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November 21, 2006:
Organizing Knowledge in the New Media: Notes on
New Business Models at the Intersection of
Education and Media
The traditional academic system of refereed
articles is limited in offering a solution to the
new problems of organizing usable knowledge in a
rapidly-changing world. The
incentive structure of traditional academics does
not value public education and encourages
hyper-specialization. On
the other hand, even though the collaborative
knowledge of the open-source era has produced new
patterns of organizing knowledge, it has also
created risks for
those who want safeguards against unverified
writings and the blurring of the lines between
opinion and analysis. There
is still an essential role for "credentialized" or
"certified" expertise. Some
in academia view this as an inevitable tradeoff
between relevance and reliability. The
market appetite is for both. These
issues are not new, but they are now encountered
daily. With
this in mind, it is worthwhile to look at new
media blogs, wikis and new designs for organizing
and validating knowledge.
If one looks at blogs systematically, it is
easy to be extremely optimistic about the new
trends for dissemination of knowledge and
debate.
There is a need for symphony conductors or
intellectual traffic cops (the new credentials and
certification). The
symphony conductor and traffic cop are potentially
new business models. Where
there are people playing this role, there is
extraordinary innovation on the web.
There has always been an assumption that
specialized knowledge based web-sites would
flourish in the Long Tail world of new media.
Certainly "boutique" websites like Nathan
Hamm's synopsis on
Central
Asia
, Registan or
Marianna Gurtovnik and Denise
Mishiwiec on
Azerbaijan
fit
this description, aggregating information which
was inaccessible in a pre-new media age. It is
impossible to imagine this kind of information
organization in a pre-internet age and is an
instant refutation of skeptics regarding the value
of new media.
While the world of internet media contains
many websites which are self-referential and
basically on-line diaries, there is also a
remarkable development of academics providing
current and analytical commentary at a level which
was simply inaccessible five years ago.
There are obvious examples like
Daniel
Drezner and
Andrew
Sullivan that
represent this fusion of academic research and
thought-based journalism.
While not pretending to be comprehensive,
here are six web-sites which serve as case studies
of "the new curriculum", replacing the slow-moving
knowledge-construction of academia and going into
more rigorous debate than journalism can do.
In designing the University
of the Future, these are the new building-blocks
and are cited for that purpose.
FDNF (Eddie
Beaver), TDAXP
(Dan Abbott),
Abu
Aardvark (Marc
Lynch) , The
Duck of Minerva, Oxblog and
Davos Newbies
(Lance Knobel) all fit this
role.
In sociology of media, this is a new
trend.
In the business model of post-internet
universities and the new commercialization of
knowledge, these models will be of increasing
importance. The
venture capital community is looking at ways in
which search engines can be combined with
collaborative knowledge capacities to
create
value-added organization of
knowledge.
Start-ups like Radar
Networks are
prototypes of business models in this space. John
Battelle's Federated Media is an
innovative attempt to aggregate content as is, in
a different manner, Nicholas Denton's Gawker. Both seek
to use brand to become content navigators and
aggregators of content.
The new media will become a cornerstone of
educational content and customized curriculum when
there are clear brands in validation of
content. The
wisdom of crowds creates the extraordinary value
of Wikipedia, but there will be many other models
as the contours of the new information society
takes shape. It
is hard to imagine a wiki-model doing the kind of
investigative journalism which one associates with
the CBS newsmagazine 60 Minutes. It is also
hard to imagine a wiki formula replicating a BBC
seminar with Nobel prize-winning scientists.
Brands and maintaining brand credibility
becomes more, not less important is a new media
world.
The informal links between blue chip online
media is a first step towards validation, not
quite wisdom of crowds, but a new branding
equivalent to the earned influence of movie
critics like Roger Ebert and A.O. Scott. Within
these innovations are some winning venture capital
models and the potential for a valuable innovation
in the manner in which educational content is
organized for the next generation of learning.
In a
new era where collaborative knowledge and
certified expertise achieve a workable synthesis,
there could be a variety of successful new
business models for both education and new media
and in the area where the two increasingly
overlap. In
this era, business models which create products
that serve as intellectual "symphony conductors"
or "traffic cops" will be much in
demand.
