When I lived in Minnesota, it was relatively uncommon to hear a foreign language being spoken. When you heard it, you noticed. Now I live in Florida, but not just anywhere; I live on 'Florida's Riviera'. It is officially, Sunny Isles Beach, but the true boundaries include Bal Harbor, Golden Beach and Aventura East of Biscayne Boulevard.
I was mentioning to a friend just the other day that I have stopped noticing that I am living in the middle of Babel. I speak Russian, some German and some Spanish. But that doesn't even begin to cover what we hear in this town. Portuguese, Hebrew, French, Bulgarian, Italian, Hungarian and many more languages are common enough to hear a couple of times per day.
Some of that is because we are a tourist destination. However, tourist season is over now and the proliferation of languages continues. These languages are coming from what I might call International itinerants. The Mansions at Acqualina just announced that they have sold two of their $16 million penthouses, one to a Russian family the other to a South American family, most likely either Argentinian or Brazilian. What is astonishing is that in neither case will these likely be their primary residence. These are second, third or even fourth residences.
A real estate agent I was speaking with told me that, with private jets and 'jet cards', families are going one place for a month, another place for two weeks, etc. The children have a nanny or tutor that travels with the family. They really are not permanent residents anywhere, but they, based upon arcane legal analyses, maintain the fiction of residence at one locale.
This is the future. In reality, Sunny Isles Beach is not part of America. It is a new kind of place. True, the legal jurisdiction is U.S., Florida, Miami-Dade, but the cultural, social and economic reality is that it is a EuroAmerican village. People are from Rio/Banf, Sunny Isles Beach or Moscow/Cern/Sunny Isles Beach or Toronto/Hamptons/Sunny Isles Beach.
The other day at the Starbucks, I heard two men talking. One said that they were next going to go to Rio. The other man asked what it was like there now. The first replied that it is very similar to Sunny Isles Beach in the winter. The second said that it sounded good and that he and his wife would meet them there. Where do they live? The short answer is, 'Where ever they want.'
While the great contemporary civilizations, EuroAmerica, China, India and Islam will likely persist for quite some time, we are seeing here the seeds of the destruction of the Nation State as the dominant expression of sovereignty. If you life in Omaha or Portland, you probably don't notice yet. However, it will be coming to your town, too.
An important aspect of this is how rapidly Sunny Isles Beach formed. In 1999 it was here as a EuroAmerican Village. by 2007 it existed in mature form. That is how quickly it can happen, no matter where you are.
Showing posts with label Careers. Show all posts
Showing posts with label Careers. Show all posts
Friday, May 25, 2012
Thursday, February 9, 2012
Punditry in the Information Age
ABSTRACT:
The first Knowledge Class career I am going to investigate in detail in The Future 101 premium service will be that of pundit. It includes columnists, bloggers, speakers, consultants, authors, etc. Currently, this is generally being understood to be people who write and speak with authority on civic matters. The definition, however, will be much more extensive in the Information Age.
For example, quibis astronomicae is a facezine that is providing an outlet to about a half dozen astronomy and space pundits. Such pundits will have increasing opportunities for compensated exposure much of which may reside in several boutique homepages. In the Information Age, there will be orchid growing pundits, antique Mercedes pundits, private equity market pundits, Thai cuisine pundits, well, the list almost doesn't end. Essentially anything that has blogs now will have pundits then.
To better understand the difference a blogger and a pundit, visit Dennis Prager's site. You will notice that he essentially has a blog under his link 'articles.' However, he also has audiocasts. He has a premium content subdirectory entitled Pagertopia, costing $54.95 per year. He sells Prager items in his store. Through groups he facilitates offline Prager fans. He has a tab, University, a series of 5 minute video lectures. And you can book him for a speaking engagement. That is how Dennis Prager has transcended a talk show radio personality and become a multi-service pundit. Of course, each pundit will create a web presence and their own unique combination of offerings.
By organizing the Polymathica market and making it readily and cost effectively available to aspiring pundits, the mass migration from marginal blogger, consultant, etc. to affluent pundit will begin. There will, of course, be behemoths in the market. However, the typical pundit, residing in the very, very long tail, will likely belong to a network or roundtable of a half a dozen pundits (as with quibis astronomicae) sporting 100,000 subscribers.
With a annual subscription of $54.95 for all six pundits, perceived value will be high. At this price point and audience, each pundit will realize a $500K 2012USD income. That is low by Knowledge Class standards, but, like Dennis Prager, they will have the opportunity to augment their income with speaking or consulting engagements, books, endorsed products, etc. Also, as the inexorable march into the post Income Explosion world of Finely Crafted Lives, subscription rolls and rates will increase.
Throughout the 2010's, the industry will grow to about $35 billion 2012USD, of which about $3.5 billion will be in Polymathica. However, as The Cultures of Affluence and their dedication to a Finely Crafted Life emerges, it will quickly grow by tenfold or more. At the outset, Polymathica.com will be able to support about 1,500 pundits. At maturity, that number will likely have grown to over 10,000.
For full article subscribe to The Future 101
The Polymathic Institute, through Polymathica.com, will be promoting a wide variety of pundits and providing them with the tools they will need to reach six figure incomes. The first step is to become a member
The first Knowledge Class career I am going to investigate in detail in The Future 101 premium service will be that of pundit. It includes columnists, bloggers, speakers, consultants, authors, etc. Currently, this is generally being understood to be people who write and speak with authority on civic matters. The definition, however, will be much more extensive in the Information Age.
For example, quibis astronomicae is a facezine that is providing an outlet to about a half dozen astronomy and space pundits. Such pundits will have increasing opportunities for compensated exposure much of which may reside in several boutique homepages. In the Information Age, there will be orchid growing pundits, antique Mercedes pundits, private equity market pundits, Thai cuisine pundits, well, the list almost doesn't end. Essentially anything that has blogs now will have pundits then.
To better understand the difference a blogger and a pundit, visit Dennis Prager's site. You will notice that he essentially has a blog under his link 'articles.' However, he also has audiocasts. He has a premium content subdirectory entitled Pagertopia, costing $54.95 per year. He sells Prager items in his store. Through groups he facilitates offline Prager fans. He has a tab, University, a series of 5 minute video lectures. And you can book him for a speaking engagement. That is how Dennis Prager has transcended a talk show radio personality and become a multi-service pundit. Of course, each pundit will create a web presence and their own unique combination of offerings.
By organizing the Polymathica market and making it readily and cost effectively available to aspiring pundits, the mass migration from marginal blogger, consultant, etc. to affluent pundit will begin. There will, of course, be behemoths in the market. However, the typical pundit, residing in the very, very long tail, will likely belong to a network or roundtable of a half a dozen pundits (as with quibis astronomicae) sporting 100,000 subscribers.
With a annual subscription of $54.95 for all six pundits, perceived value will be high. At this price point and audience, each pundit will realize a $500K 2012USD income. That is low by Knowledge Class standards, but, like Dennis Prager, they will have the opportunity to augment their income with speaking or consulting engagements, books, endorsed products, etc. Also, as the inexorable march into the post Income Explosion world of Finely Crafted Lives, subscription rolls and rates will increase.
Throughout the 2010's, the industry will grow to about $35 billion 2012USD, of which about $3.5 billion will be in Polymathica. However, as The Cultures of Affluence and their dedication to a Finely Crafted Life emerges, it will quickly grow by tenfold or more. At the outset, Polymathica.com will be able to support about 1,500 pundits. At maturity, that number will likely have grown to over 10,000.
For full article subscribe to The Future 101
The Polymathic Institute, through Polymathica.com, will be promoting a wide variety of pundits and providing them with the tools they will need to reach six figure incomes. The first step is to become a member
Sunday, February 5, 2012
A Quickly Approaching Cliff for the Accounting Field
If you are an Accounting Clerk, an Accountant, a Financial, Budget or Treasury Analyst or you train Accountants or you place Accountants, you, at most, have five years left of guaranteed career. That is about how long it will likely take for expert systems and artificial intelligence, currently in development, to reach the marketplace.
In the near future your accounting software will be able to talk directly with the accounting software of your vendors, your customers, your bank and the various government reporting agencies. Invoices will be e-mailed from your accounting software to those of your customers where they will be triple matched and entered automatically into Accounts Payable. When the invoice is to be paid, your vendor's accounting software will notify its bank's software to pay your bank. Your accounting software will apply the payment and automatically notify your customer's accounting software of their new balance.
Payroll information will be reported automatically, wages and deductions calculated, necessary tax reports prepared and e-mailed to the appropriate agencies and the net pay will be automatically deposited in employees' bank accounts. Your accounting software will automatically calculate sales tax and e-mail the reports to the various taxing authorities. Similar imbedded expert systems will take over the inventory control and purchasing functions. In other words, over the next five to ten years, all clerks will become virtual. The live ones will be laid off.
The above scenario is not a someday, gee whiz, event. It requires no new technology. The required documents already exist as files in your accounting software. Currently, they are being printed out, mailed, manually received, entered into the recipient's accounting software, etc.. All that is really required is a File Format Translator so that your accounting software can create a record that your vendors', customers', bank's and reporting agencies' software can interpret. Once this is accomplished, most clerical functions will go the way of chimney sweeps and elevator attendants.
This will likely be stealth automation. One of my premium subscribers talks about how, with every new release, more of his job is automated. In similar form, over the next five years, every new release of your accounting software will automate more of these functions until they are completely automated. Twenty clerk AP departments of today may be reduced to just one or two.
In February of 2011, IBM unveiled Watson, a computer that spectacularly demonstrated that it could beat virtually everyone at Jeopardy. It played and easily bested the two top past champions.
In order to do this the computer was required to hear a natural language answer, usually designed specifically to be ambiguous, interpret the answer, search through its database, often make conceptually remote connections, find the correct information and, lastly, formulate the question to which the answer was related. As this video concludes, Jeopardy is the beginning, not the end of what will be a profoundly transformative technology.
IBM is creating, from Watson, a Physician's Assistant, named Dr. Watson, that will most likely be able to diagnose and treat diseases better than the Physicians it is assisting. It will lower costs, streamline the diagnosis process, reduce unnecessary tests and improve outcomes. Many in the field, as this Washington Post article demonstrates, are amazed by the technology and optimistic about its potential. Very recently, Wellpoint, the largest health benefits company in the U.S. announced that it had reached an agreement with IBM to "put Watson to work in health care."
This is, however, the beginning, not the end of the process. Automated diagnostic systems are beginning to surface everywhere with the ability to outperform the best of their human counterparts. This has led the X Prize Foundation to create their 'Tricorder' X Prize. X Prize boldly states, " With the equivalent of a board of physicians in your pocket, wireless sensors and imaging, you will be able to assess health and determine health care needs with a device in the palm of your hand." Clearly, A.I. and expert systems are ready to completely transform the medical industry, not someday, but now and going forward.
The question naturally arises, 'How soon will IBM or one of its competitors announce that it is creating an A.I. accountant?' Surely, if Watson can beat almost everyone at Jeopardy and his child, Dr. Watson can out perform Physicians in medicine, accounting and finance professionals will not be able to compete in knowledge, cost or accuracy with a Mr. Watson, CMA, CPA, CFA. Dr. Watson is estimated to require 18 months to bring to market. It should not take longer to bring Mr. Watson CMA, CPA, CFA to market. In many ways, he will be easier. For the most part, he will be a 'plug-in' to a system that is well bounded and already residing on your computer.
He will come loaded with all GAAP, GAAS, the APB Bulletins, FASB Statements, IFRS Standards, Corporate Tax Law, local regulatory, reporting and tax requirements and will be programmed with all accounting procedures and standard financial analysis methodologies.
It will be able to do NPV and DCF in its 'head' and program and perform monte carlo simulations, and other what-if analyses in a blink of an eye. It will have all the company's financial history at its finger tips. It will be able to close the books, make standard and adjusting journal entries, reconcile all GL accounts and perform statistical reviews of subsidiary ledgers and do it all far more quickly and accurately than any human. Since it is equipped with natural language capability, it will be able to produce the comments and analysis of the financial statements.
It will be able to produce the various required government reports and e-mail them directly to the proper agency. Every one of the quickly decreasing members of management will be able to, with one click, access Mr. Watson, CMA, CPA, CFA and ask natural language questions. The company will still need a Polymathic CFO to acquire and use a deep understanding of the company's financial data in the management of the enterprise. However, all other Accountants and Analysts will be replaced by the software.
This, too, will likely be stealth automation. IBM in partnership with SAP, Oracle, PeopleSoft, etc. will imbed more Watson-like functions into each release of its software. On one release, it may announce 'The Reconciler'. On the next release, it may announce 'The Adjusting Journal Entry Generator'. The next, it may announce a 'Sales Tax Reporter.' In this way, over time, with each release, fewer of the non-management Accountants will be needed. Next, as the number of Staff Accountants decreases, the number of Accounting Managers will decrease. Smaller enterprises will have their finance operations completely automated and will rely upon a part-time CFO.
As the profession experiences this implosion, it will then move to reductions in required Accounting Instructors and Recruiters. I know many readers will want to reject this outcome. However, with all due respect to Accountants, I have been one, Accounting is easier than playing Jeopardy at the championship level. It is easier than medicine. Watson has conquered those activities. It will conquer Accounting. The question is only, 'When?'
Nobody can know that for sure. However, Dr. Watson was put on an 18 month development schedule. It is unlikely that Mr. Watson CMA, CPA, CFA will require more. If we guess 24 months for IBM or a competitor to 'get to it', an 18 month development time and another 18 months for the major Accounting Software companies to imbed it in their next release, we have, perhaps five years. After that, the whole profession is on borrowed time.
So, unless you are approaching retirement, sometime between 2017 and 2022, you will need to find something else to do. What this will entail cannot really be properly understood without understanding The Income Explosion and Technological Unemployment which I Abstract on this site and explore in great detail at my premium subscriber site. I strongly advise you to read them, if you have not already done so.
Basically, the Economics of the next thirty years is going to be driven by two countervailing forces. First, advanced robotics and A.I. will drive incomes up, perhaps ten fold, from current U.S. levels. Second, 90% of all job descriptions will be eliminated. In the end, the two counteract one another and all will be well. However, all will not be well on the way.
