Mdia p3-04-knowledge capital-150609

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

WORK-IN-PROGRESS.
SLIDESET STILL IN DEVELOPMENT.
UPDATES WILL BE POSTED OVER
THE NEXT SEVERAL WEEKS

There has been rapid growth in KNOWLEDGE
over the past few centuries …
… but performance not as good as it could be
or should be ...

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EOPPOSSIBILITIES vs ACHIEVEMENTS
Tr-Ac-Net … A graphic from around 2002

There has been a lack of investment to
enable KNOWLEDGE to be used to the
maximum to achieve PROGRESS

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).

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.

In projects with profit potential there has
been massive investment and PROGRESS
and PERFORMANCE has been quite
amazing ...

The OIL AND GAS industry, for example …

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Knowledge translating into Operations
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Financial
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Man Built
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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.

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 …

Most KNOWLEDGE can be mobilized for
good …
… but equally it can be mobilized for bad.

And it is not always clear what is good and
what is bad …

In almost every decision there are winners
and losers.
Achieving the right balance is a difficult
calculus.

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.

Almost all money flows when there is a
potential big winner.
Without a big money profit winner there is
no investment … no money flow.

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!

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.

KNOWLEDGE enables technology, and
with investment enables PROGRESS along
a trajectory described by Moore's Law

RESEARCH and DEVELOPMENT

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.

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.

… 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.

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.

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

Research and Development
… adds to KNOWLEDGE

Investment / Deployment
… produces PROGRESS

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 …

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.

… 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.

OPEN KNOWLEDGE

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.

The PUBLIC LIBRARY was an application
of OPEN KNOWLEDGE and knowledge
sharing, and remains an important part of
the knowledge infrastructure.

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 …

… or possibly misinformed.

THE VALUE OF KNOWLEDGE

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.

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.

EDUCATION

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.

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.

RESEARCH UNIVERSITIES

RESEARCH in the university setting is
potentially very powerful ...
… but there are problems.

RESEARCH priorities are driven by the
availability of funding ...
… and most funding has an 'agenda' that
may or may not be good.

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.

KNOWLEDGE WARFARE

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.

THE SOCATA INITIATIVE

The following slides set out the vision of
SOCATA (as of 2014) to change the way
data are used in the Public Sector.
SOCATA 2014 (YouTube) The Vision of Open Data: Government Leading the Innovation

SOCATA Vision for Open Data Development - 2014

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.

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.

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.

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

Mdia p3-04-knowledge capital-150609

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