Andrey V. Semenov

Innovation by default

LUBIN 2010

PACE

1. Should treat others according to how one would like others to treat one's self (positive, passive form)

2. Treat others as you would like to be treated (positive, active form)

3. One should not treat others in ways one would not like to be treated (prohibitive, passive form)

4. Do not treat others in ways you would not like to be treated (prohibitive, active form. Also called the Silver Rule)

……………

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In my paper I would like to give broad view on technological innovation and its role in financial

architecture for XXI century. But first thing first: Let’s start from the simple question:” How

technological innovation has influenced finance in recent years? “In my mind answer to that

question is simple and complex at the same time.

Simple, because, as I believe, technological innovation cannot change the human nature , No

matter how far humanity develops its technology on the end of the day it still be humanity with

its distinct patterns of behavior .

Roots for understanding human nature and it`s behavioral patterns was, as I think, excellent

presented in famous work of Edward Osborne Wilson: Sociobiology: The New Synthesis 1975.

Michael McGoodwin paraphrasing and quoting Wilson (pp. 16 and 222) on sociobiology

Sociobiology is defined as the scientific or systematic study of the biological basis of all forms of

social behavior, in all kinds or organisms including man, and incorporating knowledge from

ethnology, ecology, and genetics, in order to derive general principles concerning the biological

properties of entire societies. "If humankind evolved by Darwinian natural selection, genetic

chance and environmental necessity, not God, made the species." "The brain [and the mind] exists

because it promotes the survival and multiplication of the genes that direct its assembly."

The two apparent dilemmas we face therefore are:

(1) We lack any goal external to our biological nature (for even religions evolve to enhance the

persistence and influence of their practitioners). Will the transcendental goals of societies dissolve,

and will our post-ideological societies regress steadily toward self-indulgence?

(2) Morality evolved as instinct. "Which of the censors and motivators should be obeyed and which

ones might better be curtailed or sublimated?"

Although much human diversity in behavior is culturally influenced, some has been shown to be

genetic - rapid acquisition of language, human unpredictability, hypertrophy (extreme growth of

pre-existing social structures), altruism and religions. "Religious practices that consistently enhance

survival and procreation of the practitioners will propagate the physiological controls that favor the

acquisition of the practices during single lifetimes." Unthinking submission to the communal will

promotes the fitness of the members of the tribe. Even submission to secular religions and cults

involve willing subordination of the individual to the group. Religious practices confer biological

advantages.[1]

Wilson used sociobiology and evolutionary principles to explain the behavior of the social insects

and then to understand the social behavior of other animals, including humans, thus established

sociobiology as a new scientific field. He argued that all animal behavior, including that of humans,

is the product of heredity, environmental stimuli, and past experiences, and that free will is an

illusion. He has referred to the biological basis of behavior as the "genetic leash."[2] The

sociobiological view.[3]

The controversy of sociobiological research is in how it applies to humans. The theory established

a scientific argument for rejecting the common doctrine of tabula rasa, which holds that human

beings are born without any innate mental content and that culture functions to increase human

knowledge and aid in survival and success. In the final chapter of the book Sociobiology and in the

full text of his Pulitzer Prize-winning On Human Nature, Wilson argues that the human mind is

shaped as much by genetic inheritance as it is by culture (if not more). There are limits on just how

much influence social and environmental factors can have in altering human behavior. [4]

Complex , because , never before something that start so simple in the beginning – idea that

people can communicate openly without any borders – became “impossible to control “ and

involve in products so complex with the chains from borrower to end-investor so long , that

thorough due diligence was impossible .” A proper understanding of typical collateralized debt

obligation (CDO) would have required reading 30,000 pages of documentation.” [5]

Fundamentally it became so complex that it almost destroyed world economy as we know it in

2007-2008 , and as I believe radical changes should be made or … well I hop`s I’m wrong .

let`s start from beginning:

The financial services sector in the United States is experiencing an era of rapid innovation. These

changes are fueled by the rapid improvements in the two technologies -- data processing and

telecommunications -- that are at the heart of financial services. The financial services sector is also

one of the most heavily regulated sectors in the U.S. economy -- despite two decades of

widespread deregulation.

Technological improvements and innovations are almost always healthy and beneficial for an

economy, they can place serious strains on the incumbents in a particular industry or sector on

which they are focused, and they may create challenges for public policy, especially in a heavily

regulated industry. This has certainly been true for financial services. Further, the heavy overlay of

government regulation on the financial services sector has certainly influenced the course of

financial innovation and, in turn, been influenced by it.[6]

First, the underlying technologies of finance -- data processing and telecommunications -- have themselves undergone near-revolution, becoming dramatically more powerful and less costly on almost a daily basis. These improved technologies have allowed "financial engineers" better to Accumulate data, assess risks, and thereby design new products and services that can better meet the financial demand for individuals and enterprises. These products and services can be offered across wide geographic areas. The securitization of many categories of previously illiquid loans -- most notably, residential real estate mortgages and credit card receivables -- and the offering of credit card services nationally from remote locations (e.g., South Dakota) are good illustrations of these developments. Second, legal and regulatory changes -- generally in the direction of less restrictiveness and Less protectionism (i.e., deregulation) -- have reinforced these technological improvements by yielding heightened levels of competition throughout the financial services sector. In turn, these greater competitive pressures have forced incumbents to find improved and less costly ways of providing financial services; Deregulation has made it easier for innovators to enter these markets. Third, the U.S. economic environment changed sharply. After two postwar decades of relatively steady economic growth, low inflation rates, low interest rates, and fixed foreign exchange rates -- an economic world of modest fluctuations and apparently low risks -- the U.S. economy began experienced period of more volatile stagnations. Inflation rates became higher and more variable in the late 1960s and the following decade and a half, as did interest rates. Foreign exchange rates were unfixed in 1971 fluctuated since then. In sum, the world had become a much riskier place by the early 1970s, and the demand for financial instruments to buffer and hedge some of these heightened risks grew commensurately. The development of financial futures and options, most notably by the exchanges located in Chicago, was a direct response to this demand.[6] Fourth, the dense regulatory structure that envelopes much of the financial sector has also been influential in inducing innovation.[7] In the 1970s, especially, some important innovations were inspired by efforts to avoid or circumvent regulatory restrictions. For example, the Banking Act of 1933 required that the Federal Reserve (through its "Regulation Q") restrict the interest that banks

could pay on deposits.[8] In the inflationary and higher-interest rate environment of the 1970s, these constraints became tightly binding, which motivated a number of radical innovations. Three notable innovations were the development of the money market mutual fund, the offering of interest-paying checking accounts by credit unions and by savings banks in the Northeast, and the development of the "sweep account" by commercial banks (whereby banks would "sweep", on an overnight basis, idle checking account funds of their customers into interest-bearing securities).[9] Similarly, the Glass-Steagall Act of 1933 has prevented securities firms from owning and operating a commercial bank (and vice versa).[10] This constraint was part of the motivation for Merrill Lynch to develop (and to patent) its "Cash Management Account" (CMA), which allowed customers to buy and sell securities, earn interest on idle funds, write checks, and have a credit card -- all linked to a common account. Since the late 1980s the progressive easing of many regulatory restrictions has in turn encouraged financial innovation; the development of customized swaps, hedges, and other derivative instruments in the late 1980s and early 1990s -- by commercial banks as well as by securities firms -- is a good illustration of the results of this regulatory loosening. [6] Financial innovation has been influenced by a number of important changes however as I believe, human sociopatterns remains the same independently form economic and IT technological innovation and without proper understanding of them we risk to miss another elephant in a glass store. We can ask ourselves: “How important innovations are? “ Well I think the best answer was given

by The Commission of the European Communities in September 2006: “Our future depends on

innovation” [10]I think it`s fair to say - our survival depends on innovation .

