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Diary of an Intangibles Accountant -part 1 It is broadly true to say that if you live in a completely industrial
age where people are only marketing things then tangible accounting knows how to count up 90% of what a company is worth;
and if you live in markets where value is diferentiated by service or how just-in-time knowledge is humanly netorked
and how energetically innovative people are at colaboratining then you live in a world where tangible accounting only
knows how to count up at most the 10% of things owned by the company. In 1989 I joined coopers & lybrand deloitte
which went through 5 names chnages in as many years as one of the then Big 5 accountants racing to audit the world's 5000
biggest organsiations. By definition intangibles are not tangibles, and I had spent a decade researching with mit in
boston and a global start up in paris what became the world's first database on what societies trusted most from
brands and purspose of almost every product category you can imagine. So I hoped to be able to make a small contribution to
the missing audit of intangibles. Anyone with whom I tried to do this got the sack. Somehow I lasted 5 years because
they still valued me to design the largest (or most deeply conflict ridden) research projects they had ever done including
one on what was done with very project the EU funded in Portugal. But my passion (my hoped for mission in life as a maths
guy) since 1990 had become tryiing to network with those who want a different (hi-trust as well as hi-tech,
and deeply context-specific) audit of intangibles. Indeed we incraesingy decided that the missing audit corresponds to:
does an organsaition have an above zero-sum model, and if it does does its board celebrate a goals specific audit.
Not that far from what my father back in 1976 had demanded transformation of economics would also need to do if we were going
to empower net generation productivity in an age of a million times more collaborative technology At the moment I am
trying to help the european union celebrate how much it found out about intangibles valuation unitil the bush adminsitartion
came in and banned all future funding wherever it had influence. Anyhow this is a copy of where the EU inatngibles crisis
networks got to in mapping their research when the last euro of funding ran out . Soon therafter at intangibles valuation's
last lunch of the 00s, my deep source in Brussels said - chris politicians dont think the peoples are interested in hi-trust
audits. I reckon it will take 3 Euroepan Enrons in the same eyar before they revisit this issue of how risk is compounding
globally unseen. Well I believe we have gone way past 3 enrons in one year with what the subprime virus has now done to government
finances in every state of usa as well as every nation in EU. So I duplicate these notes which interestingly enough the greeks
and spanish researchers who did a lot of the spadework of intangibles have diarised. I realise many of the links have gone
missing and will search if they have any relevant substitutes. European Commission work on Intangible Assets  EC Studies,
Communications and conferences
Research
Projects Eurostat European Centre for the Development of Vocational Training (CEDEFOP) |
The concept of intangible assets has become an important theme of European policy
for industrial competitiveness, as Europe increasingly becomes a knowledge driven economy. In October 1999, a Communication on "Structural change and adjustment in European manufacturing"
and recent declarations of new Commissioner Erkki Liikanen reaffirmed that "we must reinforce intangible investments
which is a key factor in competitiveness: life-long learning, spirit of enterprise, innovation, protection of intellectual
property, European patents (…)". Therefore, EU Information Society policy,
R&D and innovation policies and education and training policies should include actions aimed to stimulate innovation,
the spirit of enterprises, creativity and the competitive development of European companies through intangible investments.
But the Communication recognised that "despite the importance of these types of capital for the competitiveness of
the economy, our relevant data sources and our understanding of the investment decisions in this field are inadequate".
Also as the "1999 Report on the Competitiveness of European Industry" states: "Our understanding of the competitive process remains fundamentally incomplete
(…) Paradoxically, our knowledge about intangibles is still poor. Intangibles are, by nature, difficult to measure,
and the lack of reliable, comprehensive and internationally comparable data is a major barrier to broad-scale empirical analysis". "The diffusion of ICT-based products and services is contributing to higher
productivity (…) Unfortunately, these themes had to be excluded from this (the Competitiveness) report because, for
the time being, the appraisal of these effects faces critical measurement problems and would consequently require the development
of new statistical indicators." "Data on more detailed
breakdown of investment spending is scarce. Ongoing investment in information technology, for example, explains an important
part of investment expansion in the USA. … Unfortunately, comparable data do not exist for the EU"
Since 1994, the European Commission has launched a series of studies, actions
and projects which aim to better understand the knowledge economy and the importance of intangibles as competitiveness factors.
