The value system is an agent-driven system that processes value.
Some parts of the value system are given to agents, others are designed by agents. For example, if a process uses natural resources, these resources are given and the number of process that one can use for extracting and utilizing them might be very restricted. On the other hand, there can be multiple ways to fabricate a product, some that optimize costs, others that optimize environmental impact, others that make the product reusable, etc.
The value system underlying an OVN influences the structure of the OVN.
Working definition: value is what moves individuals to do something.
See What is value?
The value system must take into consideration the following processes:
- the creation of value through the creativity and the labor of agents, individually and/or in collaboration,
- the transformation of value, i.e. transposing value from one form into another form, accruing or diminishing it.
- the consumption of value, i.e. value used, including for creation and transformation of value.
- the destruction of value, as distinct from consumption, i.e. a process through which value simply vanishes without any positive effect on the value network.
- the infusion/injection of value from value pools not strongly connected with value system [ex. grants, donations, free participation/help, other networks’ assets],
- the exchange or distribution of value, among agents or within a larger ecosystem, and
- the sharing of value among agents, a process in which there is no change in ownership
Value systems and socio-economic organization
Value systems have a large influence on socio-economic organizations. Throughout history societies have been structured by their underlying value systems. For example, the transition from feudalism to the industrial era, characterized by an increase in economic freedom and democracy, was greatly influenced by the discovery of new means of production (steam engine-driven manufacturing) relying on new types of resources (coal and petrol). The new possibilities in production coincided with new means of distribution (steam engine-driven ships), and incited the emergence of new exchange systems (currencies), new institutions (the corporation), new governance systems (parliamentary democracy, republic, etc.), new types of markets, etc.. In short, these new means of production unleashed huge transformative processes. Recently, archaeologists uncovered forgotten civilizations dating from the bronze age, that were politically highly centralized, with powerful armies. Historians believe that the socio-economic structure of these civilizations was greatly influenced by the nature of the raw material (copper) and processes required for its extraction and transformation into goods (bronze tools and weapons), which were the main source of their development and wealth. These communities had to defend the rare and prized resource (copper), therefore they had to build large armies that could only be effective at that time under a central command. Moreover, turning copper into bronze tools was very labor-intensive. These communities had to develop ways to sustain large numbers of workers.
Abundance or scarcity of resources, the amount of work required to extract and to transform raw resources into added value products, the efficiency of the production process, the efficiency and costs related to the distribution of products, the lifetime of the product, all these factors and others determine the structure of the value system and in turn determine the set of relations that get established between agents within the value systems, who try to reach a compromise between optimizing their value system and improving their lives.
The Internet era introduces a series of new possibilities that operate profound transformations into our global value systems. Human resources go from scarce to abundant, because it is now possible to reach everyone across the planet with a computer and a connection to the Internet for information and knowledge-based work. Open source development, crowdsourcing (skills), crowdfunding (financial resources) have been made possible by this connectivity without spatial and even temporal constraints. Moreover, some Internet applications increase the availability of material resources by facilitating sharing. Examples: Airbnb, BlaBlaCar, and all other ventures part of what we now call the sharing economy. The OVN economic model builds on these new possibilities and tries to put them to the best use for humanity.
Value system in relation with OVN and OVNi
- The value accounting system assists OVN affiliates in recording and evaluating contribution to projects. Some projects generate products which are exchanged on the market, generating revenue. The value accounting system calculates revenue for every contributor in proportion to contributions. This system outputs a map of value sources, points of consumption and transformation, as well as the value flow distribution. See some examples in our new prototype
- The value exchange system insures exchange of value among OVN affiliates and with its larger ecosystem.
All these sub-systems are necessary to incentivise activity, to induce tight self-organization within the OVN, to focus activities according to priorities, and to render the network creative and productive. These systems are designed for a fractal structure. An OVN is fractal structure, a networks of networks that can span the entire global economy. The architecture will be adapted to fit with the diaspora paradigm, see Value Networks - moving forward
Another important aspect of OVNs is the commons and the pool of shareables, which are pools of shared resources (tangible and intangible, material and immaterial) within the network or with the world, governed by some rules.
The agent (affiliate) is the most important element in a value network. Agents can be individuals or different types of organizations, including networks. The agent is represented by an avatar, an individual profile.
The value system determines the structure of an OVN. Different types of value networks.
The value system must be compatible with a contribution-based compensation model. It must account for tangible, as well as intangible value. The value system is able to capture economic events in context and to follow their effects on the economic system from their creation to the point of consumption of different products and services that have been influenced by these events. It must be capable of taking into consideration many small and sporadic contributions, and to incentivize such contributions, in parallel with long-term commitments.
The value system is designed to be scalable to global proportions and to operate in a swarm mode, i.e. to extract value from a long-tail distribution.
The value system manages flows.
Agents in the value system are individuals, any type of organization, even those organized as decentralized networks.
Example of contributions are: time spent (doing R&D, manufacturing, office work...), financial contribution (to purchase materials in the context of a project, to fund infrastructure development and maintenance, etc.) ; material contributions (sharing of a tool, equipment, space, etc.); social capital contribution (opening access to a new market), and others.
The system takes into consideration many resources like time, materials, physical and virtual spaces, ...
See more on the Value accounting system.
Ideas to build on
Information and knowledge are now abundant (very good ideas are still scarce tough). Bringing in or finding the right idea in context, when needed should be rewarded. In other words, academia should be for generating ideas. The OVN has an economic aim, ideas are only good in context, if they solve a problem. The idea can be generated on the spot, by a spark of creativity, or important. Either way, this is an economic event and it should be associated with some form of reward.
See this paper
- value stream
- Verna Allee and Value Network
- Virtual organisation breeding environments value system and its elements
First published on April 29, 2011, edited by Tibi, Kurt, Ishan, Ian, Francois, and Steve. See original doc, last modified on Oct 14, 2012 before content was moved here. If you contribute to this doc make sure you respect Content rules.
Work on the value system is hosted on github. We are using REA (for Resources, Events and Agents) designed by Bill McCarthy of Michigan State University (See more on Bill McCarthy’s website). See a prototype HERE.