Some jobs and professions will be demand limited. In other words, if the productivity of the medical profession increases tenfold, it is unlikely that people will seek ten times more medical care. As Dr. Watson and similar technologies increase the productivity of Physicians, the number required will fall and it will fall permanently. However, some professions, such as the Polymathic CFO, the descendent of Accountants, Financial Analysts, etc. will grow as economic activity grows.
However, the current jobs will be eliminated today and the new jobs will begin to become significant much later. We see an emerging picture of a period of dramatic unemployment and underemployment in the profession, followed by a slow, but dramatic increase in demand over the subsequent ten to twenty years. However, it will not be a return to business as usual. There will be both an increase in the minimum competency required in the profession as A.I. has taken over all the easier, specialized activities and, parenthetically, a dramatic increase in compensation. While ultimately an optimistic outcome, for current practitioners, instructors and recruiters, this is not a rosy scenario.
As I told my subordinates when I was a Financial Manager, 'Come to me with a problem and you are a Professional. Come to me with a problem and a proposed solution and you are a future Financial Manager.' If I expected it of my subordinates, I clearly should expect it of myself. So, if you are an Accountant, Analyst, Instructor or Recruiter and you understand this site and specifically this article, what should you be doing? What is the proposed solution?
First, as you will come to understand in 'The Death of Capitalism', 'The Rise of the Knowledge Class' and 'The Enterprise Network', the large, hierarchical, usually publicly traded and multinational corporation will not survive the transformation to an Information Age global economy. It will be replaced by Enterprise Networks, operating not under a single, hierarchical and unified management, but rather through strategic partnerships, vendor, customer and consultative relationships. You will not be an employee, you will be an owner-operator of one of the enterprises within the Network.
If it is your goal to become a Polymathic CFO in the Information Age, you will need to either wait until the transformation to an Information Age civilization and economy unfolds and find something else to do until that happens, or you need to push the envelope yourself by immediately leaving the corporate world and becoming a CFO of an enterprise preferably imbedded within an Enterprise Network. If you do not already have competency in all areas of Accounting and Finance, you are probably not qualified to do this at this time.
As you will understand when you read 'The Death of Capitalism' and 'Building a Liberating Portfolio While Saving the World' the investment markets are undergoing profound change. Over the next decade, the emphasis will migrate away from secondary markets, capital appreciation and acquisition strategies toward primary markets, income streams and organic growth. The ability to analyze the performance and potential of an enterprise will take precedence over the ability to analyze markets and market statistics. This means that the jump from Accountant or, even better, Financial Analyst to Fund Manager is a rather easy one. As investment dollars leave the secondary markets and begin to seek start-up or early round private equity opportunities, the outlook for this productive activity is very, very good. This too, needs to be a polymathic profession with expertise that extends to marketing, operations, technology and future studies.
As the quantity of openings for Accountants and Financial Analysts plummet, the opportunities for executive and professional recruiters also will fall. There will, however, be an ever increasing demand for Organizational Developers who will assist in constructing the management teams of the enterprises within Enterprise Networks. When the Transformation is complete a typical 25 million USD enterprise will be comprised of only the "C' jobs. Those will most commonly be CEO, COO, CFO, CIO, CTO and CMO. The Practitioner will first bring qualified candidates into an appropriate Enterprise Network and then, working with an aspiring CEO and the fund manager(s), build the complete management team. When a management team member leaves, retires or dies, the Practitioner will also be retained by the enterprise to acquire a replacement.
There is much buzz being generated currently by M.I.T.'s decision to introduce a certification process for their free, online and automated courses. Stanford has been pushing the envelope on this, as well. What is becoming apparent is that 90% of all University Professors and Instructors will not be needed. Since the demand for Accountants and Analysts will be plummeting until it again reaches its current level some time in the 2030's, Accounting Professors and Instructors will be hit doubly hard.
Like the profession of Physician, employment levels will be demand constrained. As you read 'The Cultures of Affluence' you will understand that the demand for personal development through learning will increase. However, it will not increase tenfold and that increase will be in self-actualization and 'meaning of life' style courses, not Accounting and Finance. So, if you are a Professor or Instructor in these areas, you better start planning your new career and sooner is much better than later. It is very unlikely that there will be any significant rebound once the employment rolls begin to decrease.
Whatever your current situation within the fields and whatever your aspirations for the future, the most important first step is to assure that you are not flying blindly into that future. There are lots of 'Futurists' out there who want to tell you about what the future might hold. Most of them will bombard you with hundreds of potential new 'gee whiz' gizmos.
Many of them are all about the Singularity, a time projected to be around 2045, when computers surpass humans. Some go even further and tell you about a time when humans become machines. Of course, there are a whole lot of Futurists that opportunistically play into the common beliefs of Global Climate Change, Peak Oil, the BRIC age, etc. Some conflate Strategic Planning and Futurism in order to capitalize upon the corporate consulting market.
Really, only I look at the near future, say between now and 2040 or the likely career span for the 40 year old of today, with an unwavering eye toward personal relevance for my subscribers. I look at career, lifestyle, community, personal finance, etc. I do so from the vantage point of having been a Controller, a Manager of Financial Planning and Analysis, a Director of Strategic Planning and a CFO and a business owner. I do so with an imposing wealth of polymathic knowledge acquired over 40 years of intensive study. I am both competent and disposed to assisting you through the treacherous years before us.
You should read the Abstracts here. It should take you less than an hour. Then, you should subscribe to The Future 101. For $54.95 per year, I provide you with a graduate level, online course of study that will provide you with an understanding of the emerging, global Information Age civilization. It will not be 'pie in the sky' or designed to 'blow your mind.' It is designed to be personally relevant. It is designed to help you to identify your correct decisions, attitudes and actions now and over the next year or two.
Also, through The Polymathic Institute I will be building the infrastructure in the form of Enterprise Networks that you can use to begin to implement your Information Age action plan. If you are an Accountant, Analyst, Recruiter or Instructor this is most likely something you should be doing, at least part-time, as soon as possible.
In the near future your accounting software will be able to talk directly with the accounting software of your vendors, your customers, your bank and the various government reporting agencies. Invoices will be e-mailed from your accounting software to those of your customers where they will be triple matched and entered automatically into Accounts Payable. When the invoice is to be paid, your vendor's accounting software will notify its bank's software to pay your bank. Your accounting software will apply the payment and automatically notify your customer's accounting software of their new balance.
Payroll information will be reported automatically, wages and deductions calculated, necessary tax reports prepared and e-mailed to the appropriate agencies and the net pay will be automatically deposited in employees' bank accounts. Your accounting software will automatically calculate sales tax and e-mail the reports to the various taxing authorities. Similar imbedded expert systems will take over the inventory control and purchasing functions. In other words, over the next five to ten years, all clerks will become virtual. The live ones will be laid off.
The above scenario is not a someday, gee whiz, event. It requires no new technology. The required documents already exist as files in your accounting software. Currently, they are being printed out, mailed, manually received, entered into the recipient's accounting software, etc.. All that is really required is a File Format Translator so that your accounting software can create a record that your vendors', customers', bank's and reporting agencies' software can interpret. Once this is accomplished, most clerical functions will go the way of chimney sweeps and elevator attendants.
This will likely be stealth automation. One of my premium subscribers talks about how, with every new release, more of his job is automated. In similar form, over the next five years, every new release of your accounting software will automate more of these functions until they are completely automated. Twenty clerk AP departments of today may be reduced to just one or two.
In February of 2011, IBM unveiled Watson, a computer that spectacularly demonstrated that it could beat virtually everyone at Jeopardy. It played and easily bested the two top past champions.
In order to do this the computer was required to hear a natural language answer, usually designed specifically to be ambiguous, interpret the answer, search through its database, often make conceptually remote connections, find the correct information and, lastly, formulate the question to which the answer was related. As this video concludes, Jeopardy is the beginning, not the end of what will be a profoundly transformative technology.
IBM is creating, from Watson, a Physician's Assistant, named Dr. Watson, that will most likely be able to diagnose and treat diseases better than the Physicians it is assisting. It will lower costs, streamline the diagnosis process, reduce unnecessary tests and improve outcomes. Many in the field, as this Washington Post article demonstrates, are amazed by the technology and optimistic about its potential. Very recently, Wellpoint, the largest health benefits company in the U.S. announced that it had reached an agreement with IBM to "put Watson to work in health care."
This is, however, the beginning, not the end of the process. Automated diagnostic systems are beginning to surface everywhere with the ability to outperform the best of their human counterparts. This has led the X Prize Foundation to create their 'Tricorder' X Prize. X Prize boldly states, " With the equivalent of a board of physicians in your pocket, wireless sensors and imaging, you will be able to assess health and determine health care needs with a device in the palm of your hand." Clearly, A.I. and expert systems are ready to completely transform the medical industry, not someday, but now and going forward.
The question naturally arises, 'How soon will IBM or one of its competitors announce that it is creating an A.I. accountant?' Surely, if Watson can beat almost everyone at Jeopardy and his child, Dr. Watson can out perform Physicians in medicine, accounting and finance professionals will not be able to compete in knowledge, cost or accuracy with a Mr. Watson, CMA, CPA, CFA. Dr. Watson is estimated to require 18 months to bring to market. It should not take longer to bring Mr. Watson CMA, CPA, CFA to market. In many ways, he will be easier. For the most part, he will be a 'plug-in' to a system that is well bounded and already residing on your computer.
He will come loaded with all GAAP, GAAS, the APB Bulletins, FASB Statements, IFRS Standards, Corporate Tax Law, local regulatory, reporting and tax requirements and will be programmed with all accounting procedures and standard financial analysis methodologies.
It will be able to do NPV and DCF in its 'head' and program and perform monte carlo simulations, and other what-if analyses in a blink of an eye. It will have all the company's financial history at its finger tips. It will be able to close the books, make standard and adjusting journal entries, reconcile all GL accounts and perform statistical reviews of subsidiary ledgers and do it all far more quickly and accurately than any human. Since it is equipped with natural language capability, it will be able to produce the comments and analysis of the financial statements.
It will be able to produce the various required government reports and e-mail them directly to the proper agency. Every one of the quickly decreasing members of management will be able to, with one click, access Mr. Watson, CMA, CPA, CFA and ask natural language questions. The company will still need a Polymathic CFO to acquire and use a deep understanding of the company's financial data in the management of the enterprise. However, all other Accountants and Analysts will be replaced by the software.
This, too, will likely be stealth automation. IBM in partnership with SAP, Oracle, PeopleSoft, etc. will imbed more Watson-like functions into each release of its software. On one release, it may announce 'The Reconciler'. On the next release, it may announce 'The Adjusting Journal Entry Generator'. The next, it may announce a 'Sales Tax Reporter.' In this way, over time, with each release, fewer of the non-management Accountants will be needed. Next, as the number of Staff Accountants decreases, the number of Accounting Managers will decrease. Smaller enterprises will have their finance operations completely automated and will rely upon a part-time CFO.
As the profession experiences this implosion, it will then move to reductions in required Accounting Instructors and Recruiters. I know many readers will want to reject this outcome. However, with all due respect to Accountants, I have been one, Accounting is easier than playing Jeopardy at the championship level. It is easier than medicine. Watson has conquered those activities. It will conquer Accounting. The question is only, 'When?'
Nobody can know that for sure. However, Dr. Watson was put on an 18 month development schedule. It is unlikely that Mr. Watson CMA, CPA, CFA will require more. If we guess 24 months for IBM or a competitor to 'get to it', an 18 month development time and another 18 months for the major Accounting Software companies to imbed it in their next release, we have, perhaps five years. After that, the whole profession is on borrowed time.
So, unless you are approaching retirement, sometime between 2017 and 2022, you will need to find something else to do. What this will entail cannot really be properly understood without understanding The Income Explosion and Technological Unemployment which I Abstract on this site and explore in great detail at my premium subscriber site. I strongly advise you to read them, if you have not already done so.
Basically, the Economics of the next thirty years is going to be driven by two countervailing forces. First, advanced robotics and A.I. will drive incomes up, perhaps ten fold, from current U.S. levels. Second, 90% of all job descriptions will be eliminated. In the end, the two counteract one another and all will be well. However, all will not be well on the way.
Some jobs and professions will be demand limited. In other words, if the productivity of the medical profession increases tenfold, it is unlikely that people will seek ten times more medical care. As Dr. Watson and similar technologies increase the productivity of Physicians, the number required will fall and it will fall permanently. However, some professions, such as the Polymathic CFO, the descendent of Accountants, Financial Analysts, etc. will grow as economic activity grows.
However, the current jobs will be eliminated today and the new jobs will begin to become significant much later. We see an emerging picture of a period of dramatic unemployment and underemployment in the profession, followed by a slow, but dramatic increase in demand over the subsequent ten to twenty years. However, it will not be a return to business as usual. There will be both an increase in the minimum competency required in the profession as A.I. has taken over all the easier, specialized activities and, parenthetically, a dramatic increase in compensation. While ultimately an optimistic outcome, for current practitioners, instructors and recruiters, this is not a rosy scenario.
As I told my subordinates when I was a Financial Manager, 'Come to me with a problem and you are a Professional. Come to me with a problem and a proposed solution and you are a future Financial Manager.' If I expected it of my subordinates, I clearly should expect it of myself. So, if you are an Accountant, Analyst, Instructor or Recruiter and you understand this site and specifically this article, what should you be doing? What is the proposed solution?
First, as you will come to understand in 'The Death of Capitalism', 'The Rise of the Knowledge Class' and 'The Enterprise Network', the large, hierarchical, usually publicly traded and multinational corporation will not survive the transformation to an Information Age global economy. It will be replaced by Enterprise Networks, operating not under a single, hierarchical and unified management, but rather through strategic partnerships, vendor, customer and consultative relationships. You will not be an employee, you will be an owner-operator of one of the enterprises within the Network.
If it is your goal to become a Polymathic CFO in the Information Age, you will need to either wait until the transformation to an Information Age civilization and economy unfolds and find something else to do until that happens, or you need to push the envelope yourself by immediately leaving the corporate world and becoming a CFO of an enterprise preferably imbedded within an Enterprise Network. If you do not already have competency in all areas of Accounting and Finance, you are probably not qualified to do this at this time.
