Risk, capital markets and the future: a new generation of policy reform

UTSNicholas GruenE ngruen@gmail.comT @ngruen1

19th Oct 2016Nudging towards innovation

1Not representing anyone but myself, though these ideas are being discussed on IA board. Part of the challenge to show how much innovation isnt on the innovation agenda

Outline2Nudging Public goods Emergent public goodsThe ecology of public and private goodsThe interface Digital public private partnerships

PoV: Mainly government policy but also business

Nudging Seen as an offshoot of behavioural economics But theyre also commonsenseDesigned defaults dont need BETaking a problem and reducing interventionMore $ into venture, startups and development Regulate minimum quotasSubsidiseUse soft power3

Superannuation and innovationWorldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionallySo does the lawDefence of usual professional practiceReverse legal onus of proofPublish sample portfolios

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The technology stack5

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The Platform

8Information Policy Hayek Arrow, Stigliz and Akerlof

The new information economics substantiates Hayek's contention that central planning faces problems because it requires an impossible agglomeration of information. It agrees with Hayek that the virtue of markets is that they make use of the dispersed information held by different participants in the market. But information economics does not agree with Hayek's assertion that markets act efficiently. Joseph Stiglitz The takeout good institutions for information will be hybrids

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PIMS and Midata data sharing9Citizens AdviceCommunications Consumer PanelConsumer FocusInformation Commissioners Office (ICO)OFCOMOffice of Fair Trading (OFT)Which?

AMEEAvoco SecurebillmonitorBritish GasCallcreditEDF EnergyE.ONGarlikGoogleLloyds BankingMasterCardMoneysupermarket.comMydexnpowerRBSScottish PowerScottish Southern EnergyThe UK Cards AssociationThreeVisa

Windows on workplaces10

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Windows on workplaces

What drives progress?12TradeCompetition TechnologyProgress is mostly market development

But . . . Economic progress requires new public goods

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Effectiveness Efficiency

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All but one of those public goods was information based15

Public goods goods that no-one will supply if the government doesnt Public goods

21st C Public goods

Google (1998)Wikipedia (2001)Blogs (early 2000s)Facebook (2004)Twitter (2006)

The economics of abundancePublic goods . . . present serious problems in human organisation.Vincent and Elenor Ostrom - 1977

He who receives an idea from me, receives instruction himself without lessening mine;as he wholights his taper at mine, receives light without darkening me. Thomas JeffersonPublic goods as a problemPublic goods as an opportunity

Total economic value ~ $ 1 tril

Revenue$60 bil

Tot Value

RevenueConsumer surplusConsumer Surplus$ 940 bilTot Value

RevenueConsumer surplus

Costs

Profit

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Public goods . . . present serious problems in human organisation.Vincent and Elenor Ostrom - 1977

He who receives an idea from me, receives instruction himself without lessening mine;as he wholights his taper at mine, receives light without darkening me. Thomas JeffersonPublic goods as a problemPublic goods as an opportunity

What could be built in this space?The economics of abundance

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Total economic value

Revenue$60 bil

Tot Value

RevenueConsumer surplusConsumer Surplus

Costs

Loss

Bulk Billing from MedicareOpen Access to dataNudgesConnections to e-healthDiagnosisPharmacovigilanceResearch

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The takeoutShould govt look for innovative firms to fund/attract?Or for what unique value it can add?the question a good firm would ask24

25Platform A: a trip advisor for the artsFor consumers:Central repository of arts offeringsConsumers can consent to allowing service providers to access their data to eg. determine their preferences, track activity and provide feedback (reviews and recommendations) and network with people like themaccess to third party applications personalised recommendations/offers, travel/event planning, festival or event specific engagement etc ability to have a voice in expressing their conscious art, event or artist they would like to see

26Platform AFor promoters:better planning (locations, venues etc) based on more detailed venue and consumer informationbetter cheaper access to consumers based on preferences, activity, location etcbetter targeting of promotional activitiesability to identify potential artists to represent based on consumer preferences

27Platform AFor venues:better event planning and schedulingnew opportunities for collaborative events and promotionsnew applications offering cross sector customer identification and retention, affinity and behavioural analysis, offer/price management etcbetter targeting of promotional budgetsbetter targeting and measurement of free listsdata to optimise revenue yield over time like airlinesenriching art experience pre and post performanceassociated offerings such as parking, hospitality, merchandise, live streaming, event video/audio, backstage experiences etc

28Platform AFor artists:opportunities to extend consumer/patron engagement through more personalised communications, merchandise, blogs, private events, micro-patronage, crowdfunding etcsocial media apps engaging patrons and promotersstreaming video/audio options for participationFor arts and cultural funding organisations:data/evidence based assessment for funding allocation and measurementcontinuous arts participation data new and uplift rates

29Platform AFor developers:opportunities for social, mobile and web applications using unified arts data by overcoming the data and data access limitations (that have hampered previous efforts to offer solutions)new application integration opportunities with existing social, mobile and web applications, such as YouTube, Bandsintown, Facebook, iTunes, Google arts, Eventbrite, Meetup, Artshub, Foursquare and ticketing applications, etc.

30Platform AArts experience data platformDevelopment of a shared data platform to support services that improve collection, analysis and presentation of cultural and event information for audiences and organisations in the creative industries. The platform and initial business case will be developed in consultation with audience groups and organisations that hold the data and will drive new creative services and responses.

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Rate My Professors, http://www.ratemyprofessors.comIntegrating state and private platformsRatings sites like Ratemyprofessors subject to strategic behaviour by:StudentsProfessorsOutsiders State apparatus can provide the infrastructure for integrity via ID validation A back-end for participating universities could build a rich validated, opt in social databaseSo too with schools, hospitals etc

Private endeavour, entreprenuerialismIntegrityGovernment validation of ID

Opt In

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InterfacesOpen AustSeeClickFixCareMonkeyInternal InnovationOneTouchFixMyBudgete-taskrChaperoneMurmurDirectoryHealthKitPublic Private Partnerships23andMe Seeding altruismCode for Australia ValidationRate my profRate Govt Services

Building platforms Open Australia Sense-t

The interface35

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An interface program in health and education 37

Care Monkey38

Allo Mobile39

Insert: 1 Ollo Mobile.mp439

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Whats there not to like?

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The ecology of private and public goods: Markets

Private GoodsTraders address their mutual self-interestPublic Goods

Marketplace for meeting Price discovery Liquidity

Public GoodsPrivate Goods[The public good of] Justice . . . is the main pillar that upholds the whole edifice. If it is removed, the great, the immense fabric of human society . . . must in a moment crumble into atoms.

Adam Smith

The ecology of public and private goods

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Public goods Governments FamiliesCivic associationPhilanthropy Within teams

Cooperation and group-interest The fractal ecology of public and private goodsPrivate goodsIndividuals FirmsTeams

Competition and self-interest

Private and public goods on a platform

Private GoodsMeeting private needsLinking to other websitesPublic Goods

Google uses this information to rank sitesEveryone benefits

Google monetises with ads

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