FinTech

FinTech

What is FinTech? It is a multi-billion dollar industry and it means Financial Technology. It includes a range of Products, Technologies, Business Models that are changing the Financial Services Industry. It refers to cashless processes, crowdfunding platforms, roboadvisers and virtual currencies!!! Start ups using FinTech are currently attracting more and more attention and funds. Big companies are also going into FinTechs, with examples such as Apple Payer (Apple) or AliPay (AliBaba). 

It is estimated that 2 billion people world wide do not have bank accounts!!! Now thanks to FinTech all you need is a phone to take out a loan or insurance. Kenya has pioneered a mobile banking system called MPesa. Kenyas access MPesa directly through their phones to transfer money, pay bills, or take out loans. Fintech has forced traditional Lenders, Insurers and Asset Managers to embrace new digital technologies. Wealth Managers now have to compete with roboadvisers which are automated financial planning services. Thanks to high tech algorithms these services are available 24x7 and can be more affordable than traditional asset managers. Examples of FinTech include:

1. Peer-to-Peer Financing: they appear as solutions for people to lend and borrow without going to the bank. Data privacy is one main issue of concern as more financial services go digital, cyber-attacks become a risk. The higher the risk, the higher the interest rate demanded.
2. Cognitive AI: they go a step beyond normal data crunching and can see and analyse patterns and accelerate/optimize decision making.
3. Digital-only banks: almost every bank offers mobile and web-based access. Digital Banks go one step further and rely solely on a digital interface. They save physical costs and pass on cost savings to customers.
4. Mobile Payments: they represent the head of the FinTech value pyramid for now. Mobile payment apps have reduced the time and cost to make online payments.The payment revolution is just starting!!
5. White Label Banking: it allows companies without a banking license or a regulatory infraestructure to offer financial products to their customers.For ex, a card issued and branded by a retail store but using the payment infrastructure of a licenced bank.
6. Telematics (Insurance): an example is a small device is installed in your vehicle which tracks your car and determines your premium based on how you drive. They apply not only for auto-insurance but also for safely renting out vehicles.
7. RegTech: they intend to automate regulation compliance, from credit card fraud detection to monitoring financial risks thresholds.
8. Virtual and Cryptocurrencies: they range from ways to transfer value, to smart contracts and decentralized storage to leasing smart devices.
9. Web-based financial planning tools: large corporations use ERPs to manage their financial budgeting, planning and forecasting needs while small businesses are using excels which take up a lot of time. By implementing new tools the user only needs to feed the raw data and define the relationship between certain variables, and the system automatically produces a number of reports, graphs and insights that can be plugged into an investor presentation.
10. Financial learning: apps offer the opportunity to practice your trading skills in real time, using dummy accounts on simulated exchanges. 
11. Robo-Advisors: they provide easy and accesible basic invesment advice to consumers, eliminating tasks previously performed in excels files.

The appearance of FinTech, low cost easy to develop financial technology, put a Question (?) mark on the role of Business Majors itself. Is it really worth it to take a PLACE in a company and attempt to climb the corporate ladder? Or is it SMARTER to team up with engineers adding value with products and services needed by the financial world and build a billion dollar business? In my article "The Need for Business Majors in the Tech World" I explain how Business Majors add value and should ideally team up with engineers to build businesses. In a world of rising inequality and unemployment, and acknowledging that professional jobs will also be automated and lost in the NeXT few years, it might be that reinventing the business carrer itself and switching to the technology sector is the way to GO for business majors.

Romania: The Little Italy

Romania: The Little Italy

Validating hypotesis is not as difficult as it sounds... Seasoned travellers should be easily be able to grasp these concepts. Romania, a country of beautiful landscapes, is located in the middle of Slavic Europe. After the fall of the Greek, the Romans established themselves in a garrison with the cohabitation of the native Dacians and the Roman colonists. The Roman garrison were used to to resists invasions from the Russian Zars, becoming the first border of heavy resistance.

