3 Ways to Improve COVID-19 Relief Programs for the Startup Sector

3 Ways to Improve COVID-19 Relief Programs for the Startup Sector

Part 2 of 2: We Must Protect the Years of Investment Made to Creating a Strong ICT Sector in Canada

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Suggested proposals for Improving CEWS and other relief programs

Based on part one in this series, we reviewed the fundamental issues with COVID-19 crisis relief programs, primarily looking at the Canadian relief programs CEBA and CEWS.

Recently, Soushiant Zanganehpour, CEO of Swae, was invited to provide his perspective alongside other startup Founders/CEOs on this topic to Canada’s Ministry of Innovation Science and Economic Development.

His commentary and recommendations, among the other startup founders present, were focused on the CEBA and CEWS relief programs specifically, and their ability to fit into the startup legal structures and operating circumstances.

3 Potential Solutions to Improve the Relief Programs

The following solutions were the recommended adjustments to the CEWS program to provide the right level of support to those that have been highly affected by the pandemic while supporting economic recovery:

Proposal 1: Redesign the CEWS eligibility criteria to include investment or debt alongside revenue

To help make the CEWS program compatible with how startups within the ICT sector are structured, it has been recommended that the revenue test for eligibility for the CEWS be reframed or expanded to include investments or debt accrued during that time. So, startups that were in the pre-revenue stage and are now in the post-revenue stage, they would be able to demonstrate how they lost financial opportunities resulting from COVID-19, and how they can take advantage of the CEWS specifically to not fall through the cracks.

If the test can reframe revenue to also recognize investment or debt as part of the revenue measure, then many would then be eligible and could benefit from this relief program to be able to survive.

At this time, other than taking on debt (with personal guarantees), without access to the CEWS wage subsidy program or other grants/investments, many like startups like us have a very limited runway to be able to get through this crisis. The fact of the matter is that B2B customers are not in a position to make buying decisions for at least 6–12 months and investors are not in a position to make high-risk investments when they’ve lost 40–60% of their own investment portfolios.

Proposal 2: Expand the range of relief programs beyond CEWS

Alongside Soushiant, there were five other startup Founders/CEOs that were invited to offer potential solutions to Canada’s Ministry of Innovation Science and Economic Development group. Together, they came up with the following list to help expand the programs available:

  1. Businesses can be eligible to get government-backed credit at 0% to 2% interest over a fixed term. The maximum credit amount would be a percentage of the business’ expenses on the tax return for their most recent fiscal year-end and should be capped up to a maximum per company.
  2. Businesses can choose to get money directly from their bank (similar to CEBA or BCAP), or as a credit or grant from the government directly (in this case, the Canadian government).
  3. Business owners should not be required to provide a personal guarantee as is currently being required.
  4. There shouldn’t be a strict revenue reduction qualifier. This introduces complex accounting overhead which has already caused confusion for all involved.
  5. There shouldn’t be a strict requirement for it to be used for payroll or even credited against payroll accounts.
  6. Special non-repayment incentives should be put in place when businesses use this credit to hire back or retain existing employees, hire new employees, or invest in R&D efforts.
  7. Punishment should be extreme for abuse and fraud. Administering banks and grant administrators should be required to inform on the misuse of funds.

Proposal 3: Offer a matching investment facility for startups

(A proposed solution from Soushiant Zanganehpour)

This proposal relates to expanding the eligibility requirements of the BDC Capital Bridge Financing Program, to allow non-VC backed ventures to also access the investment facility.

Currently, the BDC Capital Bridge Financing Program only entertains funding requests if a deal is referred and already backed by a pre-qualified Canadian VC firm. If you are referred to this program by a VC firm General Partner (GP), you as the entrepreneur are out of luck (even if you have syndicated a group of accredited investors yourself and have already raised over the $500K threshold).

This financing program suffers from a fundamental flaw. Historically, over 90% of accredited Canadian VCs do not invest in very early-stage ventures (pre-seed, pre-revenue, or post-revenue) and typically concentrate their investments to ventures who are looking for Series A sized investment round and have Series A metrics and achievements to show ($150K+ MRR).

As a consequence, most startups who are backed by accredited angel investors will not be able to benefit from this bridge program, and the government will also not benefit from the potential upside of being involved in such deals at such an early stage.

This leaves a large gap to fill and a lot of high potential companies without access to resources to continue growing and derisking their ventures.

Soushiant recommended that access to the investment facility should be limited only to technology ventures backed by accredited Canadian VCs and ventures that can syndicate their own accredited investors. He recommended that the Government of Canada should offer a Matching Fund Facility through a Convertible Note, and if an entrepreneur or venture is able to syndicate a set of accredited Canadian investors to commit a minimum of $250K or above, they could benefit from this matching funding facility.

Expanding the scope of this facility or building something complementary has multiple benefits:

  • It allows other accredited professionals to lead a round, allowing the government to take advantage of the diligence already done on the venture by professionals;
  • It allows thousands of other startups to benefit from funding in a risk-adjusted manner
  • It may provide additional assurance to accredited investors to invest more in the ICT sector during this particularly challenging time
  • It helps the government benefit from any financial upside experienced by promising early-stage companies, as they are involved through a convertible note, not a wage subsidy or through a grant.

 

 

Are you a startup or small business facing this same challenge and are concerned about your ability to survive like we are? If so, what are your thoughts on this? We want to hear from you [click here]!
Why There’s a Fundamental Issue with the COVID-19 Crisis Relief Programs

Why There’s a Fundamental Issue with the COVID-19 Crisis Relief Programs

Part 1 of 2: Simply, Past Revenue Is Not the Right Measuring Tool

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Background and Types of Relief Programs Offered

financial relief programs around the globe kick in with the main goal to stimulate businesses, in Canada, many in the Information and Communication Technology (ICT) sector are feeling left out and misrepresented.

After assessing the various programs offered to companies affected by COVID-19, our research has found that most companies are unable to benefit from a variety of relief programs offered by the government. The issue lies in the way that the programs are structured, and how the companies that make up the ICT sector have financed their growth to-date which is being overlooked. Or, these same companies are being penalized by the government programs that were supposed to help them in a time of crisis.

There’s a serious problem here because there’s a lack of answers around important concerns relating to the fundamental design of the programs, and the bottom line is that many feel the policy makers are ignorant of how technology startups and companies grow. This is leaving founders in the ICT sector feeling unfairly penalized for their legal structures and for the strategic growth decisions they’ve made.

Currently, the most significant relief programs offered to businesses (under 500 people) affected by COVID-19 by the Canadian Federal Government are the Canada Emergency Business Account (CEBA) — a $40,000 interest-free, government-backed loan that includes a $10,000 grant if you spend and pay back the full loan amount. And, there’s the Canadian Emergency Wage Subsidy (CEWS) — a 75% wage subsidy up to a maximum of $847 per week.

