How Value Grows with Intentional Positive Globalization

There’s an old saying that goes something like this, “What cannot be measured cannot be improved.” This is a very simple statement with profound implications for our personal lives. It is also true in business and economics. Without accurate, reliable measurements of whatever we do, we have no frame of reference from which we can grow and improve.

positive globalizationMoreover, this is particularly important to improving human lives across the world. If any society truly wants to improve, the first step is to place itself within context. The leaders of that society – business leaders as well as policymakers – must know with certainty the relative position their country holds against other nations. Once a baseline or benchmark has been established, proper and reasonable goals, objectives and strategies can be developed to address our social issues and improve them.

Interestingly, at the end of the day, there’s no grand science behind making change and improving human life. The problem is this. It’s easy to sit and wait for human crises, then react and respond to them. It is a whole new way of living to be intentional, see opportunity and initiate change.

But opportunity rarely finds us. We must seek it out. When opportunity presents itself, fear keeps us from being intentional. But Seth Godin says that “you have everything you need to build something far bigger than yourself.”

To help you find those trends and opportunities we have compiled four indices you can use:

With this information, value grows with the intentional. And, as you engage, you’ll find others will feel the need to belong. Fascinating how human behavior is, right? They will want to be led, to join you, to contribute. “We are drawn to leaders and to their ideas,” says Seth Godin, “and we can’t resist the rush of belonging and the thrill of the new.”

Your job is to make change.

Will Mobile Money Revolutionize Commerce in Developing Countries

Mobile money in the world’s developing and poorest regions is transforming lives and transitorily eliminating the need for checking accounts, credit cards – even cash.

In Niger the poorest families are lining up to get free mobile phones from the Word Food Programme. Through these phones the WFP will be distributing the equivalent of $65USD per month to help needy families survive the hunger season — families like Mamoudou’s.

Now her five children won’t go hungry when food is scarce or inaccessible. She tells AlertNet, “This is what my family needs.”

Funds transferred and used for commerce through mobile phones is called mobile money and is a “game changer,” as Citi CEO Vikram Pandit told a recent USAID Frontiers in Development forum held at Georgetown University. He explains that mobile money has “the potential to improve lives, create jobs, catalyze new enterprises and expand financial inclusion, particularly in the emerging markets that are critical to the growth of the global economy.”

Niger is just one example where mobile money technology has been applied intensively in poor nations, more so than in developed ones, because financial systems are underdeveloped in these countries.

In third-world countries most people don’t have basic checking accounts. As a result, using technology to transfer money through mobile phones, people otherwise having no or very limited access to technology are suddenly immersed in it.

This type of technology and access to money begins to equalize societies and breaks barriers where, otherwise, families like Mamoudou’s would not have survived the hunger season.

Interestingly, news of improving life in the third-world is good news, and it’s evidence that the time has come for programs like my Turbo Charged Global Project to be embraced.

The Fundamental Importance of Connecting the Dots

Knowledge is power—that is an unquestionable truth. On one hand, the whole world is totally immersed inside the information age, the knowledge era. The tools to successfully navigate it have already been developed and are both relatively accessible and extremely powerful. At the same time, the world is also fully immersed in an age of intensive and accelerated globalization. If these two elements are combined, the solution is within the problem itself. There is no way to overstate the importance of appropriately connecting the dots, tying up loose ends in order to achieve success in any human activity. This is a universal truth that knows no exceptions. It is such a simple truth that it is both humiliatingly simple and painfully obvious. However, judging by the enormous delays observed in most countries, it is clear that:

  • We live on an inconceivable level of unconsciousness.
  • There is a great lack of motivation to learn and an aberrant lack of interest in progressing. or alternatively…
  • There is a genuine desire of progress, but we do not know how.

