The 2nd Law (part 2) – My Issue with Ecological Sustainability and World Economy (Mankiw’s Ten Principles)


ABC_Towards_Ecological_Sustainability

Global Footprint and Ecological Sustainability

19th August 2014, planet Earth: humanity has exhausted all the biological resources provided by nature in one year [1].

According to Global Footprint Network, last 19th August was the Earth Overshoot Day 2014. That means, from 20th of August till the end of the year 2014, in order to support world consumptions and human activities, the world economy has to exploit natural resources, such as water, soil and gas, that nature is not able to recover back as usable as well as all the carbon dioxide emissions will not be assimilated by the ecosystem anymore.

Till 70s, human activities where below Earth’s biocapacity. From 80s, the world economy has always overshoot the biocapacity and it’s getting higher and higher every year. Financially speaking, is like withdrawing from a bank account more money than incomes: It’s not sustainable in the long run.

Way towards ecological sustainability (Mankiw’s Ten Principles)

According to Mankiw’s ten Principles [2], there are manly two ways\approaches that might promote ecological sustainability:

  1. Regulations
  2. Decision Making and Consumer Awareness

1. Regulations

Recalling the so called “invisible hand” of principle n.6, markets are a good way to organize economic activities:

Households and firms that interact in market economies act as if they are guided by an “invisible hand” that leads the market to allocate resources efficiently. The opposite of this is economic activity that is organized by a central planner within the government.

Meanwhile, Governments and policy makers can fix market inefficiencies, as stated in principle n.7:

When a market fails to allocate resources efficiently, the government can change the outcome through public policy. Examples are regulations against monopolies and pollution

Therefore, according to principle N.7, Governments and policy makers can regulate market ecological inefficiencies towards sustainability as well. For example, through incentives in renewable energies (see also principle n.2), taxes or regulations.

As an example, with regards to climate changes, Mankiw himself suggest (see A Carbon Tax that America could love with, New York Times [3]) to put a price (tax) on carbon emissions. In such a way, Governments, by charging a fee for each carbon emission, will “internalize the external costs” due to climate changes (hurricanes, global warm,…).

Prices of Product\Services with higher carbons emissions will have higher prices and thus people will be inactivated to buy other products with less carbon emissions (see also Principle N.2), look for alternatives, or even not to buy it (see also principle N.1).

2. Decision Making and Consumer Awareness

Since people have a limited amount resources in terms of time and money, behind each consumptions there is always a tradeoff.

That means, People Face Tradeoffs (principle n.1):

To get one thing, you have to give up something else. Making decisions requires trading off one goal against another.

As an example, in the same post concerning climate changes [3], Mankiw’s pointed out that people might decide to:

  • buy a smaller, more fuel-efficient car;
  • use public transportation;
  • eat more locally produced foods, which need less fuel to transport;
  • ….

as a trade-off for introducing in the ecosystem less carbon emissions and waste.

Therefore, people decision-making and how much people is sensitive toward sustainability issues when consuming, have an impact on the ecological footprint.

My issue about economic activities and (bio) sustainability

In order to achieve ecological sustainability, there are two approaches argued among economists, activists, biologists and mathematicians. One is through regulations (tax, incentives, agreements,…) and the second one through more responsable decision-making by consumers and firms.

Regulation approach concerns “How Economic Work as a Whole” Mankiw’s principles:

  • n.5: Trade Can Make every one better off;
  • n.6: Market are a good way to organize economic activity;
  • n.7: Governments can improve economic outcomes;

While, Decision Making is about awareness on biological impacts of consumptions. “How People Make Decisions”  are explained by the following Mankiw’s principles:

  • n.1: People Face Trade Offs
  • n.2: The Cost of Something is what you give up on get it
  • n.3: Rational People think at the Margin
  • n.4: People Respond to Incentives

Regarding regulations, Mankinw’s himself complained how difficult is to convince politicians to put a fee on a carbon tax. Elections debates are about reducing rather than increasing taxes [3] and usually people is not willing to vote a candidate who promotes new taxes.

