Category: Society

Working Memory, Success and Education

In a recent article published in New York Times (“Sorry, Strivers: Talent Matters”) David Hambrick and Elizabeth Meinz discuss a research study directed by David Lubinski and Camilla Benbow from Vanderbilt University which demonstrates that people who have higher level of working memory capacity have a distinct competitive advantage in their careers. The correlation between significant successful career and the size of the working memory is extremely high, too high not to be meaningful.

So, if you happen to be lucky enough to have been bestowed by Mother Nature with a large working memory capacity you will have it easy in life. You still need to work hard, but you are likely very successful and not struggling. And what happens if you are not that lucky? You will have to work harder, the conventional wisdom says.

The problem is there are no accessible methods that we can use to assess the working memory. There are no benchmarks. You could find books and magazines and web sites with official assessment kits and quizzes to measure your IQ, but not the level of your working memory.

Let’s assume you know the capacity of your working memory. What could you do about it? I think you could do a few things to improve the odds of success because this attribute is only one condition in your pathway to greater achievements and its influence depends on other factors. Intelligence, good character, capacity for sustained effort and motivation, to name a few other attributes, are all critical elements to success. It is not necessary that all of them are strong, but it all depends how good your strategy is in using them in a smart way. For instance if the level of your working memory is lower, this has an impact on your multitasking abilities and your capacity to handle big chunks of complex information. You could compensate that by controlling your pace. With a slower pace, you could patiently use your strong cognitive skills to process the same complex information, but it just takes a bit longer. If on top of this you use smart cognitive tools then in the long-term you could achieve the same performance levels.

If you perfect your mental frames and have a clear understanding of fundamental cognitive structures, you could accelerate your learning with practice. This was one of the most remarkable observations discovered at the Kahn Academy when processing data with the online analytical tools: students who normally would fall behind in a standard classroom environment, if they take their time to master the study units, they eventually pick up the pace once they successfully consolidated their understanding of the fundamental cognitive structures discussed in the respective study units regardless of how long it takes to do that.

This is a big promise of the education in the future. Our advances in understanding how these metacognitive skills (thinking strategies) could be used to adapt the approach to learning and problem solving to our personal profile with better chances at getting closer to what we are really capable of. Unfortunately, education in its current industrial format just focuses on a simplistic manifestation of our abilities as they are limited to a few skills that rely heavily on the use of working memory. This is mostly obvious in numerical computation and verbal abilities. The traditional literacy and numeracy subjects are the core of the learning and teaching activities targeting systematic knowledge acquisition without achieving mastery of thinking skills. This is reflected in the structure of the formal of assessment programs. Education doesn’t emphasize very much the importance of thinking strategies, which would give young students a valuable life toolset. If we teach the students how to become better at organising their thinking, they will achieve more in their lives, and in the end they will be much happier people because they have a better chance to personal fulfilment.

The day computers will know more than humans will be sometime in 2032

The total information digitally stored in the world in 2010 was 1 zettabyte. The human brain can store 2.5 petabytes. This means 400,000 people can carry in their brains the entire digital data stored in the world in 2010.

When the information stored will reach 7.5 billions (assuming population will reach this level in the next few years) times 2.5 petabytes = 18,750 zettabytes, ( that is 18.75 yottabytes), the size of the total digital information will be equal to the total information stored in people’s brains.  When will that be?

If information stored doubles every 18 months, the world needs 14.195 periods to reach that limit. This is roughly the year 2032.

The computing power packed into microprocessors has followed the same growth rate for a long time, and it is highly probable it will do so in the next couple of decades. That means not only the computers will store more data, they will become significantly more intelligent.

We haven’t considered the networking effect. This increases dramatically the computing power of networked devices.

The digital ecology will look very different in 2032. Attempting to make detail predictions of what will happen is fraught with danger of missing the mark by a mile. However, we can try to anticipate some general changes based on past trends.

In the year 2032, a small personal device will have the smarts of a super computer today. The computers will have sufficient intelligence to display quasi-human attributes: metaphoric meaning, low level of perception, complex meaning, natural voice recognition, real time facial recognition, etc. The last two attributes will probably be heavily used in super-high definition of video cameras for pervasive supervision. The computing power will be sufficient then to create realistic special effects that can simulate voice and images, helping trouble makers to fool supervision cameras.

The drones will be smaller, faster and ubiquitous. They can be deployed by thousands to cover designated areas to identify and destroy strategic targets.

Cars will think and drive themselves even in busy urban districts.

Will we still use petrol? Maybe, but there will be a lot more green and smart energy by then.

How will people be?

