El artículo entero se encuentra aquí:

http://thenextweb.com/la/2013/06/15/latin-americas-wanna-be-silicon-valleys-have-to-face-an-inconvenient-truth-the-need-for-immigration/

http://thenextweb.com/insider/2013/04/20/for-tech-industries-to-develop-in-emerging-economies-the-first-obstacle-is-trust/

The term is useful in that it provides a rhetorical safety net by simultaneously describing everything and nothing, but its lack of precision inhibits technologists from achieving the goal of articulating an accessible vision of the future. By failing to accurately describe what changes the world is undergoing, technologists not only fail to put out the fires of panic lit by those with an anchored interest in maintaining the status-quo, they inadvertently end up stoking them.

A more useful term then to explain the multi-sectoral patterns of change we see unfolding before us is ‘disintermediation’. To disintermediate, as defined by Merriam-Webster, is the elimination of an intermediary in a transaction between two parties.

Even this definition, however, does not do full justice to what tech. companies and social entrepreneurs alike are trying to achieve: after all, eliminating the intermediary is not always the goal.

In some cases the objective is to replace a human intermediary or proxy with software. In other cases the objective is to make the intermediary more malleable so that it can react to surges of human input while continuing to operate with limited input under normal conditions.

To make this argument more tangible, think of it another way: much of the world as it is currently designed is based on a series of proxies meant to specialize and serve the will of those they are meant to represent. Such a system of specialization is supposed to free up resources and enable the most educated individual on a topic make decisions for the masses.

For example, parliamentarians are elected to ‘represent’ the will of a constituency, or at the very least the will of a majority of a defined constituency.

Record label executives are proxies for the musical tastes of music fans.

Traditional media outlets are proxies for the interests of their audiences.

Venture capitalists are meant to be proxies for both the investors they represent as well as consumer demand.

In each case we assume that the expertise and specialisation of the proxy serves the best interest of the will of the represented.

Changing Nature

Though this system has arguably served us well throughout the 20th century when mobility and communications were limited by the technologies of the day, the tools of the 21st century are calling into question the continued relevance of the proxy-reliant systems, or at least the role of the proxy.

The fundamental problems of outsourcing to experts are threefold: first, over time our representatives develop their own agendas that diverge from the best interests of those they are mandated to represent.

The recent financial crisis is one example of this: perverse incentive systems that rewarded short-term gains over long-term stability ultimately manifested themselves through the creation of derivatives designed to deceive rather than create value.

As the subsequent continued economic woes can attest, though institutional investors may have benefited from the ensuing market correction, society at large is still quite literally footing the bill. The trusted representatives mandated with creating value thus let us down.

The second problem with systems of representation via proxy is that they tend to be fairly static and do not account for times when individuals want to bypass their proxies and re-assume agency.

No clearer example of this exists than government.

If you happen to feel passionately about an issue and your elected representative feels the opposite you are unfortunately fresh out of luck.

Your voice is limited to expressing yourself through analogue inputs, none of which have actionable consequences unless you can rouse millions to your cause. The representative in this case is only open to input once every so many years. He thus fully represents the will of his constituency in lock-step with their wishes until the moment when he doesn’t. Then it’s wash, rinse and repeat.

Finally, when we represent via proxy the proxies have the incentive to appeal to the widest base possible, and in doing so relegate niche content to the fringes.

The stale air that characterizes commercial radio is but one example. Radio stations use sophisticated algorithms to ensure that the new song you hear is familiar enough to prevent you from changing stations, thus reducing the potential that you might hear something that might surprise you.

Similarly, traditional media’s emphasis on banal stories void of analysis is symptomatic of an industry where the quest for the lowest common denominator eliminates any coverage that might challenge us beyond our most instinctual and emotional understanding of the world.

The Nature of Change

The wide-scale disintermediation we are seeing, therefore, calls into question the representation via-proxy model by attacking  the assumptions imbedded in the aforementioned vulnerabilities.

Crowd-funding platforms such as Kickstarter and Kiva are examples of where venture capitalists and professional philanthropy organizations are bypassed so that individuals with a passion to build something can easily connect with individuals eager to buy or support something. The human intermediary whose expertise was meant to connect supply and demand is overlooked and instead replaced by software that facilitates the transaction.