William Baumol has provided striking evidence indicating that private innovative activity has been divided by market forces between small firms and large,. Even though the preponderance of private expenditure on research and development (R&D) is provided by the giant business enterprises, a critical share of the innovative breakthroughs of recent centuries has been contributed by firms of very modest size. These radical inventions then have been sold, leased or otherwise put into the hands of the giant companies, which have then proceeded to develop them—adding capacity, reliability, user friendliness and marketability more generally—to turn them into the novel consumer products that have transformed the way Americans live. [11] A comprehensive description of the term “innovation” was given by Myers and Marquis in 1969: Innovation is not a single action but a total process of interrelated sub processes. It is not just the conception of a new idea, nor the invention of a new device, nor the development of a new market. The process is all these things acting in an integrated fashion. [12] The Commission of the European Union summarizes the present economic situation as follows: “In a remarkably short period of time, economic globalization has changed the world economic order, bringing new opportunities and new challenges. In this new economic order, Europe cannot compete unless it becomes more inventive, reacts better to consumer needs and preferences and innovates more. [13] Research shows that small firms make significant contributions to economic environment and Innovations. With the significant advances being made in Information and Communication Technologies (ICTs), the Internet has become very important to many small firms, enabling them to overcome various inadequacies attributed to factors such as firm size, availability of resources and other technological, operational and managerial shortfalls. Despite the contributions that the adoption of Internet technology can make, research shows that many small firms have not yet embraced the technology in ways that will allow them to capitalize on potential

benefits. It is therefore important for firms and researchers to understand the factors that enable (or hinder) the adoption of various technologies. [14] Innovation activity leads to technological progress in two distinct ways. Purposeful research and development can result in the invention of completely new products and processes. This kind of innovative activity moves the global technological frontier and still mainly occurs in developed countries. But innovation also consists of the adoption and adaptation of existing technology, which closes the gap between countries converging towards the global technological frontier and those on the leading edge, pushing the world frontier. Innovation shares a strong connection with the provision of financial services. Invention and adoption of technology are costly and risky activities, which require financing. It is therefore natural to study the impact of a country’s financial development on TFP via the innovation channel. The adoption of a technology (in this case, the Internet) can be viewed as an innovation for a firm, where that technology represents something that is new to the adopting organization (Damanpour, 1991). Thus, adopting the Internet for e-mail could be seen as an innovation, so too Web browsing and engaging in electronic commerce (e-commerce) to sell or purchase goods. Innovation theory suggests that the adoption of an innovation may have a number of stages. For example, Zaltman, Duncan and Holbek (1973) suggested the adoption of an innovation may take place in two stages: the initiation stage, involving knowledge and awareness of the innovation, the formation of attitudes toward the innovation and decision making (i.e., whether to adopt the innovation); this is followed by the implementation stage, when the actual implementation of the technology takes place. Rogers (2003) proposed a similar view of adoption; namely, the innovation-decision process, which comprises the stages of knowledge, persuasion, decision, implementation and confirmation. It is at the decision stage that the organization determines whether to accept or reject the innovation. But let`s forget about theory and look at several examples of how innovation technology is an enabler of entrepreneurial activity as it applies to the world of finance. Paypal Inc. - Peter Thiel and Max Levchin founded PayPal in 1999 under the name Confinity. The idealistic vision of the company was one of a borderless currency free from governmental controls. PayPal enables any business or consumer with an email address to securely, conveniently, and cost-effectively send and receive payments online. They network builds on the existing financial infrastructure of bank accounts and credit cards to create a global, real-time payment solution. PayPal deliver a product ideally suited for small businesses, online merchants, individuals and others currently underserved by traditional payment mechanisms. PayPal Inc., a subsidiary of online auctioneer eBay, Inc., provides users with a means of exchanging funds via the Internet, a revolutionary step in the development of electronic commerce. By obtaining a PayPal account, consumers and businesses may send and receive payments via e-mail. PayPal users make payments securely online using credit cards or bank transfers, as well as by maintaining funds in personal interest-bearing PayPal accounts. [16] PayPal handled approximately $71 billion in payments in 2009. Let’s look at the pattern of innovation: innovation {started by simple idea}-can be grown in multimillion dollar Enterprise - in just a few years.

We will see that pattern over and over again in different business , different fields , different continent and time zones .As I think it`s safe to say innovation usually starts form small , simple idea , and all it takes to grow it in successful business is simple group of dedicated , enthusiastic

people not afraid of difficulties , people who try to REALLY DO something in the lives .

money.yandex.ru - Yandex Money is a joint project of Yandex and PayCash. Yandex Money is an online payment system. It allows users to use e-accounts to pay for goods and services, to transfer money to other users’ accounts and receive payments from them, to cash e-money. Yandex.Money is an easy and safe option to pay for the services and goods via internet in Russia. The system Yandex.Money originates in 2002. The technology of payment system PayCash was used while Yandex.Money system creation. From the very beginning, it was created as a joint product, but on March 30, 2007 Yandex.Money reacquired full share fraction and became fully legitimate owner of the payment system. New version of service allowing working with the system in "web interface" was realized in September 2005. In 2008 the payment system made revolutionary breakthrough - new mean of account funding and withdrawal using cards was introduced into the system. In 2009 revised version of Internet. Wallet was launched. At present moment, more than 3000 new accounts are being opened and more than 20 000 operations are executed daily in the system Yandex.Money. Money.Yandex.ru revolutionized Russian-online market simply by introducing fast safe way to make payments or money transfers .[18] So the same usual pattern – innovation{ started by simple idea }-can be grown in multimillion dollar Enterprise - in just a few years .

Zopa Inc – Zopa is British-based company providing an online money exchange service , allowing people who have money to lend it to those who wish to borrow , instead of using savings accounts and loan applications at traditional banks . The process is sometimes referred to as peer-to-peer lending .The name ,Zopa, stands for Zone of Possible Agreement a negotiating term indentifying the bonds within which agreement can be reached between who parties. Lunched in 2005 , Zopa was the first P2Plending company and acts as man in the middle , facilitating the loans process. It was set up by management team that comprised many of those that founded Egg in the UK. Company is based in London and backed by Benchmark Capital. [17] Zopa offers a smarter, fairer way to do money –and just the kind of refreshing alternative that the UK public deserves after years of ill-treatment by banks .The ironic thing is that although Zopa is the first online lending and borrowing community, it is in fact no different to what `s been happening in families and communities for centuries all around the world .Zopa has simply successfully harnessed the power of those types of relationships. In 2009, Prosper reported 830000 members and outstanding loans of $178 million. So the same usual pattern – innovation{ started by simple idea }-can be grown in multimillion dollar Enterprise - in just a few years – that give us , as I think , excellent example of monetary value ( or Expected value) of creativity and innovation at the same time.

Financial Architecture Int. - It became evident that without proper scale for human behavioral patterns financial architecture cannot be sustainable build. I started the company Financial Architecture Int. 6 years ago with simple and at the same time difficult task - analyze stock market as a fractal entity and find estimate for human behavioral patterns and We find it. We found set of rules , and combined it to self learning mathematical algorithm, which give us estimate for Human Fear and Greed behavioral patterns and most beautiful thing is that our algorithm will work for any financial instrument , stock’s , bond’s , Interest Rate Swaps , futures ,

currencies , options, basically any financial instruments traded publicly, existed now or created in the future . Our algorithm also can be used as a tool for understanding phenomenon known as S-curves or other data , basic principles will be the same change is only in the nature of data . We find the way which gives us most vulnerable points in time and prices where essential Fear and Greed or Bulls and Bears have equal strength. We create “Intelligent software” on basis of leading since projects in Mathematics, Computer Science and Financial management. We believe we can not only revolutionize investment and trading activities, but also give new essential instrument for financial architecture of XXI century. Our innovation path therefore will be the same - innovation {started by simple idea}-will be grown in multimillion dollar Enterprise - in just a few years. It always arguable that if we thinking about entrepreneurship and innovation, does size matter?