In the Middle Ages, the Kingdom of Romania resisted the Ottoman Empire invasions. Amongst the most legendary icons is Vlad III of Wallachia (Vlad the Impaler - Dracul). In a fortress in the midst of Transylvania, Vlad resisted the Ottoman invasions time after time, impaling the enemies once killed to send a clear message to the enemies. When Ottoman soldiers showed up in future invasions, the bodies to their desceeds comrades would fill them with fear. Bram Stocker used his figure to inspire him for his novel "Dracula". Interestingly enough, Bram Stocker never visited Transylvania and imagined this area to be gloomy and cloudy. Transylvania is actually a very sunny and beautiful area. 

Consider the case of the Gypsies (Romfolk). Though many have Romanian passports, they represent an ethnical group spread across Europe. Being a Gypsy does not make you Romanian, beign Romanian does not make you a gypsy!

Romanians (generally speaking) resemble italians physically, romanian language remains as the living language closest to the original latin, Italian music is as popular as ever, and many romanians dream of going (back?) to Italy!!! The case of Romania exemplifies how culture is preserved even after centuries, when a Roman Empire Garrison to fence invasions preserves authentic latin culture even if surrounded by slavic countries!!! Mind blowing!!!

REVOLUTION 4.0 - A REVOLUTION OF THOUGHT

  

Comparing Apples vs. Oranges

Comparing

Apples vs. Oranges

Compared to, compared to, let us compare... the countries!!! In my Releases "Revolution 4.0 and the Man of Tomorrow - Post-Industrialism, Inequality and the Knowledge Based Economy - Parts 1 & 2", I take you through the last 200 years of history of the two regions I know the most: South-South America and Scandinavia, to show you the differences, but also the similarities. Comparing countries is a difficult thing. Sure, government processes have played their role, but what about history, culture and religion? It is very difficult to compare countries in different regions. Let us take the discussion to a higher level. While the American continent has been mainly populated by immigrants, Europe has much more history of emigration, war and colonization. Could be difficult to explain the situation TODAY without knowing a little bit about the history of these regions.

While Northern Europe has only received migration waves from other parts of Northern Europe, and Southern Europe was under the influence of the Roman Empire (a multicultural empire), Argentina was populated mainly by Europeans, being the 2nd country in the American continent to receive the most European immigrants after the US. Argentinians naturally tend to compare themselves with the US, but the United States of America consists of 320 million inhabitants spread in 50 States. Meanwhile, Argentina consists of 23 states housing 43 million inhabitants. Norway, on the other hand, has only 5 million inhabitants and can be compared only to a Province in these countries. There is no possible comparison.

As explained in my fantastic chapter "Death and Taxes", tax systems cannot be applied indiscriminately without having regards for the culture. While Scandinavians tolerate a heavier tax toll, Southern Europeans prefer a more moderate tax rate and Southeast Asians do not want to pay taxes at all. Consider that communities IN those countries will keep their customs and traditions. Meaning the Asians will still resist paying taxes, even if they live in Europe (or Argentina). The counterpart of the Tax System is the Welfare System. The more taxes you pay, the more you get in return: be it healthcare, education, social plans, whatever. But be careful, too much welfare kills entrepreneurial spirit and drives laziness. Countries should then look up to models that offer a CULTURAL match.

Argentina, the most southernmost country in the World, can look up to both Australia and Canada. From the center South, it could be said that Argentina is very much like Canada. Consider an average of 25.000 USD x capita for Buenos Aires and the Southernmost provinces compared to 5.000 USD x capita in the North. This responds to lower Productivity from the Bolivians, Paraguayans and Peruvians, people of Indian origin and their children also found in Buenos Aires and who live in very bad conditions (they are Argentina's poor people). Former President Cristina Kirchner referred to this group as the people "of the original tribes". They are really 3er or 4th generation immigrants from nearby countries that were not incorporated Productively to the workforce (for whatever reason). I will refer to this group as "the latinos", a much friendlier term than the nicknames that they usually get. The solution to poverty in the case of Argentina lies in increasing the Productivity of the latino group. Canada, much further North, does not face this issue. Australia did have descendents from indigenous people, but not as much. The US does have a much higher Latino immigration rate, usually coming from Mexico. My view is that migration at some point happens naturally: no wall or fence will separate the North of Argentina from Bolivia or Paraguay. As explained in my chapter "Bolivia: the NeXT India", the most powerful nations in South America must "help" or make sure that the situation in Bolivia and Paraguay improves, to resolve their own situation. The impoverishment of nearby countries eventually hits you, as migration waves naturally flow from one country to another. This was not understood by Europe, that with austerity measures strangled Southern European economies dooming itself to the deepest depression since WW2.