To be considered eligible to receive the CEWS, an employer must demonstrate a drop in revenue of 15% or more for March 2020, and 30% or more for April 2020 and May 2020, when compared to their revenue for the same period in 2019. This means that if your revenue did not drop by at least 15–30% more than you made last year, sorry, you’re not eligible.

Where the Canadian Federal Relief Programs Have Design Flaws

And herein lies the fundamental flaw: the design of this program using the revenue test used to establish eligibility overlooks the way startups finance their growth and development.

Let us further explain…

The majority of technology startups do not start their business with revenues to report early on, and growth is based on investments in order to develop a product and find a market for that product to sell to.

Most startups grow through bootstrapping or raising grants, equity investments, and/or debt. In the rare case that a startup begins generating revenue on day number one, under normal growth circumstances they would have less revenue generated last year than they would have this year. In a technology venture, revenues are expected to increase exponentially year-on-year, not remain stable and stagnant for years on end (like a traditional brick and mortar small business or storefront).

If a technology venture generated $100K in revenue last year in 2019, and this year they projected to generate $500K, even a 30% loss would not qualify them for the CEWS program because they have earned well over their 2019 baseline for the same period. This venture must have lost much more than 30% to benefit from this relief.

What the Canadian ICT Sector thinks of the Relief Programs Offered

Following the announcement of the CEBA and CEWS relief programs, the Council of Canadian Innovators (CCI) — a national advocacy organization and business council led by the CEOs of Canada’s fastest-growing companies — conducted a sector-wide survey, to see how the various programs would impact startups and the ICT sector.

We weren’t at all surprised that they found that:

  • Around 39,000 Canadian ICT companies are ineligible for the CEWS because of how they evaluate a reduction in business activity.
  • 94% (609 CEOs) said they would be ineligible for CEWS based on the previous 30% reduction in wages year-over-year.

Like the other technology startups surveyed, Swae is in the same boat, and like other startups, we did not start our business venture with revenues to report early on. We have grown based on investments in order to develop a product and then find a market for our product. Though we incurred significant losses due to COVID-19, we had no revenue to report during this 3 month eligibility period in 2019 so we do not qualify for the program.

What’s at Stake if Relief Programs are Not Improved and Do Not Increase Accessibility to Liquidity

Given the impact of COVID-19 on most economies globally, stimulation through financial relief is required if there’s going to be any “economy” left when COVID-19 subsides. This isn’t just about Canada, but the entire globe.

Governments could help stimulate technology companies and startups if they were creating programs using suitable measuring tools, and really understood the recipient’s circumstances and the kind of relief needed.

Across Canada, more than 60,000 workers a year are joining the tech sector and the innovations of these startups fuel a network of advanced industries that collectively drive 17% of the national GDP and 11% of national employment. That’s a giant network of customers, clients, and suppliers that stand to lose big time if the startup ecosystem fails.

Many tech startups can only keep going and raise funds based on assumptions around sales that are now becoming null and void during this COVID-19 crisis. This concern has been voiced by many technology entrepreneurs.

For example, Gordon Casey, Founder of Brave Technology Coop in Vancouver, BC said, “We have a team of 7 FTE. Our runway is based on assumptions around sales that are all irrelevant now. So we can either let everyone go to put a pause on the business in every sense and attempt to “time travel” to the other side of COVID. Or, we can keep paying those employees while we pause revenue and sales-generating activities.”

Either way, it’s not a winning scenario for Brave Technology Coop.

They’re not the only ones stuck in that position. Many companies, including Swae, are stuck between pre-revenue and post-revenue generation stages and have no reliable predictions on when a stable and receptive market will happen. It’s a difficult situation no matter how you dice it.

These concerns must be addressed and alleviated to ensure no one is unfairly penalized for their existing legal structure and the growth decisions they’ve made to-date.

Canadian tech entrepreneurs have made tremendous gains over the past 15 years, thanks to the support of all levels of government. From incubators, grant programs, investment funds, to trade missions — all of this nurturing has helped to build a vibrant ecosystem that’s driven huge growth in jobs, investment, and economic activity.

If relief stops due to technicalities and flaws in how programs are designed to help the startup sector at this moment of crisis, our future economy will start from zero afterward.

More importantly, nuanced support is required to help protect the many years and millions of dollars of investment made by the Canadian government in creating a strong ICT sector all across Canada.

In part 2 we’ll be discussing 3 solutions that we’ve found to combat this major problem. Stay tuned!

What do you think, do you agree? We’d love to hear from you, go here to let us know your thoughts!

Etihad Airways Partners with Swae for Innovation

Etihad Airways Partners with Swae for Innovation

Announcement

We’re excited to announce our first flagship partnership and upcoming proof-of-concept with Etihad Aviation Group. Together, we plan to deploy Swae’s platform company-wide to help improve the inclusivity and quality of bottom-up ideas generated and the employee-led innovation process. Through the proof of concept, Etihad aims to leverage Swae’s platform, our methodology, and AI tools to help take employee ideas to the next level, to influence the broader strategic direction of the organization.

Backstory

This partnership has been a work-in-progress for several months now. Our teams first met while participating in NYU Abu Dhabi’s StartAD Venture Launchpad program in April 2018. Thanks to NYUAD’s stewardship, they brokered a handful of such opportunities to allow start-ups like us to explore different applications of our platform within operations of established companies.

Deployment and Potential Impact

Etihad Airways is undergoing a subtle, yet very exciting transformation. Having welcomed a new CEO, they are preparing to become more organizationally nimble, adept, customer-centric, and more technologically driven in order to insulate against the general challenging trends facing the global airline industry. Moments like this offer unique opportunities to introduce new ideas, processes, policies and infrastructure to help sustain a shift in the orientation and trajectory of the organization for long-term competitiveness, prosperity and future-compatibility. Our partnership comes at a pivotal time, one in which we’re excited to explore the different ways in which Swae can support Etihad Aviation Group’s growth and adaptation.

Though specific details about the proof of concept are still being finalised (and cannot yet disclosed), kick off is expected in early 2019. We wanted to share this news with our community and supporters, as you watch us grow and test Swae’s platform, technology and operational capabilities while deploying in an organization of 15,000+ people. For us, the volume and diversity of ideas and decisions generated by the pilot will help us improve our systems and processes, calibrate our tools, and have real world learning to apply to more public facing experiments and applications.

Next Steps

2019 is already shaping up to be a great year, with a few other pilots expected to deploy early in the year. One we are in discussions with is a Smart City looking to deploy Swae’s platform for a large participatory budgeting / citizen policy creation experiment. Watch this space as we share more news about this pilot and the other experiments in our pipeline soon.

Swae featured in the Guardian UK Newspaper

Swae featured in the Guardian UK Newspaper

The $1.8m prize aiming to tackle global threats to humanity – winners revealed

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The Global Challenges Foundation’s New Shape Prize, which seeks ideas to tackle global threats through cooperation, received more than 2,700 submissions from 122 countries. But what are the aims of the award – and the inspiration behind it?