Traditionally, the thinking goes, small, nimble firms have an advantage over large, established

organizations because they can get things done faster, with less red tape. Especially in industries

where time-to-market is critical, size can be the difference between cutting-edge and also-ran.

Some companies, however, are bucking the trend. They’re especially adept at what’s known as

“entrepreneurship” – encouraging divisions and individuals within the organization to think like

entrepreneurs and implement breakthrough innovations. [18] I believe that technological

innovations for large firms easier and more difficult at the same time compare to small firms. More

easy simply because that big firms have good reputation , or at least they trying to have it, which

is path to mass recondition and human confidence in a product,. Most of new projects usually

became more easily acceptable by mass and that’s lead `s to chance of commercial successes . On

the other hand that technological innovation for financial firm can became isolate simply by size of

the company. Large companies have to sustain growth at all cost, so sometimes they sacrifice

innovation to growth. By doing that companies became redundant really soon, as I think it can be

easily seen in graphic interpretation of that human sociophenomenon known as S-curve.

Most large companies start as small companies by creating something new, something needed

for the market. It is like a guy who first created a sword; we can call it – radical innovation .Well, it

good to have a sword then you opponent have a stick and bone. Swords become accepted by

market really fast. The guy who invented sword - create something new simple and desirable. We

are on a starting point of your curve. After invention of the sword coming faze of replication and

improvements- where can be added new fetchers to the sword or make a swords more sharp – this

phase is faze of incremental innovations .Eventually everyone who want, need or desire a sword

got it - this is a point of stabilization on our curve. Swordsman firm became big and well known,

but now someone new come up with a gun. Our swordsman now old , rich and probably not even

noticed invention of the gun until demand for the swords did not reduces rapidly .Now our

swordsman have two options : radically innovating again or slowly bleed as a business entity . But

now sward industry is huge with slow responsiveness to change in customers’ needs. Will our

swordsman survive or not depends form the speed and wiliness our swordsman to innovate.

Until 2001, and particularly during the mid- and late-90s, investments in IT were relatively high

and the industry boasted fantastic growth rates .However recently instead of considering IT as a

powerful tool of innovation, many companies became wary because of its related expenses and

low ROI. In some cases innovation has been perceived as a high –risk investment due to the well-

known incapacity of implementation in the IT industry as well as the gap between what the

customers expect and what IT can truly deliver. IT technological innovations for a large financial or

any other type of firm is like innovations for old swordsman , most large firms start as a relatively

small firm by introducing something new , something needed by the market , eventually most of

them grew in to a huge organizations with its own culture , traditions and customs – they create

really good “swords “( aka CDO , Swaps , Credit derivatives), Financial Architecture Int , just

invented a gun ,will you still use a sword ? And will ours “swordsmen’s” survive or not depends

form the speed and wiliness our “swordsman” to innovate. Recent examples of AIG and Bern

Sterns give us, as I think, good examples of how difficult it can be.

The Bear Stearns Companies, Inc - based in New York City, was a global investment bank and

securities trading and brokerage, until its collapse and fire sale fire to JPMorgan in 2008. Bear

Stearns was involved in Securization and issued huge amounts of asset-backed securities, which in

the case of mortgages were pioneered by Lewis S. Ranieri, "the father of mortgage securities". [19]

As investor losses mounted in those markets in 2006 and 2007, the company actually increased its

exposure, especially the mortgage-backed assets that were central to the subprime mortgage

crisis. In March 2008, the Federal Reserve Bank of New York provided an emergency loan to try to

avert a sudden collapse of the company. The company could not be saved, however, and was sold

to JPMorgan Chase for as low as ten dollars per share, a price far below the 52-week high of

$133.20 per share, traded before the crisis, although not as low as the two dollars per share

originally agreed upon by Bear Stearns and JP Morgan Chase.[20]

American International Group, Inc.- AIG suffered from a liquidity crisis when its credit ratings

were downgraded below "AA" levels in September 2008. The United States Federal Reserve Bank

on September 16, 2008 created an $85 billion credit facility to enable the company to meet

increased collateral obligations consequent to the credit rating downgrade, in exchange for the

issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. The Federal

Reserve Bank and the United States Treasury by May 2009 had increased the potential financial

support to AIG, with the support of an investment of as much as $70 billion, a $60 billion credit line

and $52.5 billion to buy mortgage-based assets owned or guaranteed by AIG, increasing the total

amount available to as much as $182.5 billion.[21] AIG subsequently sold a number of its

subsidiaries and other assets to pay down loans received, and continues to seek buyers of its

assets. NY Attorney General Andrew Cuomo has stated he wants to disclose names of those

receiving bonuses. [22]

It is clear that the financial services industry has some particular characteristics that make is more

difficult to innovate radically in comparison to other industry .One important characteristic that

inhibits disruptive technologies is the barriers to new entrants . It means that even when a

particular company has a very innovative business model based on new technologies , the hurdles

to overcome are so difficult that they prefer to either focus on niche markets or sell the idea to the

whole industry and work as a technical partner offering the innovation to the whole industry.

Wachovia - Starting in 2009, the Wachovia brand is being absorbed into the Wells Fargo Wells

brand, in a process that was initially estimated to last three years. In July 2009, Wachovia Securities

became Wells Fargo Advisors. The merger of Wells Fargo and Wachovia [23] bank charters was

completed on March 20, 2010 and this formally dissolved Wachovia as a separate entity.[24] States

containing both brands (not converted already) will convert in 2010 and all remaining branches will

re-brand by 2011 to the Wells Fargo brand. All Texas branches became Wells Fargo on August 1,

2010. Wachovia dealer services became Wells Fargo dealer services as of April, 2010.

Bloomberg LP- The Bloomberg Terminal is a computer system provided by Bloomberg LP . that

enables financial professionals to access the Bloomberg Professional service through which users

can monitor and analyze real-time financial market data movements and place trades.[25] The

system also provides news, price quotes, and messaging across its proprietary secure network.

Most large financial firms have subscriptions to the Bloomberg Professional service. Many

exchanges charge their own additional fees for access to real time price feeds across the terminal.

The same applies to various news organizations. All Bloomberg Terminals are leased in 2 year cycle,

with leases based on how many displays are connected to each terminal. A subscription is around

US$1500 per month.[26] Most Bloomberg setups are either 2 or up to 4 displays. There are

currently 287,500 Bloomberg Terminal subscribers worldwide. [27]

Does strategic management of IT technological innovation differs from strategic management in

the classical sense of the term?

It is common sense to emphasize the importance strategic management of technology innovation

to development growth and wealth creation. Moreover, we know the enormous impact of

innovation on society and its power to work social change (Kuhn, Schumpeter) However, from the

enterprise perspective, the common good brought by innovation is not an effective incentive to

invest in it. No matter the particular characteristics of a certain industry, innovation sooner or later

arrives and changes the entire business. Industrial sectors can be conservative or technologically

saturated but almost always we can find disruptive changes through innovations. (Christensen)

Firms can act differently when dealing with IT innovation compare to strategic management in

the classical sense of the term. Firms can chose any role for them - pioneers, followers, or even

laggards, but they cannot ignore the impact of their technology strategies on their future successes

or failures.