As you will understand when you read 'The Death of Capitalism' and 'Building a Liberating Portfolio While Saving the World' the investment markets are undergoing profound change. Over the next decade, the emphasis will migrate away from secondary markets, capital appreciation and acquisition strategies toward primary markets, income streams and organic growth. The ability to analyze the performance and potential of an enterprise will take precedence over the ability to analyze markets and market statistics. This means that the jump from Accountant or, even better, Financial Analyst to Fund Manager is a rather easy one. As investment dollars leave the secondary markets and begin to seek start-up or early round private equity opportunities, the outlook for this productive activity is very, very good. This too, needs to be a polymathic profession with expertise that extends to marketing, operations, technology and future studies.
As the quantity of openings for Accountants and Financial Analysts plummet, the opportunities for executive and professional recruiters also will fall. There will, however, be an ever increasing demand for Organizational Developers who will assist in constructing the management teams of the enterprises within Enterprise Networks. When the Transformation is complete a typical 25 million USD enterprise will be comprised of only the "C' jobs. Those will most commonly be CEO, COO, CFO, CIO, CTO and CMO. The Practitioner will first bring qualified candidates into an appropriate Enterprise Network and then, working with an aspiring CEO and the fund manager(s), build the complete management team. When a management team member leaves, retires or dies, the Practitioner will also be retained by the enterprise to acquire a replacement.
There is much buzz being generated currently by M.I.T.'s decision to introduce a certification process for their free, online and automated courses. Stanford has been pushing the envelope on this, as well. What is becoming apparent is that 90% of all University Professors and Instructors will not be needed. Since the demand for Accountants and Analysts will be plummeting until it again reaches its current level some time in the 2030's, Accounting Professors and Instructors will be hit doubly hard.
Like the profession of Physician, employment levels will be demand constrained. As you read 'The Cultures of Affluence' you will understand that the demand for personal development through learning will increase. However, it will not increase tenfold and that increase will be in self-actualization and 'meaning of life' style courses, not Accounting and Finance. So, if you are a Professor or Instructor in these areas, you better start planning your new career and sooner is much better than later. It is very unlikely that there will be any significant rebound once the employment rolls begin to decrease.
Whatever your current situation within the fields and whatever your aspirations for the future, the most important first step is to assure that you are not flying blindly into that future. There are lots of 'Futurists' out there who want to tell you about what the future might hold. Most of them will bombard you with hundreds of potential new 'gee whiz' gizmos.
Many of them are all about the Singularity, a time projected to be around 2045, when computers surpass humans. Some go even further and tell you about a time when humans become machines. Of course, there are a whole lot of Futurists that opportunistically play into the common beliefs of Global Climate Change, Peak Oil, the BRIC age, etc. Some conflate Strategic Planning and Futurism in order to capitalize upon the corporate consulting market.
Really, only I look at the near future, say between now and 2040 or the likely career span for the 40 year old of today, with an unwavering eye toward personal relevance for my subscribers. I look at career, lifestyle, community, personal finance, etc. I do so from the vantage point of having been a Controller, a Manager of Financial Planning and Analysis, a Director of Strategic Planning and a CFO and a business owner. I do so with an imposing wealth of polymathic knowledge acquired over 40 years of intensive study. I am both competent and disposed to assisting you through the treacherous years before us.
You should read the Abstracts here. It should take you less than an hour. Then, you should subscribe to The Future 101. For $54.95 per year, I provide you with a graduate level, online course of study that will provide you with an understanding of the emerging, global Information Age civilization. It will not be 'pie in the sky' or designed to 'blow your mind.' It is designed to be personally relevant. It is designed to help you to identify your correct decisions, attitudes and actions now and over the next year or two.
Also, through The Polymathic Institute I will be building the infrastructure in the form of Enterprise Networks that you can use to begin to implement your Information Age action plan. If you are an Accountant, Analyst, Recruiter or Instructor this is most likely something you should be doing, at least part-time, as soon as possible.
Thursday, February 2, 2012
Building a Liberating Portfolio While Saving the World
Lately, I have been reading ever more frequently that 'nobody wants a job'. That, of course, is ludicrous. What is really meant is that most people don't want the job they have. They spend 40 hours a week at a job and another 3.5 hours commuting to engage in an activity that they really would rather not do. The problem is, everyone wanted to be a rock star. The vast majority were not good enough to get one of the limited gigs, so,instead, they are changing brake pads at the local garage. All day long they engage in the same dull and repetitive activity.
Within ten, perhaps twenty, years we will all have 'smart garages'. We will drive in every evening and every morning the garage will have done the necessary maintenance, washed and detailed our car and we will be ready to go without ever thinking about the details. No more changing brake pads for anyone.
But for now, the rock star is an auto mechanic and he is selling five of his days per week to an economy that needs the work done. In return, he is allowed to live two days per week. If you ask him if he wants his job, of course he'll say no. However, if you tell him he can be a rock star after all, he will be in line, taking one of the gigs, before you can blink.
Almost everyone has productive urges. They really don't want to be completely indolent. They simply want to do the productive things that they want to do without concern for how much money they will or will not earn from it. They want to do it as much as they want to do it, not how much they need to do it in order to have enough money. It is from this frustration over inappropriate work rather than a desire to avoid work, that the attractiveness of The Venus Project and The Zeitgeist Movement originates.
One of the most extraordinary opportunities to work 'how you wish rather than how you must' arises from the dramatic changes that are taking place in the investment markets. If you read the Abstract, The Death of Capitalism, you will, actually, have all the information you need to understand what it is. However, I will summarize it here, as well.
In the Abstract I show you that Industrial Age companies had equity constrained growth of about 23% per year and typically had Market to Book Value Ratios around 2.5. Information Age companies have equity constrained growth rates of 67% and Market to Book Value Ratios in the range of 12. Because of this fundamental and dramatic change in the structure of Financial Markets, nearly everyone actually has their thinking about investing exactly backward.
Because the value of an Industrial Age company was so concentrated in the financial capital, both contributed and retained, people have thought about how much portfolio value they can have in Y years with an initial investment of X. For example, suppose a 35 year old has a $10,000 portfolio that they might like to roll over into an IRA and pursue higher risk, higher return investment opportunities.
If they set their return expectations at, say, 18% (historically the S&P 500 returns about 11%) they will expect a portfolio valuation of $1,996,292.77 thirty two later when they retire at the age of 67. However, they understand that inflation will have devalued their portfolio and it will likely be, in today's dollars, valued at about $900,000. They will need to lower their return expectations in order to prudently lower their risk, after retirement, likely to about 7% after inflation. That means that they will have about $63,000 of retirement income in addition to their Social Security and/or pension income.
There is one more, very important aspect that most people don't know or don't think about. As a mass market investor, when you buy stock, it is almost always from the secondary market. What that means is that you are not investing in a company. The company gets none of your money. Rather, you are making a wager. You are betting that the prospects for return on investment are more than supported by the purchase price. With the fullness of time, if you are correct, you win and the seller loses. If not, it is the other way around. You lose and the seller wins.
It isn't quite a zero sum game because the value of stocks do tend to increase over time and most, though not all, dividend a portion of their earnings to the owner of record. However, it has nothing to do with investing in the future economy or in the businesses themselves. Wall Street, in this manifestation, which is by far its largest one, is essentially a huge casino where the house take, effectively, is negative. If you win, you may be saving yourself, but you are doing nothing to save the world. Also, above the growth in market valuation, it is a zero sum game and your win is someone's loss.
However, there is a primary market for securities, as well. It is totally different from the casinos such as the New York, NASDAQ, London, Tokyo, Euronext, Deutsche Borse, Borsa Italiana, et al stock exchanges. It is private. Your purchase funds the business itself. This has been primarily a playground for the wealthy, either through Venture Capital partnerships or individually as 'Investment Angels'. It is a very significant component of the phenomenon of 'the rich getting richer' and the resultant income and wealth inequalities. The only significant exceptions are the IPOs where individual investors do get to invest in the company directly, at least in part. Most IPO's also cash out early round investors and as such are secondary market purchases.
The risks in the private, primary markets are, indeed, higher, but the rewards are also higher. When the Industrial Age companies could not grow faster than 23% per year without additional equity infusions, for the small investor, the risk was not justified by the potential return. However, with the 67% equity constrained returns of Information Age companies, the dynamic is totally different.
In the wonderful SAP panel discussion on the future of business, X Prize Chairman, Peter Diamandis introduced the idea of an Age of Abundance. He said that billion dollar companies will go bankrupt overnight to be replaced almost as quickly by new billion dollar companies. In this, he is absolutely correct. In fact, during the Transformation, Real Gross World Product (GWP) will likely grow 70 fold. Not only will new billion dollar companies emerge, there will be seventy of them for every one that goes under. In other words, during the Transformation, new billion dollar companies will arise everywhere. So, let's think about how much it will cost to get into one.
In The Death of Capitalism Abstract, I show that Industrial Age companies typically will have an equity constrained growth rate of about 23% and a Market to Book Value Ratio of 2.5:1.0. On the other hand, Information Age companies typically will have a equity constrained growth rate of 67% and a Market to Book Value Ratio of 12:1.0. You will know whether you properly appreciate the difference based upon whether it stuns you or not. If it doesn't, you need to think about it more. If it does, then you understand that the world of business and investment markets is undergoing its greatest upheaval in history. It will enable a democritization of wealth.
An Industrial Age company with a billion dollar Market Value will likely have a 400 million USD Book Value. Suppose that the company had been started ten years earlier and the first round of investors got 50% of the company for 100% of the equity contribution. A simple calculation tells us that the investors must have put in 400 million USD / (1.23^10) =50,467,161.90 USD. Their current market value is 500 million USD which translates to a respectable 25.77% annual return. In order to buy a $1,000,000 portfolio ten years hence, the cost would be 50,467.16 USD today. Most of us don't have that amount of risk capital available to us.
Now let's consider the billion dollar Information Age company. Its book value will be 83,333,333 USD. At a 67% annual equity constrained growth rate, the contributed capital ten years prior would have been 83,333,333.33 / (1.67^10) =493,917.08 USD. However, because of the high competition for the very high ROIs that will typify Information Age companies, the initial investors only received 20% of the company for a Market Value of 200,000,000. The annual return is 82.28%. More importantly, you can buy $1,000,000 of portfolio ten years hence for just 2,469.59 USD today! Many, probably most, of us do have that amount available for risk capital.
As we discuss in The Future 101, it is also very significant that in the Information Age scenario, the entrepreneur kept 80% of the company versus keeping 50% of the company in the Industrial Age scenario. It not only enables entrepreneurship in the Information Age, it makes it much more attractive.
So that is the light switch that needs to be flipped in your world view. Don't think, 'I've got X to invest. What return can I realistically expect?' That is thinking Industrial Age. Rather think, 'I want a X million USD portfolio in Y years. How much is it going to cost me?' Because Information Age companies have Market to Book Value Ratios of 10:1.0 or above, the invested financial capital is actually less than 10% of the value of the company. In order to get in, you will need to contribute a nominal amount of money, but that is minor compared to the knowledge capital you are bringing to the table.
Now, let's get back to that 35 year old with a $10,000 IRA and a desire to get high returns while accepting higher risks. The numbers we have been using are overly simplistic. There will be losses. However, one does not hold the same position indefinitely. The increase in Market to Book Value from an initial 5:1 to 12:1, increases your return every time you change positions from a mature investment to a new one. Taking everything into account, a realistic Industrial Age return is about 18%. In other words, the return for pre-IPO investments in the Industrial Age were not much different than for the more liquid and generally lower risk publicly traded investment strategies.
However, with the Information Age percentages and ratios, a realistic return is in the 65% range. So $10,000 X 1.65^32 = $91,093,253,745. Of course, you are not likely to actually achieve such a result. While GWP will grow dramatically over the next 30 years, it will not support everyone achieving such results. In fact, because that isn't possible, the Investment Markets are going to have truly profound shocks as they adjust to the new economic realities of the Information Age. We explore these shocks and the new points of equalibria in The Future 101. For now, however, look at the following chart:
What will happen in reality is that sometime prior to the age of 50, the investor will decide that the portfolio is large enough, there is no reason to continue to work at their current productive activity that is not optimal and they will choose to 'retire' with a seven figure income and an eight figure net worth. Retire, of course, means to work how one wishes, not how one must. Additionally, the amount that needs to be reinvested each year keeps increasing and, at some point, the investor will have neither the time nor the opportunities to continue the exponential growth in portfolio valuation. However, many will choose to continue to allocate a portion of their income to new opportunities, thereby assuring, albeit at a lower rate, continued growth in portfolio value and income.
This is a fundamental and profound change in how investments affect personal finance. Rather than preparing for retirement, which will actually be closer to 80 than 67 for the 35 year old of today, the person will be earning their liberation. Long before reaching the end of their productive years, most people will be liberated from the need to consider personal finances when considering their preferred productive activity.
Of course, the sooner you begin your investment program, the sooner you will reach your point of liberation. In the example above, it takes 15 years. In order to start, you will need three things.
The first two can be easily acquired by subscribing to The Future 101. You are at an Abstract site and this is an Abstract. In The Future 101 we will discuss all aspects of building a liberating portfolio. You will gain knowledge that will directly improve the quality of your investment decisions.
Additionally, our alumni will have the opportunity to collaborate with entrepreneurs, investors, strategic partners and advisers through Fellowship in The Polymathic Institute. It is specifically designed to be the opportunity rich and success prone environment that you will need. It will not only provide you with a steady stream of investment opportunities, it will also provide you with the network and infrastructure you need to successfully enter a Knowledge Class career.
Parenthetical to this article, it will also provide you with an intellectually rich social environment. Unlike high IQ societies, there is no test score required for Fellowship although the median IQ of Fellows will undoubtedly be very high. Rather, it will be a community characterized by extraordinary intelligence, unrelenting drive, well tempered vision and a bias toward excellence.
The information presented here is in complete conformity with the 'save the world by saving ourselves' strategy that I discuss often here and at the premium service. As you build your portfolio, you will be enabling Information Age enterprises that will move people out of the Industrial Age economy, thereby indemnifying them against the worst of the 'train wreck.' Simultaneously, by reducing the supply of Industrial Age job seekers, you will be putting downward pressure on Technological Unemployment and putting upward pressure on Industrial Age wages.