July
11, 2006
CREATING VALUE THROUGH
ENTREPRENEURSHIP IN
KAZAKHSTAN
AND
ANGOLA
Transparency, Innovation and
Branding Honey
September 2006
Jim de
Wilde
www.jimdewilde.net
The Bill and
Melinda Gates foundation, supported now by Warren
Buffett's new contribution will change the way
entrepreneurial capital markets function. Target-oriented
social entrepreneurship will replace
bureaucracy-building as the new economic
development paradigm.
Microcredits, remittances and
venture-capital have focused economic development
on wealth creation. The
transformation of the global economy has many
characteristics, but the role of a global labour
market has transformed the practical realities of
capital formation, creating opportunities for new
investment models.
A network of global innovation is now
possible to facilitate the incubation of
"cultivated pearls", strategic entrepreneur-led
growth in emerging markets. From
Dubai
to the Malaysia
Supercorridor, from science parks in
Scandinavia
to
economic clusters in wired hubs in emerging
economies, the economics of knowledge
commercialization is creating new entrepreneurial
opportunities.
Global assistance now focuses on targeted,
mission-oriented social entrepreneurs, focusing on
specific measurable results and operating
according to the efficiency standards of private
sector companies.
These changes have created opportunities
for innovation in much of the emerging
market.
They have transformed the serious debate
and discussion about international development
assistance and economic growth.
This presents a different challenge for
educators and political activists than has existed
before.
From George
Soros' Open
Society , to organizations like
SIFE , this intellectual
revolution in putting the development of
entrepreneurs front and centres is now widely
recognized. In economic
terms, entrepreneurship is at its core about the
creation of new sources of value in a
society. In political
terms, an entrepreneurial economy triggers the
kind of innovative problem-solving which leads to
collateral social benefits.
In
Canada
, the promotion
of this kind of activity has long been backed by
the Dobson Foundation, with its centerpiece at
McGill's
Dobson Centre, where I am proud to be a
fellow. Now the
teaching of entrepreneurship is reaching a new
stage. In
conjunction with friends at many institutions
around the world, this lecture is intended to
start to design a framework for teaching global
entrepreneurship without turning great ideas into
ideologies.
The cautionary notes are important:
(i) we have to be very careful not to
confuse teaching entrepreneurship with studying
entrepreneurship. There
is some excellent research on entrepreneurial
trends: the work of the
Global
Entrepreneurship Monitor, which usefully tracks
patterns of entrepreneurial development, work done
on verifying the assumption that venture-capital
backed entrepreneurship facilitates the
development of export products (or the
globalization of local enterprises). Many excellent
MBA courses are now being developed around these
new trends, including Stephen
Sammut at Wharton, MIT's G-Lab and Philip
Anderson at INSEAD. We can
benefit greatly from seeing how entrepreneurial
models are developed and how transfusions of
entrepreneurship into established businesses can
be managed. But
entrepreneurs cannot be taught like accountants or
anesthesiologists. They have to be
discovered and developed like football players and
innovative musicians. They can
be encouraged with case studies and demonstration
effects. Also as we now
globalize the experimental culture of the dotcom
world of the 1990s, we learn by collaboration and
comparison.
(ii) Those of us who
love discovering and developing entrepreneurs have
to remember that entrepreneurship doesn't happen
in a vacuum.
There have to be stable capital markets and
a reliable rule of law to assure that capital is
efficiently allocated and that companies can grow
to their natural side without the distorting
effects of corrupt economic systems, variable
political rules and regulations. I already
have heard entrepreneurship being presented as a
panacea, as though simply injecting a few
entrepreneurs into
Equatorial Guinea
will change a
stagnant country ranked very low by
Transparency
International into a
Denmark
or
Korea
. One
also has to recognize that in malfunctioning
economic systems, entrepreneurs are often people
living on the edge of a system, creating markets
for connections, or selling goods outside the
existing (ill-regulated) legal system. This is the
message of Hernando
de Soto's analysis of "informal
markets" and C.K.