Particularly large IT organizations might have a well distinct strategy for technology innovation

compare to the classical rivals. Utterback emphasizes “the dangers inherent in large scale , which

often leads to overemphasis on tending to current well-established business , a lack of

entrepreneurial dynamism , and vulnerability to innovative competitors”.

Many authors also studied the fate of failure for well-established competitors when new

competitors with disruptive technologies came into the market (Foster, Christensen). In fact, the

traditional competitors directly face increasing constraints from the growing web of relationships,

binding product, and process change together. In other words, they suffer the burden of the legacy

value. But I think it is common for both strategic management of IT technological innovation as

much as for strategic management in the classical sense of the term, well at least it`s arguable as I

think. Saying exist that God created the world in just seven days because He had no legacy system

to adapt. From the innovation perspective, we should probably add to saying legacy customers,

suppliers, internal culture, common corporate norms, etc.

Porter points out “…newcomers are outside the system of social constraints and may be less

aware or less concerned about the disruptive nature of the changes that they promote to the

existing web of mutual obligations and understood limits”

When we apply the innovation dynamics discusses above to financial services, the key question is

whether or not it is possible to create a disruptive (radical) innovation that could change

dramatically the industry. From history examples we can see sometimes it can be almost

impossible ( AIG , Bern Stern ) Although the cases where it happened in financial services were not

as clear or as revolutionary as some examples in the IT or biotech industries we could find , some

cases within past decades .[28] One example is CIO in Brazil – in the 70s, a large retail bank in

Brazil decided to open new braches offering the convenience of parking lots to their customers,

which was not common practice for Brazil in 70s. As the economy in Brazil was growing very fast at

that period, parking lots became a real issue to most people, and the service offered by that bank

turned to be as important as financial services fees and interest rates .There was most likely other

reasons for their success but the fact is that they increased they customer base enormously and by

the beginning of the 1980s they were the largest retail bank in Brazil.[29]

Strategic management of IT innovation sometimes easily can be slowed by corporate culture and

by unwillingness people to change and learn new things. Sometimes it becoming almost impossible

to fight arrogance of people who simply don`t want to change or not ready to change as fast as the

world around them evolved. Way of solving that problem in my mind is the biggest task not only

for strategic managers for creating IT technological innovation but also for strategic managers in

the classical sense of the term. This is simply the biggest problem that business society faces now

and most likely will faces in the near future, or at least I believe it will be so.

Form my own example I know how it difficult to manage IT innovation but also I know how it is

sometimes almost impossible to implement it. People, in the mass, don`t like changes especially if

they didn’t understand them. So if we try to innovate in something that regular human didn’t

understand … well we have a problem. How it can be explain to someone who redundant to

changes that future is now? How you can explain that if he or she will not learn new thing he or

she become obsolete? How you can explain to someone that he or she is outdated and only way to

solve that problem is path of open-mindedness and cooperation if they not open-minded and not

cooperative? How you can fight it if even professor in graduate schools think that “he too old to

learn new things “? Well questions remains but I think every manager should solve it if he or she

expect to achieve any goals not only in IT industry but also in most others industries as well.

Let’s examine S-curve more closely.

Both the rate of a technology`s performance improvement and the rate at which the technology

is adopted in the marketplace repeatedly have been shown to conform to an s-shape curve.

Though s-curves in technology performance are related (improvements in performance may foster

faster adoption, and greater adoption may motivate further investment in improving performance,

they are fundamentally different processes. Financial firms offer products and services that are, in

many instances, similar to competitor firms. Often, these new innovations in finance (e.g.,

collateralized mortgage obligations, arbitrage, etc.) have a ‘life cycle’ where they are born, thrive,

and are then replaced by some new product or service. In the same way, IT innovations follow

similar S-curves throughout their useful lives. [30]

S-curve model suggest that a certain product improvement or introducing new product (financial,

IT or most others) in a given time period or due to a given amount of engineering effort is likely to

differ if we try to plot it against effort scale .In a financial industry . In the first stage, the innovation

needs high investment (FTEs per weeks and capital expenditure) to accomplish a low rate of

improvement or technological acceptance. Further , as technology or financial instrument becomes

more diffused , controlled and understood , the cost are lower and the adoption rate is much

higher. In the third stage , we do not see so much innovation or acceptance and the performance

asymptotically reaches a limit ,regardless of the extra efforts invested .[28] Basically it the same

patterns that that we saw in our swordsman example- Similar pattern, matching form and same

basic logics.

Understanding these dynamics has been a long-standing topic among students of innovation.

However, easily immitigable nature of financial innovation may not lend itself to these models.

Merton characterizes the dynamics of innovation in the financial service world using a metaphor of

“financial innovation spiral” in which one innovation became the corner stone for the next one.*31]

Also the same pattern can be seen when we consider that the trading of standardized exchange –

traded products facilitates the creation of custom-designed OTC products , which in turn

stimulates even greater volume of trading ,lowering transaction costs and making possible

creation of the new products. A variant of this concept would help explain how rival investment

banks created a set of increasingly improved preferred stocks that would maintain a relatively

constant principal values, by copying and improving the prior products.[32] Warther and Persons

(1997) model the innovation spiral in which adoption of financial innovations provides other

participants with information about the profitability of innovation, creating waves of innovation

and its S-curve shape of adoption.[33]

From the newcomer perspective, we can identify three sequential steps in the evolution of most

new technologies or products, independently from the sector there technology or product been

created. In the first phase, the challenge is to create a new product or technology capable of

fulfilling the needs of a particular customer segment and if such product or technology succeed in

covering demand of the market, when product or service experience the transition phase which

strongly based on capital expenditures to capture and keep market share, through quality, product

performance aka - incremental innovations. In the last phase if interest of the market will not be

shaped by new radical innovation , incremental innovations became not sufficient , market

interest will shift to new product or service existed on market or just created .In this sense of the

term ‘life cycle’- the new financial innovation (e.g., collateralized mortgage obligations, arbitrage,

etc.) where they are born, thrive, and then replaced by some new product or service is quite

similar to living cycle of most IT innovation , they follow the same basic pattern of logic .Only

difference is probably the ‘life time “ of financial innovations and the speed with which financial

innovation introduced , grow , and became obsolete . It becomes evident that without proper

scale for S-curve shape of adoption it will become increasingly difficult to analyze future

perspective not only new IT innovation or innovation in finance, but also most likely ‘life-cycles ‘of

majority innovations in XXI Century. Without proper scale (if I can put it this way) it will become

almost impossible to expect legitimately estimate valuable life-time for most of the innovations.

That was the underlying reason for Financial Architecture Int. to create the scale, or map, for

human socio (Fear and Greed) patterns .Without proper understanding of human nature and it`s

evolutionary stapes taken to evolve and without proper understanding why they was taken, it`ll be

increasingly difficult to expect proper understanding of human progress or how we know them –

Innovations. Understanding that lead Financial Architecture Int. to creation algorithm which gives

estimate for useful life of innovation and points in time there new radical innovation is most

valuable , needed and important or decline of human confidence , interest and Greed is almost

inevitable.