Climate change, politically motivated violence and extreme poverty are some of humankind’s most pressing challenges – but what are the best ways to deal with these 21st-century problems? And what sort of institutions can people around the world trust to tackle them effectively?

On 29 May 2018, the New Shape Prize awarded a total of $1.8m in prize money to three entries* who proposed new forms of global governance to address those challenges.

The organisation behind the prize, the Global Challenges Foundation (GCF), was set up in 2012 by Swedish financial analyst and author Laszlo Szombatfalvy to explore new ways to tackle the most serious threats facing humanity.

The vice-chair of the Global Challenges Foundation, Mats Andersson, says: “We don’t have the toolbox today to deal with global risks. The only tool we have is the United Nations. The UN was founded 70 years ago to deal with the challenges we had at that time. Now we need something better and more powerful.”

Another GCF board members is renowned environmental scientist Johan Rockström of the Stockholm Resilience Centre, he says: “We have entered a fully globalised stage of human development, at a special juncture where our social, political, economic and environmental pressures are right at the ceiling of what the social and biophysical world can cope with.” Rockström, who is also professor of environmental science at Stockholm University and an international researcher on global sustainability issues, adds: “Are we, as a humanity, able to destabilise the whole planet?”

In 2016, in an effort to catalyse new thinking around the collective management of global catastrophic risks, the foundation launched the New Shape Prize competition. It aims to reshape the future of global governance, by inspiring ideas around different forms of cooperation.

“Prizes have a historic track record in spurring on innovation,” says the foundation’s executive director Carin Ism. And the economic incentive is only a part of it. “[Prizes] have tended to create community around an issue, increasing the talent pool but also [connecting] individuals thinking about the same topic who had not known about each other.”

The Global Challenges Foundation wants to act as a convener for the best thinking, in order to uncover advances in contemporary global governance. “We want to see who is also thinking about decision-making and the way we make and enforce those decisions,” she continues.

From 2016-17, GCF invited submissions proposing new forms of global cooperation. In total, the competition received more than 2,700 submissions from 122 countries. They were assessed by 10 regional review panels, each including experts from civil society, politics, academia and international organisations.

The overall criterion for the competition was to design governance models capable of tackling these global challenges, rather than trying to solve individual problems. The proposals should also be acceptable to the international community, with the potential to be implemented in the near future.

For Rockström, the implementation issue was particularly challenging. “We felt that it was necessary to avoid blue-sky type utopian ideas. You could think about many ideas that are intellectually appealing – for instance, let’s abolish nation states – but we had to be pragmatic and have something that can stand a chance of implementation in the real world.”

The 14 shortlisted entries represented cutting-edge thinking on global governance and were proposed by some visionary and innovative thinkers with backgrounds in social science, ethics and law.

Many of the entries built on work already done by the UN or other global institutions such as the World Bank. Some looked at ways to tackle the most important issues for local communities and involve them in the process. Others explored better means by which citizens can participate more fully in democracy; and others sought new ways to tackle poverty.

The projects often incorporated emerging technologies, such as blockchain and AI that could enable communities to have direct and secure access to decentralised forms of governance.

These projects were presented at the New Shape Forum, which took place in Stockholm, Sweden, from 27-29 May. Some of the world’s most significant thinkers in the sphere of global governance took part in this forum, with Michael Møller, director-general of the UN office in Geneva, giving a keynote speech.

The general public was invited on the first day to voice ideas on how global cooperation could be improved, and how threats to humanity could be tackled more effectively. That same day, finalists presented their proposals for feedback and input from the public. These proposals were presented to the final jury, consisting of representatives from all over the world, with the shortlisted candidates honoured in an awards ceremony.

The forum is, however, just the start of the process to find a New Shape for global governance. The Global Challenges Foundation will convene working groups to refine some of the New Shape ideas; and its Educator’s Challenge is asking teachers and lecturers – of all disciplines – to create knowledge about global governance and positive ways in which it can be reformed.

“We all want a safe tomorrow,” says Ism. “We cannot ensure this unless we tackle the root cause of our global challenges: the limits of current frameworks for global cooperation.”

On Tuesday 29 May 2018, the New Shape Prize awarded a total of $1.8m in prize money to three entries: Global governance and the emergence of global institutions for the 21st century, by Augusto Lopez-Claros, Arthur Lyon Dahl and Maja PCE Groff; A truly global partnership – helping the UN do itself out of a job, by Natalie Samarasinghe, and AI-supported global governance through bottom-up deliberation, by Soushiant Zanganehpour. The Global Challenges Foundation remains committed to supporting the reworking and refinement of the best ideas toward more holistic models that emerge from this process.

The regional panel of judges (pictured main) were: (L-R) Fredrik Karlsson, head of projects, GCF; Maina Kiai, chair eastern/southern Africa; Folke Tersman, board member, GCF; Emil Andersson, project coordinator, GCF; Darynell Rodríguez Torres, chairperson Latin America; Penda Mbow, chair western Africa; Jens Orback, chair western Europe; Azita Raji, chair North America; Ulad Vialichka, chair eastern Europe; Lan Xue, chair east Asia; Magnus Jiborn, consultant, GCF; Hajer Sharief, chair North Africa/Middle East.

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Swae wins Global Challenges New Shape Prize

Swae wins Global Challenges New Shape Prize

Swae announces that it is one of three winners of the Global Challenges New Shape Award 2018. The highly presitgious award is an accolade demonstrating the importance of the Swae mission and gives the start-up a $600k USD grant to start fulfilling its goals.  

At the New Shape Forum (NSF), convened by the Global Challenges Foundation in Stockholm on 27-29 May, more than 200 participants came together with the aim of reshaping global governance to better tackle global catastrophic risks. We would like to thank all attendees for their involvement and enthusiasm.

We are grateful for the immense interest in the New Shape Prize received from people in every continent and from diverse backgrounds – from academic institutions, think tanks, researchers, and business, to university students and non-governmental organisations.

The New Shape Prize initiative has always had an ambitious goal: to inspire ideas and stimulate debate around new, more effective forms of global cooperation at the highest levels about how the world community manages global catastrophic risks, ranging from climate change effects to weapons of mass destruction.

We have been encouraged by the many innovative ideas proposed, although we now realise that the quest for models that meet all the criteria set out in the New Shape Prize was an ambitious ask. The distinguished final jury, led by Professor Maria Ivanova, selected the following three proposals out of the 14 put forward by the semi-final review panel:

Speaking about the process, Professor Ivanova noted that “This competition has unleashed the creativity of thousands of people around the world and has launched a new community of thinkers, advocates and doers.”

The Global Challenges Foundation has decided to award a total of USD 1.8 million, rewarding the three submissions with USD 600,000 each.

