I'm at the Milken Institute Global Conference, Shaping the Future. It's Davos-scale, 3,500 people, dominantly financial, though laced with energy types and health and medical people (the Institute is trying to do for global warming what their Faster Cures approach did for prostate cancer [lower death rates by 20%]).  More on this conference in later posts.

Now though, consider this: last year, the 3,100 people who attended accounted for $4.5 trillion under management. That means every pair of Tanino Crisci's walking down the hall by the sponsors' tables averaged about $150 million of financial decision-making power. Which sponsors get the most attention?  The financial institutions? Nutrition companies? Real estate?

The ones giving away shiny pens.

This week, the New Yorker's Jim Surowiecky reports on the rising wages of skilled workers in India, and the paradoxical reductions in investment in higher education there, drawing the implication that India's growth cannot continue at its current pace because the supply of skilled labor will not expand commensurately and, as wages rise, the flow of foreign investment will decelerate.

Today, the New York Times reports that despite Romania's economic growth of 7% in 2006, more than 8% of the population have left to work in Western Europe, creating a shortage of workers. The story focuses on a Swiss company that employed Romanians until 2003, but now is importing Chinese workers because of the rising cost of local labor.

Yes, this is another “World Is Flat” story, but with a different angle.  Tom Friedman, (who waited for the boom/bust/boom cycle to turn before trumpeting to the political classes what people who understood the web had foretold ten years earlier) focuses on the contribution connectivity makes to the mobility of work--call centers in India being the now-tired exemplar.

The Romanian story suggests that not only is the work mobile, so are the people.  The European Union, of course, has made one of the great strides in affording people the mobility to seek their highest and best use.

In the 1960s, the term "Brain Drain" suggested the default assumption that people stayed put, and it was the exception for a few elite individuals to relocate.  But as the opportunities in other nations become more visible to all, the barriers that have protected local job markets are falling, and labor markets become more efficient.  The Economist published a good overview of this trend last October, concluding that “the brain drain is giving way to brain circulation.”

One of the implications that seems to me to get too little attention in the political press is the straightforward fact that US workers are overpriced in the world market, though of course there are specific exceptions. This means that average US wage growth will continue to stagnate until equilibrium is reached, just as under priced Indian resources will continue to experience strong wage increases.

Since this is result of unstoppable trends, we’d better start revising our assumptions about what healthy wage growth to expect in the US. Otherwise, political pressures to show growth in real wages will lead to inflationary economic policies, trade policy that harms consumers, and a decline in US innovation as we close our Universities to students.

It’s been said dozens of ways that the Net decentralizes and democratizes communications (a favorite is The Wealth of Networks). One of the prominent consequences is that companies are losing control of their brands, sometimes to their advantage, sometimes not.

In twelve hours I was struck by three examples of the decentralization of power, none of them a new story in itself, but as a set interesting in illustrating that the “brand” issue applies equally well to geopolitics, national politics, and a net-based business.

First, on this week’s episode of 24, the Vice President Otherwise Known as Cheney orders a nuclear strike against a Middle Eastern state although there is no evidence that the Middle Eastern nation has anything to do with the catastrophes that are befalling the U.S.—a collection of non-state actors is responsible. The state had lost control over the actions and intent attributed to it. (It would be nice if this were fiction.)

Second, a mashup Apple’s 1984 Superbowl ad and Hillary Clinton’s words and videos has been watched 2.8 million times. The final image features the Obama campaign’s website. The Obama campaign denied having anything to do with the video. Is this loss of control good or bad for him? Can’t tell yet. It’s been good for the Huffington Post and the person who made “Vote Different,” whose statement is here.

Third, MySpace, trying to maintain economic control, may lose the value of what it’s controlling. MySpace worried that entrepreneurs like Tila Tequila (famous for linking to 7 milllion friends) were using MySpace to make money that MySpace had meant to keep for itself. Tequila posted a widget allowing fans to download her music and pay her money, so MySpace management banned the use of this kind of software. So Tila and others are talking of moving on to the next venue.

The Times quoted Justin Goldberg, chief executive of Indie911 saying, “We find it incredibly ironic and frustrating that a company that has built its assets on the back of its users is turning around and telling people they can’t do anything that violates terms of service. Why shouldn’t they call it FoxSpace? Or RupertSpace?”

