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Mdia p3-04-knowledge capital-150609

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Mdia p3-04-knowledge capital-150609

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Mdia p3-04-knowledge capital-150609

  1. 1. MULTI DIMENSION IMPACT ACCOUNTING MDIA KNOWLEDGE A COMPONENT OF MAN BUILT CAPITAL File: MDIA-p3-04-KNOWLEDGE-150709.odp Peter Burgess (c) All rights reserved
  2. 2. MULTI DIMENSION IMPACT ACCOUNTING WORK-IN-PROGRESS. SLIDESET STILL IN DEVELOPMENT. UPDATES WILL BE POSTED OVER THE NEXT SEVERAL WEEKS
  3. 3. There has been rapid growth in KNOWLEDGE over the past few centuries … … but performance not as good as it could be or should be ... MULTI DIMENSION IMPACT ACCOUNTING
  4. 4. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPPOSSIBILITIES vs ACHIEVEMENTS Tr-Ac-Net … A graphic from around 2002
  5. 5. There has been a lack of investment to enable KNOWLEDGE to be used to the maximum to achieve PROGRESS MULTI DIMENSION IMPACT ACCOUNTING
  6. 6. Investment flows into projects that have a high financial return based on money profit financial analysis. Investment does not flow into projects that only have 'GOOD' return … that is they do GOOD for society (people) and the environment (planet). MULTI DIMENSION IMPACT ACCOUNTING
  7. 7. One of my assignments in the late 1980s was to help plan post-drought recovery in the Horn of Africa. Quite modest investment in low tech water infrastructure would have made a huge difference to the quality of life of millions of people. But that was not to be. Rather a single investment in a big dam was chosen. This investment gave profit benefit to a big international construction company with no benefit whatsoever to the people of the region. In fact it merely disrupted the poor economic rhythm of the local people. MULTI DIMENSION IMPACT ACCOUNTING
  8. 8. In projects with profit potential there has been massive investment and PROGRESS and PERFORMANCE has been quite amazing ... MULTI DIMENSION IMPACT ACCOUNTING
  9. 9. The OIL AND GAS industry, for example … MULTI DIMENSION IMPACT ACCOUNTING
  10. 10. MULTI DIMENSION IMPACT ACCOUNTING Sun Knowledge translating into Operations Sun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun
  11. 11. KNOWLEDGE has a most unusual property … when knowledge is given to another, there is no loss of knowledge by the donor. This is win-win. In all other transactions, one party gains while the other party loses something. This is zero sum. MULTI DIMENSION IMPACT ACCOUNTING
  12. 12. The amount of KNOWLEDGE has been increasing exponentially for a very long time … and it continues. This is potentially very positive for the future. But not certain … MULTI DIMENSION IMPACT ACCOUNTING
  13. 13. Most KNOWLEDGE can be mobilized for good … … but equally it can be mobilized for bad. MULTI DIMENSION IMPACT ACCOUNTING
  14. 14. And it is not always clear what is good and what is bad … MULTI DIMENSION IMPACT ACCOUNTING
  15. 15. In almost every decision there are winners and losers. Achieving the right balance is a difficult calculus. MULTI DIMENSION IMPACT ACCOUNTING
  16. 16. When decisions are made using traditional money profit financial analysis, the result will always favor the business actors. A better result requires that inclusion of a SOCIAL or PEOPLE dimension so that GOOD for people is taken into account. The best result is when the ENVIRONMENT (PLANET) dimension is also included in the analysis. MULTI DIMENSION IMPACT ACCOUNTING
  17. 17. Almost all money flows when there is a potential big winner. Without a big money profit winner there is no investment … no money flow. MULTI DIMENSION IMPACT ACCOUNTING
  18. 18. I recall doing some work in Somaliland in the 1990s. An important road between the capital city and the coast was seriously degraded. The EU funded consultants to study this problem several times over a period of about 10 years. Consulting fees paid to EU experts were estimated to have been over a million dollars, but no work was actually done to fix the problem. Eventually a local contractor was funded locally and paid something like $10,000. A big part of the road problem was fixed … but no expatriate benefit! MULTI DIMENSION IMPACT ACCOUNTING
  19. 19. PERSPECTIVE matters! Good profit performance is good for the owners of a company, but may not be good for other stakeholders. Profits up may mean payroll down and more stress for employees and their families, and their community. Profits up may mean less attention to environmental impact and quality of customers. MULTI DIMENSION IMPACT ACCOUNTING