If you are a 'look before you leap' sort of person, I suggest that you read the Abstracts here and then subscribe to The Future 101. It is a nominal risk for the opportunity to place yourself on a far superior career, wealth and life track. Some of those of great vision and a high level of self confidence may wish to move directly to Fellowship. If you wish to consider this option, contact me at Michael.W.Ferguson@hotmail.com.
I look forward to your continuing involvement in this, a great personal and societal cause and adventure.
Within ten, perhaps twenty, years we will all have 'smart garages'. We will drive in every evening and every morning the garage will have done the necessary maintenance, washed and detailed our car and we will be ready to go without ever thinking about the details. No more changing brake pads for anyone.
But for now, the rock star is an auto mechanic and he is selling five of his days per week to an economy that needs the work done. In return, he is allowed to live two days per week. If you ask him if he wants his job, of course he'll say no. However, if you tell him he can be a rock star after all, he will be in line, taking one of the gigs, before you can blink.
Almost everyone has productive urges. They really don't want to be completely indolent. They simply want to do the productive things that they want to do without concern for how much money they will or will not earn from it. They want to do it as much as they want to do it, not how much they need to do it in order to have enough money. It is from this frustration over inappropriate work rather than a desire to avoid work, that the attractiveness of The Venus Project and The Zeitgeist Movement originates.
One of the most extraordinary opportunities to work 'how you wish rather than how you must' arises from the dramatic changes that are taking place in the investment markets. If you read the Abstract, The Death of Capitalism, you will, actually, have all the information you need to understand what it is. However, I will summarize it here, as well.
In the Abstract I show you that Industrial Age companies had equity constrained growth of about 23% per year and typically had Market to Book Value Ratios around 2.5. Information Age companies have equity constrained growth rates of 67% and Market to Book Value Ratios in the range of 12. Because of this fundamental and dramatic change in the structure of Financial Markets, nearly everyone actually has their thinking about investing exactly backward.
Because the value of an Industrial Age company was so concentrated in the financial capital, both contributed and retained, people have thought about how much portfolio value they can have in Y years with an initial investment of X. For example, suppose a 35 year old has a $10,000 portfolio that they might like to roll over into an IRA and pursue higher risk, higher return investment opportunities.
If they set their return expectations at, say, 18% (historically the S&P 500 returns about 11%) they will expect a portfolio valuation of $1,996,292.77 thirty two later when they retire at the age of 67. However, they understand that inflation will have devalued their portfolio and it will likely be, in today's dollars, valued at about $900,000. They will need to lower their return expectations in order to prudently lower their risk, after retirement, likely to about 7% after inflation. That means that they will have about $63,000 of retirement income in addition to their Social Security and/or pension income.
There is one more, very important aspect that most people don't know or don't think about. As a mass market investor, when you buy stock, it is almost always from the secondary market. What that means is that you are not investing in a company. The company gets none of your money. Rather, you are making a wager. You are betting that the prospects for return on investment are more than supported by the purchase price. With the fullness of time, if you are correct, you win and the seller loses. If not, it is the other way around. You lose and the seller wins.
It isn't quite a zero sum game because the value of stocks do tend to increase over time and most, though not all, dividend a portion of their earnings to the owner of record. However, it has nothing to do with investing in the future economy or in the businesses themselves. Wall Street, in this manifestation, which is by far its largest one, is essentially a huge casino where the house take, effectively, is negative. If you win, you may be saving yourself, but you are doing nothing to save the world. Also, above the growth in market valuation, it is a zero sum game and your win is someone's loss.
However, there is a primary market for securities, as well. It is totally different from the casinos such as the New York, NASDAQ, London, Tokyo, Euronext, Deutsche Borse, Borsa Italiana, et al stock exchanges. It is private. Your purchase funds the business itself. This has been primarily a playground for the wealthy, either through Venture Capital partnerships or individually as 'Investment Angels'. It is a very significant component of the phenomenon of 'the rich getting richer' and the resultant income and wealth inequalities. The only significant exceptions are the IPOs where individual investors do get to invest in the company directly, at least in part. Most IPO's also cash out early round investors and as such are secondary market purchases.
The risks in the private, primary markets are, indeed, higher, but the rewards are also higher. When the Industrial Age companies could not grow faster than 23% per year without additional equity infusions, for the small investor, the risk was not justified by the potential return. However, with the 67% equity constrained returns of Information Age companies, the dynamic is totally different.
In The Death of Capitalism Abstract, I show that Industrial Age companies typically will have an equity constrained growth rate of about 23% and a Market to Book Value Ratio of 2.5:1.0. On the other hand, Information Age companies typically will have a equity constrained growth rate of 67% and a Market to Book Value Ratio of 12:1.0. You will know whether you properly appreciate the difference based upon whether it stuns you or not. If it doesn't, you need to think about it more. If it does, then you understand that the world of business and investment markets is undergoing its greatest upheaval in history. It will enable a democritization of wealth.
An Industrial Age company with a billion dollar Market Value will likely have a 400 million USD Book Value. Suppose that the company had been started ten years earlier and the first round of investors got 50% of the company for 100% of the equity contribution. A simple calculation tells us that the investors must have put in 400 million USD / (1.23^10) =50,467,161.90 USD. Their current market value is 500 million USD which translates to a respectable 25.77% annual return. In order to buy a $1,000,000 portfolio ten years hence, the cost would be 50,467.16 USD today. Most of us don't have that amount of risk capital available to us.
Now let's consider the billion dollar Information Age company. Its book value will be 83,333,333 USD. At a 67% annual equity constrained growth rate, the contributed capital ten years prior would have been 83,333,333.33 / (1.67^10) =493,917.08 USD. However, because of the high competition for the very high ROIs that will typify Information Age companies, the initial investors only received 20% of the company for a Market Value of 200,000,000. The annual return is 82.28%. More importantly, you can buy $1,000,000 of portfolio ten years hence for just 2,469.59 USD today! Many, probably most, of us do have that amount available for risk capital.
As we discuss in The Future 101, it is also very significant that in the Information Age scenario, the entrepreneur kept 80% of the company versus keeping 50% of the company in the Industrial Age scenario. It not only enables entrepreneurship in the Information Age, it makes it much more attractive.
So that is the light switch that needs to be flipped in your world view. Don't think, 'I've got X to invest. What return can I realistically expect?' That is thinking Industrial Age. Rather think, 'I want a X million USD portfolio in Y years. How much is it going to cost me?' Because Information Age companies have Market to Book Value Ratios of 10:1.0 or above, the invested financial capital is actually less than 10% of the value of the company. In order to get in, you will need to contribute a nominal amount of money, but that is minor compared to the knowledge capital you are bringing to the table.
Now, let's get back to that 35 year old with a $10,000 IRA and a desire to get high returns while accepting higher risks. The numbers we have been using are overly simplistic. There will be losses. However, one does not hold the same position indefinitely. The increase in Market to Book Value from an initial 5:1 to 12:1, increases your return every time you change positions from a mature investment to a new one. Taking everything into account, a realistic Industrial Age return is about 18%. In other words, the return for pre-IPO investments in the Industrial Age were not much different than for the more liquid and generally lower risk publicly traded investment strategies.
However, with the Information Age percentages and ratios, a realistic return is in the 65% range. So $10,000 X 1.65^32 = $91,093,253,745. Of course, you are not likely to actually achieve such a result. While GWP will grow dramatically over the next 30 years, it will not support everyone achieving such results. In fact, because that isn't possible, the Investment Markets are going to have truly profound shocks as they adjust to the new economic realities of the Information Age. We explore these shocks and the new points of equalibria in The Future 101. For now, however, look at the following chart:
| Age | Beginning | Income | Ending |
| 36 | 10,000 | 6,500 | 16,500 |
| 37 | 16,500 | 10,725 | 27,225 |
| 38 | 27,225 | 17,696 | 44,921 |
| 39 | 44,921 | 29,199 | 74,120 |
| 40 | 74,120 | 48,178 | 122,298 |
| 41 | 122,298 | 79,494 | 201,792 |
| 42 | 201,792 | 131,165 | 332,957 |
| 43 | 332,957 | 216,422 | 549,378 |
| 44 | 549,378 | 357,096 | 906,474 |
| 45 | 906,474 | 589,208 | 1,495,683 |
| 46 | 1,495,683 | 972,194 | 2,467,876 |
| 47 | 2,467,876 | 1,604,120 | 4,071,996 |
| 48 | 4,071,996 | 2,646,797 | 6,718,793 |
| 49 | 6,718,793 | 4,367,216 | 11,086,009 |
| 50 | 11,086,009 | 7,205,906 | 18,291,915 |
This is a fundamental and profound change in how investments affect personal finance. Rather than preparing for retirement, which will actually be closer to 80 than 67 for the 35 year old of today, the person will be earning their liberation. Long before reaching the end of their productive years, most people will be liberated from the need to consider personal finances when considering their preferred productive activity.
Of course, the sooner you begin your investment program, the sooner you will reach your point of liberation. In the example above, it takes 15 years. In order to start, you will need three things.
- You will need a more complete understanding of the Information Age investment markets.
- You will need a superior knowledge of futurity so that you can make superior investment decisions.
- You will need an opportunity rich and success prone productive environment that can bring you a steady stream of superior Information Age investment opportunities.
The first two can be easily acquired by subscribing to The Future 101. You are at an Abstract site and this is an Abstract. In The Future 101 we will discuss all aspects of building a liberating portfolio. You will gain knowledge that will directly improve the quality of your investment decisions.
Additionally, our alumni will have the opportunity to collaborate with entrepreneurs, investors, strategic partners and advisers through Fellowship in The Polymathic Institute. It is specifically designed to be the opportunity rich and success prone environment that you will need. It will not only provide you with a steady stream of investment opportunities, it will also provide you with the network and infrastructure you need to successfully enter a Knowledge Class career.
Parenthetical to this article, it will also provide you with an intellectually rich social environment. Unlike high IQ societies, there is no test score required for Fellowship although the median IQ of Fellows will undoubtedly be very high. Rather, it will be a community characterized by extraordinary intelligence, unrelenting drive, well tempered vision and a bias toward excellence.
The information presented here is in complete conformity with the 'save the world by saving ourselves' strategy that I discuss often here and at the premium service. As you build your portfolio, you will be enabling Information Age enterprises that will move people out of the Industrial Age economy, thereby indemnifying them against the worst of the 'train wreck.' Simultaneously, by reducing the supply of Industrial Age job seekers, you will be putting downward pressure on Technological Unemployment and putting upward pressure on Industrial Age wages.
If you are a 'look before you leap' sort of person, I suggest that you read the Abstracts here and then subscribe to The Future 101. It is a nominal risk for the opportunity to place yourself on a far superior career, wealth and life track. Some of those of great vision and a high level of self confidence may wish to move directly to Fellowship. If you wish to consider this option, contact me at Michael.W.Ferguson@hotmail.com.
I look forward to your continuing involvement in this, a great personal and societal cause and adventure.
Thursday, January 26, 2012
The Coming Age of Abundance
For premium members, we will be analyzing this video cast in great detail over the next few weeks. It is, I believe, the first major statement by the intellectual establishment on this issue. You will see many, many of the ideas of The Future 101 partially emerging in this conversation. They get some of it wrong, much of it correct, but mostly, it is, in this presentation, a series of thoughts rather than a synthesis. In other words, the interactions between them have neither been explored or rationalized.
Tuesday, January 24, 2012
Your Career in the Knowledge Class
The Future 101 presents, at the graduate level, an objectively supportable world view and a superior knowledge of futurity. As such it is primarily an educational service. It imparts knowledge, however, that veritably begs to be used. You may choose to use it by joining our Global Community of Action. It is intended to be a route to early entrance into the Knowledge Class.
Most of the Members of our Global Community of Action will enter first as passive investors and then, as the organization matures, will find and enter as an owner-operator within an Enterprise Network. Because the organization will be pursuing an investment first strategy, by the time they are ready to take on a permanent, productive role, the investment funds will be available for them on favorable terms.
By the end of the Transformation, the profile of careers will match what I have described in the article, 'What will you be doing in the Information Age?', in other words, in descending order of frequency, Designer, Content Creator, Social Experience Creator.... However, at the beginning, most participants will be Content Creators, Scientists and Inventors, Entrepreneurs and Investors. This will partially reflect the investment first strategy, but also will be the result of the need to build the Information Age infrastructure first. In other words, inescapable limitations will continue until incomes explode and cultures of affluence emerge.
Beginning as a Passive Investor:
Our goal of 20,000 Members, at an average Venture portfolio of 10,000 USD, will provide a total of 200 million USD of investment funds. This will grow through retained profits, between now and about 2025, into an aggregated portfolio value of 200 billion USD. This means a portfolio growth, for the individual who made an initial investment of 10,000 USD, to 10 million USD in about a dozen years. The Book Value on 10 million USD of Market Value is about 833,333 USD. A 67% return on Book Value suggests that the portfolio will provide the Member with equity in earnings of 558,333 USD per year.
However, for about 80% of our Members, the investments will be made through an investment fund that will take about 20% for their services. Remember, as I discuss in The Death of Capitalism, only about 8% of the value of an Information Age company is in financial assets. Most of the value is in ideas, knowledge, relationships, etc.
You will be providing capital that will acquire about 20% of the enterprise's equity in earnings. 8% will be compensation for the funds contributed themselves and the remaining 12% will be for understanding the future, something you acquire through The Future 101, and the industry sufficiently to choose a winning idea. By investing through a managed fund, in essence, you will be giving 4% of that 12% to someone expert in the industry and in picking winners. For most people that will be 4% very well spent. Of course, if you think you are very good and can do better than the 12% yourself, then you will likely be in the 20% who choose to 'go it alone.'
So, the typical Member should have the following investment expectation as a component of their Knowledge Class action plan. You will invest 10,000 USD, mostly over the next five years. Within 20 years, your portfolio will have grown to 8 million 2012USD and will have transitioned from a growth to an income portfolio, providing an income stream of about 450K 2012USD per year.
About 160 Fund Managers
As already mentioned 80% or so of the investments will be made through managed funds. The average fund will likely have 100 participants X 10,000 average portfolio = 1.0 million USD of funds under management which will grow to 1,000 million USD over a dozen years. It will provide an annual income of 56,250K USD. The typical fund will likely take positions in ten to forty enterprises. At maturity, the fund manager's share will be 200 million USD and an annual income of 11,250K USD. In other words, Fund Managers, if they are good, will be among the most highly compensated members of the Knowledge Class. The scope of our Community of Action will support 160 fund managers.