In my article: "Dark Clouds over Norway and Scandinavian countries", I explain the challenges Scandinavian countries are going through TODAY. In his masterpiece "Scandinavian Unexceptionalism: Culture, Markets and the Failure of Third-Way Socialism", Nima Sanandaji explains that the success of the Nordics little had to do with the Government. Scandinavians and their descendants abroad show higher Productivity rates than in Scandinavia itself, were government intervention and the Welfare system have actually contributed to hinder growth. This might refer to "the Protestant Work Ethic and the Spirit of Capitalism", as described by German Sociologist Max Weber. Consider that Scandinavian countries have not received migration that is not from Northern Europe at any point in history, and are as such uni-cultural societies. Social tensions are arising as the region shifts towards multi-culturalism. From that view, ALL Scandinavian countries (composing a total population of 20 million people, excluding Finland), should look to the Kingdom of the Netherlands, a country with a colonial, multicultural and merchant history consisting of 17 million people.

Consider the case of Spain. Many times Spain looks up to Germanic countries. Quite clearly, nothing does the multicultural Kingdom of Spain (Roman Empire influenced), have to do with Northern Europe. Different religion, colonial history, multiculturalism, the way the country is organized, the Tax system... Comparisons seem futile. But what is Spain missing, to take the leap? In my article "How Tech Hubs create Wealth", I explain that entrepreneurs should be focused in the efforts of Wealth creation leaving the distribution of that Wealth in the hands of the Government (hopefully in a transparent manner). Culturally different but with the same Religion and Tax burden, Spain can look up to Ireland, a country that appears as bridge between the US and Europe and that the largest Tech giants in the World have chosen to establish their offices (location matters as well). Once more, the same cannot be said about the Nordics, which offer a different Tax System and can look to each other for examples in the Tech Industry (Finland being the most attractive case).

But enough with the countries and comparing!!! In my article "the 4 Keys of Value Creation", I have given you the ingredients to change YOUR OWN life and situation. If you live in a Developed Country, you have all the tools that you need to improve your situation. Don't follow the Pack, do your own thing, find your niche, succeed, and ENJOY LIFE!!! Better LUCK NeXT time!!!

SKÅL!!!

Textile Tech

Textile Tech

In post-industrial societies, knowledge is about to become the most valuable commodity of all. And while developed countries continue to lose the low-end jobs in manufacturing which are outsourced to low cost countries, the challenge is how to add value to the economy to remain competitive. An example in the textile industry comes to mind. Before, textile was manufactured in Europe. But today, countries debate themselves between two models: import clothes, or keep a high-value adding textile industries. Keeping the whole supply chain does not seem like an option.

How can we integrate the Fourth Industrial Revolution to the textile industry? In my release "Where No Man Has Gone Before - the Road to the Fourth Industrial Revolution", I take you through a recount of 5000 years of civilizations to understand the crucial moment the World is facing today. The NeXT industries, less capital intensive than before, must integrate to the old industries in order to add value. While manufacturing is automated and outsourced, design must remain in developed countries. 3D Printers can be used today to sketch digital blueprints at almost no cost. Their easy access make it easier for small business to have access to the latest technology to develop rapid prototypes. To cite my release "Nike uses 3D printers to create multi-colored prototypes of shoes. The cost and timing for prototyping has been cut significantly in the last few years. Besides rapid prototyping, 3D printing is also used for rapid manufacturing. Rapid manufacturing is a new method of manufacturing where companies are using 3D printers for short run custom manufacturing".

