.

In 2009 Kahneman and Renshon wrote a paper called Hawkish Biases. It is an attempt to unite the many Cognitive Biases into one Model. The model shows that Humans are highly Confused Predators (Hawks).

As a Predator they protect their Territory with every means possible. They are Confused because they are capable to Observe and Reason about their own behavior and the behavior of others.

Humans need the “Illusion of Control” to sustain their own Identity. Every time something happens they are looking for reasons to believe that they are the Primary Actor in their own context. They don’t want to believe that Other Human Beings are also Active Agents.

If they would believe this was the case their “Unrealistic Optimism” could change into “Realistic Pessimism”. Unrealistic Optimism makes managers, politicians and generals receptive to advisors who offer highly favorable estimates of the outcomes. Such a predisposition, often shared by leaders on both sides of a conflict, is likely to produce a disaster.

When a Human is Depressed by Realism he Loses his Face and moves down in the Picking Order of the Territory.

Humans believe that every other Human is always capable to see their Weaknesses (“the Illusion of Transparency“) just like they are convinced that the intentions of others are always clear to them (“the Fundamental Attribution Error“). To hide their Weaknesses they have to wear a Mask and Play the Strong Leader of the Pack. They have to Keep Up their Appearances.

doveHumans base their theory of the other on inferences about historical behavior and completely forget Situational aspects. When a context is hostile the other must be hostile too. When others behave differently from their expectations they suddenly introduce situational factors to sustain their believe system.

Humans need to sustain their believe-system because this system is the foundation of their personality. Their view on the World has to stay constant because when it changes too fast they will get into big psychological problems. When people get older their believe-system becomes very rigid.

Humans value their own possessions much higher as the possessions of others (“The Endowment Effect”). They even consider possible, imaginary, possessions as real possessions if they are convinced there is an easy way to get them.

If they lose a real or imaginary possession they take tremendous risks to get their possessions back (“Risk Seeking in Losses“). People in general don’t like cutting their losses. They’re willing to gamble on in the hope of recovering them.

Humans simply believe that a Hawk always wins the Game and a Dove always loses. What Humans (want to) forget is that they are living in a group and their In-Group and the many Out-Groups contains many Hawks. They need the confidence that they are “the best” to Survive.

The world of the Human Hawk is a world of Competition (Winner takes all) and therefore highly Stressful. The Sad Thing is that the many faces of Stress are the Major Cause of the Cognitive Bias. When Humans relax and reflect they are much more capable to solve a complicated conflict.

The competitive Hawks always fall in the trap of the Prisoners Dilemma and don’t realize that Cooperation, the Win-Win is the only Certain Way to Leave the Prison.

At this moment another Behavioral Economist, Robert Shiller, is getting a lot of attention. Together with the Economic Nobel Prize Winner George Akerlof he wrote the book “Animal Spirits“.

In the book they identify five distinct elements that blur the theory of the Rational Economy. These elements or “animal spirits” are called: confidence, fairness, corruption; money illusion and the reliance on “stories”of others.

The first three have a lot to do with the “hawk“-theory of Kahneman. The Hawks use the Rational System for their own benifit. They Play with the Rules and invent new exiting possibilities to win more than they ever could imagine.

Sometimes they Play Dirty Games to beat their Opponents. The Doves believe the Economic (Rational) Fairy Tales of the Hawks and are unable to understand the Real Value of their Money.

The Money Illusion is caused by Inflation. Inflation happens when prices Rise but the value of the objects that are priced stays the same. Inflation give people the feeling that they are making money but in reality they are losing money.

The Hawks use Inflation to keep the Doves Buying and Investing. They also use the weapon of Inflation to win the war with the other Hawks.

The Majority of the Human Beings are Doves. They believe the Hawks or are afraid of the Hawks. The Doves are the Workers in the Economy and they make it possible for the Hawks to Hunt.

The Hawks provide the Workers with many things to live an easy life until other Hawks start to Attack the Territory. In this case the Hawks need the Workers to fight and win the War.

Sometimes even the Hawks lose their Rational Capacity. They see a Big Win and become Greedy and Vulnerable. If this happens the Territory is open for other Hawks (The Chinese?) to enter and to take over without any problem.

What has Happened?

The Economic System is just like the Weather System a Cyclic System. When the Economic Cycles and the Weather Systems move UP the Hawks have an Easy Time. Their is enough food for all the Hawks. When the System is going Down Competition starts.

The Hawks forgot to look at the patterns. They did not see or believe that the downfall was approaching. They did not take enough stock to survive the Seven Bad Years. Suddenly the Autumn turned into Winter.

At this moment they are regrouping to create a Powerfull Alliance to take from the other Hawks what they need. They don’t care about the Doves. They always believe the Tales they Tell.

They are afraid of the Other Hawks that are outside their Huge Territory and are Prepared to Fight the Wars that are needed. The Doves will believe them as usual.

LINKS

About Prospect Theory and Conflict Resolution

About Economic Cycles

Kahneman/Renshon, Hawkish Biases, 2009

A Very Long List of Cognitive Biases

About the Prisoner Dilemma in Foreign Policy

An Abstract of the Book Animal Spirits

How the Chinese Networks are Conquering the World

A Review of the book Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George A. Akerlof and Robert J. Shiller by Benjamin Friedman

About Enterprise 2.0 and the New World of Work

Sunday, May 17th, 2009

At this moment there is a lot of discussion going on about the New World of Work. In the New World of Work the new developments of the Internet 2.0 (Social Networks, Blogging, Twittering, etc) are used to Speed up the Work of the Knowlegde Worker. The infrastructure to make this possible is called Enterprise 2.0.