The New Shape Forum marked the starting point of a new phase in our efforts to find new global governance models. Looking ahead, the Global Challenges Foundation remains committed to supporting the reworking and refinement of the best ideas toward more holistic models that emerge from this process. Working groups began to convene at the Forum and will continue to develop frameworks for global governance. We are confident the models will evolve over the next five months, and look forward to seeing these ideas come to life, when the most promising ones will be presented in Paris in November at the Paris Peace Forum.

This article originally featured here

 

Read the full proposal below:

AI-supported global governance through bottom-up deliberation
1. Abstract
The founding purpose of our current international governance system was to prevent interstate violence and large-scale conflict, creating the conditions for collective prosperity.

Since its inception, the world has not seen another world war and the system has helped prevent numerous conflicts while inculcating shared norms of cooperation and progress.

That said, today’s reality is very different from when our global governance system was built. We face man-made species endangering existential crises that transcend individual races, national interests, and sovereignty. But, today’s institutions are poorly designed to building experimental, self-sacrificing solutions and alliances for prioritizing collective preservation above a narrow set of national interests. Our norms, operating assumptions, and legal jurisprudence prioritize national interests above all else. Cooperation and progress under are framed as zero-sum calculus, breaking down the ability of leaders to make necessary concessions for long-term collective progress.

The resulting limitations of our governance structures have created dangerous under-managed macro risks that threaten our survival and future prosperity. We need new actors, new operating assumptions, and norms to help reframe our priorities to protect humanity-first, and nations second.

An update to our global governance system must start with building new digital tools and institutions at the city, national and international levels, allowing citizens to directly ideate, build strong proposals with support of AI, debate and build consensus with insights mined from millions of conversations by AI, and vote the best proposals into existence. Furthermore, new special economic and political zones will be created to test and institutionalize the results of the new decision-making protocols. After considerable testing and iterations, a movement can help spread these tools and institutions to complement or replace existing governance institutions and decision-making protocols and processes.

The digital tools for a new governance model include:
Blockchain global identity

Immutable, verifiable identity, operating on a public blockchain
Facilitates incorruptible liquid democracy protocol, sentiment capture, participation in e-parliaments, and other key functions of new institutions, providing fidelity to institutions
A necessary building block for a decentralized, direct, deliberative global democracy
Citizen sentiment tracker

A polling service at the local, national and international levels leveraging anonymized blockchain ID, helping shed light in real-time about how people feel about certain issues and how they believe those should be dealt with.
AI-augmented proposal development tool

Tool combines anonymisation with ai-augmentation and crowd intelligence to help identify, create and build consensus around new bottom-up solutions for complex, multi-stakeholder challenges.
Helping increase likelihood of participation, and quality of ideas inputted
AI-based budget simulator & trade-off analysis tool

AI-based budget simulators and tradeoff analysis tools, leveraging real-time data, helping highlight the potential implications of supporting one proposal versus another.
AI-supported mass policy deliberation tool

Through data mining and computation, AI and machine learning unveil patterns of synergy and agreement amongst disparate and opposed constituent groups, helping create the building blocks for creative, multi-stakeholder solutions.
Implementation & Impact Tracker

Transparent real-time workflow sharing where approved proposals sit relative to being implemented.
Reveals degree to which a “promise inflation” exists; the % of promises being inflated by representatives or those in charge of executing approved proposals
Real-time dashboard showing the potential intended and unintended implications and impacts of various implemented solutions.
The new institutions include:
Digital City, Country, and World

A digital environment and testing ground for building solutions to existing local, national and international challenges and policies
Injected with real-time raw data about developments in cities, nations, the world
Allows for the creation and modeling of creative policy solutions in a safe environment
Suggestions that have large backing and consensus on these platforms will compete against existing solutions crafted by today’s leaders for acceptance In the future, will be the basis by which new public policies are initially conceived and stress tested, before deep development and feasibility at local, national or international stages prior to implementation.
Ministry of Ideas – City, Country, and World

Local, national and transnational institution, providing relevant solutions concerning how best to steward our commons
Collects the most popular ideas from digital environments (city, nation, world) or small-scale physical pilots for further deliberation.
Global Library of Societies Solutions – City, Country, World

A repository of all past policies explored by cities, nations and global coalitions to deal with different systemic challenges.
Shares the success or failure of experiments and policies.
Includes data sets and impact reports.
Parliament for Citizens – City, Country, World

An institution where the most popular proposals from the various ministries of ideas are discussed and deliberated.
Allows for distributed sourcing of expertise and creative ideas concerning different issues we face locally, nationally or internationally to provide feedback and ideas.
Open to constituents from a mix of territorial and Internet-based jurisdictions, helping legitimize the internet as a sovereign jurisdiction.
Allows for the functioning of a direct, deliberative liquid democracy protocol.
Will influence the trajectory, content, and approach of different local, national and international public policy solutions that are consequential to the stewardship of global commons.
Helps current leaders see the delta between their interpretation of the public will and the public’s direct articulation of that will.
The basis for future consensus formation and policy-making in the long-term.
Global Parliament of Mayors

A new institution where the majority of legislation and policies proposed are solutions co-created by different mayors only with the majority approval of their constituents (evidenced through citizen sentiment capture tool).
Provides institutional authority to mayors to decide over their territory.
Gives them the opportunity to compete to build better solutions to global challenges, ones that nation states are unwilling or unable to create.
Crowd-Justice

An open-source judicial system and platform reimagined around the internet era.
Allows for dispute resolution at scale, using algorithms to source the right experts for the right problem around the world.
An opt-in protocol, decisions are legally-binding (unlike ICJ).
Exponentially more cost-effective and incorruptible than centralized legal systems.

2. Description of the model
Context
The current global governance system and its associated institutions were founded in the aftermath of two world wars. The system’s primary purpose was to uphold the required pillars for long lasting peace between nations. These included enshrining national sovereignty, creating the conditions to pursue shared security, and global social and economic prosperity.

The system and its institutions encourage diverse nations to cooperate while pursuing objectives that protect their sovereignty and interests. The notion of national sovereignty and each nations inalienable right to pursue its national interests as they deem fit are key operating assumptions for the correct functioning of the system. Progress in the system relies on coalition-building and the alignment of national interests with that of a collective. Sometimes different nations’ goals align, most often, interests are incompatible with the majority. Concessions towards the common good are perceived to be zero-sum tradeoffs, depending on how well your national economy is postured vis-a-vis the particular issue. For example, trade or climate change quotas are good examples of this zero-sum dynamic. There are a limited number of tools available within the system to help nudge a nation towards prioritizing the interests of the collective above those they have predetermined. The use or threat of force as tool to influence a nations preferences, negotiating posture or choice of alliances, or as a means for reconciling disputes is highly unacceptable. Other tools for influencing a nations perception of a their ‘best’ interests include dialogue, negotiations, trade, treaties, incentives, investments, and sometimes economic sanctions. Most international norms or agreements created within this system are voluntary, opt-in declarations that are non-binding and unenforceable.