Though additional effort is required on behalf of the demand side to make the transaction take place, the effort is minimal compared to the reward that comes from participating in communities often built around niche interests.

In other words, connectivity makes it easy for niche audiences to become masses and express their true authority and influence accordingly.

What’s Next?

If we see examples then of where proxies are bypassed and replaced by the consumers, voters, investors, etc., they are meant to represent, is it just a matter of time before representation by proxy mechanisms disappear completely?

Not really.

The GodFather of media Marshall McLuhan wrote that rarely does one medium ever fully overtake another: T.V. did not kill the radio star, nor did planes make trains obsolete.

Instead, new mediums tend to expand the markets they disrupt before the old systems and the new systems learn to accommodate each other in different proportions. Following the Darwinian nature of modern capitalist economics, the weakest players in a market will disappear whereas the industry itself often remains stronger.

For example, regardless of how responsive our democratic systems become through direct democracy mechanisms it is unlikely that every citizen will want to vote on every bill that appears before a nation’s parliament, thus necessitating the existence of elected representatives.

Similarly, venture capitalists will continue to compete with crowdfunding, offering competition for both entrepreneurs and investors. So long as VC firms continue to produce a return they’ll continue to exist.

The same can be said of traditional news media companies: though some will fail to transition from the analogue world to the digital world and will find themselves overtaken by social media, others will re-invent themselves in the new world order by successfully navigating the process of translating their trust and relationships into new economically viable products and services.

Conclusion

 Whether we’re speaking of disruption or disintermediation, ultimately what we’re speaking of is a massive change in how different groups of people express their will and the ensuing adjustments that accompany the change. What is ultimately under question then is the assumption that we always want decisions made by experts, when the truth is we sometimes want to represent ourselves.

The proof of this change can be found whenever someone chooses to fund a Kickstarter project; share indi music amongst friends; sign an online petition or re-tweet information we want others to know.

 Though we see this change happening, it’s still not clear whether the movement of self-representation underfoot will prove as transformative as the industrial revolution or something with a much more natural inflection point, similar to green movements around that world that took off in the 70s and then whose growth has slowed to a less rampant but still highly effective pace.

In the meantime, however, while some will continue to debate the merit of the shift in the balance of power, others will choose to focus their energies on designing the systems that both enable the expression of collective will whilst taking into account the need to mitigate certain risks including abuse.

Whereas markets responding to demand will likely to adjust fast barring excessive regulation, more conservative institutions, such as government, will take longer and require more experimentation before individuals feel entirely comfortable modifying how decisions are made. Just as we saw online commerce take off once people experienced a few successful transactions, so too might the pace of change quicken once a few pilot projects prove that the benefits of the new systems outweigh the risks.

What is clear is that wide-scale change is underway, whilst what is unclear is how much time and effort will be required for the exception to become the rule. Helpful to this process will be a better vocabulary with which we proponents of a more participatory, inclusive, transparent and representative world can convert others to the cause.

Change is by no means inevitable: as history has shown, suboptimal systems sometimes prove themselves to be surprisingly resilient. The test then is not whether we will succeed or fail, but for how long are we willing to fail before we succeed.

http://forumblog.org/2012/12/what-is-resilient-dynamism-in-the-context-of-the-world-economic-forum/

http://forumblog.org/2012/12/the-crisis-of-legitimacy-and-representation/

Hey Everyone, 

A published a more organized article on the topic of the recent spat between Google and France on TheNextWeb.com. You can find the link here. Enjoy! 

Por mas llamativa esa nota, lo que mas me llamó la atención fue la política anunciada de ‘internet para todos.’

Como primera reacción a cualquier política que se expresa como “x para todos,”  como muchos tengo la tendencia de asumir que es el populismo que motiva la política. Además, el populismo es el lenguaje natural de la política ecuatoriana: culpar a un político por ser ‘populista’ es igual a acusarlo de hablar castellano. Lo digo no para promover el cinismo sino reconocer una realidad: la política ecuatoriana se define por el populismo, producto en mi opinión de las grandes desigualadas que sufre el país. El desafío del votante, entonces, es ver mas allá del discurso para ver si hay respaldo de políticas publicas sanas e inteligentes que pueden producir desarrollo y mejorar la calidad de vida de los ciudadanos.

