UU20170609

‘SME Disruptive Innovations’ is the third issue in this sub-theme of P5GO. The ongoing 4th Industrial Revolution cause changes to Small Enterprises as well as Large and dominant ones - of both the public and the non-public sectors. Large enterprises fire masses of employees when automating the IR3 productions and services by IR4 means. In contrast, SMEs hire to make innovations that the unfit enterprises cannot, or will not. Still, there are uneven rivalries in the markets, especially because some Parliamentary powers are too corrupted and have become too dysfunctional. State aids and legal protection for SMEs are mishandled and do suffocate the helpless and maturing SMEs. In this relation, a particular focus is set on the Dexit too. The Dexit is an important and unique example of how any ‘Western’ nation should not do in order to resist organized international crime and to prevent dysfunctionality and chain-reactions of CCD (Colony Collapse Disorder). Therefore, for the arguments sake, this blog provides some rather profound references to some theoretical arguments, after an introduction and before some concluding remarks.

What are SME? First of all, most firms start up as micro business. Some are even started by ambitious unemployed, post-graduates and drop-out students. There are several famous examples of that during the IR3, where some ‘IT nerds’ disrupted some dominant enterprises by simply introducing the innovative products and services into the existing market rivalries. Most SMEs did not make it, though. Previously, there was a single definition of SME (Small and Medium sized Business) for the millions of very different businesses. The EU definition of SME changed in 2003. Now there are 3 categories of sized, based on number of employees, and economic turnover and balance: Micro; < 10, ≤ € 2 M, ≤ € 2 M. Small: < 50, ≤ € 10 M, ≤ € 10 M. Medium: < 250, ≤ € 50 M, ≤ € 43 M. The main focus in this blog is firstly on the smallest firms as start-ups. Actually, even a single citizen, with nothing but a VAT ID, is a micro enterprise. There are millions of them, and the number is growing rapidly during this IR4.

What is a Disruptive Innovation, then? “It is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances with a signiﬁcant societal impact. Not all innovations are disruptive, even if they are revolutionary. For example, the first automobiles in the late 19th century were not a disruptive innovation, because early automobiles were expensive luxury items that did not disrupt the market for horse-drawn vehicles. The market for transportation essentially remained intact until the debut of the lower-priced Ford Model T in 1908. The mass-produced automobile was a disruptive innovation, because it changed the transportation market, whereas the first thirty years of automobiles did not.”

Furthermore: “Disruptive innovations tend to be produced by outsiders and entrepreneurs, rather than existing market-leading companies. The business environment of market leaders does not allow them to pursue disruptive innovations when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from sustaining innovations (which are needed to compete against current competition). A disruptive process can take longer to develop than by the conventional approach and the risk associated to it is higher than the other more incremental or evolutionary forms of innovations, but once it is deployed in the market, it achieves a much faster penetration and higher degree of impact on the established markets.” “Beyond business and economics disruptive innovations can also be considered to disrupt complex systems, only including economic and business-related aspects.” (Wikipedia)

In contrast, negative ‘Distortions’ are too often deliberately mistaken for the positive Disruptive Innovations. Arguments might be like the unspecific ‘make a change’. Such ulterior Moves are of psychosocial Games. Related to IRs, they are called ‘Pyramid Games’. The anti-thesis is called P5GO (the 5th Pyramid Game Over) and is the main theme of these 50 blogs. In brief, the positive ‘Disruptive Innovations’ of the industrial revolutions are abuse to cause ‘Distortions’ in order to cause CCD, CdE and even WW on prey nations. As introduced to UU 2017.juni.02 about ‘Virtual money’: “We also know that Game Player of the 3rd and 4th Pyramid Games lured citizens in distress into civil wars, believing that the Game Players ever would pay back as promised. Consequently, the public social services are organized by such oligarchic criminals that systematically violate international laws and human rights, - quite the opposite of their public images. Yet, this is easy to fix by proper and sound use of IR4 technocracy, bureaucracy and democracy. The Pyramid Games in Industrial and Social Revolutions are talked through in UU 2017.juni.02.