Underlying reason for that phenomenon is quite simple if you put a lot of talented people who

thinking about the future because, well they have no other options but innovate, you`ll get the

Street. So essential pattern of greed and fear will remain the same but will be more isolate and

vulnerable as technology evolved. But as I said in the beginning of my paper - technological

innovation cannot change human nature and anything started by the humans for the humans

will obey essentially the same set of laws, independently from the field where it was created – In

the place where the money coming to the game, well it`s Fear and Greed time. More-money-more-

fear-more-greed faster something made becoming something needed and faster something

needed in the past becoming obsolete. With proper scale from Financial Architecture it becomes

possible for innovators to succeed. I gave example on base of euro future contract, but the same

logic applies to most others financial instruments which are essentially - physical interpretation for

people estimate of the future. As I said {no matter how far humanity develops its

technology, on the end of the day it still be humanity with its distinct patterns of

behavior}. [34]

……………

}

If you were a manager in charge of training programs for new hires (at all levels), what IT

technologies do you think should these new hires have some measure of fluency in? Is there a

dominant IT technology that should be ‘mastered’ by key employees of the firm? What it it and

how does it influence the overall performance of the firm? 1 full page.

{

…………… Albert Einstein-

The laws of physics are the same for all observers in uniform motion relative to one another (principle of relativity), The speed of light in a vacuum is the same for all observers, regardless of their relative motion or of the motion of the source of the light. A tavern is a place where madness is sold by the bottle. -Jonathan Swift

acarology study of mites accidence grammar book; science of inflections in grammar aceology therapeutics acology study of medical remedies acoustics science of sound adenology study of glands aedoeology science of generative organs aerobiology study of airborne organisms aerodonetics science or study of gliding aerodynamics dynamics of gases; science of movement in a flow of air or gas aerolithology study of aerolites; meteorites aerology study of the atmosphere aerophilately collecting of air-mail stamps aerostatics science of air pressure; art of ballooning agonistics art and theory of prize-fighting agriology the comparative study of primitive peoples agrobiology study of plant nutrition; soil yields agrology study of agricultural soils agronomics study of productivity of land agrostology science or study of grasses Alethiology Study of truth algedonics science of pleasure and pain algology study of algae Anaesthesiology study of anaesthetics Anaglyptics art of carving in bas-relief Anagraphy art of constructing catalogues Andragogy science of teaching adults Anemology study of winds Angelology study of angels Angiology study of blood flow and lymphatic system Anthropobiology study of human biology Anthropology Study of human cultures. Aphnology Science of wealth Apiology study of bees Arachnology study of spiders Archaeology study of human material remains Archelogy The study of first principles. Arcology Science of the origins of government. Arctophily Study of teddy bears. Areology Study of Mars Aretaics The science of virtue Aristology The science or art of dining Arthrology Study of joints Astacology Science of CrayFish, Crawfish, Crawdads Astheniology study of diseases of weakening and aging Astrogeology Study of Extraterrestrial Geology Astrology study of influence of stars on people Astrometeorology Study of Effect of Stars on Climate Astronomy Study of celestial bodies Astrophysics study of behavior of interstellar matter Asteroseismology Study of Star Oscillations Atmology The Science of Aqueous Vapour Audiology Study of Hearing Autecology Study of Ecology of one Species Autology Scientific study of One Self Auxology Science of Growth Avionics the science of electronic devices for aircraft Axiology Science of Ultimate Nature of Values Bacteriology Study of Bacteria Balneology Science of the Therapeutic Use of Baths Barodynamics Science of The Support And Mechanics of Bridges Barology Study of Gravitation Batology The Study Of Brambles Bibliology Study Of Books Bibliotics Study Of Documents To Determine Authenticity Bioecology Study Of Interaction Of life In The Environment Biology Study of Life Biometrics Study of Biological Measurement Bionomics Study of Organisms Interacting in Their Environments Botany Study of Plants Bromatology Study of Food Brontology Scientific Study of Thunder Bryology The Study of Mosses and Liverworts Cacogenics Study of Racial Degeneration Caliology Study of Bird's Nests Calorifics Study of Heat Cambistry Science of International Exchange Campanology The Art of Bell Ringing Carcinology Study of Crabs and Other Crustaceans Cardiology Study of The Heart Caricology Study of Sedges Carpology Study of Fruit Cartophily The Hobby of Collecting Cigarette Cards Castramentation The Art of Designing a Camp Catacoustics Science of Echoes or Reflected Sounds Catalactics Science of Commercial Exchange Catechectics The Art of Teaching By Question And Answer Cetology Study of Whales and Dolphins Chalcography The Art of Engraving on Copper or Brass Chalcotriptics Art of Taking Rubbings From Ornamental Brasses Chaology The Study of Chaos or Chaos Theory Characterology Study of Development of Character Chemistry Study of Properties of Substances Chirocosmetics Beautifying the Hands, Art of Manicure Chirography Study of Handwriting or Penmanship Chirology Study of The Hands Chiropody Medical Science of Feet

Chorology Science of The Geographic Description of Anything Chrematistics The Study of Wealth; Political Economy Chronobiology Study of Biological Rhythms Chrysology Study of Precious Metals Ciselure The Art of Chasing Metal Climatology Study of Climate Clinology Study of Aging Codicology Study of Manuscripts Coleopterology Study of Beetles And Weevils Cometology Study of Comets Conchology Study of Shells Coprology Study of Pornography Cosmetology Study of Cosmetics Cosmology Study of The Universe Craniology Study of The Skull Cryobiology Study of Life Under Cold Conditions Cryptology