There are Venture Funds today. Here is an example of an open Venture Club. Imagine an Industrial Age company with a billion dollar market value. It will likely have a Book Value of about 350 million. If it reached this point by growing at its equity constrained rate of 23% for ten years, then it would have needed an initial book value of $44,158,766.13.
Now imagine an Information Age company with a billion dollar market value. It will likely have a Book Value of about 85 million. If it reached this point by growing at its equity constrained rate of 67%, then it would have needed an initial book value of $503,795.42.
When a company needs to obtain $44 million of initial capital, the options are few. Deep pockets win over vision. The Venture Capital industry is an exclusive club of high net worth money guys. They hold all the cards and they call the shots. They also take most of the company, because they can.
When you need $500K to start a business, a Reg D, Rule 504 raised from visionary members of your expanded network can finance it. A $5,000 investment now becomes a $5 million portfolio in ten years. You can create 100 multimillionaires from 100 smart people of modest means. So, the game is no longer for high net worth money guys. Its for nearly anyone with the vision to participate.
Our Enterprise Network Founders:
Of the 20,000 Members that constitute our organizational development goal, most will enter an Enterprise Network, form a management team for a new enterprise, 'pitch it' to the fund managers and independent investors and become a member of the Knowledge Class, with a Knowledge Class income and lifestyle. However, the Enterprise Networks must be there to be joined. This requires that a percentage of our Members be Enterprise Network Founders.
How this will be done and how the Founders will be compensated is a complex question that will have a somewhat different answer with each Network. Polymathica, a Culture of Affluence that cherishes refinement and erudition, is an example. In fact, it is the one in which I wish to become involved. We will do so by creating the foundational organization for our nascent culture, Polymathica.com.
There people can find and watch refined and erudite television and movies. There the can consume more erudite news, analysis and commentary. There, they can acquire a more polymathic education and proper credentials for a polymath. There, they will find online stores of refined products and erudite services. And finely, with time, there they will be able to find Polymathican boutique villages, when they can live anywhere and choose to live elsewhere. It will be Netflix, Amazon, facebook, Yahoo, Monster.com all rolled into one and created especially for people of refinement and erudition.
Polymathica.com will organize and enable everything with the reward of advertising and commission revenue. People who want to create and sell content, products and services that will appeal to Polymathicans, can go to the Venture Club, a private and premium venue within Polymathica.com, and there meet investors who want to invest in content, products and services that will appeal to Polymathicans. People who want to provide content, products and services to Polymathicans can go to the Polymathica Career venue and find collaborators.
In other words, Polymathica.com becomes the founding organization that enables enterprises that, in turn, provide the environment that Polymathica.com offers to people of refinement and erudition. It is one example of many. In aggregate these Enterprise Network Founders will also be the Founders of the global, Information Age civilization. They will become many of the wealthiest and most influential people in the world and they will have earned it.
The Best of the Rest:
I have highlighted the 160 fund managers and what might be a couple thousand Enterprise Network Founders because, although they represent a minority of the Members of our Community of Action, they are critical to its success. Most of the Members will subscribe to The Future 101 to gain the basic knowledge they will need to participate in the Community of Action and to succeed in the Information Age. They will then move on to Membership with the intent to begin investing and to, over time, create their own Information Age enterprise.
However, none of it happens until and unless we find the organizers, the Founders the visionaries. Without them, the rest will sit around permanently waiting for something to happen. And having something happen is absolutely essential. We are headed for a train wreck, the four horsemen of the Industrial Age apocalypse. They are technological unemployment, death of the Industrial Age city, The disintegration of the corporation and the loss of national identity.
This will take place between now and about 2025. Avoiding it is devoutly to be desired. This is accomplished by acquiring an Information Age career and lifestyle before the worst of it arrives. I call this the 'save the World by saving ourselves strategy.' You want to be involved in it.
I realize that these events, these calculations will likely cause a degree of Future Shock in most people. Keep in mind that in the Information Age, this will not be rich. It will be solid upper middle class.
Since the financial investment comprises about 20% of the company valuation, the owner-operators within our Community of Action will have a Market Value of 200 billion X 4 = 800 billion USD. Consequently, we are pointed at a future, for some as early as 2015 and for most by 2025, where the typical Member of our Community of Action will have a personal financial profile that looks like this:
From an ideological viewpoint, many people decry the current income and wealth disparity, primarily in the U.S. Here is the inescapable logic. The disparity can only be remedied in one of two ways. Either the majority of people will get much more affluent or society as a whole will need to get much poorer. The former is clearly better than the latter and that is what the Income Explosion is all about.
We are at a point in our history of great change. I quote John Maynard Keynes, '"I look forward, therefore, in days not so very remote, to the greatest change which has ever occurred in the material environment of life for human beings in the aggregate. But, of course, it will all happen gradually, not as a catastrophe. Indeed, it has already begun. The course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed."
We can excuse him for not seeing the paroxysmal event facing us right now. He got the rest exactly correct. In this strategy to save the World by saving ourselves, the biblical passage comes to mine, 'Many are called; few chosen - Many hear; few believe.' I am discovering the truth of this in today's situation. However, a few are enough.
Most of the Members of our Global Community of Action will enter first as passive investors and then, as the organization matures, will find and enter as an owner-operator within an Enterprise Network. Because the organization will be pursuing an investment first strategy, by the time they are ready to take on a permanent, productive role, the investment funds will be available for them on favorable terms.
By the end of the Transformation, the profile of careers will match what I have described in the article, 'What will you be doing in the Information Age?', in other words, in descending order of frequency, Designer, Content Creator, Social Experience Creator.... However, at the beginning, most participants will be Content Creators, Scientists and Inventors, Entrepreneurs and Investors. This will partially reflect the investment first strategy, but also will be the result of the need to build the Information Age infrastructure first. In other words, inescapable limitations will continue until incomes explode and cultures of affluence emerge.
Beginning as a Passive Investor:
Our goal of 20,000 Members, at an average Venture portfolio of 10,000 USD, will provide a total of 200 million USD of investment funds. This will grow through retained profits, between now and about 2025, into an aggregated portfolio value of 200 billion USD. This means a portfolio growth, for the individual who made an initial investment of 10,000 USD, to 10 million USD in about a dozen years. The Book Value on 10 million USD of Market Value is about 833,333 USD. A 67% return on Book Value suggests that the portfolio will provide the Member with equity in earnings of 558,333 USD per year.
However, for about 80% of our Members, the investments will be made through an investment fund that will take about 20% for their services. Remember, as I discuss in The Death of Capitalism, only about 8% of the value of an Information Age company is in financial assets. Most of the value is in ideas, knowledge, relationships, etc.
You will be providing capital that will acquire about 20% of the enterprise's equity in earnings. 8% will be compensation for the funds contributed themselves and the remaining 12% will be for understanding the future, something you acquire through The Future 101, and the industry sufficiently to choose a winning idea. By investing through a managed fund, in essence, you will be giving 4% of that 12% to someone expert in the industry and in picking winners. For most people that will be 4% very well spent. Of course, if you think you are very good and can do better than the 12% yourself, then you will likely be in the 20% who choose to 'go it alone.'
So, the typical Member should have the following investment expectation as a component of their Knowledge Class action plan. You will invest 10,000 USD, mostly over the next five years. Within 20 years, your portfolio will have grown to 8 million 2012USD and will have transitioned from a growth to an income portfolio, providing an income stream of about 450K 2012USD per year.
About 160 Fund Managers
As already mentioned 80% or so of the investments will be made through managed funds. The average fund will likely have 100 participants X 10,000 average portfolio = 1.0 million USD of funds under management which will grow to 1,000 million USD over a dozen years. It will provide an annual income of 56,250K USD. The typical fund will likely take positions in ten to forty enterprises. At maturity, the fund manager's share will be 200 million USD and an annual income of 11,250K USD. In other words, Fund Managers, if they are good, will be among the most highly compensated members of the Knowledge Class. The scope of our Community of Action will support 160 fund managers.
There are Venture Funds today. Here is an example of an open Venture Club. Imagine an Industrial Age company with a billion dollar market value. It will likely have a Book Value of about 350 million. If it reached this point by growing at its equity constrained rate of 23% for ten years, then it would have needed an initial book value of $44,158,766.13.
Now imagine an Information Age company with a billion dollar market value. It will likely have a Book Value of about 85 million. If it reached this point by growing at its equity constrained rate of 67%, then it would have needed an initial book value of $503,795.42.
When a company needs to obtain $44 million of initial capital, the options are few. Deep pockets win over vision. The Venture Capital industry is an exclusive club of high net worth money guys. They hold all the cards and they call the shots. They also take most of the company, because they can.
When you need $500K to start a business, a Reg D, Rule 504 raised from visionary members of your expanded network can finance it. A $5,000 investment now becomes a $5 million portfolio in ten years. You can create 100 multimillionaires from 100 smart people of modest means. So, the game is no longer for high net worth money guys. Its for nearly anyone with the vision to participate.
Our Enterprise Network Founders:
Of the 20,000 Members that constitute our organizational development goal, most will enter an Enterprise Network, form a management team for a new enterprise, 'pitch it' to the fund managers and independent investors and become a member of the Knowledge Class, with a Knowledge Class income and lifestyle. However, the Enterprise Networks must be there to be joined. This requires that a percentage of our Members be Enterprise Network Founders.
How this will be done and how the Founders will be compensated is a complex question that will have a somewhat different answer with each Network. Polymathica, a Culture of Affluence that cherishes refinement and erudition, is an example. In fact, it is the one in which I wish to become involved. We will do so by creating the foundational organization for our nascent culture, Polymathica.com.
There people can find and watch refined and erudite television and movies. There the can consume more erudite news, analysis and commentary. There, they can acquire a more polymathic education and proper credentials for a polymath. There, they will find online stores of refined products and erudite services. And finely, with time, there they will be able to find Polymathican boutique villages, when they can live anywhere and choose to live elsewhere. It will be Netflix, Amazon, facebook, Yahoo, Monster.com all rolled into one and created especially for people of refinement and erudition.
Polymathica.com will organize and enable everything with the reward of advertising and commission revenue. People who want to create and sell content, products and services that will appeal to Polymathicans, can go to the Venture Club, a private and premium venue within Polymathica.com, and there meet investors who want to invest in content, products and services that will appeal to Polymathicans. People who want to provide content, products and services to Polymathicans can go to the Polymathica Career venue and find collaborators.
In other words, Polymathica.com becomes the founding organization that enables enterprises that, in turn, provide the environment that Polymathica.com offers to people of refinement and erudition. It is one example of many. In aggregate these Enterprise Network Founders will also be the Founders of the global, Information Age civilization. They will become many of the wealthiest and most influential people in the world and they will have earned it.
The Best of the Rest:
I have highlighted the 160 fund managers and what might be a couple thousand Enterprise Network Founders because, although they represent a minority of the Members of our Community of Action, they are critical to its success. Most of the Members will subscribe to The Future 101 to gain the basic knowledge they will need to participate in the Community of Action and to succeed in the Information Age. They will then move on to Membership with the intent to begin investing and to, over time, create their own Information Age enterprise.
However, none of it happens until and unless we find the organizers, the Founders the visionaries. Without them, the rest will sit around permanently waiting for something to happen. And having something happen is absolutely essential. We are headed for a train wreck, the four horsemen of the Industrial Age apocalypse. They are technological unemployment, death of the Industrial Age city, The disintegration of the corporation and the loss of national identity.
This will take place between now and about 2025. Avoiding it is devoutly to be desired. This is accomplished by acquiring an Information Age career and lifestyle before the worst of it arrives. I call this the 'save the World by saving ourselves strategy.' You want to be involved in it.
I realize that these events, these calculations will likely cause a degree of Future Shock in most people. Keep in mind that in the Information Age, this will not be rich. It will be solid upper middle class.
Since the financial investment comprises about 20% of the company valuation, the owner-operators within our Community of Action will have a Market Value of 200 billion X 4 = 800 billion USD. Consequently, we are pointed at a future, for some as early as 2015 and for most by 2025, where the typical Member of our Community of Action will have a personal financial profile that looks like this:
| Net Worth | Annual Income | |
| As Owner Operator | 32,000,000 | 1,800,000 |
| As Passive Investor | 8,000,000 | 450,000 |
| Total | 40,000,000 | 2,250,000 |
From an ideological viewpoint, many people decry the current income and wealth disparity, primarily in the U.S. Here is the inescapable logic. The disparity can only be remedied in one of two ways. Either the majority of people will get much more affluent or society as a whole will need to get much poorer. The former is clearly better than the latter and that is what the Income Explosion is all about.
We are at a point in our history of great change. I quote John Maynard Keynes, '"I look forward, therefore, in days not so very remote, to the greatest change which has ever occurred in the material environment of life for human beings in the aggregate. But, of course, it will all happen gradually, not as a catastrophe. Indeed, it has already begun. The course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed."
We can excuse him for not seeing the paroxysmal event facing us right now. He got the rest exactly correct. In this strategy to save the World by saving ourselves, the biblical passage comes to mine, 'Many are called; few chosen - Many hear; few believe.' I am discovering the truth of this in today's situation. However, a few are enough.
Saturday, January 14, 2012
The Premium Subscription
The future is not as you are being told. It has been commandeered by groups that wish to forward their ideological viewpoint. This is important because, one, it means that the public discourse and, by extension, the creation of laws, policies and programs, are based upon a future that will never happen and two, you are basing your life planning upon a future that will never happen.
By subscribing to The Future 101 and dedicating one to three hours per week to its study, you can completely solve the second problem and, if there are enough subscribers, begin to make inroads on the first problem. If you become an ambassador for The Future 101, as many of my subscribers are, we can really change the public discourse to something far more productive. We can create what is currently missing with our political, intellectual and cultural leaders, an inspiring vision of the near future that can be positively affected by actions we can take today.
The Transformation is a set of twelve events that will completely reshape the world and usher in the global, Information Age civilization. Here, I provide an Abstract for each of the twelve events. The Future 101 premium service will provide detailed and fully cited articles exploring each event in depth. I will recommend additional reading assignments. Here, I also provide articles that elaborate on some of the more important events and interactions. These also will be greatly elaborated upon in The Future 101. Again, additional reading will be suggested.