Prahalad's work on creating wealth at the
bottom of the economic "pyramid". There is useful
academic work to be done in understanding this
relationship in countries like
Egypt
and
Russia
where entrepreneurship functions best in areas
where it doesn't conflict with state power.
(iii) I continue to argue that we need new
capital market instruments (African pension funds)
to develop the pool of capital required to back an
entrepreneurial economy, in the manner which the
CDP played that role in
Quebec
. For those
interested in sustainable longterm international
economic development, this remains at the top of
the agenda. Financial
intermediaries are prerequisite to sustainable
prosperity. They
organize strategic thinking, network creative
ideas with disciplined capital and organize the
strategic talent in a community to increase the
competitive advantage of an investment. Remittances
and returning global workers offer a new kind of
capital formation, but the real
challenge for the next decade remains turning
billions of dollars of resource rents into
productive investment capital - something I
have referred to elsewhere as the political
challenge of the 21st
Century.
(iv) In designing
innovation networks, educational policy-makers
create virtuous circles, focusing creative talent
on commercializeable activities and creating
evergreen capital for reinvesting in new
projects.
Kevin
Maney describes the global phenomenon in a recent
USA Today article:
Ten years
ago,
Malaysia
hung its hopes on its
Multimedia Supercorridor outside
Kuala
Lumpur
.
Singapore
launched a national
broadband project called Singapore One, hoping it
would create a tech haven.
Finland
two years ago handed the job
of sparking entrepreneurship to charismatic former
prime minister Esko Aho.
Dubai
is in the process of
building a tech zone it's calling
Internet
City
.
Of potentially the greatest
impact,
China
's leadership has begun
pushing for entrepreneurship, saying the nation
needs to come up with its own innovations.
Yet success in most countries
has been elusive. The Multimedia Supercorridor has
attracted little money or business.
Finland
still
has no comparable follow-up to its one superstar
company, Nokia.
To teach global entrepreneurship
effectively, one of the things we need to do is to
create relevant case studies. Case studies
inspire and provide strategic templates. They can
also produce demonstration effects, signposting
the importance of cultural values, efficient
capital markets, and access to strategic
support.
Entrepreneurship is a broad category, often
applied to people who take advantage of a
positional good to dominate a market. For
our purposes, entrepreneurship will be defined as
the "creation of new value", eliminating
appropriation as a means of politically-enabled
entrepreneurship and focusing on the kind of
entrepreneurship associated with the venture
capital-backed model of the
1990s.
Before we turn to case studies, I want to
examine some of the
general trends in global entrepreneurship which
have changed the way global economic growth is
occurring:
1.
Entrepreneurship will occur
most rapidly in areas where individuals have
access to capital (remittances and microcredits),
because this provides a model of capital formation
conducive to entrepreneurial activities: Globalization
has changed the pattern of fertilizing new
enterprises. Initiatives can
now take place
anywhere. This can only
happen if there is access to efficient and
realistic capital, either though remittances or
microcredits. There are
still worryingly few formal institutions that
serve this
function:
(a) the
importance of remittances as a new form of
investment in entrepreneurial
activities. Over the
years, there have been a number of attempts to
turn the Garage.com model into a way to create a
pool of syndicated capital targeted to
entrepreneurs, which would turn remittances into
leveraged investment
capital. This model theoretically would make it
possible for an
entrepreneur in
Nigeria
being able to
access capital and strategic advices from
a Nigerian.ventures.com, but the model has
proven to be difficult to implement in
practice.
(b) microcredits
make possible a serious social policy goal of
promoting entrepreneurship. This has
proven to be uniquely successful in
empowering women entrepreneurs who would
otherwise have no access to capital.
2.
There
are now global hubs of entrepreneurial finance,
e.g. the
Stanford
Business
School
network, Indo Silicon
Valley communities. Certain
networks, e.g. the
Indo-Silicon
Valley
or the Tamil community in
South East Asia
have demonstrated a capacity to create satellites
which ties to a hub. This is
another model of economic support available to
some of the most globally-oriented of
communities. B-Schools
like INSEAD and Stanford have been able to create
incubators linking their students in collaborative
projects sometimes formally and sometimes
informally. Given the
global base of the Montreal B-School alumni, new
models of global entrepreneurship are developing
as we speak, but in an improvised manner (e.g.