Enterprise 2.0 is : A System of Web (2.0)-Based Technologies that provide rapid and agile Collaboration, Information Sharing, emergence and integration capabilities in the Extended Enterprise. An Extended Enterprise is a Supply or Value Chain.

The definition of Enterprise 2.0 is constantly changing because Enterprise 2.0 is still a Concept. Many people are now struggeling to move from the concept/idea-stage to the realization-phase.

The main issue behind de term “Web 2.0” is the move from a Sender/Receiver-model, the One-Sided Website, to a more Collaborative use of the Internet (Discussions, Social Networks). According to the Inventors of the term Web 2.0 the “new web”, is a Collaborative Web.

For some reason they have forgotten that the World Wide Web (WWW) software of Tim Berners Lee was part of a Collaborative Platform to support the scientists that Participated in a Network called DARPANET. This network was created by DARPA, the Technological Think-Tank of the American Army in 1957!.

What is the definition of the term “Collaboration”?

The word “collaborate” comes from the Latin “Collaboratus” meaning “Work (Labore) together (Col)”. The term “to-gather” comes from the term “gadurojan” which means “in good fellowship” or “United“. When you Collaborate you are not working Alone but with Others United in Good Fellowship.

The Potential to Collaborate is an Aspect of the Personality.

The Personality Types of the Human Being can be described with two variables Agency and Communion. Comm-Union is the capability to Col-Laborate, to accomplish a Union. The variable Agency describes your relationship between the Self and the Other.

When you are High in Communion and Low in Agency you are suffering from a Dependent Personality Disorder. This disorder is characterized by a pervasive psychological dependence on other people. You always want to Collaborate and are very Emotional.

When you are High in Communion and High in Agency you are suffering from a Histrionic Personality Disorder. People with a Histrionic Personality Disorder have good social skills, but they tend to use these skills to manipulate other people to become the Center of Attention. They are very Imaginative.

According to Interpersonal Theory a “normal” person is able to Combine Two or More Interpersonal Faculties.

There are two Disorders left called Paranoid (High Agency, Low Communion) and Schizophrenic (Low Agency, Low Communion). Paranoid people have a big problem with their Expectation. They want to control the Future and Every Person in their Context. Schizophrenic people are completely influenced by their mostly Visual Senses. They See what they Want to See.

If you combine the Four Interpersonal Faculties (Emotions, Imagination, Expectations and Senses) Twelve Interpersonal, Collaborative, Patterns emerge. A good example is the Master(Paranoid)/Slave(Dependent)-Relationship (Expectation/Emotions). Some People Love to be Dominated by the Other.

Interpersonal Faculties can be combined into Collaborative Work Patterns.

In my blog about Vocation I showed that work is an Expression of the Personality. If you believe this is True and you believe Interpersonal Theory is True you have to admit there are Twelve Types of Work.

When you are highly Imaginative and Sensitive (You Believe Your Own Eyes, You are Realistic, Factual) you are an Entrepreneur, You want to bring An Idea into Reality. To Find the Facts you need an Information System to Investigate what is Happening. The Internet with all its Sources of Information is a beautiful tool to use.

To bring an Idea into Practice you have to Realize the Idea. In this case you need a Designer (Transform Ideas into Models) and a Maker (Bring Models into Reality). A Maker is not a Collaborative person (Low Communion). Makers want to work Alone.

When you create a Team of Makers to Realize your Idea the Team will fail. To avoid Competition the Designer has to define a Model (An Architecture and a Project Plan) in which all the Lonesome Workers are able to do their Specialized Job.

I hope you believe we are able to define a complete (meta)-Architecture and a (meta)-Plan to move around in the (meta)-Work-Space.

What is the Relationship between the Work Patterns and Enterprise 2.0?

An Enterprise is a combination of many people with many Collaborative Work-patterns. We could Specialize an Enterprise to perform one kind of Pattern. If we Specialize an Enterprise we have to combine many Enterprises in an Extended Enterprise to do Everything we Want to Do.

We need a Designer Company, A Sales Company, Visionairs, Entrepeneurs and other Roles to cover the Complete Spectrum of Work. If We want to Produce we always need the Makers. The Makers need a well defined Structure (A Hierarchy), a Plan and an Architecture, to operate in.

At this moment Enterprise 2.0 is nothing but a Concept. Somebody of High Agency and High Communion (A Creator) has gotten the Idea that the new 2.0 Internet is able to support an Enterprise.

 He hopes that the new tools will break down the Hierarchical Structure of the Organization of the Makers. Creators don’t like Hierarchies. They love Networks. If Creators are One-Sided, Histrionic, they want to Stay in the Center of Attention of the Network.

What Creators don’t realize is that Makers, the Majority of the Human Beings,  don’t want to use Collaborative Tools. They want to work Alone in their own Specialized Compartment of the Beehive.

Enterprise 2.0 is a Concept to support Innovation. Someday the Innovation has to be Stabilized. If we want to do that we still need Enterprise 1.0, The Factory until we find another Solution (The Robots?).

Don’t forget the Worker Bees. They Bring in the Honey.