  20. 20. KNOWLEDGE enables technology, and with investment enables PROGRESS along a trajectory described by Moore's Law MULTI DIMENSION IMPACT ACCOUNTING
  21. 21. RESEARCH and DEVELOPMENT MULTI DIMENSION IMPACT ACCOUNTING
  22. 22. What is constraining knowledge growth? Can knowledge growth be accelerated? The conventional business model is a huge constraint. Investment flows where there is profit potential. Much of what is really important in the modern world cannot give a money profit return, although these works will deliver huge impact for the good of society and the environment. MULTI DIMENSION IMPACT ACCOUNTING
  23. 23. The pace of progress should not be constrained by the amount of money that those with decision making power choose to allocate to research and development … but constrained by the capacity of the human brain to understand and solve problems. MULTI DIMENSION IMPACT ACCOUNTING
  24. 24. … another is that the PROCESS to get at conclusions from BIG DATA even if it is OPEN DATA is at the top of a hierarchy and not close to the issues needing to be addresses. In practice this means more concentration of power and influence and much less of distributed initiatives. MULTI DIMENSION IMPACT ACCOUNTING
  25. 25. I attended a big conference on information and management early in the 1990s. I listened to three days of presentations about how information technology was changing everything in the corporate world. Traveling home after the conference it occurred to me that the corporation was like a human being with no neck. The C-suite (the brain) was making decisions and independently the company (the body) was also doing its thing … but MIS (the neural system) was not connecting the two in a meaningful way. MULTI DIMENSION IMPACT ACCOUNTING
  26. 26. Fact … about a reality Data … a data representation of a reality Analysis … to understand what the data means Information … conclusions drawn from the analysis Knowledge … people knowing about the conclusions Wisdom … understanding the implications of the conclusions MULTI DIMENSION IMPACT ACCOUNTING
  27. 27. Research and Development … adds to KNOWLEDGE MULTI DIMENSION IMPACT ACCOUNTING
  28. 28. Investment / Deployment … produces PROGRESS MULTI DIMENSION IMPACT ACCOUNTING
  29. 29. Knowledge is applied rapidly where the profit potential is good … but nothing happens where the performance is only to do with social or environmental good … MULTI DIMENSION IMPACT ACCOUNTING
  30. 30. OWNERSHIP OF KNOWLEDGE In order to give incentive for investing in R&D and building KNOWLEDGE, a system of INTELLECTUAL PROPERTY (IP) has been created. This allows the owner of the knowledge to use it exclusively for its own benefit for a period of time. MULTI DIMENSION IMPACT ACCOUNTING
  31. 31. … it also allows the owner of IP the ability to constrain progress by not allowing others to use this knowledge. The resultant monopoly of knowledge distorts markets usually to the detriment of consumers. A strategy for profit maximization using IP rules is visible at its worst in the case of the pharmaceutical industry. MULTI DIMENSION IMPACT ACCOUNTING
  32. 32. OPEN KNOWLEDGE MULTI DIMENSION IMPACT ACCOUNTING
  33. 33. An environment of OPEN KNOWLEDGE or knowledge sharing is the fastest way to expand knowledge, and in some situations to mobilize knowledge for the good of society as a whole. MULTI DIMENSION IMPACT ACCOUNTING
  34. 34. The PUBLIC LIBRARY was an application of OPEN KNOWLEDGE and knowledge sharing, and remains an important part of the knowledge infrastructure. MULTI DIMENSION IMPACT ACCOUNTING
  35. 35. Modern information technology now enables INTERNET SEARCH that makes it possible to access information that exists in digital form anywhere on the Internet. This is a game-changer because now everyone has the potential to be well informed … MULTI DIMENSION IMPACT ACCOUNTING
  36. 36. … or possibly misinformed. MULTI DIMENSION IMPACT ACCOUNTING
  37. 37. THE VALUE OF KNOWLEDGE MULTI DIMENSION IMPACT ACCOUNTING
  38. 38. The value of knowledge is a composite … it is part an absolute value; … it is part a function of the investment allocated to deployment and use of things making use of the knowledge; … it is part a function of the opportunity that exists to use the knowledge. MULTI DIMENSION IMPACT ACCOUNTING