Concerning Decision Making, some researches applied thermodynamics principles (2nd Law) to Economics (Thermoeconomics) and theirs conclusion was that each money transaction as well as consumptions is essentially a flow of energy [4][5].

Thus, no matter if the decision is to buy a smaller and more, fuel-efficient car or use public transportation: an amount of energy will be dispersed anyway.

But, what happen in everyday life when a new car is bought? Actually, there is a money flow from the consumer to the retailer.

Thus, since for each consumption there are either  a money flow and an energy flow, my issue regarding ecological sustainability of economy is:

Why not considering money as a measure of energy and biocapacity flows?

People use money as a tool for exchanges, and such interactions are described by the remaining three Mankiw’s principles (How People Interact):

  • n.8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services;
  • n.9: Prices Rise When the Government Prints Too Much Money;
  • n.10: Society Faces a Short-Run Tradeoff Between Inflation and Unemployment;

Some scientists already pointed out the missing link between Information Theory (Cybernetics) and social sciences (e.g. economy) as well as biologists have some concerns about sustainability of an economy based on endless growth.

Thus, how to create a link between human economy and the Earth biocapacity thanks to the achievements and researches in Economy, Physics, Biology and Cybernetic?

Decision Making and Policies have a key role for pursuing economy towards ecological sustainability, as described by Mankiw’s principles from number 1 to 7.

Nevertheless, till economy is not linked with natural environment and its limited biocapacity neither policies and more conscious behaviors towards sustainability will be effective since what is missing is how people interact: money flows and monetary policies.

With regardless to Mankiw’s principle n.2:

The Cost of Something is What You Give Up to Get It.

So, how much does it cost to give up to link economy with natural environment?.

There is an Optimistic View about a self-regulation of the world economy that, thanks to the supply-demand’s law, will guarantee an endless growth and energy efficiency as well [6].

However, relying mainly on the supply-demand’s law it is a reactive, rather than proactive, attitude towards sustainability.

Since economy is also a social science, having such an optimistic view it means forgetting what happened in the 18th century to the population of Easter Island: they dropped from 15.000 to 2.000-3.000 inhabitants because of an ecology disaster created by themself.

People of Easter Island realized supply-demand’s effect when it was too late for recovering their ecosystem and its biocapcity.

Economy, ecosystems and complex systems in general, have outcomes that are not predictable and controllable in the long-run.

Avoiding to consider the constraint of a limited Earth’s biocapacity, it means avoiding the risk of definitely compromise the entire ecosystem without any chance for recovering.

So the question is: would all humankind be reactive or proactive towards the ecological sustainability issue?

Feelink – Feel & Think approach for doing life!

Resources

[1]: Earth Overshoot Day. “Global Footprint Network“. http://www.footprintnetwork.org

[2]: N.Gregory Mankiw. Principles of Economics 6e. South-Western, Cenage Learning.

[3]: N.Gregory Mankiw. “A Carbon Tax that America could Love with”. New York Times. 01. Sept. 2014.

[4]: A. Annilla, S. Salthe. “Economy Evolves by Energy Dispersal”. Entropy. 11-2009. http://www.mdpi.com/journal/entropy/

[5]: M. Gong, G. Wall. “On Exergetics, Economics, and Optimization of Technical Process to Meet Enviromental Conditions”. International Conference on Thermodynamic Analysis and Improvements on Energy Systems. 10-13 June 1997. Beijing, China.

[6]: Buttonwood’s Notebook. “Energy use and Growth: an Optimistic View”. The Economist. 26 June 2013.

Social Media Magic Quadrant (Part 2): Ability to Search Content


Social Network Magic Quadrant

The second aspect of a social media that wants to lead is the ability search and provide meaningful content to users.

(see also Social Media Magic Quadrant)

When we need an information, where to look for it in the web? As a part of a marketing communication strategy, from a SEO perspective, knowing who is leading as a search engine is crucial in order to be visible and been known as a brand.

(see also: Sentiment Analysis in Semantic Search: Find Out What Others are Thinking About Your Brand).

In other words: be visible as a brand where most likely people goes to look for something.