While the next thirty years will be a complex time with much turmoil, to me, the most important message that The Future 101 contains is this.
Between 1875 and 2000 Real GDP per Capita in the U.S. increased by 1,286%. Through the implementation of advanced robotics and A.I., between now and about 2040, a similar percentage increase will take place. This time, nearly all of the world will catch up to the U.S. standard of living. This will drive virtually all of the world's population up Maslow's Hierarchy so that cultures will reflect a primary emphasis on esteem, self-actualization, personal development and transcendental issues. In other words, while counter-intuitive for many people, the Income Explosion will actually sound the death knell for materialism as a central theme of Western culture.
What does a 1,286% increase in household income mean, in practical terms?
The cultures of today are dominated by thoughts and discussions that revolve around the lower levels of Maslow's Hierarchy. The News is full of stories about hunger, homelessness, income disparities, poverty, inadequate health care and crime. For most people, it is extremely difficult to think outside of the box that insufficient income creates. What happens when we are liberated from these concerns? What happens when everyone has adequate shelter, food, clothing, health care and safety?
You should be thinking about it, because that is the world in which you will find yourself. That is the world within which public policies will be formulated and implemented. Clearly, we should, as a society, attempt to ameliorate current poverty and suffering within the context of our values. However, primarily we should be considering ways to hasten this approaching Gold Age. It is the positive and practical vision that is so desperately needed today.
The second most important message of The Future 101 is this.
Currently underpopulated regions will become the new centers of civilization. These population centers will be comprised of a lattice of boutique villages populated by highly affluent, very mobile communities that are generally defined by a Culture of Affluence. These areas, often coastal, tropical or subtropical and arid, will be enabled by new energy sources, desalination technologies and defarmed food production. They will lack national identity and will have negotiated cultural independence from the surrounding remnants of the Nation States. Because of the defarming, most of the world's land areas will become either natural or engineered biodiversity parks.
What is that likely to mean for you?
This vision of the near future, despite being completely at odds with the views promulgated by the ideologically driven "Pundits, Professors and Politicians', is rigorously supported in The Future 101 subscription. It is the future that you need to understand. It is the future for which you need to be planning. It is the future that you should assist in injecting into the public discourse.
The $54.95 per year and 50 or 100 hours of study per year of The Future 101 is going to make you, over time, a very well informed person. You will make superior life decisions because of it and you may even gain early entrance into this profoundly affluent Information Age civilization. It will also make you the informed and valuable ambassador for the positive future that awaits us. In this sense, I say that subscribing to The Future 101 is the first step in 'Saving the world by saving yourself.' I can't guarantee that subscription will indemnify you against the 'train wreck.' However, your prognosis will most assuredly be very superior to the one where you do not subscribe.
So, this is my 'hard close.' If we are to make significant improvements in the current outlook, we need to get influencers like you well educated on The Transformation. We need to build a community of people who are planning their Information Age future, not attempting to 'fix' their broken Industrial Age present. In other words, we need you to 1) subscribe to The Future 101 and then, do the work, 2) become an ambassador for the Golden Age by influencing your network and 3) create and implement a personal Information Age action plan.
This is the 'Save the world by saving ourselves' strategy. It is an altruism/self-interest win-win. Although it may not be apparent now, it is the only solution to the problems that face us. It is the only way to lessen the severity of the train wreck.
They say that the first casualty of war is the truth. Well, we are in a cultural war and the truth long ago was sacrificed to ideological goals. Every single day you are bombarded by News stories intended to drag you back to an Industrial Age world view and get you mired in fruitless political arguments. Article after article will give you evidence that one cultural mythology is correct or another one is false. It may involve Climate Change or income disparities or whether most people favor abortion rights or the death penalty.
If you turn a cynical eye toward your News sources you will see that virtually every article is either attempting to destroy or reinforce a moral, ethical, political or cultural attitude. Your vote is wanted. Your donation is needed. Whether it imparts an objectively supportable world view or a rational expectation of the future is not relevant. They are not interested in your education, they are interested in influencing your behavior.
When you subscribe to The Future 101, it is entirely different. We will look at an issue and then examine the evidence. The evidence will come primarily from peer reviewed papers and government white papers. It will not come from The Huffington Post or Scientific American or Town Hall save to contrast and compare the attitudes of Industrial Age ideologies.
The longest journey begins not with a single step but rather with the realization that one ought to be elsewhere. Are you on the correct road? Does the road take you where you think it does? Will the people you meet along the way be a help or a hindrance? These are questions that have answers whether you think about them a little or you think about them a lot. The Future 101 subscription will not answer all of them. But it definitely can make a valuable contribution to your understanding.
Lastly, because the community of subscribers will have forums, your subscription will also become a portal to an extraordinary community. These people, by virtue of their subscription, are clearly people of exceptional intelligence and well-tempered vision. As you read The Future 101 and learn about the Transformation, many potential career, social, political and cultural opportunities will likely occur to you. This community, as an added benefit, constitutes a valuable source of collaborators and investors for whatever projects you may wish to undertake. The more you and your fellow subscribers act as ambassadors for The Future 101, the larger the community will become and the more valuable an asset it will become.
So, in conclusion, I ask you to begin your road to the Information Age by subscribing to The Future 101. It is a nominal financial commitment. It is a somewhat larger time commitment. However, it is very small in both regards compared to, say, a college education or buying into a franchise. It is not the journey. However, if you have decided that you ought to be elsewhere, it is a first step. Of course, I do also welcome the intellectually curious.
Hope to see you inside,
Michael Ferguson
By subscribing to The Future 101 and dedicating one to three hours per week to its study, you can completely solve the second problem and, if there are enough subscribers, begin to make inroads on the first problem. If you become an ambassador for The Future 101, as many of my subscribers are, we can really change the public discourse to something far more productive. We can create what is currently missing with our political, intellectual and cultural leaders, an inspiring vision of the near future that can be positively affected by actions we can take today.
The Transformation is a set of twelve events that will completely reshape the world and usher in the global, Information Age civilization. Here, I provide an Abstract for each of the twelve events. The Future 101 premium service will provide detailed and fully cited articles exploring each event in depth. I will recommend additional reading assignments. Here, I also provide articles that elaborate on some of the more important events and interactions. These also will be greatly elaborated upon in The Future 101. Again, additional reading will be suggested.
While the next thirty years will be a complex time with much turmoil, to me, the most important message that The Future 101 contains is this.
Between 1875 and 2000 Real GDP per Capita in the U.S. increased by 1,286%. Through the implementation of advanced robotics and A.I., between now and about 2040, a similar percentage increase will take place. This time, nearly all of the world will catch up to the U.S. standard of living. This will drive virtually all of the world's population up Maslow's Hierarchy so that cultures will reflect a primary emphasis on esteem, self-actualization, personal development and transcendental issues. In other words, while counter-intuitive for many people, the Income Explosion will actually sound the death knell for materialism as a central theme of Western culture.
What does a 1,286% increase in household income mean, in practical terms?
- The average household income will increase to around 600K 2012USD.
- 80% of households will have incomes that would put them in the upper 1% today.
- The upper 20% of households will have annual incomes above 1.5 million 2012USD
- The minimum hourly wage will be about 95 2012USD
- If the poverty level remains a constant percentage of the minimum wage, the poverty level for a family of four will be 287,421 2011USD
- The average home price will be about 2.5 million 2012USD
- Because homes will be built to higher standards of quality in material and construction and will be highly automated, the average new home square footage will increase from its current 2,400 ft² in the U.S. to about 7,000 ft²
The cultures of today are dominated by thoughts and discussions that revolve around the lower levels of Maslow's Hierarchy. The News is full of stories about hunger, homelessness, income disparities, poverty, inadequate health care and crime. For most people, it is extremely difficult to think outside of the box that insufficient income creates. What happens when we are liberated from these concerns? What happens when everyone has adequate shelter, food, clothing, health care and safety?
You should be thinking about it, because that is the world in which you will find yourself. That is the world within which public policies will be formulated and implemented. Clearly, we should, as a society, attempt to ameliorate current poverty and suffering within the context of our values. However, primarily we should be considering ways to hasten this approaching Gold Age. It is the positive and practical vision that is so desperately needed today.
The second most important message of The Future 101 is this.
Currently underpopulated regions will become the new centers of civilization. These population centers will be comprised of a lattice of boutique villages populated by highly affluent, very mobile communities that are generally defined by a Culture of Affluence. These areas, often coastal, tropical or subtropical and arid, will be enabled by new energy sources, desalination technologies and defarmed food production. They will lack national identity and will have negotiated cultural independence from the surrounding remnants of the Nation States. Because of the defarming, most of the world's land areas will become either natural or engineered biodiversity parks.
What is that likely to mean for you?
- You will likely enter an Enterprise Network, undertake a new, highly lucrative Information Age career and 'jump to the Knowledge Class.'
- Over time, your Knowledge Class career will enable you to 'live anywhere.' There is at least a 50% chance that this means relocation to a 'boutique village', often in a different region of the world.
- Over time, while you may or may not retain an ethnic identity, you will likely replace your national identity with a cultural identity.
- You will plan for a 'Finely Crafted Life' that emphasizes a lifestyle facilitative of your unique interpretation of self-actualization.
- As the implementation of advanced robotics and artificial intelligence accelerates, technologically induced unemployment could exceed 20% before decreasing again.
- Put simply, with everyone moving to new locations and to much larger and higher quality houses, nearly all the current housing inventory will become functionally worthless. The Northern Industrial Age urban areas will begin to die.
- Corporations will fade to be replaced by Enterprise Networks. This means 'jobs' will permanently disappear in favor of owner-operators.
- The ascent of Maslow's pyramid will cause differences between groups to become principled and cultural rather than primarily economic. This, combined with several other factors, will tear the Nation State asunder.
This vision of the near future, despite being completely at odds with the views promulgated by the ideologically driven "Pundits, Professors and Politicians', is rigorously supported in The Future 101 subscription. It is the future that you need to understand. It is the future for which you need to be planning. It is the future that you should assist in injecting into the public discourse.
The $54.95 per year and 50 or 100 hours of study per year of The Future 101 is going to make you, over time, a very well informed person. You will make superior life decisions because of it and you may even gain early entrance into this profoundly affluent Information Age civilization. It will also make you the informed and valuable ambassador for the positive future that awaits us. In this sense, I say that subscribing to The Future 101 is the first step in 'Saving the world by saving yourself.' I can't guarantee that subscription will indemnify you against the 'train wreck.' However, your prognosis will most assuredly be very superior to the one where you do not subscribe.
So, this is my 'hard close.' If we are to make significant improvements in the current outlook, we need to get influencers like you well educated on The Transformation. We need to build a community of people who are planning their Information Age future, not attempting to 'fix' their broken Industrial Age present. In other words, we need you to 1) subscribe to The Future 101 and then, do the work, 2) become an ambassador for the Golden Age by influencing your network and 3) create and implement a personal Information Age action plan.
This is the 'Save the world by saving ourselves' strategy. It is an altruism/self-interest win-win. Although it may not be apparent now, it is the only solution to the problems that face us. It is the only way to lessen the severity of the train wreck.
They say that the first casualty of war is the truth. Well, we are in a cultural war and the truth long ago was sacrificed to ideological goals. Every single day you are bombarded by News stories intended to drag you back to an Industrial Age world view and get you mired in fruitless political arguments. Article after article will give you evidence that one cultural mythology is correct or another one is false. It may involve Climate Change or income disparities or whether most people favor abortion rights or the death penalty.
If you turn a cynical eye toward your News sources you will see that virtually every article is either attempting to destroy or reinforce a moral, ethical, political or cultural attitude. Your vote is wanted. Your donation is needed. Whether it imparts an objectively supportable world view or a rational expectation of the future is not relevant. They are not interested in your education, they are interested in influencing your behavior.
When you subscribe to The Future 101, it is entirely different. We will look at an issue and then examine the evidence. The evidence will come primarily from peer reviewed papers and government white papers. It will not come from The Huffington Post or Scientific American or Town Hall save to contrast and compare the attitudes of Industrial Age ideologies.
The longest journey begins not with a single step but rather with the realization that one ought to be elsewhere. Are you on the correct road? Does the road take you where you think it does? Will the people you meet along the way be a help or a hindrance? These are questions that have answers whether you think about them a little or you think about them a lot. The Future 101 subscription will not answer all of them. But it definitely can make a valuable contribution to your understanding.
Lastly, because the community of subscribers will have forums, your subscription will also become a portal to an extraordinary community. These people, by virtue of their subscription, are clearly people of exceptional intelligence and well-tempered vision. As you read The Future 101 and learn about the Transformation, many potential career, social, political and cultural opportunities will likely occur to you. This community, as an added benefit, constitutes a valuable source of collaborators and investors for whatever projects you may wish to undertake. The more you and your fellow subscribers act as ambassadors for The Future 101, the larger the community will become and the more valuable an asset it will become.
So, in conclusion, I ask you to begin your road to the Information Age by subscribing to The Future 101. It is a nominal financial commitment. It is a somewhat larger time commitment. However, it is very small in both regards compared to, say, a college education or buying into a franchise. It is not the journey. However, if you have decided that you ought to be elsewhere, it is a first step. Of course, I do also welcome the intellectually curious.
Hope to see you inside,
Michael Ferguson
Friday, January 13, 2012
Made for Internet TV
ABSTRACT:
As we explore in The Age of Boutique Everything, television is migrating to Internet delivery. That is certainly nowhere near as controversial a statement today as it was when I first started making it in the mid-1990's. However, the process, as exhibited by Netflix, Hulu, et. al is just starting. We have not yet got to "Made for Internet" TV which, over time, will come to dominate the market. We will, however, be there soon.
Based upon the research of Leta Hollingsworth and D. K. Simonton, approximately 4% of the population have a degree of sophistication in their News consumption preferences that cannot be satisfied, even with the smaller audiences enabled by cable television.' This unfulfilled demand will likely facilitate an Internet delivered News, commentary and analysis industry that will eventually grow to over 30 million viewers and produce revenues in excess of 10 billion 2012USD. The market will be segmented by Cultures of Affluence. Essentially, one's cultural values informs one as to what constitutes a relevant news story and what is likely to be considered objective coverage of the story.