The European Commission tends to consider that policy makers should take stock of that evolution by defining new objectives
and instruments for industrial policy. 
1. EC Studies and conferences
1.1
Preliminary work In 1994, a Communication entitled "An industrial competitiveness policy for the European Union" was published,
stressing the importance of investing in areas such as training, R&D and industrial property rights. In 1996 and 1997, a series of documents
analysed the industrial aspects of the information society in the framework of DG III activity (Working document on Impact
of the Information Society on Industry and Service Sectors in May 1996; Analysis of the Industrial aspects of the Information
Society). This work has been influenced by the specific recommendation of the Competitiveness Advisory Group ("Enhancing
European Competitiveness. CAG June 1995 also called "Ciampi report"). The CAG report identifies the need for a concerted
European approach in the form of self-sustaining Knowledge Resource Centres. These KRCs will be linked in networks to enhance
synergy and ensure a Europe-wide framework for individual experiences. These networks will facilitate information supply and
demand and play a leading role in enhancing developments in the information society. For the CAG, this includes fostering
business opportunities and education and training activities, diffusing solutions throughout Europe, and encouraging learning
organisations. Also, the first action plan for innovation in Europe (DG
XIII, 1997) included the following action point: "To promote a positive fiscal and accounting scheme for intangible investments",
to be implemented by the member states. 1.2 1998-1999 activities This preliminary work has been followed in 1998 and 1999 by
several reports and studies stressing the role of intangible as competitiveness factors: - report on "Competitiveness of European Industry" which produced a new classification of
sectors;
- a series of benchmarking studies on financing innovation, skills, ICT and new organisational arrangements;
- study on "ICT investment in the intangible economy" led by DG III and commissioned to
MANTOS Consulting (Clark Eustace and Jorgen Mortensen). Addressed to the business community, this publication describes the
fundamental changes which have taken place in the mode of corporate wealth creation and competitivity where activities are
organised on a global sale, either directly or through a network of linkages between economic agents specially due to the
digital revolution in ICT. Researchers have collected, filtered and analysed results from academic, empirical and industrial
studies in order to propose a perspective on the productivity of IT investments. The publication contains three main chapters:
The changing ICT Market; Assessing the Economic Impact; The Role of Intangibles. This study has been published by OPOCE and
is available on DG Enterprise web site.
In the framework of the EU Finnish presidency, the issue of
intangibles has been discussed during an Informal Meeting of the Ministers of Industry on Competitiveness in the Information
Society which took place in Oulu on 2-3 July 1999. The Finnish presidency note entitled "Improving European competitiveness
by promoting the take up of ICT" is available on
the web site of the Finnish Council of State.
- A study commissioned
by DG Enterprise and performed by a study group led by LL&A on "Business Networks and the Knowledge-Driven
Economy" analyses how Knowledge Networks can be considered as an intangible asset. Knowledge networks represent
a step, where capacities and rights to access a value located outside the company are developed:
"Accepting the setting of
value at company level on what may appear as no more than just potentiality or virtuality will rely on fulfilling two conditions:
firstly, that adequate tools for knowledge storage and further delivery will enable the repatriation of these external resources
to the company according to its needs; secondly, that appropriate processes are implemented to ensure optimal internal dissemination
of knowledge and the involvement of end-users, thus applying a multiplying effect to value generation." This study is available for downloading on DG Enterprise web site.
- Two DG III studies aimed at evaluating the impact of intangible
investments on competitiveness at macro and micro economic levels:
- at the macro level, a study on "Intangible Investment and Human Resources" carried out
by WIFO. This study proposed a analysis of the structural differences with regard to importance of intangible investments
across industrial sectors and underlines weaknesses and strengths of the European industry;
- at the micro level, a study carried out by the National Institute of Economic and Social Research
on "Intangible Investment, Companies and Competitiveness" which investigates current hypotheses
on the links between intangible investments and performance across companies and sectors.