Affluent society will thrive in creative environments where imagination will transform into usable, consumable outputs almost immediately. Creativity will be powered by work in collaborative and dynamic groups. Highly creative groups will be very fluid, surfing the wave of complexity and sophistication, enjoying privileges that come with success.

Robotics will replace humans in doing repetitive, dirty and dangerous jobs, but it is not likely that this will bring the happiness that many are hoping for. People who made a living out of those jobs will find they have nowhere to go. They can’t cope, they don’t know what to do and the growing gap between the social cognitive abilities of the ones who can and the ones who can’t will slowly push the unfortunate into ever larger enclaves.

This will be the biggest challenge of the modern days in the future: what to do with those who cannot adapt to complex and dynamic society. As the computing devices become smarter, the mental health of humans become a bigger problem. The cost of health, education and civilian protection will not go down, but up.

This is not new, but following a trend that started thousands of years ago when cities were invented.

This problem will be the seed out of which a danger will arise threatening the existence of the whole civilisation as there will be those who will use the ignorant and the desperate to commit crimes, a practice the evil born in wealthy mediums has known for a long time. Anger makes a very good recruiting agent for all the wrong reasons.

The Social Networked Consumption

The “social network” is the buzzword of the day. Omnipresent in the social media, on TV and printed magazines, it is the darling of researchers around the world. Collaborative participation makes the social network, probably the biggest innovation since Internet, a positive phenomenon. Bringing people together to collaborate on solving problems releases a huge amount of creative energy on a global scale. Social network is a mystery as well: why are people so attracted to social networks?

In the past few years, a huge wave of websites built around the core concept of social network has been quietly gathering momentum. These systems link people, information and things through social relationships and essentially they try to solve a resource allocation efficiency problem by creating superfast links that have the effect of eliminating a real or an imaginary middle-man. If you think about it, the social network as it is understood today is the in fact another expression of the intrinsic social network that is the Internet.

To use terminology borrowed from psychology, the social networks (like Facebook) are conscious social systems, while the Internet is the massive subconscious domain that no-one can ever measure or fully understand its inner workings. When we look at social networks we only see a tiny little tip of the iceberg as what really drives us is way down below the surface. In this post I am looking at behaviour towards consumption mediated through social networks.

At its core the social network is a way of trading ideas between participants. If you abstract the social network to a system where parts exchange things through the use of an agreed currency, the social network is really an equalizer that moves things from one part to another in an attempt to restore equilibrium. If there is no external input, with time the system would reach that point. But as it happens, the social systems are far from being close and events keep triggering new imbalances and social networks busy: there is always something to talk about and share.

In its first iteration as a digital network, the web was a system that united resources using hyperlinks. Later with the rise in computing power, the hyperlinks started to be used to bring people together through more sophisticated interactions. Merely accessing documents (resources or things) across network was not enough to establish equilibrium. Discussions needed to occur to solve more complex problems, hence the need to facilitate communication between people using the very same network. People became extensions of things and things became extensions of people.

The social networks have generated a boom in communication. Not only has the communication gone up but the number of social networks has gone up, which leads to even more communication needed to trade and reconcile different ideas. You can hardly find a more powerful addictive cycle than this.

There are three distinct phases in the history of social networks on the Internet (so far): linking resources, linking people and linking services. The first phase was marked by the invention of the HTML, the second was marked by the rise of Facebook and the third is underway right now. This is about linking services in its many forms. Think ZipCar, Foodspotting, DriveMyCar, TaskRabitt, AirBnB and many similar applications that link people and services and things matching demand and supply at a scale, transparency and affordability that was never possible before Internet. The third form is social networked consumption, because in addition to performing the functions of the previous two forms it plays direct roles in the consumption supply chain (for example marketing and distribution).

The underlying phenomenon is the collaborative sharing that occurs in many ways from simple posts to feedback and rating and from questions and answers to actions that end up in economic transactions. Why are so many people suddenly ready to share things for free or pay a small fee for using someone else’s asset or mini-service?

Let’s assume this will go on and spread like wildfire in the next five years. One could say that this is a very efficient way of using resources which in the long run is good for the environment. People will learn how to live by consuming less and focus on social values. If we look into the future and extend this trend there will be a point where production would have to go down drastically because the use of the goods is so much more efficient through instant sharing.

This newly found frugality would see the auto manufacturers pulling their hair in desperation because instead of five families buying five cars they will buy maybe two cars and share them. Of course this is a totally theoretical speculation because in practice it is difficult to share assets to perfection in such a way that the usage level is constant but the number of resources is greatly diminished. This schedule is impossible. Nevertheless, the demand for expensive household products would have to come down if this model becomes a general life style choice.