"The Internet of Things" is another example. Again citing my Release "Where No Man Has Gone Before: the Road to the Fourth Industrial Revolution": "the process starts with the devices themselves, which securely communicate with an Internet of Things platform. This platform integrates the data from many devices, and applies analytics to share the most valuable data with Applications that address industry specific needs". To add value and differiante, brands can add technology to the classical outfit. A chip can be inserted into a training shoe, which in turn sends signals to an iPhone or iWatch that can be used to run reports and analytics. Metrics can help the runners identify their areas of improvements to increase their performance. And help the Brand position itself in the high quality segment, which the final customer is willing to pay for.

For bigger companies, having a strong powerful ERP also helps. The company "Pacific Textiles", headquartered in Hong Kong but with factories in Asia Pacific, uses SAP to achieve the Digital Transformation of it's Fabric Manufacturing. Efficiencies in month-end closing and MRP processes allow to automate a large part of the Supply Chain. By using Data, the company ensures consistency in quality. With Real time reports, decision making process is made agile. SAP HANA ensures a one-service framework which gives Pacific Textiles access to a global network of high qualified IT consultants ready to drive organizational change through software implementation. The aggressive strategy in technologization has helped the company expand globally, focusing on developed countries. 

While the textile industry might be seen by some as a "dying" industry, it represents an excellent example of an industry ready to be reborn. Companies must understand that using the latest technology is not a choice, but a must in order to remain competitive. All that can be automated must be automated, in a transition to "intelligent manufacturing". The low end jobs that must be destroyed should not be protected, as the focus shifts to more value added and more creativity. Companies must manage to differentiate to position their brand in the mind of the consumer and rapidly expand globally. Today, thanks to technology, it is easier than ever. Revolution 4.0 allows easy access to the latest tools to develop your business. There are no excuses. Hop on the Revolution and drive your business to the NeXT level!!!

The Dilemma of Productivity

The Dilemma of Productivity

As explained by Nima Sanandaji in his Masterpiece Scandinavian Unexceptionalism: Culture, Markets and the Failure of Third-Way Socialism in Scandinavian Societies “low income inequality, low levels of poverty and high economic growth pre-dated the development of a generous welfare state. Starting in the 19th century, the people of the Nordic countries created vast amounts of wealth, founded new firms and industries, and generated societies with high degrees of social trust and moral responsibility. They built on foundations that, as a result of their histories (absence of feudalism) were comparatively egalitarian and mono-ethnic”. Scandinavians and their descendants in the US gathered themselves formed communities around lutheran churches, adding value to the economy with high levels of productivity. Consider the following chart reflecting that Scandinavians and their descendants in the US are actually “richer” (measured in GDP x capita) than their counterparts in Scandinavia.

The success of the Nordics (and their descendants) IN the Nordics AND IN the US little had to do with the Government. It was a cultural success based on a set of shared values, marked by a mentality shaped by religion. This is clearly explained in Max Weber s Masterpiece “The Protestant Ethic and the Spirit of Capitalism”.

Weber wrote that capitalism in Northern Europe evolved when the Protestant (particularly Calvinist) ethic influenced large numbers of people to engage in work in the secular world, developing their own enterprises and engaging in trade and the accumulation of wealth for investment. In other words, the Protestant work ethic was an important force behind the unplanned and uncoordinated emergence of modern capitalism.

Protestantism had supported worldly activities dedicated to economic gain, seeing them as endowed with moral and spiritual significance. This recognition was not a goal in itself; rather they were a byproduct of other doctrines of faith that encouraged planning, hard work and self-denial in the pursuit of worldly riches. Societies having more Protestants are those that have a more developed capitalist economy.

Remember that multiculturalism also means multireligion, and according to the line of thought followed across all this essay (Conflict Theory) the different ethnic groups that compose migration waves do not mix but gather themselves in communities. These communities present different levels of productivity (measured in GDP x capita). This essay shows evidence that contrary to socialist belief wealth does not cascade down equally to society as whole, but only amongst those who belong to the same social group. Being so the communities reside in the same country, but present different realities. This explains why rich countries also present high levels of social exclusion, clearly stating that money does not resolve all issues, and socialism does not achieve equal distribution.