In 1999, Enterprise DG has also participated in several events to discuss intangible
investments and assets as well as methods and practices of measuring and reporting: - Symposium of Louvain-La-Neuve in April 1999. Organised at the initiative of P. Buigues (DG III -
Entreprise), A. Jacquemain (Forward Studies Unit and DG XII - Research) and J.F. Marchipont (DG XII - Research), this conference
aimed to assess the growing importance of intangible assets and the change of competitiveness sources;
A publication resulting from this Symposium has been published on May 25, 2000 ("Competitiveness
and the Value of Intangible assets" Jacquemin (ed) Edwar Elgar). The publication provides a theoretical and empirical
analysis of intangible investment and its effect on public policy in Europe. The authors find that the growing importance
of intangibles is transforming the direction of public policies in Europe, particularly industrial, R&D, competition and
trade policies. They conclude that government policies must recognise the fact that intangible investment is becoming the
key element in bringing about durable growth and attribute at least the same priority to intangible factors as to physical
investment.
- Amsterdam symposium in June 1999
organised by the Dutch Government, OECD and DG III (see section on OECD).
- A workshop took place within the framework of IST 99 conference in November 1999
Helsinki "Exploring the Information Society". Entitled "Intellectual Capital / Intangible
Investments: How much is your business worth ?", it was coordinated by Ronald Mackay of the European Commission.
In the minutes of the workshop, one can read the following main issues :
-
- industry
is aware that knowledge management is a key factor for business value but at present there is a need of indicators to measure
the performance of a company
- this problem transcends all aspects of business
management (accounting, corporate investment strategy, disclosure of information and aspects of economic management, etc.).
"It needs to be tackled jointly by the various institutional actors on an inter-disciplinary basis".
- it is very urgent to recognise at a policy level the need to invest more in intangibles (R&D,
innovation, training and market)
- all sectors are concerned.
The participants asked for new debates and discussions on these issues, in particular
with high level managers. "The sense of the meeting was that the Commission should take an initiative in this".
The Workshop Final report is available at www.ispo.cec.be/ecommerce/issues/intangibles/WS_full_report.html. This topic will be on the agenda of IST 2000 in Nice (6-8 November 2000).
These
issues of intangible assets are also monitored by Internal market DG, in particular in Company Law, Accounting
and Auditing which tends to modernise EU accounting rules. The Internal market DG has implemented a Contact Committee and Technical Committee which meets regularly to discuss matters particularly relating
to International Accounting Standards. The impact of the Single European Market has also recently been analysed in a consultancy
report for DG XV, emphasising that "the single market programme indirectly boosted the exploitation of intangible investments"
(The Single Market Review, Subseries V: Impact on competition and Scale effects, 1998). On June 13 2000, the European Commission has outlined a strategy for future financial reporting
in Europe in a Communication it has just adopted. The strategy aims to eliminate remaining barriers to cross-border
trading in securities. It recommends that there is one set of accounting standards so that company accounts throughout the
European Union are more transparent and can be more easily compared. A single set of standards should make it easier to compare
corporate performance, to raise capital and to enhance investor protection. This strategy should participate in the creation
of an integrated market in financial services that is the aim of the May 1999 Financial Services Action Plan. The Lisbon Summit
also insisted on the importance of the comparability of financial reporting to the creation of an efficient, deep and liquid
securities market in Europe. The Commission believes that the adoption of International Accounting Standards (IAS) are the
way forward. The Communication announces that the Commission will come forward with proposals before the end of 2000 which would require all EU companies
listed on a regulated market to prepare consolidated accounts in accordance with International Accounting Standards. This
requirement would enter into force at the latest from 2005 onwards. Member States would be allowed to extend this requirement
to unlisted companies and for preparing individual accounts. Since transparency and comparability are of particular importance
for financial institutions, this policy will also cover listed banks and insurance companies. Concerning more specifically human capital, Education and Culture DG tries to develop new ways of demonstrating the value of investments in human resources. The work is clearly policy-oriented
and is based on the fifth objective set out in the 1995 White Paper "Teaching and learning: Towards the Learning Society". The fifth objective states that investments in training ought to be treated in the same way as other capital investments.
More recently, on the Luxembourg Employment Summit in 1997 and especially the 1998 employment guidelines, Member States were asked to re-examine the obstacles to investments
in human resources and possibly provide for tax or other incentives. A survey on prevailing accounting and tax regulations
in the EU Member States suggests other ways of achieving equal recognition with other capital investments. In this field,
the European Commission works in close cooperation with CEDEFOP (European Centre for the Development of Vocational Training),
whose aim is to develop indicators that measure the effectiveness of vocational training and education (see below). Finally, many subsets of intangible assets are monitored by other DG (R&D,
innovation, Information Society, IPR, etc.).