Personally, I feel that it is a combination of points three and one, in that order. Human and social capabilities are immense, so long as they are coordinated take advantage of them. There are more than enough capabilities to fulfill and take advantage of life’s many challenges, as well as medium- and long-range goals and needs. No one invented everything, and everyone can and should learn from everyone. The world’s best success stories at all levels are awash in highly effective learning from others. It is the
only well-known route to progress. Thomas Edison summed it up superbly: “Genius is 99 percent perspiration and 1 percent inspiration.”

Effective imitation is a true path to progress. Furthermore, it is an essential path to explore in order to excel at all levels. Every country that has successfully developed has broadly used learning by imitation. Probably the best examples are the Asian economies, from the Four Tigers in the 60s, 70s, and 80s, to China during the last three decades. Also, during Spain’s rapid development of the eighties, nineties, and a significant part of the first decade of the new millennium, it essentially reached the level of the rest of developed Europe. Spain emulated and reformatted itself into a close replica of the developed European countries, thus narrowing the gap with them. Chile has been undergoing a similar process during the past three decades with splendid results. As the popular proverb goes, there is no reason to reinvent the wheel.

The effect of imitation is extremely powerful. This is why it is essential to replicate anything and everything that is useful and constructive. And that is a most crucial aspect: it is critical to be able to distinguish right from wrong. Unfortunately, human nature picks up bad habits much more easily than good ones.

Imitation is the fundamental learning pattern from birth; that is how we learn to walk, talk, and ride a bicycle. It should not be surprising that this manner of behavior and learning goes on in a permanent basis, not just in infancy as a temporary pattern. However, what cannot be justified is that we adults do not seem to accept it easily. What a great opportunity missed!

And it isn’t only learning that operates that way. All human knowledge, no matter the area, essentially works in the same pattern. One example is electricity. Electricity was not invented by anyone. It was discovered and immediately began to be examined and analyzed by a myriad of scientists and researchers. One of the most picturesque and remarkable pioneers in these efforts was the self-taught Benjamin Franklin.

The same thing happens with the rest of physics and math. They deal, as does all human knowledge with existing relationships and structures. Humans have discovered, detected, studied, and analyzed them, developing and furthering our knowledge afterward. This is the only way to build up, to document, to apply, and most importantly, to transfer knowledge to future generations.

Social, political, economic, financial, and business areas are no different from the reasoning-and-learning pattern just described. Therefore, effectively tying those loose ends is of utmost importance. There is no way to overstate the importance of doing so adequately.

Contemporary Political Systems And Their Multiple Limitations

It seems to be taken for granted, all over the world –particularly in Western society, that all things equal, democracy is by and large the best political system ever conceived. Theoretically, it makes a lot of sense to look for governments essentially oriented to the population’s needs and aspirations. Alas, a highly effective and  functional way to materialize that idealistic concept is still very far from being a reality.

Throughout history, when very poor checks-and-balances systems have been in place, there have been too many excesses and devastating consequences. There are no exceptions to this.

Winston Churchill famously stated: “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” Thus, there doesn’t seem to be a better alternative outside of democracy. However, there are sufficient and conspicuous virtuous exceptions outside the democratic model that merit taking a look at them. By analyzing those virtuous exceptions, some important findings can be reached. Thus, revisiting this topic is a must. Let’s start first with a recent governmental exception.

Italy

As an unintended consequence of the ongoing European debt crisis, the Troika (the European Union, its Central Bank and the IMF) were left with practically no other option than to exert very heavy pressure upon the Italian government and appoint a previously agreed upon new prime minister. This compelling move from November 2011, was based on the evident incompetence both, of the Italian political system itself, as well as Berlusconi’s,  the former prime minister. Mr. Mario Monti, the newly appointed interim PM, will be in power for a period of 16 months –until the 2013 general elections. Monti also chose to personally take the Finance Minister position, given the extreme adverse circumstances in which he took power. Mario Monti was recalled from the presidency of prestigious Milan’s Bocconi University and sometimes consulted as a foremost expert on European matters. Mr. Monti has declared to have no political ambitions, and has been consistently declined to be a candidate to form a new government in 2013.