As mentioned before, the solution will not come from upstairs. Right and left, socialism or free markets, all economic policy has failed in equalizing opportunities. The communities must acknowledge this and understand that they must find the solutions themselves. By increasing their productivy, the created wealth will cascade amongst the members of that community (and their descendants). Only through sheer, raw, entrepreneurial spirit can they change their own situation, by adding value to the economy and improving their own situation and hierarchy in society. They will find challenges. They do not have the same cultural (at least knowledge of local mainstream culture) and social capital that locals do. Negative trends in the productivity of migration (and their descendants) explain the rise of inequality in developed countries, and must be resolved. The communities must not reject but embrace their own origin to release the full potential of their creativity and contribute positively to their own productivity.

According to Karl Marx and his Class Theory, the burgueoise controls the means of production purchasing the labour power of the proletarian. Thus the proletariat, in itself, is forced into a subservient position by the power of capital, which has stripped the means of production from them. Non-Europeans and their descendants in Europe (and Argentina), constitute the new proletariat, the new “cheap labour”.

Consider what was mentioned earlier: in Silicon Valley, only 2% of the workforce is African-American. This low degree of african-american successful tech entrepreneurs explains the poorer situation for the afro-american group in the US. By increasing the amount of afro-american tech entrepreneurs, the situation for the whole group will improve, as they hire and give more opportunities to other afro-americans.

Revolution 4.0 introduces a new era of prosperity for the people of Earth. In the past indutries were CAPITAL intensive, today they are KNOWLEDGE intensive. Establishing a business is getting cheaper than ever. In a Knowledge based economy Karl Marx´s Class Theory is teared to PIECES. The burgueoise, previously owners the means of production, cedes room to a new entrepreneurial proletariat which has free access to education and information. With access to Internet, a Laptop and Little investment it is posible today to found a billion-dollar business. The proletariat, doomed to selling their services as cheap labour, can now take control of their own fate and situation by succeding in entrepreneurship.

The government cannot do this job for them, it can only support and stimulate. The communities must find a way to increase their productivity themselves so that is cascades to their members and descendants. Welfare programs give momentary relief, but do not attack the issue at is core. The communities must learn how to FISH in foreign waters. Revolution 4.0 DESTROYS (or CONFIRMS?) Marx´s Class Theory giving room to the Age of EQUALITY. As the old saying goes:

“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”.

https://en.wikipedia.org/wiki/Scandinavian_Unexceptionalism

https://en.wikipedia.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism

https://en.wikipedia.org/wiki/Marxian_class_theory

Cultures and SubCultures

Cultures and SubCultures

Mainstream culture refers to the cultural patterns that are broadly in line with a society’s cultural ideals and values. Within any society there are also subcultures which are cultural patterns that set apart a segment of a society’s population. Cultural groups with the most power and societal influence get labelled the norm, and people with less power get relegated to sub-groups. The US is a great example since it is thought of as a “melting pot”, a place where many cultures come together to form a single combined culture. However, each subculture is unique, and they don´t necessarily blend together into one big cohesive culture just because they share a country. Also, some cultures are valued more than others in the US.

Multiculturalism is a perspective that rather than seeing society as a homogenous culture, recognizing cultural diversity while advocating for equal standing for all cultural traditions. The ways in which cultures and subcultures fit together can vary, depending on your school of thought as a sociologist:

STRUCTURAL FUNCTIONALIST: believes cultures form to provide order and cohesiveness in a society.

CONFLICT THEORIST:  considers that prioritizing one sub-culture over another can create social inequalities and disenfranchise those who belong to cultures that are at odds with the mainstream.

As borders get thinner the group of people who share a culture gets larger. More and more overlap as technology and globalization make our world a bit smaller. Who is right? Structural Functionalists that believe that having a shared culture provide points of similarity that encourage cooperation and help societies function? Or Conflict Theorist that believe that culture divides us and benefits some members of society more than others?