2. Research Projects
Various research projects are also being carried out
on intangible investments as part of the Fourth and Fifth Framework R&D Programme. In particular, two research projects are on-going: MERITUM
(Measuring Intangibles to Understand and Improve Innovation Management) Initiated in 1998 and funded by the TSER programme (Targeted Socio-economic research), the aim of the MERITUM project is to investigate possibilities to measure and report intangibles. 9 universities and research institutes in 6 European countries
are participating in the project (Denmark, Finland, France, Norway, Spain and Sweden). The general aim of this European project is: - To provide
insight into the process of transforming intangibles into increased wealth. How are they managed and accounted for and how
do they contribute to growth and employment?
- To develop guidelines for the measurement
and disclosure of intangibles.
Researchers: - Jan-Erik Gröjer and Ulf Johanson, University of Stockholm;
- Professor Guy Ahonen, Swedish School of Economics, Helsinki.
- Associate
Professor Rita Asplund, ETLA, Helsinki.
- Associate Professor Per Bukh, Aarhus
University.
- Professor Leandro Canibano, Universidad Autonoma, Madrid.
- Professor Manuel García-Ayuso, University of Sevilla.
- Professor Hélène Löning, HEC, Paris.
- Professor
Jan Mouritsen, Copenhagen School of Business.
- Associate Professor Hanno Roberts,
Norwegian School of Management, Oslo.
- Professor Paloma Sanchez, Universidad
Autonoma, Madrid.
- Professor Hervé Stolowy, HEC, Paris.
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The Project is divided in sub-activities: - Activity
1: The classification study : its objective is to develop a set of classification schemes of intangibles acceptable and useful
for the purpose of management control as well as valuation of the enterprise by the capital market;
- Activity 2: The management control study: the aim is to investigate how the management control
is carried out, why and when organisation members do what they do, and how component parts (people, organisational
units, etc.) interact;
- Activity 3: The capital market study: the objective
is to investigate the following research questions; (1) What is the difference between market and book value?; (2) Can the
difference between market and book value be explained by dependency on human capital or any other specific category of intangibles?;
(3) Is there an abnormal return on human capital dependent stocks?; (4) Is there an abnormal return on stocks dependent on
other categories of intangibles?
- Activity 4: Guidelines for measurement
and disclosure of intangibles.
In parallel, some national
Centre have developed their own sub-projects. Contact MERITUM Coordinator:
Professor Leandro Canibano
Universidad Autonoma de Madrid - Facultad de Ciencias
Económicas y Empresariales
Ciudad Universitaria de Cantoblanco
Ctra.
de Colmenar, Km. 15 28049 Madrid ESPANA
Tel. 34 91 397 85 61 or T. 34 91 397 43 39 - Fax. 34 91 397 85 98
e-mail
: canibano.sanchez@retemail.es Other contact details of the research team are available
on Meritum web site: http://www.fek.su.se/home/bic/meritum/ |
The MAGIC project (Measuring and Accounting Intellectual Capital) The overall objective of the MAGIC project is the development of a low-cost and pragmatic IT-solution for the measuring and accounting of Intellectual Capital in engineering
and manufacturing environments. Therefore holistic methods and tools have to be developed which enable the quantitative as
well as the qualitative evaluation of IC. This project is led by Oy Quality Production & Research Ltd (FI) and involves
5 other partners and a business group. In a survey conducted by FhG-IAO (one of partners) 83% of industrial respondents believe
that measuring intellectual capital is critical to achieving business success. The industrial relevance of the measuring and accounting IC itself according
to the MAGIC project: Dow Chemicals’ activities
in Intellectual Asset Management brought the enterprise already an overall $ 40 million in additional capital and savings.
Skandia’s activities in Intellectual Capital
Management helped the enterprise to expand its number of point of sales from 5,000 to 50,000 in 5 years. The market value of engineering and manufacturing companies is between
2-5 times higher than the net book value. This difference is due to the intangible assets, which are not reflected by any
traditional financial report. In recent surveys
81% of the screened companies have not assigned any value in their annual report to intangible assets, however 49% of the
surveyed companies plan the investment in applications supporting the management of intellectual capital. The KMAT study by the American Productivity and Quality Institute
documents that only two of the eleven surveyed companies were pursuing an Intellectual Asset Management although all companies
clearly stated the importance of measurement systems. The example of Chevron proves, that Intellectual Capital Measurement is essential. Only by sharing and implementing
ideas on energy use management they have generated a 150 Mio. $ savings annually. The work of Strassmann shows that companies in average spend 150.000$ an each employee
during their career for learning and education. No financial report will reflect this.