The earliest entrants into the Made for Internet Market will likely be in the area of News, Analysis and commentary. In fact Glenn Beck just introduced the first significant success, gaining over 250K subscribers to GBTV.com It is quickly becoming a full service Internet delivered News netork. The degree of success he is enjoying suggests that this will be a very fast growth market.
Over time, the mainstream news and popular press will migrate to Internet delivery as well. However, because they have markets large enough to be supported on Cable TV, they will not be creating their content exclusively for Internet delivery at the outset. Ultimately, however, as the Income Explosion and the Cultures of Affluence change the News business, everything will end up Internet delivered. However, that will likely take a little more time.
Entertainment television is more about good story telling and emotional validity than intellectual sophistication. However, because the upper 5% or so will be early adopters of the Cultures of Affluence and actually do have somewhat different tastes, the market for "Made for Intnernet" sitcoms, dramedies and dramas could emerge any day and as dramatically as GBTV.com.
Internet delivered television will emerge in one of three ways. First, it may begin as a start-up television network similar to GBTV.com. Second, Web Television shows could increase in length until they reach industry standard 22 or 44 minutes. Third, Cable or broadcast shows that are cancelled due to overshooting the market often retain a relatively small but fanatically loyal followings that will gladly pay a download or streaming fee in order to continue the production of the show. All three will, no doubt, contribute to some degree.
Made for Internet television programming produced for the intellectually and/or culturally sophisticated market has an initial advantage in that its members tend to be early adopters, Internet capable and English speakers. The total market, although highly fragmented, may be as much as 30 million viewers. While this market traditionally has not consumed much television, the reason is likely that the programming has not been well matched to their tastes. We might assume that a better selection will increase consumption to 10 hours per week.
Cable Networks that produce original series, such as USA, SyFy, CW, Fox, Disney, etc., typically garner audiences of between 2.0 million and 5.0 million. Because Internet delivered television can charge what the market will bear, rather than what advertisers are willing to pay, there is no hard bottom to the number of viewers required to support a show. Depending upon production costs and price per episode, shows with less than 500K viewers world wide, however, could certainly be profitable.
Over time, there is evidence that the preferred format will be ten to twelve 90 minute episodes per season. Most of these will likely be dramedies such as Royal Pains and Warehouse 13 or straight dramas such as The Closer and House. While aggregating websites, such as Hulu, Netflix or the boutique homepages that will arise to satisfy Cultures of Affluence, will likely offer a per show streaming fee or individual episodes with embedded advertising, the market, reflecting the Income Explosion, will migrate toward season subscription downloads. Sitcoms, while likely not offered in 90 minute episodes will probably expand in length as the 'time slot' mentality of broadcast and cable fades.
The primary enablers of the move to 'Made for Internet' television will be Producers, Investors, Creators, Writers and Directors of the shows, themselves. As is the case today, many participants will likely fill several roles. It is unclear of the shows will drive the boutique homepages, the boutique homepages will drive the shows or if they will co-evolve.
A show with 500K viewers and a Season Subscription rate of $44.95 would have gross revenue of $22,475,000. The marketing and delivery aggregators will take 15%, leaving $19,103,750 for the producers. Talent, writers, director and actors, at current cost per viewer, would cost no more than $5 million leaving $14 million for production costs and profits. However, market forces will probably drive up talent costs and lower the profits somewhat.
30 million viewers watching 520 hours per year with 500,000 viewers per show would support about 1,700 shows. At $44.95 per season, total industry revenue would be about 39 billion 2012USD. Industry profits would like be about 4.0 billion 2012USD. Average income for the 12,000 or so creatives enabled would be over 1.5 million 2012USD. Nearly 2,000 passive investors could be supported at annual returns of 400 thousand 2012USD each.
The Future 101 is primarily an educational service. However, it is also a portal to communities of action. Whether a creative or just someone who thinks they can 'pick 'em' as an investor. Subscribing to The Future 101 will provide you with potential access to this developing industry. It is clearly a route toward early entrance into the Knowledge Class.
This Abstract is of an extended article that will be published in The Future 101 under 'The Age of Boutique Everything.'
As we explore in The Age of Boutique Everything, television is migrating to Internet delivery. That is certainly nowhere near as controversial a statement today as it was when I first started making it in the mid-1990's. However, the process, as exhibited by Netflix, Hulu, et. al is just starting. We have not yet got to "Made for Internet" TV which, over time, will come to dominate the market. We will, however, be there soon.
Based upon the research of Leta Hollingsworth and D. K. Simonton, approximately 4% of the population have a degree of sophistication in their News consumption preferences that cannot be satisfied, even with the smaller audiences enabled by cable television.' This unfulfilled demand will likely facilitate an Internet delivered News, commentary and analysis industry that will eventually grow to over 30 million viewers and produce revenues in excess of 10 billion 2012USD. The market will be segmented by Cultures of Affluence. Essentially, one's cultural values informs one as to what constitutes a relevant news story and what is likely to be considered objective coverage of the story.
The earliest entrants into the Made for Internet Market will likely be in the area of News, Analysis and commentary. In fact Glenn Beck just introduced the first significant success, gaining over 250K subscribers to GBTV.com It is quickly becoming a full service Internet delivered News netork. The degree of success he is enjoying suggests that this will be a very fast growth market.
Over time, the mainstream news and popular press will migrate to Internet delivery as well. However, because they have markets large enough to be supported on Cable TV, they will not be creating their content exclusively for Internet delivery at the outset. Ultimately, however, as the Income Explosion and the Cultures of Affluence change the News business, everything will end up Internet delivered. However, that will likely take a little more time.
Entertainment television is more about good story telling and emotional validity than intellectual sophistication. However, because the upper 5% or so will be early adopters of the Cultures of Affluence and actually do have somewhat different tastes, the market for "Made for Intnernet" sitcoms, dramedies and dramas could emerge any day and as dramatically as GBTV.com.
Internet delivered television will emerge in one of three ways. First, it may begin as a start-up television network similar to GBTV.com. Second, Web Television shows could increase in length until they reach industry standard 22 or 44 minutes. Third, Cable or broadcast shows that are cancelled due to overshooting the market often retain a relatively small but fanatically loyal followings that will gladly pay a download or streaming fee in order to continue the production of the show. All three will, no doubt, contribute to some degree.
Made for Internet television programming produced for the intellectually and/or culturally sophisticated market has an initial advantage in that its members tend to be early adopters, Internet capable and English speakers. The total market, although highly fragmented, may be as much as 30 million viewers. While this market traditionally has not consumed much television, the reason is likely that the programming has not been well matched to their tastes. We might assume that a better selection will increase consumption to 10 hours per week.
Cable Networks that produce original series, such as USA, SyFy, CW, Fox, Disney, etc., typically garner audiences of between 2.0 million and 5.0 million. Because Internet delivered television can charge what the market will bear, rather than what advertisers are willing to pay, there is no hard bottom to the number of viewers required to support a show. Depending upon production costs and price per episode, shows with less than 500K viewers world wide, however, could certainly be profitable.
Over time, there is evidence that the preferred format will be ten to twelve 90 minute episodes per season. Most of these will likely be dramedies such as Royal Pains and Warehouse 13 or straight dramas such as The Closer and House. While aggregating websites, such as Hulu, Netflix or the boutique homepages that will arise to satisfy Cultures of Affluence, will likely offer a per show streaming fee or individual episodes with embedded advertising, the market, reflecting the Income Explosion, will migrate toward season subscription downloads. Sitcoms, while likely not offered in 90 minute episodes will probably expand in length as the 'time slot' mentality of broadcast and cable fades.
The primary enablers of the move to 'Made for Internet' television will be Producers, Investors, Creators, Writers and Directors of the shows, themselves. As is the case today, many participants will likely fill several roles. It is unclear of the shows will drive the boutique homepages, the boutique homepages will drive the shows or if they will co-evolve.
A show with 500K viewers and a Season Subscription rate of $44.95 would have gross revenue of $22,475,000. The marketing and delivery aggregators will take 15%, leaving $19,103,750 for the producers. Talent, writers, director and actors, at current cost per viewer, would cost no more than $5 million leaving $14 million for production costs and profits. However, market forces will probably drive up talent costs and lower the profits somewhat.
30 million viewers watching 520 hours per year with 500,000 viewers per show would support about 1,700 shows. At $44.95 per season, total industry revenue would be about 39 billion 2012USD. Industry profits would like be about 4.0 billion 2012USD. Average income for the 12,000 or so creatives enabled would be over 1.5 million 2012USD. Nearly 2,000 passive investors could be supported at annual returns of 400 thousand 2012USD each.
The Future 101 is primarily an educational service. However, it is also a portal to communities of action. Whether a creative or just someone who thinks they can 'pick 'em' as an investor. Subscribing to The Future 101 will provide you with potential access to this developing industry. It is clearly a route toward early entrance into the Knowledge Class.
This Abstract is of an extended article that will be published in The Future 101 under 'The Age of Boutique Everything.'
Monday, December 26, 2011
Saving the World by Saving Ourselves
The political system is broken and is likely to be of little or no help in solving the problems of the next decade. In reality, it doesn't matter who is nominated or who is elected. It doesn't matter what political party or coalition controls the legislative bodies. The most that these outcomes will manage is to change the scenery on our road to Industrial Age perdition, i.e. the train wreck. Simply put, Information Age problems will not yield to Industrial Age solutions. In fact, as is the case with Technological Unemployment, the attempt to do so will actually exacerbate the problem.
Even if enlightened leadership attempted to implement Information Age solutions to the four horsemen of our particular apocalypse, the train wreck, their efforts would be successfully demagogued to a poorly educated and generally inattentive electorate. The enlightened leadership would be promptly voted out of office. Of course, this hypothetical situation has no relevance to the current, actual one. There is no potential enlightened political leadership anywhere in sight. I have tried to inform the political establishment about The Future 101, but to date, there has been no response. I expect none in the future.
In the U.S., in 2008, the Tea Party placed into Congress a significant number of Representatives and a few Senators who stand on principle and are not prepared to compromise with opponents that they believe to be entirely incorrect in their policies. While the nation has not moved particularly closer to the Tea Party - there is no Tea Party consensus anywhere in sight - the Republican nominating process and the critical swing districts, especially in the Senate, are still vulnerable. The Right may become even more intransigent.
Now, the Occupy Wall Street group is mobilizing the other side. It is quite possible that they will place into the next Congress, members who are unwilling to compromise with the Tea Party Caucus. This may not be an organized effort as it was with the Tea Party. They are intending to hold a National Assembly in Philadelphia on July 4, 2012. However, even if they are not successful in achieving the same level of organization, it is very likely that a significant number of very Liberal politicians will use the rhetoric of OWS to gain support. Given the enthusiasm sweeping the nation, it will probably work.
Information Age problems will not yield to Industrial Age solutions. On both sides of the political divide, that is what is being proposed. Between the increasing political gridlock and the inability to disengage from the battle long enough to see the larger, Information Age picture, our short term prognosis is poor. As I discuss extensively in The Future 101 premium site, any attempts to increase economic growth, whether based upon the Conservative's preference for supply side stimulation or the Liberals preference for demand side stimulation or any combination thereof will almost surely increase the unemployment rate.
To simplify our considerations here, remember AT&T's 'forklifts that drive themselves'. If the Conservatives provide incentives to business, as often as not, rather than investing in job creation, the businesses will buy the self-driving forklifts and, thereby, increase unemployment. If the Liberals provide more purchasing power, demand will increase, new facilities will need to be built and driverless forklifts, again, will increase unemployment. Clearly, Information Age solutions are required.
Certainly, rising unemployment and increasing income disparities between the emerging Information Age Knowledge Class and the prevailing incomes of the Industrial Age 'jobs' market are becoming cornerstones of the political divides. It is not perceived as an Industrial Age vs. Information Age problem, however, In fact, the recent rise of a clarion call for the 99% to rise up against the 1% is actually framing the problem in almost feudal terms. If Information Age problems won't yield to Industrial Age solutions, they most certainly won't yield to Agricultural Age ones.
The growth in income within the 1% has been primarily in 'business income' not salaries or capital gains. In other words, the 1% is getting its increasing income from the very same productivity gains that are causing the reduction in employment opportunities and remuneration for the 'workers'. This is not a cabal or a conspiracy of a passive investment class. In fact, if you subscribe to The Future 101 premium site, you will come to understand that the passive investor class is an endangered species. This is, in reality, evidence of the emerging Knowledge Class.
The arbitrary segregation of 1% from the 99% rather than the 2% from the 98%, or the 3% from the 97% is obfuscating the actual process that is taking place. Essentially, a growing Knowledge Class, with its characteristic seven figure incomes, is pushing out the old 1%. It is not yet dominating the upper 1%, but it will soon. It will then grow to 2%, then 3%, then 4%. This growth in the Knowledge Class when viewed as such rather than in a 'class warfare' 99% vs. 1% way, is really our only opportunity to avert, in any degree, the first item of the train wreck, the very high unemployment. In the end, the Knowledge Class will comprise about 20% of the population. By 2040, 80% of households will have real income that would put them in the top 1% today. The closer we can get to those numbers prior to the train wreck, the less severe it will be.
The mechanism of 'Saving the world by saving ourselves' is actually a bit more complex than that. When a person leaves an Industrial Age 'job' to become a member of the Knowledge Class, not only has (s)he averted the train wreck personally, they also are decreasing, by one, the number of workers competing for the disappearing Industrial Age jobs and, thereby, ameliorating the problems for those still in the Industrial Age. In other words, they are improving the supply and demand forces that are causing real wages to stagnate or fall.
Many of the Enterprise Networks, including the one I intend to start, Polymathica Enterprises, are structured around the emergence of a Culture of Affluence. These issues of culture are just as significant as the Economic ones of the Knowledge Class and technological unemployment. As we saw, political solutions to our Economic problems are futile. They are also useless in addressing our differences in values. In fact, in the 'Death of the Nation State, I 'argue that
Another person argued that 'reality trumps principles.' Indeed it does. We do, at times, compromise our principles because it is forced upon us by reality. However, that will not save us from the long string of examples of principled positions that are not forced by reality, such as the death penalty, abortion rights, tax policies, marriage laws, teaching evolution and intelligent design, etc.
