Government, crowds and policy development

How can government utilize technology to harness the power of non-state actors to: improve policy development; encourage networked governance; generate networked state/non-state solutions; and align potentially adverse actors with foreign policy goals?’

Government is beginning to confront a major emerging challenge of the 21st Century: the fact that State power is increasingly threatened and undermined by the emergence of non-state actors who, enabled by information technology and growing financial resources, play an increasingly important role in foreign policy. The U.S. Government recognizes the security threat posed by networked black-hat (malicious) non-state actors like Al Qaeda, narcotraficantes, and the Taliban, and is taking steps to counter these threats.

However, the challenge to hierarchal state power posed by white-hat (positive) and grey-hat (ambiguous) actors is still opaque and not fully addressed. White-hat, non-governmental actors are increasingly able to deploy resources and shape events in ways that could be detrimental or directly contrary to official U.S. Government foreign policy. This trend will accelerate as information technology further enables networked organization activities, and non-state actors accumulate endowments which rival foreign assistance budgets. Additionally, networked grey-hat organizations like the hacktivist group Anonymous present serious threats to law and order, but could generate opportunities and alliances if engaged proactively.

The challenge presented by networked non-state actors is correlated with demands for the U.S. Government to develop networked structures to address complex problems necessitating a whole of government approach. George Washington University Professor Fuerth identified the need for foresight-policy integration, networked governance and feedback for applied learning his October 2012 report on Anticipatory Governance. However, these initiatives are heavily challenged by government inertia, the persistent focus on crisis management and the lack of bandwidth by key policymakers to broadly network with internal agencies and external non-state actors.

I am specifically interested in how information technologies – specifically crowdsourcing, social networking and gamification technologies – could be utilized to provide practical and implementable solutions to these pressing problems. Specific topics are:

  • Networked governance is critical to countering and managing networked non-state actors, but policy-makers are resource constrained. Non-governmental organizations have considerable resources which could facilitate intra-governmental and government to NGO collaboration. How can government use crowdsourcing or other technologies to facilitate non-governmental participation in foreign policy development and implementation processes?
  • Non-state actors will have an increasing ability to influence foreign affairs. How can government use crowdsourcing and gamification technologies to broaden the policy-development process, integrate a wider range of inputs from white-hat and grey-hat non-state actors and ensure their efforts complement U.S. government foreign policy?
  • Public diplomacy at US missions overseas is integrating social media into its dialogue, but communications remain hierarchical. How can our foreign missions expand their use of technology to build alliances and networks with non-state actors? Are there opportunities to use technology to provide diplomats additional latitude to network with and promote non-traditional ideas and voices (sacrificing some hierarchal control for greater speed and responsiveness)?

More to come…

Note: ideas and views expressed here are my own and do not necessarily reflect the views of the State Department or the US Government

Why Apple Wont Acquire Twitter

See my new article on Seeking Alpha: Why Apple Wont Acquire Twitter

Cannibalizing the Apple?

People have been talking a lot about the iPad Mini cannibalizing regular iPad sales. However, as Cult of Mac reports, this effect is far smaller than the rate at which the Mini is cannibalizing PC sales. This isn’t surprising. The Mini provides an attractive price point entry for people who are intrigued by the iPad as a replacement for their PC, but find the full sized model a bit too expensive.

When you think about it, most people probably don’t need anything more than a tablet. My dad has a Mac but for his needs – email, web surfing, basic word processing, photo sharing, etc., a full sized computer is overkill.

Conspiracy theorists might think that Steve Jobs planned this all along. Introduce a full featured tablet to introduce people to the idea, then come out with a Mini that can dominate the low end and brutalize PC sales.

However, the real cannibalization will come when Apple allows cellular phone calls from the iPad and Mini. This is technically possible now, but Apple doesn’t want to kill its iPhone cash cow. Allowing cell calls on the iPads would eliminate the need to buy an iPhone and an iPad. But it’s coming eventually.