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The main deliverables of the project will
essentially consist of: - Benchmarking study of "Best Practice" in
measuring Intellectual Capital (IC)
- KM methodology handbook describing the system
of methods and tools for the measurement and accounting of IC
- IT-tool for the
support of the measurement and accounting of IC based on standard software solutions
- CD containing elaborated road map "How to evaluate and better manage Intellectual Capital (IC)"
3. Eurostat
Eurostat has developed a classification
proposal concerning intangible investments, in association with national statistics institutes, in particular with CBS, Statistics
Netherlands. such as the study "The role of intangibles in the competitiveness of industry" with CBS, Statistics
Netherlands. The aim of this study is to: - provide a definition of categories;
- make an inventory of existing statistical data sources;
- make an inventory of data available in firm records;
- make a proposal
for acquisition of statistical data.
In February 1999, Eurostat
and SBS, Statistics Netherlands published "Intangibles Investments - Definition and Data Sources". Eurostat has presented its Workprogramme 2000 entitled "EPROS – The
European Plan for Research in Official Statistics" which contains a sub-programme called "Definition, measurement
and exploitation of new socio-economic statistical indicators for the Information Society" which has resulted in the
SINE initiative : "Statistical Indicators for the New Economy". In that
framework Eurostat has launched a call for R&D proposals in February 2000 in order to encourage the research communities
to further elaborate R&D projects on these topics. Eurostat has prepared a document whose purpose is to present and describe
concepts, ideas and issues associated with the Statistical Indicators for the New Economy. According to that background paper, "the transition
from the industrial to the information society is characterised by the rapid growth of intangible assets, whereas economic
and social activity still relies substantially on physical, tangible goods. The relation between the two has to be defined
and measured." "Measuring the New Economy" :
statistical measurement instruments and processes are faced to huge challenges because "Classical
methods need to be adapted, more automatic and intelligent data sources would need to be developed. More rigorously relevant,
reliable, timely, comparable and user-friendly statistics would be needed for indicators in all domains". If several
Statistical Indicators for the New Economy are already available, there refer more to technology and infrastructures, specifically
on tangibles. Therefore new indicators must be
developed. Eurostat proposed to group these new indicators in 4 main domains : Domains | Possible groups of indicators | Technology Domain | - Information Technology and Communications
(ICT) Infrastructure;
- Internet Infrastructure;
- Digitisation;
- Virtualisation;
- Multimedia;
- Internet users;
- Internet
penetration.
| Industry Domain | - ICT production and trade indicators;
- Knowledge Capital
Indicators;
- Industry Performance Indicators;
- Inter-enterprise alliances indicators;
- New Business Organisational
Types Indicators.
| Economy Domain | - Production indicators;
- Economic Performance indicators;
- Foreign Trade Indicators;
- Foreign Investment
Indicators;
- Internet Economy Indicators;
- Business Indicators;
- Deregulation Indicators;
- Information Production & Diffusion indicators;
- Price
and Wage Indicators.
| | Social Domain | - Economic
and social demography indicators;
- Lifelong learning/training indicators;
- Living standards and lifestyles indicators;
- Cultural
indicators;
- Social inequality indicators;
- Technology penetration indicators;
- Internet penetration indicators;
- Time use.
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Based on the EPROS-SINE presentation paper
This paper refers to
several nomenclatures on economic activity, products, trade and occupation. Concerning indicators on intangibles, it refers
in particular to the work done by Michael Peneder (WIFO) in his working paper N°14 of May 1999 entitled "Intangible
investment and human resources" (available at on WIFO site). Eurostat wishes that the expected results of research have immediate
applicability. In particular, Eurostat considers that "there should be a fuller exploitation of the new, intelligent
data sources that are emerging as part of the evolution of the New Economy" and that : - "There is scope for improved measurement of such elements of the New Economy as for example the following:
-
- The intellectual "knowledge" capital;
- The productivity gains from networking and embedded technology;
- The effect of the New Economy on European competitiveness,
- The dynamic
links between multiculturalism and the New Economy.