Continuing, the article cited Fred Wilson, a New York VC: “Every attempt everyone has ever made to try to dictate what a person’s Internet experience will be has ended up coming up empty.”

These three examples are skirmishes randomly selected by their contemporaneity from the battle between traditional expectations of control over reputations, information, products themselves, and the decentralization of power mediated by networks. Walt Wriston, former Chairman of Citicorp, pointed out in 1992 that as the world’s money markets became connected, nations would lose control of their money supplies.

Now that the world not only relies on, but pretty much behaves like, the Net, the kind of control that states, leaders, and companies have assumed in the past is disappearing just about everywhere. We’d better start changing that assumption.

If you came to this page responding to our email, you know that the Harvard Business Review has made available to us a FREE download of their NEW list of Breakthrough Ideas for 2007 FOR A LIMITED TIME ONLY--until February 26th. Click the link to receive or purchase a copy.

If you came independently, please help yourself regardless.  And if it's after the 26th, the link will still be live, but it won't be free.

I was delighted of course to have the idea of WorkNets, central to our thinking at Monitor Networks, included on the list. Equally, though, given this blog's mission of showcasing the people in our Talent Network, it's nice to see the work of Clay Shirky represented, as well as our friends Duncan Watts and Eric Von Hippel.

And one amusing note.  On the cover of this issue, you'll see an article on Understanding Customer Experience, by Christopher Meyer. That's not me.  Chris Meyer "West," as he's known around here, has been writing and consulting around innovation issues for 30 years or so, and wrote a book called Fast Cycle Time. When I came out with BLUR,  I'd already been introduced to Chris by my co-author, Stan Davis.  I called Chris to discuss how to differentiate ourselves--should I use my middle initial, or by "Chris" instead of "Christopher," etc.  We concluded that we were so well aligned in our views that neither of us would mind having the other's thinking attributed to us, and that if we both used the same name on our publications each of us would be likely to get credit for the output of both of us, so that's how we left it.  It's worked pretty well, even to the point that one has been invited to speak and the other has ended up doing the speaking (not without the client's knowledge, of course.) Now HBR has blown our cover but putting us both between theirs.

If you've visited here before, you'll notice a change in the FutureMonitor site.  More than a thousand of you are registered, and we know many others from the Monitor Networks community have lurked regularly, so I want to be sure we tell you what's different, what's not, and why we've made a change.

FutureMonitor mission has been to "identify the trends that will matter most in two years, through the conversation of a global sensing network."  We called it a "Wisdom of Crowds experiment," hoping a broad population would sense, evolve, and select the clues to the near-term future.  What we learned from this attempt was that, while feedback for the concept was very enthusiastic, people have a high threshold before they will contribute, and that the energy required on our part to overcome this hurdle is considerable.  So we began looking for a model that would make it easier for us and easier for you.

The new version has the same mission--to identify the most important near-term trends. But we're bringing some new resources to bear. Since we began FutureMonitor, we at Monitor Networks have grown our Talent Network to critical mass. Members are leaders in business, science, and society whom we represent for speaking and other engagements. (See Monitor Talent)  While not exactly a crowd, this group represents a set of wise "over the horizon"  observers in many different fields. Now we have the opportunity to stand on their shoulders.  In this space, I'll be posting excerpts from their writings and other media to provide a collective view of what's important through their eyes. I'll be writing in blog format, partly to try to provide some continuity among these diverse contributors, and partly because this approach makes it easy for you to offer a quick comment--or more if you feel like it. I'll be writing in the same spirit.  (Also, don't expect a 4-posts-per-day blog--posting will be driven by the availability of good content. Also mood.)

We hope you'll find our contributors individually and collectively insightful enough to visit a few times each month. We'll be letting registered members know when there are new major postings (you can opt out, of course), or you can subscribe to the RSS feed. We hope that, because our input is more focused, and the effort needed to comment lower, we can broaden the community faster and ignite the evolution process. And we'll keep experimenting--as Clay Shirky pointed out in the Harvard Business Review's Breakthrough Ideas of 2007, the web affords the luxury of inexpensive trials.

Is collaborative filtering (the generic term for the techniques by which websites decide what to recommend to you based on the behavior of others) getting better or worse? Looking at a recent email from Amazon, I was first impressed by the diversity of themes they correctly identified as interesting to me....