En este caso la propuesta es mucho mas que un simple “tal para todos,” porque representa una oportunidad de saltar varios pasos en el camino hacia el desarrollo, factor que podría democratizar profundamente el país tanto gobierno como mercados.

Cuando el mundo es plano, dijo el columnista norteamericano Thomas Friedman, no hay que emigrar: se puede innovar. La ubiquidad del internet en Ecuador nos llevaría a un paso hacia esa realidad. Como es posible?

Primero hay que pensar en la educación. Si te pregunto “como reformamos la educación popular en Ecuador?” estaríamos conversando hasta el infinito. Sin embargo, si ponemos una maquina que cuesta $35 USD y con conexión al internet en las manos de un alumno, ese alumno y no falta de libros de texto ni profesores de primera calidad porque el internet ofrece los dos y son gratis.

Es decir, imaginar un mundo donde el estudiante rural puede recibir una educación parecida a la que reciben los estudiantes de los mejores colegios privados del país es, igual que imaginarnos acercar hacia la igualdad de oportunidad para todos. Los mismos que dicen “hay que enseñar a los pobres como pescar” se olviden de notar que los pobres no tienen ni siquiera caña de pescar. Una computadora con acceso al internet, entonces, podría hacer que el Ecuador tenga condiciones sociales que mas parecen a los países desarrollados que los países llamados sub-desarrollados. El impacto que describo no es un sueño utópico: organizaciones como The Khan Academy y Udacity cuentan con millones de estudiantes recibiendo una educación de primera con nada mas que una conexión al internet. La revolución ya comenzó.  (No quiero ignorar la importancia de los tener profesores capacitados en los colegios, pero con el internet los profes también pueden capacitarse, algo que ya esta pasando en el país).

No es solamente la educación que podría ser revolucionada sino también el capitalismo entero. El capitalismo que reina en Ecuador es muy mal diseñado, la evidencia siendo la poca movilización social que hay en el país comparado con otros.

Los defectos del sistema capitalista ecuatoriano podrían ser tema de un libro tan grande ni siquiera Rodrigo Borja tendría la paciencia de escribir.  Resumo por decir entonces que las condiciones del mercado que hay en Ecuador favorecen los titulares; la burocracia dificulta la legalización y por lo tanto el crecimiento de muchas empresas pequeñas; el acceso a los instrumentos tradicionales como el capital y la capacitación es limitado, tal como el acceso a mercados internacionales.

En los países mas desarrollados y igualitarios el capital es liquido y circula por la sociedad rápidamente tocando todos sus ciudadanos. En países como Ecuador el capital es congelado y guardado en los refgris de los suertudos. Lo que se necesita, entonces es romper y repartir ese capital de tal manera que la prosperidad se contagia.

El internet cuando no padece de regulación demasiada, ofrece acceso a un mercado bien diseñado. Los monopolios y oligopolios que dominan a través de escasez en el mundo desconectado tienen que, en un mundo conectado, competir en un contexto de abundancia donde su marca, ubicación física y el alto costo de entrada ya no aseguran su éxito.

A la vez, las estructuras que muchas veces mantienen la pobreza ya dejen de ejercer tanta influencia: los agricultores, por ejemplo, pueden aprovechar de la facilidad con que se puede conectar para evitar los intermediarios y vender directamente a quien pueda comprar al mejor costo. Si aun no le llego a convencer de las posibilidades que hay aquí, pónganse a pensar en el mundo antes de la invención de la imprenta y después: es esa la escala de cambio que estamos al punto de abordar.

Siendo historiador económico, Alberto Acosta sabe bien que la política mas importante en las historias de los países latinoamericanos desde su independencia ha sido la reforma agraria. Esa reforma ha sido tan importante porque ha permitido corregir las injusticias perpetuadas desde antes de la época colonial en las cuales los medios de producción han sido concentrados en las manos de pocos, limitando las posibilidades de los demás.