- In the
framework of research for SINE, some emphasis should be given to the concept of sustainability, both at national and local
level;
- There is a need for predictive, "leading" indicators
and to tighter partnerships between the public and private sectors in the provision of relevant indicators and statistics."
A number of EUROSTAT funded projects have been also carried out
in the area of Indicators for the New Economy.
4. European Centre for the Development of Vocational Training (CEDEFOP)
The "Centre Européen pour le Développement de la Formation Professionnelle"
was established by Council Regulation 337/75 as a non-profit- making body, independent of the Commission, to help rethink
the direction and requirements of vocational training and assist the Commission in promoting the development of vocational
training. A series of recent European Commission documents –
principally the White Paper "Teaching and Learning: Towards the Learning Society" and "Towards a Europe of
Knowledge" – set out proposals and guidelines for stimulating VET. In that framework, one task of CEDEFOP is to look at the financing of vocational education and training and, more specifically, works on measuring and reporting
on human capital. In particular, its aims is to support the objective
5 entitled "treat capital investment and investment in training on an equal basis" of the European Commission white
paper, "Teaching and Learning: Towards the Learning Society". Therefore, a dossier on "Human resources accounting"
was included in CEDEFOP workprogramme for 1997-2000: "Despite
a number of studies concerning the effects of training, information gaps hinder the quantification of the effects of training
and the qualification of the respective roles of the different financiers. In economic terms, all financial expenditure is
a risk. The risk is greater when the results of the expenditure cannot be formulated in tangible terms. One answer to this
problem is to try to translate intangible assets into tangible terms, by giving them a concrete value." "This is an issue which is increasingly debated. The Commission’s
White Paper on Teaching and Learning emphasises the treatment of "capital investment and investment in training on an
equal basis" to explore possible ways to account for investment in intangible resources. As we move towards the ‘Knowledge
Society’, the challenge for the future will be measuring the value of knowledge within enterprises in the same way as
other assets are measured. The potential of human resource accounting
(HRA), however, remains stronger than concrete progress. A number of conceptual, methodological, legal and institutional barriers
exist. In addition, there are different interests associated with this issue, in defining both its objectives and the way
in which it should be pursued. The dossier on this topic will provide an overview of the various approaches to human resource
accounting as well as a comprehensive outline of the stakeholders’ interests in HRA." Source: Funding Vocational Education and Training: the CEDEFOP approach for providing information
and informing debates CEDEFOP has conducted several activities concerning
the measuring and accounting of human capital such as: - participation to conferences;
- implementation of a "human capital network", i.e. a electronic meeting room for human capital which contains resources on a list of research Articles, Literature
Review, Publications, Working Papers, Conference Presentations, etc. on human capital;
- studies and papers such as:
-
- Exploring the returns
to continuing vocational training in enterprises, a review (Barrett A., Hövels B., den Boer P. Kraayvanger G) - 1998
- Regognition and transparency.
- Human resource
accounting: interest and conflicts - Frederiksen Jens V. and Westphalen Sven-Age
- Reporting
on human capital: objectives and trends - Westphalen Sven-Age
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0.1 Has a continental or worldwide search solutions on job creation
that can be replicated across communities been organised before this EU launch of Nov 2011?While alumni of entrepreneurial economics have always valued job creation searches- we
know of no clear evidence that this has been top of mind in the way that continental-wide government has operated since
1984 even though it was scripted by The Economist's Unacknowledged Giant as the number 1 question the first net generation
would need to mediate if sustainable futures and humanity's most needed millennium goals are to be served what's different about nov 2011 is 4 top directorates of the EU have nailed their future reputation to
this search -more
Posted on: November 23, 2011 Microfinance Focus, November 4, 2011: Professor Muhammad Yunus was invited to deliver
a key note speech during the G20 Young Entrepreneurs Summit held in Nice, France. Professor Yunus addressed an audience of
more than 400 entrepreneurs from all G20 countries. In his speech, he shared his personal entrepreneurship experiences, his
faith in young entrepreneurs to be the pillars of society and the need to include poor countries in the discussion process
in making global decisions. Professor Yunus being an entrepreneur himself started off creating the Grameen Bank that