Mediascrape).
3.
It is
possible to create serious concentration of
expertise in a particular location. There is no
reason that the world's leading educational toys
company would be in
Denmark
(Lego) or the world's
leading producer of urban transportation
technology in
Montreal
(Bombardier):
Innovation can take place anywhere. Science
orients itself to local specializations and the
precision engineering of Switzerland, the
development of a food preservative science base in
Denmark are all part of a brad pattern of
competitiveness. There
is also no reason that the next innovation in
specialized activities could take place anywhere
there is satellite broadband: Mozambican
tropical wood products, Chilean marine
ecology based nutritional sciences.
Case studies of success stories which
didn't come from geographically-based competitive
advantage are particularly
valuable.
4.
But
there are geographically-based products which
result from local skills and knowledge being
commercialized into an exportable
product: Bamboo and
Ginseng are examples of emerging markets finding
entrepreneurs who can create a global market for a
local product. Many of the next
generation products being developed around the
world require entrepreneurs who can commercialize
local competitive advantages. The
development of brands in crafts and artistic
products is an example of this kind of
entrepreneurship, as is the customization of
specialty products like wines in
Georgia
and coffee in
Ethiopia
.
A
well-capitalized company that made Ghanaian cocoa
butter, Indonesian bamboo furniture or Kenyan
honey could be a Lego or
Danisco of the future.
5.
Commercializing intellectual
property is a global entrepreneurial
opportunity. There is no
reason that medical products from herbal remedies
to new pharmaceutical products cannot be created
in
Brazil
or
China
from local
knowledge:
The case
of poisonous Brazilian tree
frogs or Botswana
cactus shows the extent to which
emerging market intellectual property has already
been commercialized. The problem in
that the original discoverers of the intellectual
property were not the ones compensated. As we create an
intellectual property regime which recognizes that
there is no Modigliani without West African art
and fewer pharmaceutical products without Mayan
shamans, there will be a limit to growth in places
where knowledge and creativity
originate.
6.
Science parks as
models of collaborative
knowledge can exist in
Kazakhstan
or
Angola
: The most
important thing that public policy can do is to
create functional universities/science
parks/economic incubators in new places. A University in
Kazakhstan
does should not
be built on an economic or social model equivalent
to Canadian or
U.K.
universities. (Nor
should a
greenfield
knowledge incubator in
Canada
or the
U.K.
) But it can be
designed to incubate and develop engineering and
applied skills.
Local science parks have developed
clusters, from multiple companies commercializing
acoustic engineering knowledge and sound design in
Switzerland
,
to industrial biotechnology in
Scandinavia
.
This model has relevance to entrepreneurial
growth in
Kazakhstan
or
Angola
in a networked world where
collaborative knowledge can commercialize talent
and indigenous intellectual
property.
7.
"Cultivated pearls":
Cultivated pearls are a good metaphor as
they were a conscious attempt to create a new
industry in a geographically remote region. In the cultural
industries, Senegalese and Mauritanian artists
like N'Dour and
Sissako have generated an industry around their
activities. By
making films in Kurdistan, Bahman Ghobadi
entrepreneurially created dozens of
job, incubated an industry and
became the major foreign investor in the region
outside the resources industry.
Fashion has been a means to generate
entrepreneurial activity in
South
Africa
and
India
.
CASE STUDIES FOR GLOBAL
ENTREPRENEURSHIP
There are many case studies
which are worth developing. These are
merely meant for demonstration effects. They
represent geographically-diverse sources of
entrepreneurship and as case studies address a
number of the themes discussed above.
Honey Care
and the
development of African entrepreneurs. The
possibility of developing companies which produce
for export markets and use local labour organized
in a collective manner provides one more example
of how branding can produce a global product.