Current Systemic Dysfunction
The founding purpose of our current governance system was to prevent inter-state violence and large scale conflict. Creating the conditions for mutual-shared prosperity was to be a natural consequences of this primary goal.

At the time, the threat of inter-state war (e.g. Hiroshima/Nagasaki, WW2, Cold War) was the largest man-made existential threat possible. Natural disasters were relative anomalies that did not threaten humanity in any consequential manner. The global commons (air, pollution, water, oceans, space, etc.) were also insignificant priorities and poorly understood phenomena. Issues of commons management – ensuring public safety and health and air quality, creating reliable infrastructure, managing pollution, creating and conserving ecosystems, parks and shared spaces, establishing social norms – were managed within the realm of responsibility of the nation-state. National sovereignty was the baseline used to determine how best to deal with global commons.

Despite episodic challenges with this system, the world has not seen another world war (yet) and the system has helped prevent numerous conflicts while inculcating shared norms of cooperation and global progress.

Though the goals around preventing interstate conflict have mostly been accomplished, today’s reality is very different from the historical context from which our current global governance system was invented.

For example, over the past decades, the nature of conflict and threats to humanity’s progress have changed from interstate to intrastate violence. The genocides in Serbia, Darfur, South Sudan, to crimes against humanity in Syria, Israel-Palestine, to the Rohingya in Myanmar, are all proxies of how poorly equipped the current system is to deal with new forms of collective challenges.

Even more troubling, we face species endangering and humanity-altering existential crises, which are mostly man-made, the likes of which we have never faced before collectively. These phenomena transcend individual races, national interests, and national sovereignty. They are equal opportunity disasters waiting to be unleashed on us collectively.

Unfortunately, our norms, operating assumptions, and legal jurisprudence prioritize national interests above all else. Today our leaders proudly convey they are “(name any country) First!” over and above the systemic global challenges we all face as a species. Defending ‘X’ interest above all else and bargaining on zero-sum winner-takes-most tradeoffs between nations is what the current system optimizes for. Cooperation and progress under the current framework are framed as zero-sum calculus, breaking down the ability of leaders to make necessary concessions for long-term collective progress.

Today’s international institutions are poorly suited to building experimental or creative win-win solutions to the global commons problems we face. We need new solutions, potentially self-sacrificing ones, for prioritizing species preservation above a narrow set of national self-interests and benefiting all of humanity.

Consequently, there are dangerous emerging under-managed macro risks stemming from the limitations of our governance structures. Our system is no longer fit for our new age and we need new actors, new operating assumptions and norms to help reframe our priorities and uphold humanity-first, and nations second.

New Context and Operating Environment – The Case for Decentralization and Disintermediation
The nation state is no longer the only nor most appropriate vehicle for global problem-solving to elevate the human condition. In fact, finding far reaching, win-win solutions by competitive nation states in today’s maze of a governance framework appears to be beyond the capabilities of the design of the system.

In today’s system it is nearly impossible to persuade decision-makers to prioritize the long-term consequences of their actions and commit to self-sacrificing solutions that benefit the greater good; they are too worried such actions will lead to career suicide and opt instead to preserve the longevity of their careers over collective best interests. Consequently, leaders and their governments are losing credibility rapidly for their inability to tackle and solve some of the world’s greatest challenges.

In 2017, the Edelman Trust Barometer surveyed thousands of people across dozens of countries about their level of trust in business, media, government, and NGOs. For the first time in 17 years they found a decline in trust across all four of these institutions. In two-thirds of the 28 countries surveyed, the general population did not trust the four institutions to “do what is right” — the average level of trust in all four institutions combined was below 50%. The study also revealed a staggering lack of confidence in leadership: 71% said government officials are not at all or somewhat credible, and 63% said the same about CEOs.

Today our biggest challenge is not scientific or technical, it is political and systemic. We organize our pursuit of our collective interest through representative democracy and command-and-control centralised organizational governance models that operate on the inalienable right of the nation state to pursue its self-interest and sovereignty.

Though there are certain advantages and efficiencies that we derive from organizing politics around centralized hierarchies that concentrate power and afford mass participation through representation, the costs of maintaining such structures are beginning to outweigh their benefits.

For example, in centralized systems, the concentration of power and decision-making at the top, segments people into the powerful and the powerless leaving the majority feeling powerless, with deep sense of resignation and resentment. Power in such systems is a scarce commodity, worth fighting for, leading people to compete over its access, exacerbating the worst attributes of human nature: personal ambition, mistrust, fear, greed, politics. Concentrated power is corruptible and can lead to deep levels of cognitive bias and group think when smaller concentrations of like minded people decide on behalf of others. The speed of decision making can also be significantly delayed when other possibilities existing in our digital age.

New research is beginning to shed light on a number of negative social and economic problems directly attributed to how we organize ourselves. These include:

High levels of voter apathy. In mature democracies, there are the highest levels of reported voter apathy. In the 2014 US congressional elections, only 20% of the US voting youth (18-24 YO) participated. Most those that did not participate expressed that if you are young and nobody shares your views, the only other option is to protest or not vote at all.
The proliferation of protest movements. Since the 2008 financial crises, the frequency of protest movements demanding political alternatives (e.g. Arab Spring, Occupy) has proliferated, mobilizing millions of people onto streets.
Public systematic silenced. A Princeton University study concluded that the U.S. is not a functioning democracy anymore. Using data drawn from over 1,800 policy initiatives from 1981 to 2002, experts concluded that “…economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy”, “while mass-based interest groups and average citizens have little or no independent influence”, and the “rich, well-connected individuals on the political scene now steer the direction of the country, regardless of or even against the will of the majority of voters.”
High levels of employee disengagement. A Recent Gallup study revealed that in the private sector we witness the highest levels employee disengagement; 70% of U.S. employees consider themselves disengaged at work (resembling similar trends globally) which is a source of lost productivity, which produces a high cost on the economy. McKinsey estimates the bottom-line impact of disengagement costs the US economy over half a trillion dollars a year.
As evidence mounts, we’re beginning to recognize that command-and-control centralized organizational models and by extension, representative democracy is less well suited for our times. We are outgrowing old operating assumptions and protocols for collective organization, governance and problem-solving.

Emerging technologies, trends and implications
Thanks to the pace of change ushered in by the internet, the conditions required for global cooperation could be achieved without reliance on intermediation nor facilitation through our existing institutions, but instead through new institutions that allow for greater and more direct citizen-participation. New institutions combined with digital tools can help create new decision-making protocols to help build bottom-up alternative competing policies and solutions, allowing new ideas to be deliberated widely over internet platforms, for consensus to be built around the most powerful solutions. In the short run, the best ideas that surface from these new institutions can act as normative alternatives to the existing solution set we have, and we can invest in lobbying for them to be seriously considered and institutionalized. In the longer term, these new institutions will replace our current governance systems wholeheartedly because they are cheaper to operate, more participatory, create better quality solutions for ensuring collective prosperity.