provides microfinance services to the poor who had little access to financial provisions. From that, he ventured into a wide
number of social businesses such as Grameen Nursing College, Grameen Eyecare Hospitals, Grameen Shakti, etc. He has
always considered young entrepreneurs to be the most effective solution for the future. He said “In my opinion, G20
YES is a fabulous initiative, gathering so much energy and momentum from all over the world. Because of their creativity and
leadership, provided that they commit to share the value they create, these 400 young entrepreneurs in this room can change
the world.” Professor Yunus is also a member of the Millennium Development Goals (MDGs) Advocacy Group, advising
the Secretary General of the United Nations. Hence, he believes that the next generation of youths should be handed over the
process of the MDGs as soon as possible. He believes that entrepreneurs will have a key role to play in fulfilling the MDGs,
if they are committed to the social value created by their companies, and social business can be part of the solutions. In
his speech, he added that the G20 needed to broaden its scope to deal with the current world crisis. It can no longer remain
a political forum with economic agendas. The G20 needs to create a social agenda as well. Professor Yunus proposes that ‘social
business’ should be brought to the agenda of G20, as one of the concrete and effective solutions to be considered for
immediate implementation so as to guide capitalistic investment towards social value and jobs creation, rather than sheer
profit maximization strategies. A social business is a cause-driven business where profits stay within the company for its
sustainability. Lastly, Professor Yunus concluded that the G20 should be expanded into the G25, where poor countries
from each continent should be included in the global agenda which they are part of. He added that “Their problems are
inter-related with others, and their proposals of solutions should be considered by the most economically advanced countries
in making global decisions. A G25 would be a big step toward ensuring that global social issues are raised, and MDGs implementation
is fully shared on the global agenda. And finally, because fighting poverty together is the only way to bring long lasting
peace in this world.” Source: http://www.microfinancefocus.com/muhammad-yunus-expresses-faith-entrepreneurs-g20-summit inquiries chris macrae info @worldcitizen.tv us tel 301 881 1655 ; us office 5801 nicholson lane
suite 404, North Bethesda, MD 20852 USA - skype chrismacraedc
Mapping is a process of discovery. Crucially maps are only as usable as updating correctness of bottom
up information. Think of your own use of a map. You look for the "you are here arrow". You want to be directed to
somewhere/someone you dont know how to get to; you want your return vist to be safe as well as a value multiplying win-win.
Does anyone remember the simplest findings of einstein and jon von neumann. Einstein proved
that to innovate more value you need to go more micro in what you model; von neumann showed that there is more value to be
networked by interfacing safe flows across systems instead of ruling over separation of boundaries. There isnt a single
global metrics profession that gets these mathematical -and natural - principles right. Unless we change this global
markets will cycle through ever greater collapse and more and more communities will lose sustainability. Mapmaking is that
critical an idea to what the net genration will achieve in 2010s; but its also one that children from primary age up can action
learn. Its simple. Its just that it works the other way round from top-down people's fatal conceit.
It explores how to make the invisible principles and practices of real wealth creation
visible, and therefore useable. Our planet needs case studies underline the search for new win-wins that build ‘system
integrity’
Trust-flow is the unseen wealth to invest sustainability in. Tranpsarently mapped it develops
a goodwill gravity tyhat invites with roleplayer in a community to multiply goodwill while sustaining their own cashflow..
Trust is not some vague, mushy, abstract warm-hearted sentiment. It is an economic powerhouse – probably just as economically
and socially important as oil.
The point is, there are specific things you need to do to get trust flowing, just as
there are specific things you need to do to get oil flowing. And like oil trust has a dark side. Right now, the world is awash
with the carbon emissions which threaten the stability and sustainability of its ecosystems. Right now, the world is also
awash with the ‘carbon emission’ of trust – mistrust. Indeed it may well be that our ability to tackle the
one issue – the threat of environmental catastrophe – depends on our ability to tackle the other issue: how to
generate, deepen, extend and sustain trust.>br>But what is the best way of doing this? One thing is for sure. You don’t
build and sustain trust via some sentimental exercise of goodwill to all and sundry. There are three very simple principles
at the heart of effective trust generation.