...Then I looked a little deeper and saw that each choice was a pretty straightforward extrapolation from something I'd purchased before, rather than a surprising recombination of my tastes and those of other customers.  (Ok, except for the C++ Primer--no clue.) Curious, dear reader, what your experience has been lately: are iTunes, Amazon, CNET, et al bringing interesting surprises to your attention?

[edit to add: Before I could get the foregoing posted, Netflix answered the question. On Oct. 2, it announced the creation of the "Netflix Prize," an award of $1 million to the first person who can improve Netflix's recommendation process by 10% or more. The company's real ante is that it'll make 100 million of their customers' movie ratings available for analysis--a boon to students of collaborative filtering everywhere.

Netflix's current system is highly regarded by filtering experts, but improvement has stalled and the company is turning to the biggest possible network for help. Said CEO Reed Hastings to the New York Times: "If we knew how to [keep improving the system ourselves]," CEO Reed Hastings told the New York Times, "we'd have done it already. We're pretty darn good at this now. We've been doing it a long time."

In other words, the insider pros have had their crack. Now it's everybody's turn.]

From the Sept. 27 New York Times:

It was only a matter of time before a homemade commercial appeared during the Super Bowl.

 

And now it is happening.

 

Frito-Lay and Chevrolet, looking to capitalize on the buzz created by user-generated content, are holding ad-making contests, with winners getting money and prizes and their spots used as part of Super Bowl XLI campaigns. Some of the spots will also appear online, giving them a chance to be spread around the Internet virally....

 

--The New York Times, Sept. 27, 2006

Shortly after the iPod came out, Kevin Kelly extolled to me the joys of shuffling your entire music collection, sitting back, and savoring a sequence of surprises. I was with Kevin again two nights ago, and he had a new media mash-up meme: “DVD video.” This means viewing TV shows, originally shown one episode per week, as a continuous movie: “24” marathons, in which people stay up for the 17 or so hours required to watch the complete season, constitutes extreme DVD TV.

Both of these make sense. Music albums, for the most part, are not constructed for continuity, so the shuffling with other albums is not destroying artist intent, but many TV shows build on continuity so watching the story as an elaborate movie can be rewarding (especially for Nicholas Nickleby fans) if you don’t mind seeing Elisha Cuthbert being abducted every 75 minutes.

Where else could re-juxtaposition be interesting? Looking at the year’s email from a single person can be informative. In what for me was one of the high points of the show Commander In Chief,  Geena Davis’s character, preparing to deliver her State of the Union Address, watches a series of clips of Eisenhower, Kennedy, Johnson, Ford, Carter, Bush, and Clinton giving their own speeches. In about 90 seconds of TV, one was presented with a history of the political discourse of the U.S.

Digital media make signal processing easy, and in one sense that’s what all of these examples are, just as much as Danger Mouse’s Grey Album. But speaking of mash-ups, what if we combine Kevin’s two approaches: would Kevin watch a DVD TV shuffle, interleaving episodes of House, 24, Gilmore Girls, Project Runway, Law and Order: SVU, The Sopranos, and Lost?

A recent long feature in the New Yorker took up the debate about "citizen journalism"--the internet-enabled coverage of events and ideas by the countless amateurs on the ground. Nick Lemann argues that far from being the pathbreaking eventual replacement for establishment news providers, citizen journalism never equals actual journalism and never will. "The content of most citizen journalism will be familiar to anybody who has ever read a church or community newsletter," and none of it "yet rises to the level of a journalistic culture rich enough to compete in a serious way with the old media--to function as a replacement rather than an addendum."

Lemann closes with: "Journalism is not in a period of maximal self-confidence right now, and the Internet's cheerleaders are practically laboratory specimens of maximal self-confidence.... As of now, though, there is not much relation between claims for the possibilities inherent in journalist-free journalism and what the people engaged in that pursuit are actually producing. As journalism moves to the Internet, the main project ought to be moving reporters there, not stripping them away."

I've got no quarrel with Lemann's general assessment of citizen journalism to date, but I differ with the way he frames the debate. Three observations come to mind.