African
music centre and the rise of
a music recording hub. The
Senegalese music industry now has an
infrastructure of operation and a number of
dynamic entrepreneurs
(producers)
Wireless telephony in
Cameroon and Ethiopia Wireless
enterprises are the first choice of many young
western-educated entrepreneurs because they can
circumvent the constraints of local political
systems.
East African
Botanicals is a case study
of commercialization of Chinese knowledge in the
medical treatment of malaria, and integration of
east African agricultural land into the production
of a medicinal product. As a company
designed to be "global" in its operation, it is an
important case study.
Mauritanian
film: The
financing of Sissako's films: a case study in
cultural industries. The development
of a film industry infrastructure is an excellent
case study of entrepreneurship in many
countries. From
Bollywood to the Iraqi Kurdish experience,
film-making provides a large number of
skills-adding jobs to a local economy. By looking at
the development of a film industry in
Senegal-Mauritania-Mali, we can understand how
this can be designed as a strategy.
Digital Theatre in
Brazil: Rain
produces an example of a company generated from
local talent.
Dubai Internet
City and Malaysia Multimedia
Supercorridor:
These two high profile attempts to create
large incubation capacities for high technology
development are a large capital-intensive approach
to creating the preconditions for
entrepreneurship.
Adapting Best Practices
Internet Business Models to the Chinese
Market: In the
portfolio of top Chinese venture capital firms
there are examples of "MBA-led entrepreneurship",
adapting best practices internet and new economy
business models to the Chinese marketplace.
There are many stories of building
companies in emerging markets with returning MBA
and engineering talent. Network365 in
Sri
Lanka
offers those
kinds of case studies.
Increasing sophistication in financial
markets through financial analysis like Mbendi and
Liquid Africa have increased the potential of
regional economies.
There are of course,
other possible strategies for accelerating
entrepreneurial start-ups. There are
social entrepreneurial funds like
Foursome which have invested in
companies like Forestrade, creating a business model
for exotic spices.
The expansion of entrepreneurial activities
of this kind in an organized global
entrepreneurship in which individual
entrepreneurs can be backed by syndicated web
venture capital capabilities to build companies in
emerging markets. This
"globalventures.com" idea was floated during the
dotcom boom, modeled on what was not then called
social networking, but syndicated small-cap
venture capital. One of the
business models that inspired this was
Garage.com. The strategic
assumption was that global
management teams and global investment structures
could be put together so that, for example, a
music studio in
Dakar
could have 100 $1000 investors from
London
,
Paris
,
Johannesburg
and a management team drawn from a network of
linked talent through the graduates of top
world Business Schools. If 100 companies could be
created by this means, the management talent which
turns into the future Legos and Bombardiers of the
global economy would be kept in place.
Teaching entrepreneurship requires
an inventory of case studies.
Entrepreneurship is inherently creative and
risk-taking. An
entrepreneurial economy requires a rule of law
legal system, disciplined and
longterm oriented capital markets and a network of
sophisticated management talent. If the
social capital of learned experience in
Silicon Valley
or
Montreal
creates a network of knowledge about
entrepreneurial activities, then the more
experiments, the more successful the
entrepreneurial economy will
be.
If we are advising resource-rich economies,
like
Kazakhstan
or
Angola
on how to grow an economy, there are
six steps to building an
entrepreneurial economy which invents
value:
(i)
to create the longterm
institutional investors who will create venture
funds in which this network of experimentation can
take place;
(ii)
to ensure that there
is a digital network of "directors" or mentors to
start-up activities, along the Globalventures.com
model;
(iii)
to ensure that there
is a knowledge network around the university
system and the indigenous sources of knowledge in
the local economy, a Malaysia Supercorridor model
adjusted to scale and local competitive
advantages;
(iv)
to look at and learn
from proven entrepreneurial models especially in
the technology-driven new economy. There are
companies which replicate tried models elsewhere,
creating a Chinese or an Argentine version of
successful internet business models (like the
Chengwei model);
(v)
to build local brands
through value-added activities, Honey Care in
Kenya
or
flower cultivation in Costa Rica or
China ;
(vi)
to ensure that creative
talent is commercialized around indigenous art,
music, and film, exportable products in a global
economy and a base for profitable industries in
the Bollywood or Korean film models.