  39. 39. The value of some knowledge is simply that it is a catalyst that enables other knowledge progress to be made ... … it is a foundation that enables other research to be built. MULTI DIMENSION IMPACT ACCOUNTING
  40. 40. EDUCATION MULTI DIMENSION IMPACT ACCOUNTING
  41. 41. EDUCATION is an important part of the KNOWLEDGE ecosystem. … perhaps the most important part of modern education should be to enable young people to find information and then to be able to understand the strengths and weaknesses of the information they are seeing. MULTI DIMENSION IMPACT ACCOUNTING
  42. 42. People must be able to see KNOWLEDGE in CONTEXT … and understand that easily accessible digital knowledge may or may not reflect reality and may not be valid. MULTI DIMENSION IMPACT ACCOUNTING
  43. 43. RESEARCH UNIVERSITIES MULTI DIMENSION IMPACT ACCOUNTING
  44. 44. RESEARCH in the university setting is potentially very powerful ... … but there are problems. MULTI DIMENSION IMPACT ACCOUNTING
  45. 45. RESEARCH priorities are driven by the availability of funding ... … and most funding has an 'agenda' that may or may not be good. MULTI DIMENSION IMPACT ACCOUNTING
  46. 46. RESEARCH results are increasingly being converted into proprietary intellectual property (IP) that disappears into ownership entities that facilitate private wealth creation while stunting the growth of open knowledge and compromising academic ideals. MULTI DIMENSION IMPACT ACCOUNTING
  47. 47. KNOWLEDGE WARFARE MULTI DIMENSION IMPACT ACCOUNTING
  48. 48. Knowledge warfare has been around for a long time but is now a much more critical part of the geopolitical landscape ... … military secrets are being targeted as part of inter-nation espionage; … company secrets are being targeted to gain commercial advantage; … personal data is being targeted to gain criminal advantage. MULTI DIMENSION IMPACT ACCOUNTING
  49. 49. THE SOCATA INITIATIVE MULTI DIMENSION IMPACT ACCOUNTING
  50. 50. The following slides set out the vision of SOCATA (as of 2014) to change the way data are used in the Public Sector. MULTI DIMENSION IMPACT ACCOUNTING SOCATA 2014 (YouTube) The Vision of Open Data: Government Leading the Innovation
  51. 51. MULTI DIMENSION IMPACT ACCOUNTING SOCATA Vision for Open Data Development - 2014
  52. 52. MULTI DIMENSION IMPACT ACCOUNTING SOCATA Vision for Open Data Development - 2014
  53. 53. MULTI DIMENSION IMPACT ACCOUNTING SOCATA Vision for Open Data Development - 2014
  54. 54. MULTI DIMENSION IMPACT ACCOUNTING SOCATA Vision for Open Data Development - 2014
  55. 55. MULTI DIMENSION IMPACT ACCOUNTING SOCATA Vision for Open Data Development - 2014
  56. 56. An issue that is not addressed by the SOCATA initiatives is the challenge of 'missing data'. Modern data mining and analysis enables interesting insights into data that exist, but misses everything associated with data that have never been collected. MULTI DIMENSION IMPACT ACCOUNTING
  57. 57. My experience suggests that the indiscriminate use of BIG DATA to analyze problems will be a failure unless there is a serious effort to include data about everything and not merely the data that flows easily around social networks and digitally active consumers. MULTI DIMENSION IMPACT ACCOUNTING
  58. 58. Follow up: Request for Feedback Getting these ideas fleshed out into a clear, simple but comprehensive structure is a big job and remains a work-in- progress. Many organizations are making progress with this, but there is no broad universal framework yet that will enable all the pieces to come together and work efficiently. I would like to get feedback from anyone and everyone to help move this initiative forward. While I have some clear concepts about much of this architecture, there are many details that I do not know enough about and need help. So, please feel free to contact me (peterbnyc@gmail.com). Please put something relevant and catchy in the subject line. MULTI DIMENSION IMPACT ACCOUNTING
  59. 59. Some links and contact information: Peter Burgess … peterbnyc@gmail.com Peter Burgess LinkedIn profile https://www.linkedin.com/in/peterburgess1 Link to TrueValueMetrics.org website http://www.truevaluemetrics.org/ Link to navigation for MDIA slidesets http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0200-Burgess-p3-Slidesets MULTI DIMENSION IMPACT ACCOUNTING

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