Study of Codes Ctetology Study of The Inheritance of Acquired Characteristics Cytology Study of Living Cells Dactyliology Study of Rings Dactylography The Study of Finger Prints Dactylology Study of Sign Language Deltiology The Collection and Study of Picture Postcards Demology Study of Human Behavior Demonology Study of Demons Dendrochronology Study of Tree Rings Dendrology Study of Trees Deontology The Theory or Study of Moral Obligation Dermatoglyphics The Study of Skin Patterns and Finger Prints Dermatology Study of Skin Desmology Study of Ligaments Diabology Study of Devils Diagraphics Art of Making Diagrams or Drawings Dialectology Study of Dialects Dioptrics Study of Light Refraction Diplomatics Science of Deciphering Ancient Writings and Texts Diplomatology Study of Diplomats Docimology The Art of Assaying Dosiology The Study of Doses Dramaturgy Art of Producing and Staging Dramatic Works Dysgenics The Study of Racial Degeneration Dysteleology Study of Purposeless Organs Ecclesiology Study of Church Affairs Eccrinology Study of Excretion Ecology Study of Environment Economics Study of Material Wealth Edaphology Study of Soils Egyptology study of ancient Egypt Ekistics Study of Human Settlement Electrochemistry Study of Relations Between Electricity and Chemicals Electrology Study of Electricity Electrostatics Study of Static Electricity Embryology Study of Embryos Emetology Study of Vomiting Emmenology The Study of Menstruation Endemiology Study of Local Diseases Endocrinology Study of Glands Enigmatology Study of Enigmas Entomology Study of Insects Entozoology Study of Parasites That Live Inside Larger Organisms Enzymology Study of Enzymes Ephebiatrics Branch of Medicine Dealing With Adolescence Epidemiology Study of Diseases; Epidemics Epistemology Study of Grounds of Knowledge Eremology Study of Deserts Ergology Study of Effects of Work on Humans Ergonomics Study of People at Work Escapology Study of Freeing Oneself From Constraints Eschatology Study of Death; Final Matters Ethnogeny Study of Origins of Races or Ethnic Groups ethnology study of cultures Ethnomethodology Study of Everyday Communication Ethnomusicology Study of Comparative Musical Systems Ethology Study of Natural or Biological Character Ethonomics Study of Economic and Ethical Principles of a Society Etiology The Science of Causes; Especially of Disease Etymology Study of Origins of Words Euthenics Science Concerned With Improving Living Conditions Exobiology Study of Extra-Terrestrial Life Floristry The Art of Cultivating and Selling Flowers Fluviology Study of WaterCourses Futurology Study of Future Garbology Study of Garbage Gastroenterology Study of Stomach; Intestines Gastronomy Study of Fine Dining Gemmology Study of Gems and Jewels Genealogy Study of Descent of Families Genesiology Study of Reproduction and Heredity Genethlialogy The Art of Casting Horoscopes Geochemistry Study of Chemistry of Planet Crust Geochronology Study of Measuring Geological Time Geogeny Science of Formation of Earth's Crust Geogony Study of Formation of The Earth Geography Study of Surface of The Earth and Its Inhabitants Geology Study of Earth's Crust Geomorphogeny Study of The Origins of Land Forms Geoponics Study of Agriculture Geotechnics Study of Increasing Habitability of The Earth Geratology Study of Decadence and Decay Gerocomy Study of Old Age Gerontology Study of The Elderly; Aging Gigantology Study of Giants Glaciology Study of Ice Ages and Glaciation Glossology Study of Language; Study of The Tongue Glyptography The Art of Engraving on Gems Glyptology Study of Gem Engravings Gnomonics The Art of Measuring Time Using Sundials Gnosiology Study of Knowledge Gnotobiology Study of Life in Germ-Free Conditions Graminology Study of Grasses Grammatology Study of Systems of Writing Graphemics Study of Systems of Representing Speech in Writing Graphology Study of Handwriting Gromatics Science of Surveying Gynaecology Study of Women Physiology Gyrostatics The Study of Rotating Bodies Hagiology Study of Saints Halieutics Study of Fishing Hamartiology Study of Sin Harmonics Study of Musical Acoustics Hedonics Part of Ethics or Psychology Dealing With Pleasure Helcology Study of Ulcers Heliology Science of The Sun Helminthology Study of Worms Hematology Study of Blood Heortology Study of Religious Feasts Hepatology Study of Liver Heraldry Study of Coats of Arms Heresiology Study of Heresies Herpetology Study of Reptiles and Amphibians Hierology Science of Sacred Matters Hippiatrics Study of Diseases of Horses Hippology The Study of Horses Histology Study of The Tissues of Organisms Historiography Study of Writing History Historiology Study of History Homiletics The Art of Preaching Hoplology The Study of Weapons Horography Art of Constructing Sundials Or Clocks Horology Science of Time Measurement Horticulture Study of Gardening Hydrobiology Study of Aquatic Organisms Hydrodynamics Study of Movement in Liquids Hydrogeology Study of Ground Water Hydrography Study of Investigating Bodies of Water Hydrokinetics Study of Motion of Fluids Hydrology Study of Water Resources Hydrometeorology Study of Atmospheric Moisture Hydropathy Study of Treating Diseases With