The IR4 was talked through in UU 2017.mai.19. In brief: “The Fourth Industrial Revolution (IR4) builds on the Digital Revolution, representing new ways in which technology becomes embedded within societies and even the human body. The Fourth Industrial Revolution is marked by emerging technology breakthroughs in a number of fields, including robotics, artificial intelligence, nanotechnology, biotechnology, The Internet of Things, 3D printing and autonomous vehicles. The technologies have great potential to continue to connect billions more people to the web, drastically improve the efficiency of business and organizations and help regenerate the natural environment through better asset management.”. The blog also provides talk-throughs on the strategies of Germany ‘Industrie 4.0’, the China ‘Made in China 2025’ (MIC2025) and the European Union policies.”

Micro and Small enterprises have been a main concern in several blogs. The most recent is from UU 2017.mai.26: “The oligarchic abuse of market dominance during the IR3, in both public and non-public enterprises, is a main reason for the present dysfunctional, corrupted and criminal abuse of ‘state aid of social character’. This is a basis for a new and yet unpublished website, called CloudMaps/EM. The following shows a draft.

“Most European nations are part of the European Internal Market, - and their parliamentary relation is solid. All the nations have agreed to some obligations to give, - in order to get their rightful goods from the community. Unfortunately, the obligations are illegally undermined in 30 years by international organized crime. The European nations lose millions of Euros each day and billions annually. Financial problems for public services, citizens' rights and companies' deficits would be easily solved, if the public authorities turn more legal. The legal obligations are in the Treaty of the European Union. The national ratifications are unfortunately not correctly ratified into law and practice on important issues. However, there are no legal obstacles to end such illegalities. The Treaty is superior to any obsolete, misguiding and missing national laws and practices.”
A legal Law of Competition, according to the Treaty's articles will cause:
1. Opening for Small Enterprises to the huge public market (106).
2. Reduction of abusive oligarchic treaties and practices in the public market (101-109).
3. Reduction of market-distorting abuses by state-aid to suppliers of the public sectors (107).
4. Re-distributing state aids to the citizens from the oligarchic actors (107).
5. Prohibition of customs duties and charges having equivalent effects (30).
(Use to search to the article in the Treaty.)
“State Aid, having a social character, must be given to the consumers and not suppliers or producers. ‘Basic Income’ is such State Aid, having a social character. It concerns most payments for public services of health, transport, education, housing, caring, etc. All these aids shall be paid directly to the citizen, like payments as pensions, unemployment benefits, wage subsidies, housing assistance, day care, child support services etc. Consequently, it is illegal when public servants give the citizens’ aid directly to public or private suppliers and producers.”
“The legal foundation to this argument is in the Treaty on European Union Section 2 Aids granted by States, Article 107 (ex Article 87 TEC). “1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market. 2. The following shall be compatible with the internal market: (a) aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned; …” (This web-site will soon be used to promote SMEs in Europe. The draft can be found at cloudmaps/em.)

SMEs was in focus in a blog theme concerning the Dexit (Dane Exit from Europol/Eurojust). It was summarized in UU 2016.aug.26 and here are some relevant quotes:

“SME (Small and Medium Sized Enterprises) are also fundamental for any democratic society. They are like the ‘underwoods’ to the ‘forests’ of societies’ ecological processes. Without SME, societies decay and corrupts in a few decades. Bourgeois’ SME are the realization of the very basic idea that any vassal was freed to farm, produce and service, - free from the decaying bondage of some feudal oligarchs. The idea is the basics of Magna Carta that evolved to the UN Human Right and the extended European Human Rights. In the European Internal Markets SME are protected from oligarchs’ market abuses by law. SMEs are even supported and promoted by international regulations and programs. This has been the issues in several bogs and the following is taken from UU 2015.okt.23 and UU 2015.okt.30.”
“Furthermore, the SMEs are 80% of the market in Norden. They are particularly important for democratic nations, very defenseless towards predatory oligarchic competition and has extraordinary legal protection and support in accordance to European Legislation. Furthermore, “The SMEs suffer from illegally ‘abuse of market dominances’. Besides, the EEA law obligates public protection and support to SMEs because the regional local societies will extinct if their SMBs suffers. The past 20 years’ growth of cartels in the primary industry is the main reason for the decay in local agriculture, stores and other SMEs. Contrary to anti-European propaganda, the solution is to protect those by the EEA Law and not by SU inspired agricultural industrialization. The farmers do run their own SMBs.” However, with legal use of (Law of Public Procurement), the public sector’s enormous market would not be closed for SMEs. That would save a lot of them and consequently the fundament for regional cultures, - in addition to higher qualities and lower prices for the public purchases.”
“Coldwar propaganda has created an illusion that the market consists of a public and a private market. How untrue. Dominating oligarch have no exclusive right to state aid and exclusions from the law, - like some mafia ‘untouchables’. Unfortunately, national SMEs are nearly cleansed out of the national marked due to state-aid corruption, protection from prosecution and hostile dominance in the democratic markets. Consequently, deliveries of product and service to the civil population and public services have too high costs and too low qualities, - as stated in the OECD reports.”
“The deliberate masspsychosis of legal obligations of public service sector is talked through in several UU blogs. Here are some summary quotes to the concluding blog to 5th pyramid in UU 2016.juni.17. “Oligarchic crimes towards European civilizations were discussed in a UU theme prior to the Dane Europol referendum (UU 2015.okt.16, UU 2015.okt.23, UU 2015.okt.30 & UU 2015.nov.06.) There is no doubt that the democratic European Internal Market has made oligarchic cold war business illegal. International criminal organizations fight the laws of Europe fiercely with any means disposal. As well-known now, international organized crime won the Dane Europol/Eurojust referendum in December 2015.”
“The focus here is set on SME vs Plutocracy. In this relation, the Tax authorities are fundamental for any society. However, it can be abused in Oligarchic Games to end SME competition. That is basically feudal Games to keep the peasants and workers in bondage instead of a natural develop to ‘bourgeois’ citizens. It is said that Denmark is probably the nation where it is easiest to start an SME. Any adult can register as CVR (Central Virksomhed/Enterprise Register) to pay VAT (Value Added Taxes). However, statistics show that Denmark also is the hardest place for SME to survive. Most get bankrupted in a few years, due to bureaucracy, cleptocracy and plutocracy. The powerful tax authority is a main reason, which occasionally confiscates despite the EU SME protections. (UU 2014.nov.28).”

The Dexit, the rejection of Europol and Eurojust, makes Denmark a Pirate Bay for international organized crimes in the EU Internal Market. The massive crimes of SKAT is one obvious example oligarchic preying on SMEs. (UU 2017.feb.17) In fact, the TEU is rewritten in Dane law to make a legitimated illusion that the Executive and Legislative Parliamentary power allows such crimes.

IR4 SMEs are Game Changer in both the public and non-public markets. Therefore, this section from UU 2013.okt.18 is translated to English for the occasion.