The creativity born out of social sharing will find many ways in which the trading of personal ideas, goods and services through social networking will flourish. I wonder how much the financial crisis, the globalisation and the changes in the job market have contributed to the popularity of social network based services. The vast digital networks contribute to enhancing the capacity of countries and cross-border alliances to respond to crises. This made possible handling the GFC in a way that was not possible in 1929. During The Great Depression people suffered in isolation for a long period before the economies managed to restore the pre-crisis levels of prosperity. Imagine how different that era would have been if they had Internet.

If this trend continues, how would the world look like in five or ten years? I tend to believe the pendulum would have to swing the other way from diminished consumption to increased demand. There is a limit for how much you can share the same things. Reusability is not addressing the demand for novelty. But if the underlying motive is to buy more with less money, the downside is the cultivation of a society with an even bigger consumerist appetite.

Pay for use only is a convenient way to deal with immediate financial uncertainty and postpone expensive decisions, but it is also creates the illusion of more disposable cash. This will compensate for the initial drop in demand for expensive goods in form of full ownership by creating demand for other services that can be consumed frequently but require no big commitment, such as travel, entertainment and fashion. For instance, once the new pay for use system will become an establish business model, the number of cars on the road will keep growing through big businesses owning large car fleets and manage them with a sophisticated scheduling and mapping system that combines renting with other innovative related services.

In the end, what appears to be a cheap way of buying the pleasure with less effort, but no ownership, it may be a very expensive price to pay in the future. It is a deal that may haunt next generations of renters because it creates even more uncertainty. There will be fewer owners, but those who own these assets will amass fortunes by charging large number of renters a pay-per-use transaction fee. The next generation of renters will not be able to go back to full ownership because they will have acquired the taste of a pleasure driven life style and it will have no means to purchase outright the cars or other similar assets because they will be deemed to be too expensive to afford buying them.

A glitch in the future social system will cause a great deal of stress to people who have no plan B. It is very difficult to estimate the impact on the psyche of a population with limited or no ownership. Will it diminish the peoples’ sense of responsibility? Will it propagate a culture of superficial consumerism, work for immediate pleasure?

This superficial consumption practiced through cheering social networks may be a Faustian deal in which a temporary sense of security is purchased to avoiding the pain of long term commitment and the hardship it brings with it only to bring an irreconcilable regret later on.

The owners of the social networks will stand to benefit even more from those who make up the network. But this is another story.

Living Lab for the Study of Social Networking and Cybersafety

In a recent report published in Australia reveals how the Living Lab and Interrupting Spaces methodologies have been used to do research into how young people use social networking services. 

The argument is that the use of quantitative methods that use surveys and focus groups the research could be tainted by an initial bias based on pre-existing assumptions. The Living Lab method (Leven & Holmstrom, 2008) and Interrupted Spaces (Bolzan and Gale) are more user centric and therefore the focus will be on how users actually operate.

After reading the report, I found it difficult to convince myself if these methods are more “precise” than the widely used quantitative methods. I can see arguments for both sides but I tend to favour the more traditional methods, until further proof is offered.

The key point here is the design of the study is critical for both types of methodologies. On one hand, the argument is that surveys and focus groups tend to make assumptions about how users think and operate and thus influencing the type of questions that are asked. On the other hand, putting the user in the middle begs the question of who the representative user is. How would you know who to invite to participate in the living lab? For that, one has to do a study and use… traditional research methods to establish a user profile that will be referred to by the recruitment process.

The Living Lab method doesn’t scale. It has limited participation, therefore the selection of users must be accurate and offer adequate representation.

In this particular study, Intergenerational Attitudes Towards Social Networking and Cybersafety,  a group of young people and a small group of parents have been invited to participate in an experiment to determine if there are benefits for young people if they use social networking services (SNS).  It follows, that there are positive benefits and actually parents learned from them during the experiment.

As a parent, I did not recognised myself in any of the adults in the selected group. I also noticed that the experiment started with a preparation phase, which undoubtedly must have had an influence on the participants’ behaviour. I asked myself the question of how the selection process occurred. Was there a consideration of the socio-economic background of parents, geography or demographic profile? Is the pairing young people-adults in the experiment reflecting a real family structure?

The conclusions of the study mirror the assumptions that were used to design the setting of the Living Lab. Perhaps I need to look into a number of such research studies and get a better understanding of this type of methodology. There is a valid argument that experiments organised in a natural context offers a more complete view of the subject of the research study, the design needs careful consideration in order to avoid undue influence of outcome anticipation.