According to @netmarketshare (July, 2014), Google is without leading with 68,75% of queries, then Baidu (China) with 18,03%. Other search engines such as Yahoo, Bing and Ask, are just striving.

Anyhow, how Google gained its leadership as a search engine? Which are the main abilities as a search content leader?

1. Giving what people are looking for?

Able to collect the information that people want to know, that is meaningful and useful. In one word, a search that is semantic = content + context.

Providing a result that is contextualized according to the network and interests is what can boost user engagements. Is what Yahoo is might attempt to achieve with the acquisition of Flurry (…unless it’s only speculation).

2. What about developing a brand as a search engine? Google is not only leading as a search content providers. It’s also the best workplace 2014 mainly because provides to theirs employers Great Challenges, a Great Atmosphere and Great work.life balance. It might be correlation relationship between the two fact or it’s simply a coincidence. Anyhow, will you buy a product or a service of a company that is recognized as bad employer?

What about SNs Strategies?

Considering how Google is investing in its social media platform (Google+), according to social media magic quadrant, my perception is that Google is attempting to switch from “SN Content Searcher” to a “SN Leader”. In others words, from a search content “of others” (platform) to a search content “of my own (platform)” leadership. Feelink – Feel & Think Approach for Doing Life!

New IT Innovation Development (N.IT.I.D) method Step 1: Brain Storming (Tripadvisor Case Study)


 

NITID-BrainStorming

Immagine that a business model described in “New IT Innovation Development NITID: Tripadvisor Case Study” is in place where new data is available for Tripdavisor:

1) the receipt (WHAT)

2) the client user ID (WHO)

3) the GEO position of the restaurant (WHERE)

The purpose of collecting such data is to ensure a better service for customers by ensuring an effective countermeasure against Negative SEO tactics.

Anyhow, is this really all? How such a new data availability might be exploited? This is the aim of the NITID method: find new business opportunities that might arise from data.

Commonly, in a creative process, the first step is brainstorming. By putting all the ideas on the table without any kind of criticism, judgments and filters, here below a list of new business opportunities that a brainstorming session applied to the Tripadvisor case might generate:

1) Facilitate the process of the reviews for users by updating a list of “pending reviews” to fill once a new bill in a restaurant\hotel has been recorded. In such a way the user, when log in to TripAdvisor’s website, doesn’t need to search for the restaurateur to be reviewed since a pending review connected to the restaurant\hotel is available  Furthermore, the number of total reviews will increase since the review process has been simplified for customers.

2) Create “customer experiences” through new visualization charts such as a map of visited restaurants and hotels and\or a social network that connect users together in order to share the experiences.

3) Engage customers by creating synergies with loyalty programs and companies (e.g.: Nectar) and provide gifts to customers who deliver more reviews.

4) Provide statistics and reports that might be useful to restaurateurs and hotel managers: trends, demand forecast, seasonality, sentiment,….

5) Establish an integrated supply chain by providing further additional services to restaurateurs and hotels. In particular, the demand forecasts should be shared with restaurateurs and hotels’ suppliers by recording all the food\goods consumed by linking them with the receipt. For example, a week in a room requires three units of soap or for cooking a steak in a restaurant are needed 100 grams of meat plus 1 mg of salt and 5 grams of olive oil. By using this data it’s possible to establish a logistic platform that might provide a competitive advantage both for buyer (restaurateurs and hotels) and suppliers. In particular, buyers, and especially small entrepreneurs that cannot invest and maintain complex IT infrastructures, might improve theirs inventory turnovers by having a more granular and detailed consumption of material. Meanwhile, local suppliers might have additional information regarding consumptions and level of inventories of theirs clients and thus enable more frequent on time deliveries and\or with a small amount. Such a solution might be useful for enabling an advanced Demand Driven Supply Chain (DDSC). EBay’s already told us with its “same day delivery” business model where small retailers have became a network of a distribuited inventory (see: “EBay expands same-day delivery in local battle with Amazon“).

Maybe, or better for sure, there are many and many issues regarding those new business opportunities:

Why changing and expanding the business model of Tripadvisor beyond core activities?

Why to invest in new relations, IT infrastructure, and skills?