The internet today has become the primary mechanism for mobilizing power and the masses, the primary means by which to wage asymmetric conflict, and an important shaper of belief systems. It is also the primary means by which global economic activity will be conducted.

On the internet, communities are no longer principally defined by geography or proximity; broad territorial distinctions are less and less important to both social and economic life.

The diffusion of technology is breaking down hierarchies and creating new power structures daily. The rise of cryptocurrencies using decentralized computation server spaces as immutable ledgers compete against central banks creating new definitions of value are good examples of this. The rise of sharing economy ventures competing against traditional incumbents with antiquated business models supported by antiquated regulations also support signal more changes to come.

Technology is amplifying our collective capacity to include new voices, create informed opinion, analyze, build consensus and decide, all with rapidly reduced reaction times. Half the cellular devices being sold now are smartphones, which make up about 80 percent of all internet usage. The phones, in turn, are helping people change the way they spend and manage money; identify, make, and maintain friendships; participate as citizens; become educated; stay healthy; keep up to date with news; and be entertained, incite revolutions, and seek new disruptive innovation.

As internet penetration rates proliferate, bottom-up, citizen-led organizations become empowered because the means of distributing views are so inexpensive.

Simultaneously, we’re moving into an era of ubiquitous sensing where the combination of sensors and data-gathering mechanisms, unlimited memory, and massive processing capabilities, is growing the planet’s pool of data exponentially yearly.

Experts estimate that over the next 10 years’ there will be 150 billion networked measuring sensors, 20 times more than people on Earth, producing data. in 2016 we collectively produced as much data as in the entire history of humankind up until 2015. By 2027, thanks to the proliferation of sensing devices, the amount of data we produce collectively will double every 12 hours.

Digital is becoming the basis for most of our interactions and the more we interact with digital tools, the more we expect them to shape our experiences as consumers, employees, and citizens. As data grows, demands for accessing that data will grow as well, and eventually, people will demand policies be created using indisputable data sources.

These developments combined are creating the conditions for a) deeper interconnection – where networks form and link all their members allowing for rapid resource sharing; b) Disintermediation — where middlemen are progressively undercut and disappearing; and, c) Decentralization – where networks redistribute power to disparate parts of society and concentration of power becomes more and more difficult. As a consequence, unlike previous era’s, this new era is one where the power of the individual and the group grows daily and institutions are less powerful.

Virtually every sector impacted by the information revolutions has seen one powerful, transformational trend shift expectations, and thus its likely that changes to government and organizational governance models will be profound as well.

We are inheriting this new reality faster than expected but we live at time where two competing velocities are clashing against one another. In our physical and social worlds, we’re experiencing uneven and disruptive economic growth, fear of change, and anxiety about immigration and integration. In our digital and technological world, networks and connections are getting faster, cheaper, and smarter. The two competing forces – technology which is increasing exponentially and governance models designed to handle linear growth – are pulling institutions apart, holding the world back.

On this rapidly shifting ground, leaders are acting before thinking and creating laws or regulations views that have profound impacts on the nature of our societies without leveraging technologies or inviting broad, far-reaching public debate. They are able to continue doing so because we manage the world using antiquated institutions that are riddled with structural limitations. Our governance models are outdated and extremely slow, not taking advantage of modern tools for more agile, diverse, and inclusive decision-making.

Every aspect of democracy has been changed by the advent of the internet and new technology, except perhaps how citizens directly influence the operations of our governments through the selection of our representatives. Voters could have much more power much more often.

Centralized command-and-control organizational governance models and mass participation through intermediation had advantages when the model was first conceived, but in an age of instant digital communication, it appears more a roadblock to progress than an enabler of the expression of broad public will. In today’s political environment, in any instance where intermediation is the model, the representatives and intermediaries are extremely difficult to access, engage and influence. Their focus appears more to be on empire and career building than on civic duty. There are also quite limited routes to exercising accountability over their actions. The effort required to keep them accountable is often not worth the effort expended. People, therefore, resign themselves to the status quo, become disengaged and distrustful of entire institutions. For example, we see the rise of unchecked political dishonesty as a new operating norm. Misleading voters to advance one’s political agenda has always been around but in the past, we had relevant tools for maintaining some degree of accountability. Today it appears those tools don’t work, and dishonesty is met with no consequences and no counterbalance. We see new heights of populism and opportunism. For example, in the Brexit campaigns and following the referendum, into the first hour of the referendum decision, the ‘Leave’ campaign already backtracked on one of their major campaign pledges: To contribute the money the UK saves leaving the EU to their national healthcare system, the NHS. In the US presidential elections, Trump made many promises including to build the wall with Mexican money, have a plan for getting rid of ISIS in his first 30 days in office, to repeal Obamacare, to even put Hillary Clinton in jail and drain the swamp, none of which have been executed.

In today’s consumer and technology-driven world, people are increasingly catered to and provided customized solutions. The more they experience this, the less tolerance they have for being bystanders, accepting latency in reaction times by institutions, or being told what to do from the top.

The convergence and access to different exponential technologies are reshaping human behavior, opening new areas to human understanding, enabling new forms of creative expression, empowering new means of economic activity, and inspiring new thinking about the way lives and governments and businesses should be organized. These consequently, are putting significant pressures on our 19th and 20th-century institutions to radically reform or be replaced.

These combined make for a new foundation for developing a different operating context through which we navigate problems, identify solutions, build consensus and institutionalize proposals to global challenges we all face.

Creating new realms of sovereignty
Society is changing. In this new era, the rules are unwritten, the terminology ill-defined, and few doctrines exist to help us navigate future challenges.

Historically, when new unexpected and unwelcome realities surfaced, the international community mobilized to recognize systemic changes and built new norms and institutions to counter-balance the growth of negative systemic externalities. For example, when the nature of violent conflict changed from primarily interstate to intrastate and when the world witnessed episodes of genocide and crimes against humanity (e.g. conflicts in Bosnia-Herzegovina and Croatia, Rwanda, Darfur), the UN Security Council led the establishment of two separate temporary ad hoc tribunals to hold individuals accountable for atrocities, and later created a permanent international criminal court. We also created new international norms, such as the Right to Protect (R2P) principle.

In the same vein, to help us deal productively with systemic limitations of our institutions, that threaten our species’ survival and prosperity, we must recognize that the ground has shifted beneath our feet and our operating assumptions are no longer valid. We can’t rely on the wisdom of the past or the institutions that were created then to help solve tomorrow’s problems. We need the courage to evolve out of old operating assumptions about how the world should be organized and managed, and whose priorities are the most important.