Water Hyetology Science of Rainfall Hygiastics Science of Health and Hygiene Hygienics Study of Sanitation; Health Hygiology Hygienics; Study of Cleanliness Hygrology Study of Humidity Hygrometry Science of Humidity Hymnography Study of Writing Hymns Hymnology Study of Hymns Hypnology Study of Sleep; Study of Hypnosis Hypsography Science of Measuring Heights Iamatology Study of Remedies Iatromathematics Archaic Practice of Medicine in Conjunction With Astrology Ichnography Art of Drawing Ground Plans Ichnology Science of Fossilized Footprints Ichthyology Study of Fish Iconography Study of Drawing Symbols Iconology Study of Icons; Symbols Ideogeny Study of Origins of Ideas Idiomology Study of Idiom, Jargon or Dialect Immunogenetics Study of Genetic Characteristics of Immunity Immunology Study of Immunity Immunopathology Study of Immunity to Disease Insectology Study of Insects Irenology The Study of Peace Iridology Study of Iris Kalology Study of Beauty Karyology Study of Cell Nuclei Kidology Study of Kidding Kinematics Study of Motion Kinesics Study of Gestural Communication Kinesiology Study of Human Movement And Posture Kinetics Study of Forces Producing or Changing Motion Koniology Study of Atmospheric Pollutants and Dust Ktenology Science of Putting People to Death Kymatology Study of Wave Motion Labeorphily Collection and Study of Beer Bottle Labels Larithmics Study of Population Statistics Laryngology Study of Larynx Lepidopterology Study of Butterflies and Moths Leprology Study of Leprosy Lexicology Study of Words and Their Meanings Lexigraphy Art of Definition of Words Lichenology Study of Lichens Limacology Study of Slugs Limnobiology Study of Fresh Water Ecosystems Limnology Study of Bodies of Fresh Water Linguistics Study of Language Lithology Study of Rocks Liturgiology Study of Liturgical Forms and Church Rituals Loimology Study of Plagues and Epidemics Loxodromy Study of Sailing Along Rhumb-Lines Magirics Art of Cookery Magnanerie Art of Raising Silkworms Magnetics Study of Magnetism Malacology Study of Molluscs Malariology Study of Malaria Mammalogy Study of Mammals Mariology study of the Virgin Mary Martyrology Study of Martyrs Mastology Study of Mammals Mathematics Study of Magnitude, Number, And Forms Mechanics Study of Action of Force On Bodies Meconology Study of Or Treatise Concerning Opium Melittology Study of Bees Mereology Study of Part-Whole Relationships Mesology Ecology Metallogeny Study of The Origin and Distribution of Metal Deposits Metallography Study of The Structure and Constitution of Metals Metallurgy Study of Alloying and Treating Metals Metaphysics Study of Principles of Nature and Thought Metapolitics Study of Politics in Theory or Abstract Metapsychology Study of Nature of The Mind Meteoritics The Study of Meteors Meteorology Study of Weather Metrics Study of Versification Metrology Science of Weights and Measures Microanatomy Study of Microscopic Tissues Microbiology Study of Microscopic Organisms Microclimatology Study of Local Climates Micrology Study or Discussion of Trivialities Micropalaeontology Study of Microscopic Fossils Microphytology Study of Very Small Plant Life Mineralogy Study of Minerals Molinology Study of Mills and Milling Momilogy Study of Mummies Morphology Study of Forms and The Development of Structures Muscology The Study of Mosses Museology The Study of Museums Musicology Study of Music Mycology Study of Funguses Myology Study of Muscles Myrmecology Study of Ants Mythology Study of Myths, Fables, Tales Naology Study of Church or Temple Architecture Nasology Study of The Nose Nautics Art of Navigation Nematology The Study of Nematodes Neonatology Study of Newborn Babies Neossology Study of Nestling Birds Nephology Study of Clouds Nephrology Study of The Kidneys Neurobiology Study of Anatomy of The Nervous System Neurology Study of Nervous System Neuropsychology Study of Relation Between Brain and Behaviour Neurypnology Study of Hypnotism Nidology Study of Nests Nomology The Science of The Laws; Especially of The Mind Noology Science of The Intellect Nosology Study of Diseases, Classification of Diseases nostology study of senility Notaphily Collecting of Bank-Notes and Cheques Numerology Study of Numbers Numismatics Study of Coins Nymphology Study of Nymphs Obstetrics Study of Midwifery Oceanography Study of Oceans Oceanology Study of Oceans Odology Science of The Hypothetical Mystical Force of Od Odontology Study of Teeth Oenology Study of Wines Oikology Science of Housekeeping Olfactology Study of The Sense of Smell Ombrology Study of Rain Oncology Study of Tumours Oneirology Study of Dreams Onomasiology Study of Nomenclature Onomastics Study of Proper Names Ontology Science of Pure Being; The Nature of Things Oology Study of Eggs Ophiology Study of Snakes Ophthalmology Study of Eye Diseases Optics Study of Light Optology Study of Sight Optometry Science of Examining The Eyes Orchidology Study of Orchids Ornithology Study of Birds Orology Study of Mountains Orthoepy Study of Correct Pronunciation Orthography Study of Spelling Orthopterology Study of Cockroaches Oryctology Mineralogy or Paleontology Osmics Scientific Study of Smells Osmology Study of Smells and Olfactory Processes Osphresiology Study of The Sense of Smell Osteology Study of Bones Otology Study of The Ear Otorhinolaryngology Study of Ear, Nose and Throat Paedology Study of Children Paedotrophy Art of Rearing Children Paidonosology Study of Children's Diseases; Pediatrics Palaeoanthropology Study of Early Humans Palaeobiology Study of Fossil Plants and Animals Palaeoclimatology Study of Ancient Climates palaeolimnology study of ancient lakes palaeolimnology study of ancient fish Palaeontology Study of Fossils Palaeopedology Study of Early Soils Paleobotany Study of Ancient Plants Paleo-Osteology Study of Ancient Bones Palynology Study of Pollen Papyrology Study of Paper Parapsychology Study of Unexplained Mental Phenomena Parasitology Study of Parasites Paroemiology Study of Proverbs Parthenology Study of Virgins Pataphysics The Science of Imaginary Solutions Pathology Study of Disease Patrology Study of Early Christianity Pedagogics Study of Teaching Pedology Study of Soils Pelology Study of Mud Penology Study of Crime and Punishment Periodontics Study of Gums Peristerophily Pigeon-Collecting Pestology Science of Pests Petrology Study of Rocks Pharmacognosy Study of Drugs of Animal And Plant Origin Pharmacology Study of Drugs Pharology Study of Lighthouses Pharyngology Study of The Throat Phenology Study of Organisms as Affected By Climate Phenomenology Study of Phenomena Philately Study of Postage Stamps Philematology The Act or Study of Kissing Phillumeny Collecting of Matchbox Labels Philology Study of Ancient Texts; Historical Linguistics Phoniatrics Study and Correction of Speech Defects Phonology Study of Speech Sounds Photobiology Study of Effects of Light on Organisms Phraseology Study of Phrases Phrenology Study of Bumps On The Head Phycology Study of Algae and Seaweeds Physics Study of Properties of Matter And Energy Physiology Study of Processes of Life Phytology Study of Plants; Botany Piscatology Study of Fishes Pisteology Science or Study of Faith Planetology Study of Planets Plutology Political Economy; Study of Wealth Pneumatics Study of Mechanics of Gases Podiatry Study and Treatment of Disorders of The Foot; Chiropody Podology Study of The Feet Polemology Study of War Pomology Study of Fruit-Growing Posology Science of Quantity or Dosage Potamology Study of Rivers Praxeology Study of Practical or Efficient Activity; Science of Efficient Action Primatology Study of Primates Proctology Study of Rectum Prosody Study of Versification Protistology Study of Protists Proxemics Study of Man's Need for Personal Space Psalligraphy The Art of Paper-Cutting To Make Pictures Psephology Study of Election Results and Voting Trends Pseudology Art or Science of Lying Pseudoptics Study of Optical Illusions Psychobiology Study of Biology of The Mind Psychogenetics Study of Internal or Mental States Psychognosy Study of Mentality, Personality or Character Psychology Study of Mind Psychopathology Study of Mental Illness Psychophysics Study of Link Between Mental And Physical Processes Pteridology Study of Ferns Pterylology Study of Distribution of Feathers on Birds Pyretology Study of Fevers Pyrgology Study of Towers Pyroballogy Study of Artillery Pyrography Study of Woodburning Quinology Study of Quinine Raciology Study of Racial Differences Radiology Study of X-Rays and Their Medical Applications Reflexology Study of Reflexes Rhabdology Art of Calculating Using Numbering Rods Rheology Science of The Deformation or Flow of Matter Rheumatology Study of Rheumatism rhinology study of the nose rhochrematics science of inventory management and the movement of products runology study of runes sarcology study of fleshy parts of the body satanology study of devil scatology study of excrement or obscene literature schematonics art of using gesture to express tones sciagraphy art of shading scripophily collection of bond and share certificates sedimentology study of sediment seismology study of earthquakes selenodesy study of the shape and features of the moon selenology study of the moon semantics study of meaning semantology science of meanings of words semasiology study of meaning; semantics semiology study of signs and signals semiotics study of signs and symbols serology study of serums sexology study of sexual behaviour siderography art of engraving on steel sigillography study of seals significs science of meaning silvics study of tree's life sindonology study of the shroud of Turin Sinology study of China sitology dietetics sociobiology study of biological basis of human behavior sociology study of society somatology science of the properties of matter sophiology science of ideas soteriology study of theological salvation spectrology study of ghosts speleology study and exploration of caves spermology study of seeds sphagnology study of peat moss sphragistics study of seals and signets sphygmology study of the pulse splanchnology study of the entrails or viscera spongology study of sponges stasiology study of political parties statics study of bodies and forces in equilibrium stemmatology study of relationships between texts stoichiology science of elements of animal tissues stomatology study of the mouth storiology study of folk tales stratigraphy study of geological layers or strata stratography art of leading an army stylometry studying literature by means of statistical analysis suicidology study of suicide symbology study of symbols symptomatology study of symptoms of illness synecology study of ecological communities synectics study of processes of invention syntax study of sentence structure syphilology study of syphilis systematology study of systems taxidermy art of curing and stuffing animals tectonics science of structure of objects, buildings and landforms tegestology study and collecting of beer mats teleology study of final causes; analysis in terms of purpose telmatology study of swamps teratology study of monsters, freaks, abnormal growths or malformations teuthology study of cephalopods textology study of the production of texts thalassography science of the sea thanatology study of death and its customs thaumatology study of miracles theology study of religion; religious doctrine theriatrics veterinary medicine theriogenology study of animals' reproductive systems thermodynamics study of relation of heat to motion thermokinematics study of motion of heat thermology study of heat therology study of wild mammals thremmatology science of breeding domestic animals and plants threpsology science of nutrition tidology study of tides timbrology study of postage stamps tocology obstetrics; midwifery tonetics study of pronunciation topology study of places and their natural features toponymics study of place-names toreutics study of artistic work in metal toxicology study of poisons toxophily love of archery; archery; study of archery traumatology study of wounds and their effects tribology study of friction and wear between surfaces trichology study of hair and its disorders trophology study of nutrition tsiganology study of gypsies turnery art of turning in a lathe typhlology study of blindness and the blind typography art of printing or using type typology study of types of things ufology study of alien spacecraft uranography descriptive astronomy and mapping uranology study of the heavens; astronomy urbanology study of cities urenology study of

rust molds urology study of urine; urinary tract venereology study of venereal disease vermeology study of worms vexillology study of flags victimology study of victims vinology scientific study of vines and winemaking virology study of viruses vitrics glassy materials; glassware; study of glassware vulcanology study of volcanoes xylography art of engraving on wood xylology study of wood zenography study of the planet Jupiter zoiatrics veterinary surgery zoogeography study of geographic distribution of animals zoology study of animals zoonomy animal physiology zoopathology study of animal diseases zoophysiology study of physiology of animals zoophytology study of plant-like animals zootaxy science of classifying animals zootechnics science of breeding animals zygology science of joining and fastening zymology science of fermentation zymurgy branch of chemistry dealing with brewing and distilling

Logic, logic and logic again. Knowledge and Innovation is not when you memorize definitions and try to use it to define thing that you don't understand by simply re-naming same thing using different definitions believing that it`ll somehow solve your problem; Instead knowledge and innovation is when you know and not afraid to say that you know, if it`ll became accepted well you just did it, you just innovate. You have to use knowledge base that you have, expending it accordantly to your needs , in order to make your own assumptions for solving the problems on a levels that you choose for yourself by yourself, I believe this is the only way to innovate .. Talented in anything is - {talented} - is talented in everything. Without accepting something new and without unbiased interpretation of the facts or acceptance it`s impossible to accumulate knowledge or to innovate. Future is unknown and the only way for us to succeed is to innovate and all beauty of it –it’s in our blood - it‘s our default option.