What about the issue of data privacy?

Anyhow, making questions, having doubts and putting barriers are not allowed when brainstorming.

As when dreaming:

Logic will get you from A to B. Imagination will take you everywhere (Albert Einstein).

Feelink – Feel & Think approach for doing life!

Social Media Magic Quadrant (Part 1): Ability to Generate Content


Social Network Magic Quadrant

Recalling Social Media Magic Quadrant as a tool for assessing the strategic position of a social media website, there are two key aspects:

1) Ability to generate content

2) Ability to search and provide meaningful content for the single user (contextualized search)

Considering the ability to generate content, here below an interesting infographic by Dustin W. Stout that gives the measure of who is leading as a content generator.


Click the animation to open the full version (via PennyStocks.la).

Well, e-mail is still the most used communication tool as well as WhatsApp has gained a oustansting leadership of instant messaging by intercepting and disrupting SMSs from mobile phones. Something to consider also by all the mobile operators.

Regarding microblogging, there is no doubt that Twitter is leading against Tumblr in terms of number of posts generated.

Moreover, as expected, there is no competition between Facebook and Google+ considering the number of likes.

Anyhow, how a social media will lead as a content generator?

Number of active users?

Ability to engage people? Or What?

Share your thoughts.

Feelink – Feel & Think approach for doing life!

New IT Innovation Development (NITID) method: Tripadvisor Case Study


NITID-Tripadvisor

How to fight Negative SEO tactics? Think about the case of Tripadvisor and imagine a business model as below:

1) eat a meal in the restaurant (e.g.: “La bella vita”) pay the receipt with a User ID Card (e.g.: loyalty\member card).

2) Then the consumption will be sent and registered in a TripAdvisor data base as “consumption to be reviewed”. That could be nowadays even easier than 10 years ago if you since the technology available such as card reader, smartphones, apps, are cheap and well-known by end users

3) You go home and since you have enjoyed the delicious spaghetti at “La bella vita” you decide to post a review in Tripadvisor. Since there is a consumption associated to you, your review will be validated and thus not consider as Positive\Negative SEO tactic.

4) The competition around “La bella vita” is challenging and the main competitor, “The Beagle Boys’s Pizza”, pretty tough. “The Beagle Boys” is highly pushing a Negative SEO tactic and they usually attempt to write bad reviews against “La bella Vita”. Unfortunately, since no consumption is pending as “to be reviewed”, the comment in Tripadvisor will be not considers as valid.

Well, such a business model might fix definitely the issue of Negative SEO for Tripadvisor and make their service much more useful for consumers…

…but, is that really all about implementing such a business model?

I mean, how is possible to fully exploit the investments needed for developing a new IT infrastructure?

Well, new data is actually now available for Tripadvisor since many consumptions are tracked. In particular, three key aspects has been registered:

1) WHAT (spaghetti)

2) WHO (user ID)

3) WHERE (GEO position of the restaurant)

That is actually what a BigData initiative is: leveraging the data available inside as well as outside the company not only for improving the core business but also for developing new ones.

How? By using a N.IT.I.D method: New IT Initiative Development.

Coming soon.

Feelink – Feel & Think approach for doing life!

Social Media Magic Quadrant: who will be successful? The key of a linkage with search engines


Social Network Magic Quadrant

Around the world many Social Networks are in place, many just born and many other just died.

Level of engagement, usability and giving to final users which information to share are more likely what a SN should develop in order to be successful nowadays.

Anyhow, who among the big ones like Facebook, Twitter, LinkedIN, Google+,… will survive also in the future?

Which are the key factor of success in this race?

I guess that for leading as a Social Network one key ingredient is required: a strong linkage between the content (+context) and a well-known search engine.

That’s because when people would know something more about a topic, company or person, usually type a key word in a search engine or in a Social Network as well. Therefore, having meaningful content that is delivered\promoted as results of the search engine is what will lead a social media to success.

On the other side, a search engine has to defend its brand (because they have it!!!). A search engine wouldn’t return results with bad contents and\or from people with bad reputation. Thus, the algorithm of a search engine should defend its brand by providing good contents from trusted social networks.