We must create new realms of sovereignty and new digital tools, institutions and decision-making norms and protocols aimed at highlighting bottom-up voices in cities, nations, and on the international level to help provide strong, rational and logical counter-balance of solutions that compete with those produced by our existing institutions, helping influence and change our collective understanding of what our goals should be and how best to prioritize humanity-preservation over national interests.

New institutions and realms of sovereignty cannot replicate the same systemic dysfunctions and limitations of past models. For example, they can’t and should not be designed around the notion of selecting intermediaries to represent our collective best interests. They should be adapted for emerging and expected cultural norms and technological possibilities, not be constrained by yesterday’s cultural legacies. Reform of the existing system and its institutions should also not be the focus of these interventions, though that may naturally occur as a consequence of their success and adoption.

The Path Forward – Foundations of New Governance Model
Enshrining the Legitimacy of Cities

In addition to creating new institutions, the importance of cities, which are currently under-represented in governance models and structures, will need to be amplified as they will be the epicenter of future governance power and clout.

Cities currently generate 80% of global GDP, and this proportion is expected to increase even more. Already more than 50% of the global population lives in cities, and experts predict the number will increase to 60% by 2020, and 75% by 2030. Fast expanding cities and shanty towns in the developing world is where virtually all future population growth will take place.

Rapid urbanization and expanding city limits will lead organically to the continued emergence of “megacities”.

Due to massive population growth and density and growing economic power, cities will eventually eclipse nations in terms of economic and political importance and can provide leapfrogging opportunities for society to grow out of the limited existing governance structures we have. Cities don’t have the same narrow interests and are not insulated from the decisions-taken as elites representing nation states often do. They have to live with the consequences of poor decisions and therefore often choose differently. Nation states are independent, competitive, and separated by territorial boundaries while cities are interdependent, cooperative and increasingly forge positive win-win partnerships. The city may be the most crucial form of political organization of the future in the coming decades.

Cities currently face limits to their ability to address universal problems such as climate change or to pursue other national or global goals. This can change, however: new institutions can help popularize, formalize and institutionalize creative ideas and solutions to difficult societal problems and global challenges originating from mayors or their constituents. What succeeds in one megacity can quickly become a global standard. Given their scale, this kind of domino effect can affect massive numbers of people.

Building and Legitimizing New Institutions
In the coming decade, efforts to increase internet access and broadband speeds are going to bring 3 billion new minds online. They will eventually expect to be involved in governance decisions. According to Historian Francis Fukuyama, in most countries, once a middle class begins to form and begin earning approximately $6,000 USD per capita per year, they begin to demand political participation.

According to Sun Microsystems co-founder, Bill Joy, “no matter who you are, the smartest people in the world don’t work for you. Even if you get the best and the brightest to work for you, there will always be an infinite number of other, smarter people employed by others. It’s better to create an ecology that gets all the world’s smartest people toiling in your garden for your goals.” This is especially true about policy making and governance for our era. The pertinent and niche types of knowledge required to help build nuanced and creative solutions to 21st-century problems reside outside the boundaries of any one organization, government or institution. The central challenge and opportunity for our future governance system will be to design institutions in a manner that they incentivize, harness and access pertinent and diverse knowledge regularly, leveraging the wisdom of crowds for policy making and other core functions.

Consequently, the plan to update global governance systems starts with building new digital tools and accompanying institutions at the city, national and international level that allow citizens to directly ideate, build strong proposals with support of AI, debate and build consensus with insights mined from millions of conversations by AI, and vote the best proposals into existence. Alongside this, we will create new legal jurisdictions (special economic and political zones) where these tools and institutions can pilot and institutionalize the results of the new decision-making protocols. After a period of considerable testing and technological and methodological iterations, we will begin building a movement to spread these tools and institutions to complement or replace existing governance institutions and decision-making protocols and processes.

The overarching goal is to create alternative forms of sovereignty, across the local, national and international spheres, to challenge or complement the authority and sovereignty of nation states to make decisions about our collective well-being.

Tools and Institutions for Future Governance Model
New digital tools include:
Blockchain verified global identity card

Immutable, verifiable identity, operating on a public blockchain.
Similar technology as Estonia’s e-Residency or Democracy.Earth
Facilitates incorruptible liquid democracy protocol, sentiment capture, participation in e-parliaments, and other key functions of new institutions.
Verifies identity providing fidelity and integrity to other necessary institutions (voting, etc.).
Is a necessary building block for a decentralized, direct, deliberative global democratic platform for managing global challenges and negative externalities concerning the global commons.
Can help administer broad participation of citizens in policy formation or referenda at 1/1000 the current costs.
Citizen sentiment tracker

A polling service at the local, national and international levels leveraging anonymized blockchain ID, helping shed light in real-time about how people feel about certain issues and how they believe those should be dealt with.
Captures sentiment in a neutral way.
Results put on the blockchain, are immutable and verifiable.
Can be immediately used to scour the world about people’s opinions regarding existing global challenges and how different solutions for those challenges rank.
Can reveal the delta between solutions proposed by leaders and the public’s support of those solutions on each issue.

AI-augmented proposal and policy development tool

A concept similar in application, technology, and methodology to swae.io
Tool combined anonymisation with ai-augmentation and crowd intelligence to help identify, create and build consensus around new bottom-up solutions for complex, multi-stakeholder challenges.
Tool anonymizes users but links them back to their blockchain based ID, helping verify their identity but limiting any negative implications associated with proposing creative ideas publicly, provides access to AI augmenting tools (fact-finding, language improvement, structural suggestions) to help improve quality of proposals, and crowdsources the deliberation of proposals to leverage the wisdom of crowds.
Will dramatically increase participation, increasing quality of ideas inputted for consideration.
Used to develop proposals for how certain complex problems we face should be solved.
E.g. How should the EU remain intact? How do we build a carbon tracking system that does not penalize economic growth? How do we build more mutuality in trade agreements? How Proposals for reconciling global inequality? How to build resilience against the coming technological unemployment wave?
AI-based budget simulator & Trade-off analysis tool

In situations where complex agreements are difficult to reach, or competing good quality ideas exist for a limited set of resources, AI-based budget simulators, and tradeoff analysis tools, leveraging real-time data, help shed light on the potential implications of supporting one proposal versus another.
Can help groups discover hidden areas of synergy and agreement.
AI-supported mass policy deliberation tool

A concept similar in application, technology, and methodology to pol.is
Allows for nuanced policy deliberation and the sourcing of nods of solutions at scale.
AI and machine learning, by conducting deep data mining and computation, discover patterns of synergy and agreement amongst disparate and opposed constituent groups, catalyzing the creation of building blocks for creative, multi-stakeholder problem-solving Integrated into all new forms of policy creation, and deliberation.
Implementation & Impact Tracker

