Influence Capital: The Quadrillion Super Asset Of 21st Century (LXXVI)

sharonomics (61)in #sustainability • 6 years ago (edited)

Technology can be used to tokenize influence for creating quantifiable capital assets. How big this new asset class could be? We make an attempt to answer the question.

When we first realized that influence can be tokenized, and that tokenized influence can be used to crowdfund projects without actually putting any of the physical assets at risk, it was a giant Eureka moment. However, at the time, we didn’t have a clue that the influence-based crowdfunding technology that we conceived was actually creating a brand new asset class: Influence Capital.

It was only when we reviewed the Noble Prize-winning work of two economists, Gary Becker and Theodore Schultz on “human capital”, it dawned upon us that the concept of “tokenized influence” that we created was actually a lot more tangible and quantifiable than all those intangible assets that constitute “human capital.” It was then we set out to investigate “Influence Capital” as an asset class in its own right.

Having tested the hypothesis that Influence Capital indeed qualifies as a new asset class, it became incumbent upon us to further investigate and define its place in the global wealth landscape.

A World Awash in Money

In our quest to quantify the global worth of Influence Capital vis-a-vis the total global worth of all assets, we discovered that the world is indeed awash in money.

A research report from Bain and Company looked at the capital trends through 2020 estimating the total worth of world assets to reach $900 trillion by 2020.

There are several other reports, but no matter, which analysis one looks at, the estimates range between $544 trillion at low end and $1.2 quadrillion at the higher end, the truth being the task for exact quantification of global wealth may be too Herculean for anyone to take up.

However, of all the reports, the most relevant is the one from Korn Ferry, which also includes the valuation of Human Capital. Actually it is the only one that focuses on estimating the total potential worth of global Human Capital.

Source

In the Korn Ferry report Centre for Economics and Business Research (CEBR), UK's leading economics consultancy firm that provides research to support thought leadership was commissioned by Korn Ferry to create a macroeconomic model to quantify the value of human capital in relation to physical capital. These were calculated based on a lifetime earnings approach, estimating the value of assets in use.

Korn Ferry interviewed 800 business leaders across UK, China, United States, Brazil, France, Australia, India, and South Africa to conclude that human capital represents a potential value of $1,215 trillion to the global economy.

Human capital value, in all eight nations surveyed, exceeds the value of physical capital. Korn Ferry. The trillion dollar difference. Page 6

It is 2.33 times that of physical capital, which includes tangible assets like technology, real estate, and inventory. According to the Korn Ferry analysis, the total physical capital should be valued at $521 trillion, and adding up $1.2 quadrillion human capital takes total worth to over $1. 7 quadrillion. Considering the current global debt of $244 trillion, the total net worth of humanity would reach about $1.5 quadrillion.

Estimating The Potential Value Of Influence Capital

Since the entire value of influence capital in our ZeroCash experiment came from the actions of individuals or legal entities, our initial thinking gravitated towards seeing it as an offshoot of human capital. But realizing that different types of physical assets may also create influence that can apparently be tokenized by their owners, we had to revisit our initial perception. All kinds of assets whether tangible or intangible are inherently bestowed with some value that can manifest into influence, which can be harvested and capitalized. A decentralized ledger technology system, such as the one we disclosed in our ZeroCash experiment, can harvest such influence by tokenizing the value of such assets.

Source

Now, considering the estimation of the total value of Influence Capital, the research will require an extensive analysis of the value of each category of physical as well as intangible assets and their liquidability. While that should be a subject of another extensive research, for now, we can just attempt a quick and dirty guestimate by adding up all the reported tangible and intangible assets globally ($521 trillion + $1,215 trillion = $1.736 quadrillion), and discounting the total figure by an average of 40% (although such discounting would vary depending on the liquidability of the asset, e.g. cash in hand will be least discounted, while intangibles like human capital most discounted).

That takes the total potential value of Influence Capital to $1.03 quadrillion.

Doesn't that make Influence Capital a super asset in its own right? A class above all asset classes?

And, wonder what would be the net worth of an average earthling? May be the next milestone in my expedition into the unknown.

Read the original article on Medium

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6 years ago in #sustainability by sharonomics (61)

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rabeel (71) 6 years ago

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