First, trust is generated via win-win relationships. It’s virtually
impossible to generate or sustain trust without mutual benefit for those involved. But beneficial outcomes are not enough
in themselves. For trust to be built and sustained, both sides need to signal a demonstrable commitment to finding win-win
ways forward. Such a commitment may require real changes to what we say and do. Second, real ‘win-wins’
are hardly ever purely financial or material. You don’t build trust simply by walking away with more cash in your pocket.
Trust works at all the dimensions and levels of human exchange. Yes, it’s about financial and material rewards. But
it’s also about purpose (what people want to achieve). It’s about politics with a small ‘p’: the use
and abuse of power, the crafting and application of rules of fair play. And it’s about emotions: the sometimes overwhelmingly
strong emotions, both positive and negative, that are generated when people deal with other peopleWhat’s constitutes
a ‘win’ – a sense of real improvement – is therefore highly specific. It depends absolutely on the
details of who the parties are, what they are trying to achieve, in what context. Building trus, therefore involves discovering
these specifics. Just as oil doesn’t flow out of the ground, get refined and pump its way into motor vehicles automatically
and without effort, so identifying and doing what is necessary to get trust flowing requires dedicated, skilled effort. It
requires a disciplined, structured process, not a vague sentiment.
3) Third, even if we do steps 1) and 2) there’s
still a good chance it won’t succeed. Why? Because it ignores an invisible third factor. In the real world, purely two
way bilateral relationships don’t exist. There is always a third party whose interests or outcomes are affected by what
the other two parties do but who is not a party to the contract. The environment is a case in point. Producers and consumers
may both benefit from buying and selling to each other – but what happens if, in doing so, they destroy the environment
they both depend on?
This raises a hugely important question. When two parties pursue win-wins and build mutual
trust, are they doing so in a way which creates a win and builds trust for the third party at the same time? Or are they simply
pushing the problems – and the mistrust – further down the line on to this third party? Building vigorous, healthy
networks of trust is a different kettle of fish to ‘you scratch my back and I’ll scratch yours’
win-win conspiracies. It requires a Map of all the key relationships plus careful consideration of knock-on consequences.
It requires a different perspective.
These three simple, basic steps do not happen automatically. They need to
be worked at. The territory needs to be deliberately Mapped and explored. What’s more, there are obstacles in our way
– mental and practical obstacles that need to be cleared. Prevailing economic theories about ‘rational economic
man’ for example, deny the need to commit to win-win outcomes. Instead, they promote supposedly ‘rational’
(i.e. narrowly selfish behaviours) which actively undermine trust The same theories insist that the only valid measure of
human benefit is money, thereby excluding from consideration many of the biggest opportunities for improvement. Meanwhile
many vested interests do not want to extend the circle of trust to third parties and complete networks because their positions
of power depend on their ability to take advantage of the weaknesses of these third parties. That’s another job for
Mapping: helping to identify and mount such obstacles.
The potential benefits of doing so are unthinkably huge. They
start with a simple negative: the relief that comes from when you stop banging your head against a brick wall. Mistrust breeds
wasteful, wealth destroying conflict that tends to feed on itself. Anger and hatred engender anger and hatred. Simply easing
or stopping the terrible waste of mistrust would transform prospects for many millions of people. We desperately need to find
ways of doing this. Then there are the positive benefits. Understanding the real nature of human wealth – all those
dimensions of purpose, ‘politics’ and emotion as well as money and material comfort – means we can start
being human again; human in the way we think, and act. What’s more, many of these intangible benefits won’t cost
a penny. They’re there for the taking, if only we puts our minds to it.
But there’s more, because trust is
also an economic superpower in its own right. In the pages that follow we will show conclusively that material and financial
riches are also dependent on trust. In fact, we will argue the case for going one step further. We will say that material
and financial riches are a by-product of trust: the visible fruits of invisible, intangible human exchange. Once you understand
that sustainable cash flows are a by-product of sustainable trust flows, your understanding of what makes a successful business
is transformed.
Separately, each of these three fruits – reducing the waste of conflict, unleashing the potential
intrinsic benefits of human exchange, and energising the sustainable creation of material wealth – are massive in their
own right. Put them together and they represent a vast new continent of opportunity.
As we said, this book is addressed
to entrepreneurs and system innovation revolutionaries. Wherever you happen to be, whatever the change you want to make
is, the principles explored in this book apply. The wish to change and the will to change are not the same as being able to
change successfully. For that you need to understand your territory. You will need new Maps . 
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