Once tablets fully saturate the market, this will happen and it wont be an issue. Because at that point, the cellular phone will be an archaic concept. The iPhone really is a pocket-sized mini-computer that can make cellular calls. The Mini and iPad are larger sized mini-computers. Turn on cellular capability on the iPads, and then you have three sizes of minicomputer. If you want the teeny tiny one, you have to pay more for the miniaturization.

This reveals the real issue with the Mini and Apple’s current pricing structure. The Mini really should have a price point somewhere in between the iPhone and the iPad. But it’s the cheapest of the three, and has fewer features. Apple really needs to re-work their thinking and introduce a full-featured mini with a price point in-between the iPad and iPhone. That will allow it to activate cellular service for both iPad models with a rational pricing structure.

So 2-3 years from now, I fully expect that the iPad Mini will outsell the iPhone…but somewhere along the line we need to drop the ‘phone’ terminology and call them what they are – mini-computers.

Bit the worm

Well, I seem to have started blogging about Apple right around a cyclical peak. Whoops! Bad timing. But despite the crash, the Apple story is intact. Jason Schwartz has a great explanation of why the crash happened here.

iPhone 5 sales numbers disappoint???

This morning Apple announced that it sold only 5m iPhone 5’s in the first three days. And the stock sold off 14 points on the “disappointment.” That’s what I call free money.

Apple disappointed investors because they don’t have enough iPhone 5 supply to meet buyer demand. That is an excellent problem to have. However, an investor acquaintance of mine said that he was disappointed by Apple, noting that they’re planning on rolling out the iPhone 5 in 31 countries by Friday, and they obviously didn’t allocate enough supply to their home country. (This presumes they are withholding some supply for the upcoming Friday launches in 22 countries, which should be correct.) He thinks they underestimated initial demand, but this presumes that they’d even want to fulfill that demand.

My explanation to him is below:

You’re thinking about it from an investor’s standpoint. Sure, a blockbuster # would be great for the stock, but is it what Apple wants? Do they want an iPhone in the hands of everyone who wants one as soon as possible?

No, they don’t. They want shortages, they want users to have to wait in line, they want people pining for that phone which will show up in 3-4 weeks. They want people to have to wait in line or wait at the door for FedEx. Suffering/pining for something binds you to it emotionally. They want the perception that the iPhone is a scarce object that confers high status. They want people to long for their product.

As an example, I live in DC and I was eating at a trendy restaurant last weekend. My girlfriend and I popped in without a reservation so we ate at the bar to avoid the line. As yuppies are wont to do, everyone had their phone out on the table in front of them (lest they miss something for god’s sake.) Towards the end of dinner, I mentioned this to my girlfriend and we both had a chuckle at their inability to unplug. I also noticed while all the phones were iPhones, none of them were iPhone 5s. To see the reaction, I took mine out and started playing with it. Everyone around us noticed, and it was immediately the subject of conversation for at least two groups near us.

What other object can stimulate this admiring/wanting tittering? A Ferrari? The nicest house on the block? Some of those people probably have iPhone 5s on order or are saving up for one, and their hearts were wanting while their brains were dreaming about the day it shows up on their doorstep.

That’s what Apple wants, not putting a phone in the hand of everyone who wants one on the first weekend. That would do nothing for long term sales. The emotional experience is what will help sell 200m iPhone 5s over the life of the product.

Apple TV Will Revolutionize Content Delivery And Advertising

Re-posting an article posted on Seeking Alpha in May.

Apple TV Will Revolutionize Content Delivery And Advertising

Update: The Wall St. Journal reported today that Apple is in discussions with major cable companies about letting consumers use Apple TV to deliver cable content, not just Internet content. It’s an interesting play by Apple. Delivering cable content and internet content side by side would certainly provide the best user experience, and would be in Apple’s best interest, but I didn’t analyze it simply because I don’t think the cable companies will ever go for it. I figured they’d just dig in and play defense to try and protect their economic fortress. In fact, that’s still my prediction. Why would cable companies hasten their own demise by giving Apple an easy presence in their users’ households?