1)    No medium vanishes. A media-consultant pal, Peter Kreisky (you can see his website here), likes to say that no medium ever totally disappears. As new media possibilities arise, each finds its highest and best use and every other medium jostles around a bit to find its remaining, presumably smaller, niche. Stone tablets are still used for cornerstones and gravestones. Journalism, with its rules of evidence and fairness and editorial brands, isn't going to vanish, no matter what the web does to it--so the outcome isn't binary.

2)   It's not us-vs.-them. That binary assumption is an investigative dead end. And it shows up in several aspects of the citizen journalism debate. (I'm not picking on just Lemann here; this is true about the debate generally.) Like most assessments of online journalism this article presents the schism as us-vs.-them, and asks which kind of "journalism" is better--so what we're left with is thesis and antithesis but no synthesis. Yet, as Kreisky is pointing out, synthesis will happen. Citizen journalism will take its place alongside professional journalism in the infosphere. Connectivity will in fact turn out to be a boost for both kinds of journalism. We’re seeing this already, as the Washington Post, for example, reports on and hosts blogs.

3)   Sensing, Editing, Action. To anticipate what the synthesis might be, let’s deconstruct the journalistic process that is discussed in the New Yorker piece, and divide it into sensing, editing, and action. Citizen journalism's has an enormous advantage in sensing. Anyone on the ground can report a spotting of excessive effluent emission or any other event—so the web can become what John Seely Brown called a “giant retina stretched over the planet,” and can be present in places and at times when professional journalism can’t, the more so as news organizations shrink their overseas bureaus and can afford fewer, not more, sensors.

And the editing step, applying perspective and priorities to the flood of potential news? Is that up to the consumers of news, choosing their RSS feeds and structuring their Google home pages, or to the Editor-in-Chief? Still an open question. It is clear that in today’s web environment all kinds of conspiracy theories and other conclusions get created that would be better left unpublicized, although there are exceptions. Think of that infamously problematic Intel chip and how it was pinned down by mathematicians who actually amassed the data to demonstrate it was flawed--an example of fact checking and story verification that would have been extremely slow and difficult through traditional means.

Then there's action. On the one hand, the influential traditional media have so much potential to create action that, I would argue, they don’t use it. They’re scared to use it. To be fair, they don’t see themselves as in business to change the world. But citizen journalism, Lemann argues, doesn't even have that action-prompting power in the first place. He notes the two often-cited examples of bloggers taking down Dan Rather's report on Bush's National Guard service and also bringing down Trent Lott by reporting his thoughts about the days of Jim Crow. According to Lemann, "It ought to raise suspicion that we so often hear the same menu of examples in support of [citizen journalism's] achievements." But don't the examples actually prove the opposite point? That these two highly improbable things happened might equally be an indication that action is possible through online avenues that would never have happened through traditional journalism--and that is a good capability. How often “should” these things happen to validate this on-line activism?

Where will citizen journalism--or old-school journalism, for that matter--end up? I don't know. (And I don't trust anyone who says he does.) But I know it's not thesis or antithesis. I know it will be synthesis. I know it will be something altogether new. I hope Lemann’s next feature inventories the emerging links between the two forms, not the arguments between them, so that we can begin to see how networked journalism will evolve.

"The Procter & Gamble Company, the makers of Pringles, the #1 selling stacked potato crisp,...introduced Pringles Prints, an innovative snack that features a unique, fun design printed on every crisp.  The revolutionary Prints technology allows P&G to customize the crisps by printing words and images directly on the chip."
                                                                   --JunkFoodNews.net

Yes it's an example of open innovation, but do we really want potato chips with messages--customized or otherwise--printed on them? Are we willing to pay for them? Does this create economic welfare?

Mathematical ecologists have modeled the proliferation of species within an ecology, and find that the number of species grows relatively linearly. Over time, species come to depend on one another as predator and prey, and symbiont and symbiote. Eventually one species becomes a "keystone" species on which many depend. Sooner or later something happens to a keystone species and the total number of species in an ecology crashes. This cycle has been observed repeatedly over hundreds of millions of years.

Could the same happen to the number of SKUs in an economy? Printed Pringles are unlikely to be a keystone in any markets I can think of, but what about displacement of the CRT by flat panels? What about the displacement of the internal combustion engine? Can anyone think of a case of the number of SKUs or industries crashing?

And by the way, is "stacked potato crisp" the way to define your product into category leadership, or what?