Well, probably, among the big ones who has the strongest linkage between a Social Network and a search engine is Google: Google+ (SN) and Google search (Search Engine).

However, despite Google search is the most used search engine, Google+ is not leading as a content generator and thus able to reach a critical mass of contents. Promoting Google+ by engaging as much (trusted) users as possible is part of its strategy, as far as I realized.

On the other side, according to its Merge & Acquisition , the most popular SN, Facebook, doesn’t seem to show an interest on promoting to user as well as investing on a search engine. Who will win? We’ll see.

Meanwhile, other SNs have already shown how the linkage with a good search engine is strategic. Think about LinkedIn that is widely used by hiring manager for screening candidates.

Recalling the fairy tale Snow White and the seven Dwarfs:

Mirror, mirror on the wall, who’s the fairest of Social Networks all?

(see also: Semantic search algorithm, behaviorism and fairy-tale Snowwhite with the seven dwarfs. Would SEO behave like Grumpy?)

Snow White and Semantic Search

Snow White and Semantic Search

Feelink – Feel & Think approach for doing life!

P.S.: By the way, will Gartner Inc. approve the Social Media Magic Quadrant? ;)

New IT Innovation Development (N.IT.I.D.): a new business model generator at a glance


NITID Process

Once understood the second side of technology: technology as a catalyst to change business models

(see also: Firm Infrastructure Vs Catalyst to Change Business Models (part 2): New IT Innovation Development (NITID))

  • How to develop new business models that anticipate customers’ needs and market’s trends?
  • How to make IT innovation fully sustainable also by using all the data (inside & outside the company)?
  • How to manage technology disruptions?

Here a “N.IT.I.D.” tool to address such an issue of nowadays businesses of whatever industry.

5 steps:

1. Brainstorming (lateral thinking):

Ok, a new technology or improvement has come out… which might be impacts on the business and society? How can be used for market effectiveness?…in other words, what to do? Starting by thinking to a solution is the best way for achieving a failure.  In a good brainstorming stage all the business impacts related to customers’ needs and stakeholders should be written down without any kind of criticisms. A good brainstorming stage rely on people with different mindsets, lateral thinking and should generate as much options as possible. In one world: chaos

(see also: Chaos vs. Determinism: why not both? From evolutionary theory to BIG Data challenge)

2. Simplify (vertical thinking):

A list of ideas that might have no sense (apparently!!!) has been written down. It’s time to make order upon the chaoby giving to each idea a title. An image that simplify the idea in one #hashtag. Then, remove all the ideas that are redundant because the have the same image, title or #hashtag.

Then, rank all ideas (e.g.: team members votes) and eliminate the ones less relevant. For example, keep only 30 ideas out of 200\500 initially generated.

3. Organize (vertical thinking):

With a simplified list:

  1. first level groups: unify the remaining ideas into rational association (criteria) affinity groups
  2. rank the groups. (e.g.: each member of teamwork assigns 1,3 or 6 point for each group of ideas)
  3. second level groups: group again the unified ideas into a rational association affinity group (another criteria)
  4. for each second level group, summarize a general topic (avoid a list of ideas) or a common theme.
  5. identify relations among groups (correlations, dependencies).

4. Evaluate Solutions (lateral & vertical thinking):

Now it’s time to think about a solution: how to develop a solution that meets the needs and opportunities that has been previously brainstormed, simplified and organized?

Many solutions should be brainstormed again and evaluated according to a list of “key performances” that are needed for implementing the new functionalities (needs).

That’s more likely the most challenging stage since both lateral and vertical thinking are required for generating new solutions and for evaluating them according to the key performances required from customers.

5. Select Solution (vertical thinking):

A list of selected solutions and possible business models that are possible thanks to IT innovations and technology improvements are now available with an evaluation that is linked with key performances. How to select the only one that is sustainable and worth to develop?

That is the final Selection stage where each solution is compared and assessed against accordingly what is already provided by competitors.

An example of how N.IT.I.D. process might be helpful in order to find opportunities and threats (disruptions) from IT and technology innovations?