El efecto de la democratización al acceso de información es igual si no aun mas poderoso que la reforma agraria porque el medio de hoy en adelante ya no es la tierra sino la información y el mercado al que se puede vender ya no es local sino global.

Implementar una política tan ambiciosa podría ser difícil pero no imposible. La manera mas radical que podría ser favorecida por algunos grupos de la izquierda-nacionalizar las compañías de telecomunicación y empezar a ofrecer su producto gratis-podría funcionar por un tiempo pero la inversión requerida para mantener el paso con la industria global a lo mejor no se llevaría a cabo. Instalar una red fibra óptica es otra opción que sería caroa pero la inversión valdría la pena porque las oportunidades económicas que se crearían tienen una potencia exponencial.

De todas maneras no hay que olvidar que el internet no es una pastilla mágica sino una fuerza catalizadora. No es solamente una industria sino un instrumento para transformar otras industrias, lo cual significa que su éxito también depende de avances en otras áreas. Por ejemplo, si el sistema aduanero y correo nacional impiden la compra de materias extranjeras y la venta de productos el poder transformativo del internet sigue limitado. Para concluir, el internet representa una oportunidad de y acelerar el paso del desarrollo.

Antes de poder implementar la política primero La Alianza Plurinacional tendría que ganar, y lo difícil va a ser mantenerse integra a través de una elección y, si tienen suerte, durante un gobierno. Las alianzas de grupos de la derecha tienden a ser mas estables porque se organizan por principios: gobierno limitado, disminuir la obligación tributaria, etc. La izquierda, en cambio, tiende a organizarse no por principios sino por intereses: una vez en gobierno, esas intereses empiecen a crear competencia entre si, lo cual produce gobiernos mas inestables (alguien se acuerda de un tal Lucio Gutiérrez?).

La fortaleza del gobierno actual ha sido poder capturar la imaginación de una gran parte de la población sin tener que comprometerse con otros grupos, partidos y movimientos de la misma afinidad política. De hecho, en varias ocasiones el mandatario ha provocado grupos tradicionalmente alineados  con la izquierda como ambientalistas y la dirigencia indigenista sin que esas acciones lleguen a afectar su base de apoyo. Replicar ese éxito cuando ya no hay el factor que los une (en este caso, su oposición al gobierno actual) será un desafío que requiere que cada componente de la alianza pone el interés del colectivo antes de su interés personal: problema que bien refleja y define la historia de la política ecuatoriana.

Aunque es muy temprano decir como las urnas van a reaccionar a la presencia de la Coordinadora Plurinacional de Izquierdas, mi esperanza es que el hecho de haber puesto el acceso al internet como centro de su campaña provoca una discusión sobre la gran posibilidad de cambiar el rumbo del desarrollo económico para que deje de ser un camino basado en las industrias extractivas a un cambio basado en la innovación y el capital humano. Si se logra eso y aun pierden las elecciones sus esfuerzos no habrán sido en vano.

Matthew Carpenter-Arévalo era analista político en Ecuador. Ahora trabaja en el Foro Económico Mundial en Suiza. Las ideas expresadas aquí representan sus opiniones y no reflejan de ninguna manera las opiniones de la organización a la cual pertenece. Pide disculpas por los errores ortográficos, productos de su gringiedad innegable. 

If you’re either a techie or a media junkie you’re likely aware that Google and the French media are currently barreling down the information highway in each other’s direction playing a high stakes game of chicken.

Google, operating on the assumption that the French always surrender (do I need to say which side of the debate I come down on?),  is threatening to remove all French media sites from its search index. The French media companies, for their part, are calling in favors with their legislator friends in order that the government creates a ‘Google Tax’ which would force the company to pay royalties for showing small tidbits of articles as search results.

This argument is not without precedent: indeed, it wasn’t too long ago that Google went toe-to-toe with Rupert Murdoch’s News Empire, a fight that ended in Murdoch disallowing Google from indexing any of his sites’ content and then later reversing that decision.