But if a few cable providers do partner with Apple, they’re either reckless, or they have a plan for how they will capitalize on Apple TV. It will be interesting to revisit this issue when some agreements are in place and we can determine if the cable companies have foresight or foolishness.


Apple: Another Reason For Its Cash – Insurance Against Disruption

Re-posting an article posted on Seeking Alpha last year.

Apple: Another Reason For Its Cash – Insurance Against Disruption

I haven’t seen anything that would invalidate this article. The dividend announced earlier this year was minuscule, indicating Apple still wants to hoard its cash pile.


The ultimate technical indicator???

Is the St. Louis financial stress index the ultimate technical indicator? The Index, which measures a basket of interest rates, yields and indexes, has a spooky inverse correlation to the S&P 500. The graphic below overlays the $SPX on the Index:

Since 2002, the relationship between the two is uncanny. And since the Index is on the decline, that seems to call for more upside to the S&P.


I think Romney just handed Obama the election.

I was hiking in Great Falls yesterday when my cell phone binged with the news alert of the day – Mitt Romney selected Paul Ryan as his running-mate. My first thought was “Romney just handed the election to Obama.”

This feels like 2008 all over again. Romney probably ran the numbers, realized the odds are against him and decided to throw a hail mary pass. With the electoral college leaning Democratic, Romney’s team understood they just couldn’t win unless they inspired the conservative base, and the Tea Party especially, to turn out in big numbers for the election.

Romney’s campaign attempted to make the campaign a referendum of Obama’s handling of the economy, but that strategy has failed. The American electorate is smarter than people think, and everyone understands that Obama was handed a very bad hand. He’s probably played it about as well as anyone could have, and the economy is improving, slowly but surely. And in light of the economic troubles in Europe and China, the US economy looks positively vibrant.

With the economic strategy failing, Romney’s choice of Ryan seems to make sense. Ryan is young, charismatic and bright, and his budget proposals are a beacon for the Tea Party. He’s an ideological purist who feels that over dependence on the U.S. government undermines the liberty of  its citizens. Romney believes that Ryan’s presence on the ticket will sooth the far right, which has always been suspicious of his conservative credentials, and drive the Tea Party to support him on November 6. And he’s right – Ryan will probably draw significant support from the Conservative base. Ryan will also solidify Romney in Wisconsin, a key swing state in 2012.

However, in doing this, Romney has stepped into a trap. Paul Ryan is such a polarizing figure he’s actually going to rally more support from the Democratic base than anything Obama could have done. Whether the perception is correct or not, Ryan is viewed as a symbol for gutting domestic social programs in favor of tax cuts for the wealthy. This will likely shift states leaning towards Obama into the solid Obama camp. Ryan is seen as favoring a dismantling of Medicare, so toss-up states with a high percentage of elderly voters will start to lean Democratic. Most critically, Ryan isn’t going to play well in Florida with its high proportion of retirees.

Adding Florida’s 29 electoral votes to his ‘solid Obama’ total of 237 electoral votes will give Obama 268 – only two shy of the number needed to capture the Presidency. With Florida, Obama only needs to win one additional state from the remaining seven toss up states. For the Obama camp, that’s pretty good odds.

But in fact, Romney faced long odds when he failed to make a centrist turn after the Republican primary. The center-right Romney, the one who governed Massachusetts with pragmatism, fiscal conservatism and a social libertarian bent – that Romney could have beaten Obama handily. And so its a mystery to why Romney, after making a hard right to sew up the Republican nomination, didn’t then take a hard turn back to center after he became the Republican candidate.

The ‘real’ Romney, the Massachusetts governor who seemed to favor whats right over what’s Right, was the one that held the promise of real change from the outside. The current version of Romney looks like a failed upgrade – one that is beholden to the far right, and has now selected a career politician with exactly one year of private sector experience, to be his running-mate. Ryan is the ultimate Washington insider. The private-sector pragmatist Romney now looks very much like the torchbearer for the Republican base.

I think Romney just handed Obama the election.

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