Recalling the issues of Negative SEO:

(see also: Tripadvisor: a case study to think why bigdata variety matters)

…how to improve a service like the one of TripAdvisor closer to customers’ needs?

…stay tuned ;)!

Feelink – Feel & Think approach for doing life!

BigData & SupplyChain: a S.W.O.T. analysis


Strengths , Weaknesses, Opportunities and Threats (S.W.O.T.)

  • Strengths:

Implementing analytic tools with the technology available nowadays (RFID, GPS,…), that is getting cheaper and cheaper, will enable gathering insights and information about logistic and operations on a real-time basis. This means reacting faster and faster to issues.

  • Weaknesses:

Analytic skills should be developed in order to break the barrier between such amount of data and the meaningful information for a certain business. Inaccessible data are both useless and a missed information.

  • Opportunities:

Scouting might be easier. Moreover, a demand driven supply chain (DDSC) approach might be expanded by sharing more and more data with key partners and by gathering insights from the market: from customers as well as customers of customers and thus anticipate trends and innovations rather than rely mainly on unreliable forecasts.

  • Threats:

Be disrupted by other innovations. This is what might happen whenever a new business model, closer to customer needs (or that creates new needs), is created thanks to IT innovations. New business model = New network of suppliers.

Ignoring the opportunities behind IT innovations means ignoring the risk of being disrupted. On the other side, an excess of enthusiasm towards BigData is as well a risk to fall in one of the 5 bigdata S.L.I.P.S. if no analytical and business acumen are developed.

BigData-SupplyChain_SWOT

 

 

Feelink – Feel & Think approach for doing life!

TV Audience and Tweets Flow: a great beauty or bigdata SLIP n.1 for marketing communication strategists (statistic)?


TV_Audience and Tweets: a big beauty or bigdata SLIP n.1 (statistic)?

After being awarded as the best foreign language movie (Italy) Academy Awards 20014, The Great Beauty, directed by Paolo Sorrentino, got an outstanding audience last week when it was broadcasted in Italy in TV prime time.

Comments and opinions about the movie apart (I would recommend to see it), providing trends and flows among social medias is getting more frequent every day. Few day ago, it has been posted by the Italian TV Network that transmitted the movie, a “statistic” (here) regarding the Tweet flows with the purpose to explain when twitters’ peaks happened as well as gathering the main influencers.

Accordingly to a third party analysis, twitters’ peaks happened at specific moments: 1) a meaningful sentence by Jep Gambardella, the protagonist, 2) when the Sabrina Ferilli (famous Italian actress) showed up in the movie with all her beauty and 3) at the end of the movie.

Very interesting. However, looking carefully at the charts (see figure above) I have noticed two things:

  1. Twitters’ peaks happen concurrently with a temporary decline of the TV audience (share). Thus, a correlation (negative) between peaks in Twitter and TV Share exists.
  2. The Twitters’ peaks and audiences’ downturns occur with a perfect timing: one each 30 minutes.

Since advertisements’ stops during TV shows, and radio broadcasts as well, are previously defined according to a specific TV time clock…

…well, I am wondering: Is there also a cause-effect relationship between advertisements’ stops during TV programs and the peaks registered in Twitter?

Who knows. An answer should be provided only analyzing data and real facts carefully. For example, why not putting chips in our home that register and transmit also when the refrigerator has been opened to bring something to eat or even when a WC has just been flushed? Other stimulating correlations might be found by gathering such kind of data.

Anyhow, finding correlations it’s quite easy. Just observe what happen. Finding causation relationships is definetely much more tricky (see also BigData S.L.I.P.S. n.1: statistic) since a deep knowledge of what is going to be analyzed is required and it is quite easy to fall into wrong assumptions. In this case, the beauty of human behaviours.

By the way, concerning the connection between Tweets and TV shows, last year Twitter and BBC America have established a partnership for advertising (see Mashable, Twitter Partners With BBC America to Promote Branded Videos).

Maybe it’s just a coincidence… or maybe Twitter and BBC have the information that when people go to the toilette is just for posting a tweet and not beacause of a TV break ;)

Feelink – Feel & Think approach for doing life!