Eco-Social Capitalism

I know I am walking a fine line here. The social capitalism is a term coined probably by Kees van Kersbergen in his published work, “Social Capitalism: A Study of Christian Democracy and the Welfare State”. Kevin Rudd also made references to this model in his speeches during his Prime Ministership which came about the time when the Global Financial Crisis (GFC) was in full swing. In essence this model proposes an improvement of the capitalist model through a greater intervention of the state designed to address imbalances using macroeconomic regulatory tools.  This post does not refer to such model. This article focuses more on the corporation as an economic entity and the transformation of its model of operation which has more and more a broader social meaning, as opposed to a narrow economic definition. I use the term eco-social capitalism because it refers to the existence of corporations in the context of the natural environment and social habitat, rather than an element on government’s agenda.

Many centuries ago a wonderful innovation was created: the corporation with limited liability. This propelled the economic development at amazing speeds. Where before the risk sat with the individual entrepreneur, the limited liability increased the appetite for risks and large rewards. East India Company, launched on 31 Dec 1600 with the royal blessing of Queen Elizabeth I, is probably the oldest chartered company. Investors put their money into this venture hoping for big gains. When the first ship returned back the profit was huge, some reports indicating Drake made a 5,000% return. This was one lucky strike because over the years many ships went under ruining hopeful investors. The morale of this story is that shareholders take the risks and the rewards and this is all that mattered. Until now.

In recent years the corporates, especially the large public companies with transnational operations and vast resources at their disposal, have undergone a radical change in the way they are perceived by the public.  Many companies are accused of putting the interests of their shareholders and executives ahead of the broader community. This unfavourable image is compounded by the fact that many companies use cheaper labour markets to increase their profits at the expense of local employees.

In Creating Shared Value, an article published in Harvard Business Review magazine (2011), Michael Porter and Mark Kramer redefine the corporation in very different terms using the concept of the “shared value”. Departing from a model in which the corporations act as a self-contained entity, Michael Porter is proposing a model that extends the business concerns beyond “internal” processes to include “externalities” such as social and environmental issues. The practical reason is the limitations and the risks associated with a regulatory regime that as elected representatives tries to respond to the public concern by imposing laws and regulations that force the companies to address environmental and social issues.  However this solution creates a very complex environment which increases the costs of business, it reduces the speed of new jobs creation and actually incentivising corporations to consider moving some of their operations overseas.

The better option is for the corporation to have an more flexible strategy of creating shared value. This requires an approach to the value add process which incorporates the “externalities” in the business design from the very beginning. This is not a welfare initiative and this is not a “fair trading” scheme, but an adjustment of business scope beyond the creation of value for its shareholders. This works only if the corporation investigates opportunities in three areas:

  1. Reconceiving products and markets
  2. Redefining productivity in the value chain
  3. Building industry supportive clusters at the company’s locations

This creates vast opportunities, if the company has the adequate resources, brain power being one of them. The approach resembles the Blue Ocean strategy (W Chan Kim, Renee Mauborgne) which takes into consideration all the elements of the value chain and find competitive ways in which a distinct value proposition can be offered. The two main elements of the strategy are the environment and the communities. The environment includes resources and energy while the communities include local wellbeing, employment in areas that match the local skills, local economic development through planting seeds of industry green shoots that help regional development and thus supporting the existence of a sustainable market where the company can supply its goods and services.

There is an interesting point in the case of government agencies. The notion of good from the point of view of the role of the agency is the delivery of benefits to the society. This has been the case for most agencies. It sounds like a “duh” moment, but when you take a closer look, delivering benefits does not necessarily mean producing value. Value is generated only when benefits are delivered at the right cost, otherwise there is no value. In fact the focus on benefits rather than value is the cause of the current budgetary crises in local and federal governments in many countries. The benefits or even worse, the mere exercise of a function, while ignoring the cost, builds up losses after losses, hidden behind the positive news.  In the wider context these benefits cost more and at the expense of other areas which will be underfunded and neglected.  A government agency that chooses to focus on creating value by looking for opportunities in the same three areas will support society and environment in a sustainable way ensuring more equitable long term prosperity.

The shared value creation model is very appealing and it is increasingly applied by large companies with sufficient financial clout and intellectual capital. It is difficult to believe though that in general corporations will adopt this model consciously because “it is good”. The real driving engine is the necessity of managing the risk of losing reputation which threatens to destroy a company faster than many think is possible. BP almost collapsed during the disaster in the Gulf of Mexico.

