2012-09-14, Nerijus Celkonas

Hub’s vanish (part 2) – down the rabbit hole

Hub’s vanish (part 2) – down the rabbit hole

In part 1 we wrote about individual changes that await us because of the vanishing centralization processes in retail. In this, second, part we‘ll try to visit Alice‘s wonderland – commerce.

Trade and money are the main engines of the last centuries that drag us into a closed loop. Let‘s try to have a look into how trade will change when accounting systems become automated.

The main challenge in retail today is the disposition of cashiers. Wal-Mart has already started a testing project where you have to scan your purchases with your smart phone and after the formation of the whole shopping cart, you pay the cashier with one code only. This is only the beginning of transformations that await retailers. Next step is full self-service, that is, we, the shoppers, will have to identify the items and funds will be withdrawn from our bank accounts (or, more precisely, our payment system). The main task for retailers and manufacturers is the introduction of unified item ID system. It could be Rfid, Barcode, QR or video recognition. And it doesn‘t matter which technology wins – smart cart is the next technological step in retail stores. It‘s only an upgraded shopping cart where items are recognized by radio, video or laser signals and displayed to the customer on a tablet-like display on the cart‘s handle. The cart recognizes the customer using biometric data (prints) or video recognition (check-in function) and after smart cart identifies the purchased items, the shopping transaction is made. No more shoplifting, cashiers or security.

So we‘ve came to the rabbit hole – let‘s go down

The next logical step is refusal of accounting. If we already have a unified merchandise database, why can‘t we separate the merchandise into components? Hence, our database describes the financial components of merchandise. Let‘s say that components of milk are: the supplier of raw materials has 30%, 8% goes to the processor, 15% - to logistics, 40% - to manufacturing and 7% - to retailers. And this is only 1st level components, we could separate every component to the lowest level, for example, the retailer‘s 7% are constituted of 1% rent fee, 1% - VAT, 0.03% - employees, 2% - taxes J and so on. From the instance when purchasing is initiated, there could be so many downward levels till the logical chain closes when my expenses become my income (but not necessarily, if I‘m not participating in the logical chain of the mentioned good). This can also be applied to services as well; we only need a unified database of goods and services. So, how does the whole trade system looks now? When the customer puts items into the smart cart at a retail store, the employee instantly receives his/hers 0.03% part of the wage and the processor – his/hers 8%. And if you‘re involved in this chain, you, buying the items as a buyer, will receive your share and make your wallet happy. No accounting, no accountants, no debts, no interests, no inflation J.

Can we already see the White Rabbit‘s ears?

So we‘ve changed the whole trading world, did goods and services became cheaper, did accountants and cashiers transformed into different professions, where did all the saved assets go? All these questions will be answered by time. As we’ve seen, I’m paying part of the pensioner’s pension and congressman’s salary when buying milk. Productivity increases several times as all financial components are calculated by fact only, that is, only for the job done and for the time spent anymore. The gap between middle class and slackers increases. Governments can clearly see how much they pay to the ones that can’t or won’t work. Government spending becomes unimportant, the bureaucracy is automated and corruption is under control J. Because primary value sources (goods and services) are divided into financial components, no financial decisions have to be made throughout the whole chain. In this way the saying that “money has to be distributed and in order to distribute fairly, we’ll distribute” becomes meaningless.

Organizational profit entities such as corporations transform into innovational and process control laboratories. After all, the profit goes down directly to the owners and if it’s a publicly listed company, directly to fund beneficiaries or individuals. Payment by fact only taught self-organization and self-motivation, what stayed is control and innovations.

White Rabbit - here you are

Governments as closed economic spaces are disappearing (as much as it’s allowed by the still existent unions). International business conglomerates offer to create a business profile in 5 minutes at mechanical islands in neutral territories and to legally compete with still existing economic régimes to everyone that wishes for one. Remote work has become the status quo. You, as an individual, get immediate profit when a transaction is made for your new product or service registered using SaaS type services. No company fees, taxes, administrators, bureaucracy or accounting.

Everything becomes decentralized and individuals are the future, not corporations. Though even galaxies vanish, but they form other organizational units. Read part 3

 Follow these series of insights @BalticForge.


 Author Nerijus Celkonas, CEO Qwekee.com

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Latest comments (0)

on 25/9/12
Another one http://mashable.com/2012/05/07/blueseed-pirates-silicon-valley/
on 25/9/12
Looks like in article http://techcrunch.com/2012/09/24/unreasonable-at-sea-2/