What’s ultimately visible here is the growing pains brought about by technological disruption: Google in this case is a scapegoat for the traditional media companies struggling to make the transition from a world of scarcity where they stood alone as credible sources of information to a world of abundance where each company is but one of many news sources in an entirely re-designed landscape. It’s worth pausing here to consider the underlying issues on the table, including the depreciating brand values, unsalvageable business models and the risky bet that underlines this very public maneuvering.

Depreciating Brand Values - A few years ago during a meeting with a large and well-known Canadian media company a VP wanted to open the discussion of introducing his company’s app to the Android market place. After I explained the application process he said, “We’d like to have more visibility for our app given our status here in Canada and the amount of business we do with Google.”

What was behind the executive’s viewpoint was the idea that his company should not have to compete with all of the other apps. out there because a.) his company has a high brand value in the offline world and b.) his continued use of Google products should by him some good will.

The problem here is that the online economy doesn’t automatically recognize the incumbency of offline giants: indeed, that’s what makes the internet so revolutionary and disruptive. Second, in this and many other cases I came face to face with media company executives who simply refused to believe that Google’s search algorithms were honestly and truly organic and meritocratic. The word that summarizes the attitude of both the media executive in my story as well as the French Press is entitled. 

Our audience is our audience! They cry.

They are but momentarily distracted! You must needs send them back to us! 

To which we reply: Dude, they’re just not that into you.

Think of it another way: on the Paris Street Le Monde has privileged real-estate on the corner newsstand. As you approach the newsstand Le Monde catches your eye because a.) the amount of newspapers and magazines any one newsstand can hold is limited and b.) Le Monde has made the capital investment to operate a nation-wide daily and managed to stay successful long enough to be one of the few players left. It’s reputation, in the offline world at least, precedes it.

Contrast to the online world and in Google’s eyes Le Monde is but one of an innumerable and uncountable chattering voices providing information about what’s going on in France. Of course Google’s algorithm does recognize Le Monde’s stature and rewards it accordingly and handsomely by sending millions, if not billions of clicks its way every year. Nevertheless, unlike the newsstand where the probability you buy Le Monde may be 1 in 4, on the internet the chance you may read Le Monde may be 1 in 1000, such are the exponential ratios in the world of abundance.

All of this is to say that when forced to compete in the online world to win the attention of its audience  Le Monde is at a strategic disadvantage in that it has all of the costs of the offline world without most of the advantages that come from being a dominant force on paper.

The loss of brand value in this case is immense unless you can a.) beg, plead, intimidate or strong-arm the traffic directors of the online world to favor your site or b.) close your eyes and deny the existence and legitimacy of the internet. Like Ahmadinejad squinting when he looks at a map of the Middle East to avoid seeing that which he doesn’t recognize, many of the world’s media companies have decided to close their eyes, stick their fingers in their ears and sing “I got my mind set on you” as loud as they can in hopes when they stop the world will return to what it was. Unfortunately for them, it wont.

Out of Date Business Model - The news has never paid for itself; when we have produced news on paper some other business model has always paid for it.

Television and radio, due to their ability to acquire and serve millions of customers at no extra cost, have been able to rely mostly on advertising revenues to stay afloat.

Newspapers, however, have not been so fortunate: first, writing, printing and distributing a newspaper every day requires massive capital expense. Though advertising and subscription sales cover some of the costs classifieds really brought home the bacon.

Then, of course, along came Craig’s List offering the same service only better and for the low low price of three easy payments of free of charge. In fact, Craig’s List, even more than Google, basically pulled the rug from underneath the feet of the news industry. Though their online operations do bring in revenue for traditional media companies (indeed, some have switched to becoming online only publications), the margins for online advertising are a lot less than they are in the offline world, as your audience’s attention is spread out among millions of websites, thus essentially flooding the market with excess supply. Though some media companies know a lot about their audiences the advances in advertising targeting technology makes even that advantage somewhat obsolete.

Entirely unprepared for the pace of change, traditional media companies to this day continue to struggle to figure out what the new business ‘model,’ will be, and implicit in this question is the idea that somewhere out there there is a currently vacated ‘model’ not being used that the industry as a whole can simply adopt.