There have been a few people who have tried to argue that we do share common principles, citing commitments to liberal democracy, etc. I will grant that there is some merit in that argument. The Cultures of Affluence that spring from the Western heritage will share some underlying principles that may not be shared with the Eastern, Indic or Islamic heritages. While we do share some common principles, to an increasing degree, we do not share enough of them.
I make the prediction that a first principle of the global Information Age civilization is that no person should be required to live under a body of laws, programs and policies that they consider to be fundamentally unjust. This seems an impossible goal for many, perhaps most, people. We have become inured to what we consider unjust laws. However, the emergence of The Cultures of Affluence and the cultural cocoons that will be created by culturally defined communities, both real and virtual, will undermine this willingness to accept what we consider to be systemic miscarriages of justice.
While this requires a substantial rewrite of the institutions of civilization, I believe the benefit is worth the effort. We are, perhaps, seeing the beginning of the process with the potential agreement between Future Cities Development, Inc. and the government of Honduras. Whether this is ultimately successful, the basic notion will prevail. It all begins with the construction of Enterprise Networks.
By creating these culturally defined Enterprise Networks and thereby creating a more positive vision of the future, we are relieving at least some of the pressure of the impending 'divorce' of America. People will slowly move from the fights, arguments and angry rhetoric of groups with essentially irreconcilable differences to discussions about the ways and means of living together but separately. While no system will ever be perfect, we will craft an acceptable one.
We are also building, through Enterprise Networks, the replacement to the Industrial Age corporation in advance of its actual demise. By doing so, we are creating an enabling environment for entrance into the Knowledge Class. We are also allowing our economy to make a soft landing in the post corporate world. It is worth pointing out again, that the 1% is gaining its income from Business Income, not from dividends or capital gains. This is evidence that the post corporate world is already emerging.
I would be the first to agree that creating an Internet business providing content, products and services to a highly nichified market is difficult. However, it will get easier as the traffic aggregators become more Information Age defined. When it is successful, a Knowledge Class member has been created. The live anywhere option is achieved and income will typically jump to Knowledge Class levels. As I discuss elsewhere here and explore deeply in the premium service, the '1,000 True Fans' logic is the logic of the Information Age. However, the numbers will be more like 100,000 virtual CD's sold at $15 each with the artist retaining 70% to 85% of the proceeds. Or, as in my case, 50,000 subscribers at $54.95 per year. These are not going to be exceptions. By the train wreck, these success stories could comprise 5% or more of the workforce.
Sadly, the last of the four components of the train wreck, the death of the Industrial Age cities has no good solution. By 2040 the median home price will be nearing 2.5 million 2012USD and 7,000 ft.². With the home price for a family at the poverty level being characteristically around 600K to 700K 2012USD, there will simply not be any market for 75% of the homes today. Not only are they too small, their density is too great and they are not of sufficiently high quality. They will be what the real estate industry now calls 'a tear down.' It is worth the value of the lot less the cost to remove the house.
In higher end areas this process is already well advanced. In my vicinity, 3,000 ft.² houses are being torn down and replaced by 8,000 ft.² houses. The smaller houses are almost never bought for occupancy. This is the beginning of a trend that will sweep the developed world over the next thirty years. Personally, your only defense is to join the Knowledge Class and get out before it happens to you. Macro-economically, this is both good and bad. Clearly an enormous amount of Net Worth will disappear. However, the rebuilding of the developed world and the creation of affluent communities in currently underdeveloped regions will create, primarily from 2020 onward, an unprecedented global Real Estate boom.
In all of these actions, we will be reducing the severity of the Transformation. For many of us, by the time the train hits the wall, we will be safely ensconced in a Culture of Affluence in a Knowledge Class career and, perhaps, even in a Boutique Village in an Information Age scaled house. For us, personally, the train wreck will be averted. It is unlikely that we can avert it for everyone. Most people will cling to the familiar to the very end. The Information Age solutions will be politically unfeasible to implement on a large scale. However, fewer victims of the train wreck, coupled with the much higher GDP of the Information Age, will make it, comparatively, much more bearable.
I do not know if, in my effort to get your subscription to The Future 101 and provide you with the practical tools of a community of action, I should emphasize that you are saving yourself or that you are saving the world. I do not see it as an either/or. I consider it to be most auspicious that we can do both - that, for once, self-interest and altruism are more or less congruent. Your decision is an ethical win-win.
Either way, if you are to be involved, your first step will be to subscribe to The Future 101 premium site. From there, perhaps you will choose to move on to Enterprise Networks and/or the True Fans strategy. In this way you are taking concrete and positive steps toward 'Saving the world by saving yourself.' You will be undertaking what is both a personally and societally laudable course of action. Once again, I look forward to seeing you inside.
With Warm Regards,
Michael Ferguson
Even if enlightened leadership attempted to implement Information Age solutions to the four horsemen of our particular apocalypse, the train wreck, their efforts would be successfully demagogued to a poorly educated and generally inattentive electorate. The enlightened leadership would be promptly voted out of office. Of course, this hypothetical situation has no relevance to the current, actual one. There is no potential enlightened political leadership anywhere in sight. I have tried to inform the political establishment about The Future 101, but to date, there has been no response. I expect none in the future.
In the U.S., in 2008, the Tea Party placed into Congress a significant number of Representatives and a few Senators who stand on principle and are not prepared to compromise with opponents that they believe to be entirely incorrect in their policies. While the nation has not moved particularly closer to the Tea Party - there is no Tea Party consensus anywhere in sight - the Republican nominating process and the critical swing districts, especially in the Senate, are still vulnerable. The Right may become even more intransigent.
Now, the Occupy Wall Street group is mobilizing the other side. It is quite possible that they will place into the next Congress, members who are unwilling to compromise with the Tea Party Caucus. This may not be an organized effort as it was with the Tea Party. They are intending to hold a National Assembly in Philadelphia on July 4, 2012. However, even if they are not successful in achieving the same level of organization, it is very likely that a significant number of very Liberal politicians will use the rhetoric of OWS to gain support. Given the enthusiasm sweeping the nation, it will probably work.
Information Age problems will not yield to Industrial Age solutions. On both sides of the political divide, that is what is being proposed. Between the increasing political gridlock and the inability to disengage from the battle long enough to see the larger, Information Age picture, our short term prognosis is poor. As I discuss extensively in The Future 101 premium site, any attempts to increase economic growth, whether based upon the Conservative's preference for supply side stimulation or the Liberals preference for demand side stimulation or any combination thereof will almost surely increase the unemployment rate.
To simplify our considerations here, remember AT&T's 'forklifts that drive themselves'. If the Conservatives provide incentives to business, as often as not, rather than investing in job creation, the businesses will buy the self-driving forklifts and, thereby, increase unemployment. If the Liberals provide more purchasing power, demand will increase, new facilities will need to be built and driverless forklifts, again, will increase unemployment. Clearly, Information Age solutions are required.
Certainly, rising unemployment and increasing income disparities between the emerging Information Age Knowledge Class and the prevailing incomes of the Industrial Age 'jobs' market are becoming cornerstones of the political divides. It is not perceived as an Industrial Age vs. Information Age problem, however, In fact, the recent rise of a clarion call for the 99% to rise up against the 1% is actually framing the problem in almost feudal terms. If Information Age problems won't yield to Industrial Age solutions, they most certainly won't yield to Agricultural Age ones.
The growth in income within the 1% has been primarily in 'business income' not salaries or capital gains. In other words, the 1% is getting its increasing income from the very same productivity gains that are causing the reduction in employment opportunities and remuneration for the 'workers'. This is not a cabal or a conspiracy of a passive investment class. In fact, if you subscribe to The Future 101 premium site, you will come to understand that the passive investor class is an endangered species. This is, in reality, evidence of the emerging Knowledge Class.
The arbitrary segregation of 1% from the 99% rather than the 2% from the 98%, or the 3% from the 97% is obfuscating the actual process that is taking place. Essentially, a growing Knowledge Class, with its characteristic seven figure incomes, is pushing out the old 1%. It is not yet dominating the upper 1%, but it will soon. It will then grow to 2%, then 3%, then 4%. This growth in the Knowledge Class when viewed as such rather than in a 'class warfare' 99% vs. 1% way, is really our only opportunity to avert, in any degree, the first item of the train wreck, the very high unemployment. In the end, the Knowledge Class will comprise about 20% of the population. By 2040, 80% of households will have real income that would put them in the top 1% today. The closer we can get to those numbers prior to the train wreck, the less severe it will be.
The mechanism of 'Saving the world by saving ourselves' is actually a bit more complex than that. When a person leaves an Industrial Age 'job' to become a member of the Knowledge Class, not only has (s)he averted the train wreck personally, they also are decreasing, by one, the number of workers competing for the disappearing Industrial Age jobs and, thereby, ameliorating the problems for those still in the Industrial Age. In other words, they are improving the supply and demand forces that are causing real wages to stagnate or fall.
Many of the Enterprise Networks, including the one I intend to start, Polymathica Enterprises, are structured around the emergence of a Culture of Affluence. These issues of culture are just as significant as the Economic ones of the Knowledge Class and technological unemployment. As we saw, political solutions to our Economic problems are futile. They are also useless in addressing our differences in values. In fact, in the 'Death of the Nation State, I 'argue that
- Politics is the art of compromise
- It is wrong to compromise one's principles
- We no longer share common principles
- Therefore politics is wrong
Another person argued that 'reality trumps principles.' Indeed it does. We do, at times, compromise our principles because it is forced upon us by reality. However, that will not save us from the long string of examples of principled positions that are not forced by reality, such as the death penalty, abortion rights, tax policies, marriage laws, teaching evolution and intelligent design, etc.
There have been a few people who have tried to argue that we do share common principles, citing commitments to liberal democracy, etc. I will grant that there is some merit in that argument. The Cultures of Affluence that spring from the Western heritage will share some underlying principles that may not be shared with the Eastern, Indic or Islamic heritages. While we do share some common principles, to an increasing degree, we do not share enough of them.
I make the prediction that a first principle of the global Information Age civilization is that no person should be required to live under a body of laws, programs and policies that they consider to be fundamentally unjust. This seems an impossible goal for many, perhaps most, people. We have become inured to what we consider unjust laws. However, the emergence of The Cultures of Affluence and the cultural cocoons that will be created by culturally defined communities, both real and virtual, will undermine this willingness to accept what we consider to be systemic miscarriages of justice.
While this requires a substantial rewrite of the institutions of civilization, I believe the benefit is worth the effort. We are, perhaps, seeing the beginning of the process with the potential agreement between Future Cities Development, Inc. and the government of Honduras. Whether this is ultimately successful, the basic notion will prevail. It all begins with the construction of Enterprise Networks.
By creating these culturally defined Enterprise Networks and thereby creating a more positive vision of the future, we are relieving at least some of the pressure of the impending 'divorce' of America. People will slowly move from the fights, arguments and angry rhetoric of groups with essentially irreconcilable differences to discussions about the ways and means of living together but separately. While no system will ever be perfect, we will craft an acceptable one.
We are also building, through Enterprise Networks, the replacement to the Industrial Age corporation in advance of its actual demise. By doing so, we are creating an enabling environment for entrance into the Knowledge Class. We are also allowing our economy to make a soft landing in the post corporate world. It is worth pointing out again, that the 1% is gaining its income from Business Income, not from dividends or capital gains. This is evidence that the post corporate world is already emerging.
I would be the first to agree that creating an Internet business providing content, products and services to a highly nichified market is difficult. However, it will get easier as the traffic aggregators become more Information Age defined. When it is successful, a Knowledge Class member has been created. The live anywhere option is achieved and income will typically jump to Knowledge Class levels. As I discuss elsewhere here and explore deeply in the premium service, the '1,000 True Fans' logic is the logic of the Information Age. However, the numbers will be more like 100,000 virtual CD's sold at $15 each with the artist retaining 70% to 85% of the proceeds. Or, as in my case, 50,000 subscribers at $54.95 per year. These are not going to be exceptions. By the train wreck, these success stories could comprise 5% or more of the workforce.
Sadly, the last of the four components of the train wreck, the death of the Industrial Age cities has no good solution. By 2040 the median home price will be nearing 2.5 million 2012USD and 7,000 ft.². With the home price for a family at the poverty level being characteristically around 600K to 700K 2012USD, there will simply not be any market for 75% of the homes today. Not only are they too small, their density is too great and they are not of sufficiently high quality. They will be what the real estate industry now calls 'a tear down.' It is worth the value of the lot less the cost to remove the house.
In higher end areas this process is already well advanced. In my vicinity, 3,000 ft.² houses are being torn down and replaced by 8,000 ft.² houses. The smaller houses are almost never bought for occupancy. This is the beginning of a trend that will sweep the developed world over the next thirty years. Personally, your only defense is to join the Knowledge Class and get out before it happens to you. Macro-economically, this is both good and bad. Clearly an enormous amount of Net Worth will disappear. However, the rebuilding of the developed world and the creation of affluent communities in currently underdeveloped regions will create, primarily from 2020 onward, an unprecedented global Real Estate boom.
In all of these actions, we will be reducing the severity of the Transformation. For many of us, by the time the train hits the wall, we will be safely ensconced in a Culture of Affluence in a Knowledge Class career and, perhaps, even in a Boutique Village in an Information Age scaled house. For us, personally, the train wreck will be averted. It is unlikely that we can avert it for everyone. Most people will cling to the familiar to the very end. The Information Age solutions will be politically unfeasible to implement on a large scale. However, fewer victims of the train wreck, coupled with the much higher GDP of the Information Age, will make it, comparatively, much more bearable.
I do not know if, in my effort to get your subscription to The Future 101 and provide you with the practical tools of a community of action, I should emphasize that you are saving yourself or that you are saving the world. I do not see it as an either/or. I consider it to be most auspicious that we can do both - that, for once, self-interest and altruism are more or less congruent. Your decision is an ethical win-win.
Either way, if you are to be involved, your first step will be to subscribe to The Future 101 premium site. From there, perhaps you will choose to move on to Enterprise Networks and/or the True Fans strategy. In this way you are taking concrete and positive steps toward 'Saving the world by saving yourself.' You will be undertaking what is both a personally and societally laudable course of action. Once again, I look forward to seeing you inside.
With Warm Regards,
Michael Ferguson
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