Japan spends more money on roads than on education and more on building hospitals than on paying doctors. Construction and politics in Japan are extremely intertwined. This I find it amusing when the new Prime Minister is the former president and from the family of one of the largest cement companies, Aso Cement. Nothing personal for or against PM Taro Aso, but it's just so clear. ;-)
September 2008 Archives
I get a sense that this sudden "wait a sec, do we really need investment banks anymore?" is the tip of the iceberg of a collapsing of a whole genre of financial services and products that are just obsolete once you have easy access to information and low transaction costs.
While derivatives and securitization of risk so other people can buy it makes sense, the incentive of a company full of people getting paid a crapload of money to do this is to make products that they can sell for more than they're worth. Even with regulation, risk information is omitted and the focus is on selling, not on providing the buyer/user with complete information and low transaction costs. Instead, information is hidden and there is transaction friction everywhere from management fees and transaction fees.
Hand made markets like this made sense when transaction costs costs were high and all this stuff needed to be aggregated and managed, but it doesn't REALLY make that much sense anymore.
This is similar to academic publishers who charge professors to print their papers in journals that the publishers then charge schools and libraries to read. What the professor wants is to be most widely read. Before the Internet, this made sense and was worth the hefty ($10K+ for a single physics journal subscription) price because having physical distribution to libraries was the only way to make sure your paper was distributed to every school. With the Internet, it just doesn't make sense anymore. Now the copyrighted materials can't be viewed without subscriptions and a huge percentage of our academic works are "dark" to developing nations and non-academics.
I think there are a lot of industries and services which were once super important, but have yet to face the reality of our low-cost digitally connected world.
My guess is that even in financial services, there is a bunch more stuff to go. As I bounce from bank to bank trying to find the cheapest exchange rate, I just can't imagine why things like foreign exchange just can't happen with less friction and more information. Banks want to charge a ridiculous percentage/spread/transaction fee and I have so much incentive and ability to avoid this. In fact, I bet MOST things banks do could be redesigned to happen without them.
I can imagine a sort of Web 2.0 for financial services with paypal-like services that store your money and all kinds of financial transactions provided by a huge number of global providers. This would drive competition to increase quality, lower price and would also foster an industry of analysts and information providers who independently helped you make the right decisions. If all of this could be integrated, much like how a lot of the consumer Internet services are grouping up around open standards and specifications, you could get rid of a huge chunk of costs and skewed interests where the people who are giving you advice are also the people who are trying to make money off of your transactions.
Of course we need regulation and fraud protection, but I'm sure there is a more effective way to do this than having some bureaucracy oversee a bunch of overpaid suits who don't understand technology.
My apology in advance to my friends who work at banks. I don't think banks will go away, but I think they need to aggressively adapt to technical changes and rethink why they exist and what people need them for and stop relying on legacy notions and government regulation to protect them from competition. As we have just recently witnessed, things can change VERY quickly.
I'm not a banker or an economist, so what do I know... but just some thoughts from an amateur.
I just got back from my second trip to Dubai. (Flickr Set)
The trip to Bahrain and Dubai last year, combined with my recent interactions with my Creative Commons team in the Middle East made me understand just how important this region was culturally and politically and how completely ignorant I was about everything going on there.
Since December of last year, I've been working hard to try to understand the region by talking to Mohamed at Al Jazeera, Donatella who is working for Creative Commons in the region and everyone else I know who knows a lot about the Middle East. However, I realized that there is only so much you can pick up second hand.
I spent a week in Dubai with Mizuka meeting various people. I met some local Japanese including Japanese Ambassador Hatano (in Abu Dhabi), Hiro Hosoi of NTT Communications, Mr. Takeda and Mr. Ohkami from Keio University and Maria Yogo. I hung out with Jay and his friends Balall and Nazia as well. (Special thanks to Jay, Balall and Nazia for spending so much time taking us around.)
My conclusion after this visit is that I really want to spend some time getting to understand the Middle East and that I will make Dubai my base because of the strong infrastructure, relatively freedom and proximity to the rest of the Middle East and eventually Africa (which I want to get into next.)