The problem though is that there isn’t any one model because if there is a way for lots of people to make money then lost of people will be out doing it. There will only be models, each one more different than the last.

For example, one media company I know in Canada leveraged its relationships with advertisers in order to be able to sell on behalf of large U.S. publications that are popular up North. Another company I know got into the classified auto-sales business and is looking to leverage its web traffic to become its audience’s first point of reference when they’re thinking of buying and selling a car. The smart companies are launching new media properties every week, often under different brands, to try to figure out how they can amass even larger audiences across more varied content and thus make themselves more appealing to advertisers. The stupid companies are putting up paywalls and assuming that people will pay them for what they can get for free elsewhere.

Marshall McLuhan noted that one medium never entirely replaces another, and this has been true for everything except maybe the ham radio. T.V. didn’t, in fact, kill the radio-star: it just gave the radio-star a new and different opportunity to experience his/her music (Incidentally Reedit killed the Ham Radio Star and exposed him as a pervert. Ok: I kid). What creative destruction does though is that it tends to wipe out those companies that are either poorly managed or not delivering value. The Economist, for example, will continue to do well because of the high quality of its reporting. Others, however, might not be so lucky.

Similarly, it’s worth pointing out that investigative journalism is not dying, nor is the demand for local journalism: the business model that supported them though is in crisis because people are willing to do for free what others demanded payment for, making for a difficult competitive landscape.

The Risky Bet - So what does any of this have to do with Google? In the eyes of media companies Google is the bully ingeniously disguised as a geek that has planted itself between them and their audiences and is now dispersing their readership all over the internet. For the privilege of sending them users, the French media companies argue, Google should pay.

Google would respond by noting that its only job is to let people know what is already available and rank it accordingly so that the user finds the information that is most useful to them as quickly as possible. Google assumes that if it doesn’t include you in its index you wont get any traffic, since Google is the world’s entryway into the internet. The French Media Companies, on the other hand, assume you would simply go to their site directly instead of re-directing through the search engine. Again: they assume that without Google directing traffic their offline brand value is restored.

This argument, however, simply doesn’t pass Grade 1 Internet Mathematics. For example, in this article I’ve linked to at least 3 different news stories, none of which I would have sought out, found and promoted if Google hadn’t made it easy for me. Similarly, though I write this blog mostly for my friends and family much of my traffic comes from people searching in Google for terms that appear in my blog posts (or people looking for hispanic carpentry).

If the French media companies are successful in having their parliament pass a law instating a ‘Google Tax,’ the result will be that Google will drop French media sites from its index. Google doesn’t want this outcome as its strength as a search engine comes from being an expert on everything, not just some things, and it can only do that if information is free and available. It wont, however, allow for a precedent to be set whereby it has to start paying websites for letting the world know what content they contain, as such as economic relationship would put the company out of business were it to be replicated world wide.

The French media companies are thus making a risky bet that they can inflict enough damage on Google’s ability to serve quality results that individuals interested in French news will have no choice but to skip over Google and go directly to them.

What’s more likely, however, is that French users will continue to go to Google out of habit and they will in turn be re-directed to more unconventional news sites, thus emboldening the non-traditional news companies filling the gap.  They will learn the lesson that Murdoch did which is that the traffic Google sends you is far more valuable than what you save by making your content only accessible through your own website. Though niche content sites such as The Wall Street Journal will be able to charge for premium content, others, such as The New York Times will likely ensure their own irrelevance by essentially turning away customers through a pay wall (I, for one, have almost stopped going to NYT entirely, not out of protest but because I have so many other rich options).

Conclusion: There are so many other topics to be discussed here including government intervention in limiting technologies as well as the long term societal implications for resisting and fighting against the forces of creative destruction.

For the moment however I would end by stating that journalism is an important pillar of democracy as well as a public good. We should seek to preserve and promote it at all costs, but we should not insist on trying to fit the squares of yesterday into the circles of today. There is more than one way to do journalism and there is one way to fund it: as I wrote here, the business models that will sustain the internet over the long term are only beginning to show themselves.  The world of abundance is far more free, democratic and participatory than the world of scarcity that preceded it.  Let’s not attempt to hold it back any longer.