These steps can provide the foundation of
an entrepreneurial economy, focused on organizing
next generation talent around the exercise of
creating value. With capital
markets that are designed to create disciplined
growth and export strategies for domestic
entrepreneurs, this approach to economic
development could be the basis of a sustainable
prosperity throughout the entire global
economy.
NOTES:
Global
entrepreneurship conference San
Francisco
Regional venture capital
funds:
Mekong
Capital in
Vietnam
and Chengwei in
China
.
ILO
report on Migrant Worker Remittances,
Micro-finance and the Informal Economy by
Shivani Puri and Tineke
Ritzema (excerpt below)
5.3 The potential role of
micro-finance in linking unrecorded remittances to
development
On the whole, then, the
attempts of Governments of labour-exporting
countries to attract unofficial remittances and
influence their uses domestically have had a mixed
record. There are a few schemes for
self-employment and vocational retraining, but
these contribute only marginally to the
re-absorption of labour. Clearly, it is difficult
to convert successful migrant workers/savers with
no prior business experience into dynamic
entrepreneurs. It could be argued that it is more
realistic to introduce financial intermediaries
that capture migrant remittances as deposits and
channel them to existing small and
micro-businesses, rather than transforming
migrants directly into entrepreneurs.
In other words, rather than
focussing on 'migrant-specific' investment
programmes, labour exporting countries might wish
to induce micro-finance institutions to capture
remittances. The basic idea would be to design
policies to transfer funds of the migrant workers
through to entrepreneurs. Savings and credit
schemes and investment instruments specifically
designed to suit migrant workers' risk profiles
could be important vehicles.
This could involve elements
of a payroll deduction scheme and a fund mechanism
offering competitive remuneration and little
restriction on withdrawals. Partnerships with
commercial wire transfer and courier service
companies could help share risks and costs.
Migrant worker savings could
also be managed similar to pension funds. These
options need to be explored in greater detail by
policy-makers. It is plausible that these types of
savings-credit schemes are attractive to migrant
workers who often consider overseas employment as
a means of saving money for the undertaking some
investment upon return.
June 28th, 2005: Markets in knowledge about
benchmarking in healthcare: Barry
Meier's reporting in the June 23rd New York Times (www.nytimes.com) entitled "A Choice for the
Heart: It's Easier to Get Data on a Car than on a
Medical Device", points out the
need for better information-mining in areas that
show how
competing drugs and medical products compare in
both safety and effectiveness. This
article should help us return to a modern
discussion about health care, one that suggests
that reformers can advocate strategies that
improve health care quality and produce cost
containment simultaneously if the information
benchmarking treatments was better mined. The
market in knowledge about health-care
effectiveness suggests a number of new business
models and corresponding opportunities for venture
capital firms. A recent
conference at Harvard Business School reported a
relatively increasing venture capital interest in
medical devices,. However, there continues
to be an unexploied opportunity to create
companies mining and analysing data concerning the
effectiveness and cost of various health care
procedures to insurance companies, governments and
consumers.
(http://hbswk.hbs.edu/pubitem.jhtml?id=3917&sid=-1&t=special_reports_equity2004
)
May 24, 2005
Venture capitalists and movie
producers: Gary Rivlin's
excellent article in Sunday's New York Times ("So
You Want to Be a Venture Capitalist"
May 22nd, 2005
www.nytimes.com )
raises some fundamental questions about predictors
of success in the venture capital industry. Like
sports scouts and movie producers, institutional
investors backing new venture capital funds have
to be prepared to acknowledge that there is more
"art" than "science" in predicting the next
winner. By
definition, emerging trends change, and someone
who spotted the last "next big thing" will not be
well-positioned to spot the next next big
thing.
While part of entire capital activity (like
movie producers) is technical (e.g. cost control,
team-building, strategic financing, management of
investors), some of it is also about timing and
scanning the horizon.
Successful venture capital firms will
continue to mix the two, finding the next Quentin
Tarantino, but remembering
what it is the allows Clint Eastwood to be
continuingly successful.
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