Natural selection is the process by which trakits become more or less common in a population due to consistent effects upon the survival or reproduction of their bearers. It is a key mechanism of evolution. The natural genetic variation within a population of organisms may cause some individuals to survive and reproduce more successfully than others in their current environment. For example, the peppered moth exists in both light and dark colors in the United Kingdom, but during the industrial revolution many of the trees on which the moths rested became blackened by soot, giving the dark-colored moths an advantage in hiding from predators. This gave dark-colored moths a better chance of surviving to produce dark-colored offspring, and in just a few generations the majority of the moths were dark. Factors which affect reproductive success are also important, an issue which Charles Darwin developed in his ideas on selection. Natural selection acts on the phenotype, or the observable characteristics of an organism, but the genetic (heritable) basis of any phenotype which gives a reproductive advantage will become more common in a population (see allele frequency). Over time, this process can result in adaptations that specialize populations for particular ecological niches and may eventually result in the emergence of new species. In other words, natural selection is an important process (though not the only process) by which evolution takes place within a population of organisms. As opposed to artificial selection, in which humans favor specific traits, in natural selection the environment acts as a sieve through which only certain variations can pass.[35]

This is the formula of freedom whom who have it will know.)

Let`s come back to our swordsman:

Let`s X- will be Our innovator-inventor-swordsman-unknown

A- Will be that our swordsman have now B- Will be that our swordsman will have in the future

Basic equation just one: AX=B

In order to solve it for swordsman genius, just ask your self „ that is your expectation of future form position of inventor-innovator:

X=B/A

Well from the beginning if it`s no real value of invention so , A=0. In mathematics it`s know as: division_by_zero , in the result you’ll get “infinite sigma" (more technically: "the variance does not exist") that usually avoided by substituting unknown variable X by equation of variables:

Where : x1 , x2 …xn unknown variables that needed to be define as well in order to solve the equation, but look our A is change to and became ray of something to define as well. And in order to solve our new equation with N variables we need system of N equations. How you can estimate future value of new invention if nothing like that was created before? Trying to use estimate from your own previous experience? But is it correct even though something new unknown was created? So keep defining adding more variables trying to create Expected_value of invention until system become so complex and insufficient that it collapses under its own cost or until the new innovator-inventor-gunman-unknown who can solve your set of equations by simplifying it, using blocks, left after collapse, as a building stones of new architecture, will occur.

Only you know your own truth and only you know that you need to do to prove it:

Why try to define unknown things by using unclear definitions, I think it doesn’t do anything except puzzling and giving someone who afraid to evolve something to defend. Why not give people opportunity to express them self’s in they own words? Basically tasks are the same, but ways of solving them are much shorter. So it`s not really important:” what IT technologies do I think should new hires have some measure of fluency in” I think they should be simple innovative and that will be more than enough. . I believe for any firm Innovations is - simply way to survive. Then you don`t have option to default you simply DO IT, so WE DID IT because we simple had no other options and you know , I think it`s is the natural, therefore best way how it can be done.

. . . .

. . . .

. . . .

. . . .

. . . .

……………

}

Best regards Andrey.V.A.Semenov FA

References:

1. Edward O. Wilson: On Human Nature - Summary by Michael McGoodwin, prepared 1991

2. E. O. Wilson, Consilience: The Unity of Knowledge, New York, Knopf, 1998, pp. 127-128.

3. Wolfe, Tom (1996). Sorry, But Your Soul Just Died. Vol. 158, Issue 13, pp.210ff. Forbes

4. http://en.wikipedia.org/wiki/E._O._Wilson

5. The gods strike back : A special report on financial risk , February 13th 2010

6. Technological change, financial innovation, and financial regulation in the U.S. : The challenges for public policy . Lawrence J. White Stern School of Business New NYU

7. Cohen, Wesley M. and Richard C. Levin, "Empirical Studies of Innovation and Market Structure, “in Richard Schmalensee and Robert Willig, eds., Handbook of Industrial Organization, Vol. 2. Amsterdam: North Holland,

8. Demsetz, Harold, "Information and Efficiency: Another Viewpoint," Journal of Law & Economics,

9. Economides, Nicholas, "The Economics of Networks," International Journal of Industrial Organization

10. Edwards, Franklin R. and Hugh T. Patrick, eds., Regulating International Financial Markets 11. COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN

PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS – Putting knowledge into practice: A broad-based innovation strategy for the EU, Brussels 13.9.2006, page 2

12. Astebro, Thomas (2003), “The Return to Independent Invention: Evidence of Unrealistic Optimism, Risk Seeking or Skewness Loving,” The Economic Journal, January, pp. 226–238.

13. MYERS, S.; MARQUIS, D.G.; Successful industrial innovation: a study of factors underlying innovation in selected firms, National Science Foundation, NSF 69-17, Washington DC 1969 quoted in TROTT, P.:Innovation Management and New Product Development, 3rd edition, Prentice Hall, Harlow 2005, page 15

14. COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS – Putting knowledge into practice: A broad-based innovation strategy for the EU, Brussels 13.9.2006, page 2

15. www.paypal.com/history 16. James Alexander, COO at Zopa, as cited in Press Release, 7 July 2006

17. Bingley and Wright (2006-10-01). "Internet Based Social Lending" 18. http://knowledge.emory.edu/article.cfm?articleid=720 19. Lowenstein, Roger The End Of Wall Street, Penguin Press 2010, 20. Ross, Andrew (March 17, 2008). "JP Morgan Pays $2 a Share for Bear Stearns". The New

York Times. http://www.nytimes.com/2008/03/17/business/17bear.html. Retrieved on September 30, 2008.

21. ^ http://www.federalreserve.gov/newsevents/press/other/20090302a.htm 22. http://consumerist.com/2009/03/ny-attorney-general-to-aig-you-have-until-400-pm-to-

give-us-the-names.html 23. Circles of History, a July 17, 2009 blog entry from the Well Fargo - Wachovia blog 24. http://en.wikipedia.org/wiki/Oracle_Corporation 25. http://www.bloomberg.com/professional/

26. How Bloomberg will Fare in the Financial Crisis, Oct 2 2008, BusinessWeek. http://www.businessweek.com/magazine/content/08_41/b4103102263210.htm

27. http://en.wikipedia.org/wiki/Bloomberg_Terminal 28. Technology Innovation in Financial Services Industry by Gustavo J.C. Roxo da Fonseca , MIT

2004 29. Roberts, Edward B. Entrepreneurs in High Technology: Lessons from MIT and Beyond (New

York: Oxford University Press, 1991). 30. Strategic management of technological innovation , Melissa A. Schilling 31. The Travels and Adventures of Serendipity: A Study in Sociological Semantics and the

Sociology of Science, 2004 32. Mason, Scott P., Robert C. Merton, André Perold, and Peter Tufano. Cases in Financial

Engineering: Applied Studies of Financial Innovation. Englewood Cliffs: Prentice Hall, 1995. 33. Financial Innovation , Peter Tufano*Revised: June 16, 2002 34. http://www.FinancialArchitecture.org , Andrey V. Semenov, 2010 35. http://en.wikipedia.org/wiki/Natural_selection#General_principles