Don Not Criminalize Risk Taking.

With so many businesses failing and risk being a pariah of biblical proportions what are some of the future implications and what can we do about it now?

Here is an example.

Say the business you started was to fail. You may feel that you would have been better off if you had stayed in an 8-till-5.30 job and took your 15 days holidays per year instead of giving every hour of every week to your own business.

There is a lot of risk aversion right now. People are saving. Taking too much risk is the stated cause of the mess we are in. But if we somehow criminalize the concept of risk taking where is the innovation and entrepreneurial spirit going to come from in the future?

Related Story from Washington Times "EDITORIAL: In defense of speculators"

http://www.washingtontimes.com/news/2009/jul/12/in-defense-of-speculators/

Related Market - wouldnt it be good to have this type of information on your company.

http://www.intrade.com/index.jsp?request_operation=trade&request_type=action&selConID=659100

Real Time Trade Alerts – Should be Publish?

We already have much of the technology developed to publish via email, Twitter etc instant real-time notifications of matched trades on Intrade.

The notification would be short like the example below but would inform those interested of activity on Intrade.

Before we develop this I would appreciate you’re your input as to whether you would value this information / transparency.

The body of the text would be…

E.g.

Prediction market 2012.REP.NOM.PALIN just traded at 10.5% ($1.05 out of $10) on Intrade. Previous trade was 10.5%. http://tiny.cc/FS9lN

Economic Green-Shoots Wilting. Stronger Fertilizer Needed.

Trillions have been asserted to be invested in getting us out of the recession, crisis or whatever you care to call it to-date. However to-date most of it hasn’t found its way out of bureaucratic processes. Even still, the CEO of GE, Jeffrey Inmelt, and others believe that "the crisis is over”.

Do you agree with him? Whether you do or don’t consider please…

June unemployment: Another half million added to the 14.5 million unemployed bringing the rate to 9.5%. This is expected to increase. There is a 70% chance that unemployment will be above 10.25% at year end. As a CEO of a company, we will be reluctant to resume hiring until growth commences.

Consumer Spending Reducing: Credit card companies are curbing consumer spending further as they are being stung by increased defaults and delinquencies. But consumers are adding to this be saving hard for the rainy day as evidenced by the recent saving statistics. With less people employed, spending will reduce further.

Individual States in Crisis: E.g. California defaulting on short term obligations. They can’t run current budget deficits. With taxes falling they are forced to cut spending (something the Irish government seem unbelievable slow to do) which will reduce consumer spending now and the foundation for growth in future as education spending is being cut.

Foreclosures Increasing: The rising number of foreclosed and abandoned homes and commercial property. There are about 2 million foreclosed or abandoned homes now.

So the crisis is over? Alas this seems wishful thinking to me at least.

Politickr Intrade Market Wrap Video

Watch an independent periodic video market wrap here...

http://www.youtube.com/watch?v=jd7jCOtMULM&eurl=http%3A%2F%2Fwww.intrade.com%2F%23&feature=player_embedded

Thanks to Politickr.

On Innovation

Yesterday I mentioned that we need to be innovative facing our challenges. But it dawned on me I did not talk about innovation enough. 

Commuting in at 4.30am this morning I was considering it again. Here are some further thoughts...

Innovation is a fashionable word. I use it often, probably too often. But what is innovation and how should we think about it. Or "frame" it?

Think of it as the discovery of new paths, creating something new or a better version of something that already exists.

I looked for innovation in others and found Scott Belsky again. According to Scott Belsky of Behance “part of the process is defying the status quo”. 

Here are a few quotes via Scott…

“The conventional view serves to protect us from the painful job of thinking.” -John Kenneth Galbraith

 “If you can’t solve a problem, it’s because you’re playing by the rules.” -Paul Arden

“The truth is, creativity isn’t about wild talent as much as it’s about productivity. To find a few ideas that work, you need to try a lot that don’t. It’s a pure numbers game.” -Robert Sutton, a professor of management science and engineering at Stanford Engineering School.

Looking to old quotes may not be innovative but nothing wrong from building from the "shoulders of giants". 

Have a good day. 

Innovation and Competitiveness and Our Future

We need to up-our-game. It is unlikely that the supportive winds of a global recovery will arrive for years and therefore we need to put in place now the foundation to have a big sail (think spinnaker) to catch the wind if and when it arrives.

Lets focus on education, innovation and competitiveness.

A recent report carried our by a Washington DC think tank ranks Ireland as 13th out of 40 for innovation and competitiveness. In some categories we did poorly, but overall we are in the top 15 of 40. In areas like corporate tax rates and foreign direct investment we are #1. The report focused on EU states and the US.

One of the many things concerning about the report is that Ireland only rank 18th in R&D and below places like China and the EU10 accession countries. This bodes badly for us in the future should our standing remain so low.

In the category of GDP per hour worked, Ireland exceeds the United State but in terms of I.T. investment and researchers per capita we are only at 75% approx. of the US levels. Again this is worrying.

While VC capital availability has become more troublesome from the last survey we are still 14^th and in the top 10 for entrepreneurship.

With the ongoing rise of China, India and global competition Ireland, the EU and the US will need to up-its-game.

I know investment capital at the moment is as rare as hens that have teeth. People are maxed out with borrowings including our government but where we can, indeed where we must we should focus now on…

1. Education – the cornerstone. Lets focus on the science, technology, energy, climate and food. I think clean traceable organic food may be the next “black gold”. And Ireland can be a super producer of this currently under appreciated commodity.

2. Technical Rights to Succeed. We need all the facilitating links to make sure we catch the wind and contribute to it.

a. The right regulatory framework – I give us an arbitrary score of 7

b. An accommodative tax policy – mixed score here. R&D investment relief OK, cost of employing and VAT is crazy, corp tax rates great. Score 6.5

c. Technological infrastructure. We are dreadful in this area. We need to do more and fast. I live 21 miles from Dublin and cant get broadband.

3. Focus on some “wicked problems” where we have strengths. E.g. we can contribute significantly to solving our and others fossil fuel dependency. Ireland has masses of untapped wind and waver energy. While we may not have the capital base to do the entire R&D required we must invest in these areas. We have had success before. Same can be said again for good food and water.

In conclusion, we and others are on our knees at the moment but we must continue to invest in our long term. Increase our productive capacity by focusing on education in the first instance and removing the hurdles to innovation and competitiveness.

In Ireland we are innovative and entrepreneurial by nature but we must keep our morale strong. Yes things are bad and will get worse, but “this too shall pass”, and when it does our attitude is what will fuel our recovery.

Follow me on Twitter http://twitter.com/JDelaneyIntrade

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