“Highly relevant for SMEs, during IR4 and P5GO, is the models of Michael E. Porter. They illustrate basic relations for industrial excellence, - strategically, operative and innovative. Variations of the Value Chains provide important insight for the Quality of Products and Services. The combination of value chains also provides insight in how to focus on the core production, in additional to optional ‘outsourcing’ of resource-consuming support like accounting, finance, IT, logistics, consultations.”
“A well-known Porter model is ‘the 5 forces’ that illustrates the 5 rivaling market powers. In the center of them all is the Market. Such rivalries exist in any kind of markets, - not merely in the democratic, but also the markets of public and none-public monopolies and oligarchies. Critics of the democratic market by State-monopolists’ is therefore merely moves in psychosocial Games in order to maintain or strengthen the unrightfully market dominance. It is tactics to build market barriers by anxious actors. The TEU regulations for the European Internal Market are superior to such dominant and abusive market actors. the Executive parliamentary powers are legally obligated to enforce them to the full extents.”
“The 4 other powers of the Market are: The Suppliers, that typically provide the Products and Services to the rivals in the Market. The Customers that have increased powers since the Market democratizations. The New Competitors in the market that includes the IR4 SMEs as well as (the new) global enterprises. New technologies that enables the innovative Products and Services of the IR4. The rivalries can sometimes be rather dramatic (especially during IRs and SRs). The well-established actors in the Market will promote the barriers towards the new Rivals, while the new Rivals will try to overcome them. The model provides a simple presentation of the realities that too many actors too often ignores. On the other hand, the simplicity of the model does not concern other important factors, though.”
“The SWOT model (Strength, Weakness, Opportunities & Threats) is well-known for analysis of one’s own enterprise and the Rivals in the Market. It is often used for business- and cost-benefit analysis. However, one should note that the CBA (Cost-Benefit Analysis) can be made for both measurable and non-measurable values. Yet, such a 2D projection complicates a single-sided basis for decisions that economists prefer. Also, the analysis should include in-depth risk analysis, that includes even more uncertainties in the decision document.”
“The PEST-analysis provides further in-depth to the OT (Opportunity-Threats) factors of the SWOT analysis. PEST adds on; Political, Economic, Social and Technological factors. It is especially important for any analysis of products and services related to the public sectors, since the Political and Social factors can be corruptive. A simple SWOT analysis uncovers merely half the truth. The PEST analysis is highly relevant for political decisions too, - and makes the CBA more abstract and complicated. For example, the PEST analysis includes factors like ‘custom satisfaction’ that can be indicated with ‘Smilys’. Ironically, some economics prefers the negative abbreviation PEST rather than the innovative STEP. Yet, it is highly recommendable for IR4 SMEs to focus on STEP for any innovation. Moreover, important documents for decisions, like politicalized budgets, are interesting for PEST analysis, Transaction Analysis (TA) and Games analysis - like the P5GO. If not, related politicized Games and the outcomes can be too confusing and.

SMEs do not have the ‘economy of scale’ and do not have proper internal support for common services like; administration, accounting, marketing, HR, IT, financing etc. Therefore, SMEs are dependent on inter-SME networking and outsourcing of such supporting services between each other. This is impossible if there is no such network infrastructure in place. Healthy nations promote such infrastructures for SMEs and corrupted public services prevents it. The EU Commission should promote such much more to its member states much more effectively, - like the program ‘Entrepreneurship and Small and medium-sized enterprises (SMEs)’. The DG should react much more effective to all the obvious violations of the relevant rules for competition and state aid towards SMEs. This is critical and alarmin now, in the eve of the 4th Industrial Revolution. (See most business models for enterprises at quickmba.com.)

Conclusively, a main objective to this IR4 is to learn from the previous industrial and social revolutions in order to not repeat the mistakes in this fourth time around. First of all, it is necessary to change from the collective states of denial to recognizing the present reality, - that the SMEs are fundamentally vital to ‘western’ societies’ existence, quality and soundness. Most SMEs start up as micro enterprises to enable the long term positive outcomes for society and industry. Therefore, ‘SME Disruptive Innovations’, in both public and non-public sectors, are positive for societies as well as the industries. Furthermore, this time, in order to avoid social catastrophes, the national Parliamentary powers have to enforce the rules of competition for the European Internal Market in rightful favor of the SMEs. Moreover, they need to re-construct the existing systems for social aid to include Basic Income in order to avoid riots of desperate unemployed citizens, - as in the previous IRs. There have to be public supported alternative for inter-SME financial services like crowd funding, to avoid financial preying on SMEs. Most important though, international organized crimes in the EU IM must not be allowed to distort the innovations by corrupted civil servants of the Legislative, Executive and Judicial (LEJ) Parliamentary powers. Actually, the fourth Parliamentary power, the true democracy (not the press), might interfere considerably by IR4 means of hyper-democracy this time (UU 2016.juli.01).