In all these essays I am supporting Conflict Theory to explain how subcultures do not present similar levels of integration, leading to the rise in inequality. This is very noticeable in Europe today where communities that are not of european origin are not considered european. Consider the following essay “Marketing and Consumer Studies Chapter 13 Ethnic, Racial and Religious SubCultures”, which is aimed at how to market to different subcultures in the US: “Members of minority groups are more likely to find an advertising spokesperson from their own group to be more trustworthy, and this enhanced credibility in turn translates into more positive brand attitudes. The way marketing messages should be structured depends on subcultural differences in how meanings are communicated”. The study considers ethnic, racial and religious subcultures, and how to communicate a marketing message to each of them. Mexican-Americans, Cuban-Americans,  African-Americans, Muslims, Jewish, are not the same, which leads to segregation where immigrants (and their descendants) are often likely to live and shop in places that are physically separated from mainstream Anglo consumers. They share values, religion, beliefs and influences that are important to consider when conveying a marketing strategy to these different consumer groups.

Consider the following essay by Sune Qvotrup Jensen “Rethinking subcultural capital”:  “what we are witnessing in Denmark among a number of underprivileged young men of non-Danish ethnic origin could now be meaningfully understood and explained through an analysis guided by the concept of subcultural capital, but only if this concept is rethought in a way that allows us to analyze it in relation to the intersections between class, gender, ethnicity and "race". I argue that the lack of recognition of these young people is in fact related to a very high degree to their class, gender, ethnicity and "race" and that a distinct form of subcultural capital is an integral part of the "solution" to - or stylistic attempt overcome this problem. In other words, subcultural capital is, at least in this case, generalized and of a specific and at the same time class and class-specific, racialized and ethnicized.”

Mr. Jensen clearly recognizes the existance of subcultures of non-ethnic danes in Denmark, who are underpriviliged compared to ethnic danes. As I explained in my chapter “The EuroCrisis, a Cultural Crisis, Chapter 5: Capitalizing on Business Cultures”, these subcultures are not being capitalized. They do not have the Cultural or Social Capital to progress in society and achieve a condition of equally compared to the mainstream culture that has inhabited the land for more generations. They do not have the same level of inheritance either (check: Inheritance, the root of inequality). These communities live in the same country, have access to the same public facilities, but still do not share the same standard of living. As these communities grow, inequality grows as well. Contrary to the Socialist Utopias belief, wealth does not cascade down in society equally. We will take back that concept later.

https://en.wikipedia.org/wiki/Structural_functionalism

https://en.wikipedia.org/wiki/Conflict_theories

https://journals.sagepub.com/doi/abs/10.1177/1103308806065820?journalCode=youa

https://slidetodoc.com/chapter-13-subcultures-consumer-behavior-10-e-michael/

https://www.studyblue.com/#flashcard/view/1677924

https://en.wikipedia.org/wiki/Social_capital

Cultural and Social Capital

Cultural and Social Capital

Pierre Bourdieu (1 August 1930 – 23 January 2002) was a French sociologist, anthropologist, philosopher and public intellectual. According to Bourdieu capital is the currency that buys you a higher position in society. The more time you spend accumulating a form of capital, the more valuable that capital is. There are two types of Capital:

CULTURAL CAPITAL: what you have and what you know. Embodied Capital refers to Your skills, accent, dialect, postures and manerisms. Pronunciation for example gives you social prestige. Objetified Capital are your material belonging that have social significance. A luxirius car is a good example. Institutionalized Capital are symbols of competence and authority For ex, credentials and qualifications. A shared cultural capital provides a collective identity of shared beliefs, values, way of dress and behaviours.

SOCIAL CAPITAL: is who you know. Your amount of social capital depends on your Network. Your social relationships give you social capital. This occurs through relationships you make in your life and relationships you inherit.

Groups share a capital as part of a collective capital. By joining a group you gain access to their collective capital, increasing your power. When you have social capital, people want to know you more, since having you in their network your social capital will increase. This in turn makes it easier for you to grow and maintain your social network and social capital. On the other hand, if you have little social capital it could be difficult to start, build and maintain relantionships.

https://en.wikipedia.org/wiki/Pierre_Bourdieu

https://en.wikipedia.org/wiki/Cultural_capital

https://en.wikipedia.org/wiki/Social_capital