Luckily, it looks like there will be plenty for me to do. I'll be visiting Jordan in November to speak at a university there about CC, then I've been invited back to Abu Dhabi again in November to speak as well. (This is possibly not confirmed...) It looks like we'll be doing something with Al Jazeera in Doha next year as well. (Stay tuned...)
Also, Creative Commons has a relationship with Ziad Marqa in Jordan and Hala Essalmawi at The Library of Alexandria in Egypt and I'm looking forward to spending more time with them.
Anyway, I plan to spend an increasing amount of time in the Middle East and will try to document it a bit more thoroughly than I've been documenting my travels recently. (Yeah, I'm slacking on my blog. Sorry.)
Creative Commons BlogCreative Commons Launches Study of "Noncommercial Use"
Today, Creative Commons announced the launch of a research study that will explore differences between commercial and noncommercial uses of content. The study will explore how the definitions of "commercial use" and "noncommercial use" are understood among various communities and in connection with a wide variety of content.
If that sounds like a press release blurb, it's because it is. ;-)
While CC has a pretty clear idea of what we think and hope non-commercial means, "what does non-commercial mean?" is probably one of the questions I get asked most often. It is also one of the most discussed topics in our community. I think the results of this study will be very helpful in providing a perspective and help us explain and guide this conversation.
I'm not going to dive into a conversation about what non-commercial means. I'll save that until after the study comes out.
Special thanks The Andrew W. Mellon Foundation for its supporting this study.
A more collaborative Fotonauts album. See the attribution on each image.
Freesouls Book Fotonauts widget. Still playing around... I'd post these as Twitters, but they are scripts that need to be embedded.
I'm in Dubai messing around with Fotonauts. Fotonauts is still in beta, but we just "opened up" the widget part. Here's a widget of a Dubai album I'm working on.
You can click on the CC icon to get to the CC license and the "Flickr" to get to the original Flickr image. Although the images showing now are mine, the idea is to collaborate on albums together.
PS: I'm an investor and on the board of Fotonauts.
Dopplr announced today another round of investors joining us in Dopplr. "The new investors include Esther Dyson, Tyler Brûlé, Thomas Glocer, Yat Siu, Aditya dev Sood, Lars Hinrichs, Joshua Schachter, Brian Behlendorf, Ami Hasan, Daniel Sachs, Joshua Cooper Ramo, Kim Weckström, and Azeem Azhar." Welcome aboard all! I can't wait for the shareholders meeting. ;-)
I'm the curator of this year's Ars Electronica Symposium. The theme this year is: A New Cultural Economy
I wrote the following blurb for the catalog.
Computers and the Internet have lowered the cost of communication and the creation and distribution of information so much that many fundamental notions of organizations, economics and property have completely changed or require major upgrades. There is a new generation of youth across the globe which lead the charge into this changing world, modifying their basic behaviors to adapt to technology as it develops. Some businesses and artists have been able to keep up with these trends while other struggle and fail. The much slower to adapt legal system is being pushed to its limits with organizations on all sides of the issues trying very hard to adapt outdated laws. Most of the new behaviors and organizations creating value have a completely different notion property. Intellectual property, while key to the post-industrial revolution nature of the firm, is more of an encumbrance than an asset to the sharing oriented mode of creation now central to the Internet. This year, we will bring together the users, artists, businesses, policy makers and academics involved intentionally or beyond their control in this change to understand this new world and to try to adapt to it.
Following are the four sessions that will take place over two days (September 5 and 6) and should be pretty interesting. Thanks in advance to all of the speakers for coming to Linz for this.
Production and Creation in the Commons
Beyond the firm
Yochai Benkler, Tim Pritlove, Michael Tiemann, Project "Knowledge Space Linz" - Christian Forsterleitner, Leonhard Dobusch, Thomas Gegenhuber, Stefan
Pawel, Manuela Hiesmair, Barbara Hofmann
Media, Fans and Copyright
Beyond mass media
Thomas Macho, Markus Wissen, Volker Grassmuck, Paul Keller, Gerd Leonhard
Science, Religion, Art, Literature and the Pursuit of the Truth
AKMA, James Boyle, David Weinberger, Jonah Brucker-Cohen, Ronaldo Lemos
Politics and Collective Action in Modern Open Society
Isaac Mao, Georgia Popplewell, Elizabeth Stark, Jonathan McIntosh
Coming soon. ;-)