How can the Monti government be graded, until now. A resounding success, within the deplorable circumstances that he had been facing since day one. The major irony here is that Mario Monti, a technocrat, appointed as PM, outside of the typical population’s voting mechanism, has proved to be a roaring success. In sharp contrast, Silvio Berlusconi, one of the wealthiest businessmen in that country,  gained the PM seat through the formal party channels, with disastrous results. Berlusconi represents many of the worst vices and excesses possible, inept and highly corrupt.

In the Corporate World

The late Steve Jobs was not exactly a role model for corporate governance, as far as arriving at a decision by consensus. In short, he was an autocrat … but a very bright and effective autocrat!

By not behaving according to orthodoxy, given his exceptional capabilities, Steve Jobs was able to pull ahead of the rest of the industry in an astonishing way. It is now legendary that Jobs didn’t trust market surveys … instead relying almost exclusively on his personal instincts. Under normal circumstances, autocracy and being a lone wolf  is totally contrary to best practices; in Jobs case’s, however,  a great deal of his extreme effectiveness was based on unorthodoxy.

In Summary

There is plenty of room for lessons to be learned about governance, both at the public and corporate levels. The two exceptional instances briefly discussed, as well as many others, lend themselves very well as case studies.

There is ample room for improvement to adjust most models to be more responsive to meritocracy. The ancient Greek sages had a very clear objective about governance: ideally, the wisest and the fittest are the ones to govern.

A proper understanding of globalization and its positive effects is a most coveted asset for successfully navigating the global village waters. Governance is, undoubtedly –in all ways shapes and forms–, one of the paramount areas of progress for humanity. Under the “The ABCs to a Global Social Revolution” tab in this web page, there is a very specific, ambitious and provocative initiative in this regard.

Are Bubbles A Product of Economic Cycles?

All economic cycles, particularly the long-term — say more than 5 years — have a great propensity to generate bubbles in one or several kinds of assets, depending on the variety of circumstances. However, price bubbles will never be very uniform or predictable, either in scope or duration. The biggest misunderstanding about price bubbles is precisely the reason for their existence. The reason is embarrassingly simple: human imperfection. There are three elements involved:

  • Human society has made substantial progress throughout the centuries.
  • Economics and financial knowledge are in essence also advanced.
  • Excesses are still well beyond the human capacity to overcome.

The not inconsiderable mechanisms, checks, and balances that have been developed through the ages to prevent drastic imbalances are easily overwhelmed by numerous factors:

  • The genuine human desire to progress, to always go further. Mankind has never adequately practiced the concept of limits. We tend to go overboard quite easily. This phenomena is particularly acute where credit-line management is concerned.
  • The greed that inevitably grows as a boom progresses — or fear, in the opposite extreme.
  • The lack of effective checks and balances to fight the many conflicts of interest, inevitable in any human process.

For instance, let’s expand on the last point. During the 2008-2009 sub-prime crisis, this kind of multiple conflicts had many actors: builders, sellers, middlemen, buyers,  government, and rating agencies, to name a few. They all contributed, though at different levels, to creation and nurturing of the humongous credit bubble that created so much chaos and ruin when it burst.

Of course, the three previous factors are not mutually exclusive; they usually interact and reinforce each other, magnifying the situation. While no substantial progress is made in these three areas, it is virtually impossible to expect that bubbles will not happen again. At best, the expectation would be to create less inflated bubbles, if possible is to achieve a better understanding of economic cycles and to make substantial progress in risk-management. For that purpose: the following assumptions are important:

  • At the very minimum, to avoid serious damage when the inevitable breakdown occurs.
  • In a much better scenario, to benefit from the bubble’s creation and its rupture as much as possible. However, this requires great skill in handling the tools for this purpose. The complexity of this approach begins by defining and selecting which tools to use and weighing the options, as well as the corresponding hierarchy when the frequency mixed signals appear. Both efforts, although many more in the second case, require commitment, research, and experience of two basic types:
    1. technical competence, and
    2. emotional management.

 

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