The change is dramatic, but difficult. This is more so for listed companies which have a tortuous reporting cycle that forces the adoption of a short term vision. The change to a business that creates shared values is almost impossible. However the public pressure will “help” this transition. Because the reporting cycle required by sharemarkets around the world is an impediment, and most agree that it comes with negative consequences, it may be that we will see the dawn of a new investment system by which the pooling of capital will take place outside sharemarkets.

I am not referring to private equity but to a new way of public participation to enterprise ventures based on very fast global networks in which information is shared and large group of participants can take part in new start ups some of them as investors and others as creators. This new “shareholding” system is already being used to setup companies that have a different moral compass and that are made up of people who are more ethically advanced and conscious of our responsibility towards the fragile environment in which we live. This also means that people with superior societal skills, knowledge of environmental concepts, team work and creativity will be in high demand.  The eco-social capitalism is here already.

Japan’s Outlook

Today Moody downgraded Japan’s outlook from stable to negative. I am not sure how many in the market are shocked by this news. Not many, I suppose. An interview on Bloomberg with a journalist from Kuala Lumpur was not much concerned with the news “shock” factor. However, the journalist looked a bit worried and he particularly picked on the tone in the language Moody used to announce the downgrade. In his view the word “inexorable” stands out and that is a strong warning signal. Japan is moving towards a moment of reckoning with its huge debt.

The interesting part of the interview was about why Japan cannot fix this problem, at least in the current political climate. For one, Japan is ageing fast. Many politicians are old and they will never adopt measures to hurt themselves and the ones closed to them and force measures that are going to drastically change the system.

And this brings me to a point that I thought of yesterday whilst pondering about a recent report on Japanese students’ apathy towards international studies. Japan has one of the most inflexible immigration policies in the developed world. Combine this with the negative population growth and the huge debt and the unwillingness to reform the political system and you get a lethal recipe. Stagnation is the word that comes to mind.

Japan had a vibrant economy for many decades after the Second World War. Starting from a very low level Japan grew at rapid pace to become the second largest economy in the world and leaders in many top industries. The Japanese worked very hard and had a dedication to discipline. The school system was designed with ambition to become the best system in the world that produces students with superior results in all universally accepted indicators.

Preparing students for a successful life, which sometime ago was defined as lifetime employment at the best Japanese companies, was demanding big sacrifices from parents and children alike. Studying during extra curriculum activities became the norm. A TV documentary caused consternation a few years ago in Europe and US when it showed young children studying all day until 10pm struggling to cope in a very competitive and stressful environment.

The results were impressive from the business point of view. Students who survived the tough school environment and excelled in their field were selected to become the leaders of tomorrow.  The Keiretsu system helped their members to make sure they prosper and their workers had secure jobs for life.

All went well until the real estate bubble burst. Coincidently, at that time the world has entered the era of the internet and started to learn how to use the newly invented world wide web. The crash hit hard Japan because it came at a moment of demographic stagnation and the emergence of a new type of economy facilitated by the use of Internet.  In the following years the deflation kept eroding the national wealth. The Keiretsu culture and the stagnating population level ensured that the deflationary period was to be extended for many years.

After a period of fast growth and population going through a hard schooling system, with extended deflation, high debt and almost zero immigration, what would Japanese society do and feel like? It is a question leaning on the soft side, I know. However, I think is an important one. Deflation is difficult to fight. It is slow and it spreads through many aspects of society influencing its behaviour. The question is about the background of the overall mood of the society.

In the new internet based economy, the term is a bit passé, but nevertheless useful in this context, the creative turmoil of Silicon Valley has started a global transformation with broad impact. This is the antithesis of rigidity. Creative entrepreneurship does not bode well with rigid schooling system. Challenging the norm has become the new norm. This is difficult to imprint into the Japanese disciplined system. This adds an extra challenge to its political leaders.

Japan has an obsession with its long term security. As an island nation, security has been a priority for a long time. With a strong culture, Japan has never embraced immigration like other nations did. Knowing that the ageing will become a social issue in a few years time, Japan is investing a lot of resources into developing robots that can be used in the household for all sorts of chores. It is interesting how many of the demonstrations run the scenario of helping old people, including robots carrying in their arms pensioners who have a high degree of immobility. The robots seem to be a solution for an ageing population that will face loneliness and a large debt burden in the future.

I wonder if in the long term the conservative tendency will not lead to a new period of isolation similar to Sakoku, the foreign relations policy initiated by Tokugawa started in 1633. In a business sense this does not seem plausible because Japan has many global companies, among the best in the world. However, these companies invest increasingly more overseas, especially in the emerging economies where the workforce is dynamic, hungry and creative. This trend could accelerate the isolation and strengthen the preference for maintaining a stable but rigid environment characterised by risk aversion and consequently limiting opportunities for growth.