Music:
“Dire Straits were a British rock band that formed in Deptford, London, in 1977 by Mark Knopfler (lead vocals and lead guitar), his younger brother David Knopfler (rhythm guitar and backing vocals), John Illsley (bass guitar and backing vocals), and Pick Withers (drums and percussion). Dire Straits' sound drew from a variety of musical influences, including jazz, folk, and blues, and came closest to beat music within the context of rock and roll. Despite the prominence of punk rock during the band's early years, their stripped-down sound contrasted with punk, demonstrating a more ‘rootsy’ influence that emerged from pub rock. Many of Dire Straits' compositions were melancholic.” “They became one of the world's most commercially successful bands, with worldwide record sales of over 100 million. Dire Straits won four Grammy Awards, three Brit Awards—winning Best British Group twice, two MTV Video Music Awards, and various other music awards”

"The song ‘Money for Nothing’ is a single by British rock band Dire Straits. The song's lyrics, considered controversial at the time of the song's release, are written from the point of view of a working-class man watching music videos and commenting on what he sees. The song featured a guest appearance by Sting singing background vocals, "I want my MTV" line, followed with his own brand signature ‘Don't Stand So Close to Me’. Consequently, MTV promoted the video and made it an even greater commercial hit.” Mark Knopfler described the writing of the song as: “The character is a guy who works in the hardware department. I borrowed a bit of paper and started to write the song down in the store. I wanted to use a lot of the language that the real guy actually used when I heard him, because it was more real.”
Ironically, in this video, the IR3 Worker did get his message global by 4 of them, though. However, see the live concert too, that shows the true qualities of this exceptional 3rd IR band.

The association to this blog is that even music bands are micro enterprises that went through all the Industrial revolutions, - from the start when troubadours got electricity. There were certainly major disruptions during the IR3, when synthesized bands out-conquered guitar bands. Now, with IR4, the changes will certainly take another leap with DJs and their virtual multi-media studio – these one-man bands that can out-conquer most classic orchestra.
Mark Knopfler - Money for Nothing (live with Eric Clapton, Sting & Phil Collins) + Lyrics
https://www.youtube.com/watch?v=6D6cw8Ob2sk&t=2m5s
http://www.songlyrics.com/mark-knopfler/money-for-nothing-lyrics/?fbclid=IwAR2xzTnmwJdCohHM5Cllp-R8uEjTGEkcZ94Hgvm6h0H8a1Cc_LYrxr_QM_o
Dire Straits – Live in Sydney 1986
https://www.youtube.com/watch?v=kddkJwB94kY

Extra UU - SME Disruptive Innovations in the IR4

Here are some videos related to SME Disruptive Innovations in the IR4: “A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances with a signiﬁcant societal impact.” “the IR4 (The Fourth Industrial Revolution) builds on the Digital Revolution, representing new ways in which technology becomes embedded within societies and even the human body. IR4 is marked by emerging technology breakthroughs in a number of fields, including robotics, artificial intelligence, nanotechnology, biotechnology, The Internet of Things, 3D printing and autonomous vehicles.”
14 Marketing Strategies For Small Business 2016
https://www.youtube.com/watch?v=a2x-4CKNWxU
Future Technologies That Will Change The World National Geographic Documentary 2015
https://www.youtube.com/watch?v=nckYI0ZIdNA
Documentary | The Fourth Industrial Revolution
https://www.youtube.com/watch?v=kpW9JcWxKq0
Modern Technology Documentary
https://www.youtube.com/watch?v=eWPFlszM-gY
Bill Gates interview: How the world will change by 2030 (Vision for improving the lives of the poor through technology)
https://www.youtube.com/watch?v=8RETFyDKcw0
IR4 - play list at Youtube
https://www.youtube.com/results?search_query=fourth+industrial+revolution
Top 10 Future Technology That's Here Right Now
https://www.youtube.com/watch?v=eRCKYLjR7yw
Disruptive Innovation
https://www.youtube.com/watch?v=Cu6J6taqOSg
The art of innovation | Guy Kawasaki | TEDxBerkeley
https://www.youtube.com/watch?v=Mtjatz9r-Vc