Transparent real-time workflow sharing where the successful proposals sit relative to being implemented.
Codifies what agreements were made, and what people have actually done.
Creates workflows assigns responsibilities and allows people to input updates to agreements that were approved.
Crowd-created, using the same deliberation and input methodology as Wikipedia.
Reveals the degree to which there is a “promise inflation” – the % of promises being inflated by existing representatives or those in charge of executing on approved proposals.
Real-time dashboard for all to see the potential intended and unintended implications and impacts of various implemented solutions.
New Global Institutions Include:
Digital City, Country, and World

For example, dWorld; or, dCanada, dChina, dNorway; or dSao Paolo, dParis, dDubai
A digital environment and testing ground for building solutions to existing local, national and international challenges and policiesInjected with real-time raw data about developments in cities, nations, the world.
Allows for the creation and modeling of creative policy solutions in a safe environment.
Allows users to test potential implications of one policy vs. another using ai, budgeting simulators, algorithms, and computation, faster than traditional approaches and without significant investment.
Will be a fertile laboratory of ideas, to help influence future decision makers.
Suggestions that have large backing and consensus on these platforms will compete against existing solutions crafted by today’s leaders for acceptance Initially a semi-formal institution for creating nuanced proposals from different citizens and constituent groups about how best to deal with existing global challenges.
Gives people a power and constructive means for critiquing existing solutions and lends people a voice in local, national and interactional matters of concern.
In the future, will be the basis by which new public policies are initially conceived and stress tested, before deep development and feasibility at local, national or international stages prior to implementation.
Ministry of Ideas – City, Country, and World

An institution that collects the most popular ideas from digital environments (city, nation, world) or small-scale physical pilots for further deliberation.
Could include popular experimental ideas for potential pilots/consideration.
Ideas proposed can also concern matters of intergovernmental and regional concern (MENA, ASEAN, EU, etc.)
A local, national and transnational institution, providing relevant solutions concerning how best to steward our commons, operating in an open-source protocol, and creative commons legal framework.
All votes, policies created, are registered onto the blockchain and entered into the global library of solutions to catalyze future solutions, and inspire others to build on top of these ideas.
Scores for each policy solution derived through citizens and deliberated in the same manner as Wikipedia.
Will counterbalance existing policy proposals tabled by ‘leaders’ and ‘experts’ for dealing with the challenges we face globally or regionally.
Can help bridge the delta between what people want and what leaders think people want.
Global Library of Societies Solutions – City, Country, World

An unbiased repository of all past policies explored by cities, nations and global coalitions to deal with different systemic challenges.
Shares the success or failure of experiments and policies.
Includes data sets and any impact reports conducted post-hoc on specific policies.
Can become a building block to the creation of new creative solutions to today’s problems and a source of wisdom to help us make better resourcing allocation decisions, avoiding unnecessary duplication.
Parliament for Citizens – City, Country, World

An institution where the most popular proposals from the various ministries of ideas are discussed and deliberated extensively.
Allows for distributed sourcing of expertise and creative ideas concerning different issues we face locally, nationally or internationally to provide feedback and ideas.
Would be open constituents from a mix of territorial and Internet-based jurisdictions
Would help legitimize the internet as a sovereign jurisdiction including the opinions of transnational citizens.
An institution that would allow for the functioning of a direct, deliberative liquid democracy protocol
Provides citizens from around the world direct access to building solutions that are practical and reflect their will (assuming citizens have a hard time competing against their representatives).
Can help influence the trajectory, content, and approach of different local, national and international public policy solutions that are consequential and material to the proper stewardship and management of the global commons.
Helps current leaders see the delta between their interpretation of the public will, and the public’s direct articulation of that will; Helps eliminate reasons for pursuing national interest at all cost, if we can show the public has a different national interest in mind.
Would be the basis for future consensus formation and policy-making in the long-term.
Global Parliament of Mayors

A new institution, with important caveats; the majority of legislation and policies developed and proposed by this institution are solutions co-created by different mayors only with the majority approval of their constituents (evidenced through citizen sentiment capture tool).
Does not recreate the structural limitations of current governance system by relying solely on representation and intermediation.
Allows for the public to play a decisive role in determining disadvantages of old systems (intermediated representation in a time of instant communication and distributed expertise)
Provides institutional authority to mayors to decide over their territory. Gives them the opportunity to compete to build better solutions to global challenges, ones that nation states are unwilling or unable to create.
Crowd-Justice – distributed-expertize dispute resolution Institution

An open-source judicial system and platform reimagined around the internet era.
Allows for dispute resolution at scale, using algorithms to source the right experts for the right problem around the world.
Jurors and researchers from the crowd are rewarded a fee for their services.
Is an opt-in dispute resolution platform, where final decisions are legally binding (unlike current ICJ).
Exponentially more cost-effective and incorruptible/immutable than centralized legal systems.
Integrated into all new institutions of policy creation, deliberation, and accountability mechanisms.

3. Motivation
Core Values
The assumptions this new model rests on believe that constituencies consisting of diverse global citizens

Are less immune to the negative impacts created ineffective solutions to global challenges than existing leaders;
Are more prepared to make concessions that are equitably distributed and proportional in order to realize find solutions to tomorrow’s problems;
Have vested interests in ensuring the future of humanity and generations survive and are better able to express those intensions and cooperate with others who share their values to build humanity preservation solutions than existing leaders, because they can go outside of imposed territorial, political and economic limitations of our current governance and global organizational structures.
The model allows for these assumptions to be validated by creating a competitive governance layer between existing structures and potential future structures, moving us away from only participating by voting on binary decisions made by intermediaries that prioritize narrow sets of interests. This allows citizens to build coalitions with those that have interests and value sets that are similar to theirs, transcending territorial and national economic and political interests.

Decision-Making Capacity
The future organizational governance model proposed incorporates the core and essential decision-making steps necessary for a well functioning governance system. These include:

Immutable sentiment capture
Bottom-up ideation and deliberation
Consensus capture and formation
Institutionalization
Accountability and Impact measurement
Dispute resolution
The new governance system creates the conditions for efficient, transparent and effective decentralization to flourish across boundaries alongside protocols for rational consensus formation, at 1000x a faster pace and 1000x less costs than our current centralized decision-making models. The new system allows for a far greater number of participants and inputs, deeper and more consequential engagement, the creation of more creative solutions, and more compelling and effective options to select from than our linear and centralized governance models produce today.

The new system does not have the same degree of latency designed into it as the current system.

In the short term the institutions proposed will act as a normative counter balance to our current institutions and leaders postures towards international cooperation. As participation increases and new use cases are discovered, in the long-term, these institutions will gain a greater degree of popularity and will compete to become the basis for multi-stakeholder complex problem solving and policy formation for society.

This new system is much more efficient, and cultural appropriate to our future digital world.

Effectiveness
The ultimate goal of this system is to prove decentralization, distributed authority and wisdom of the crowds can be methodologically designed to create more coherent, better quality, creative and more suitable solutions to our current and future problems. High levels of participation in policy design, consensus formation, and later high success rates for policy adoption, and limited instances of policy failure will be the proxies for measuring how much more capable this system is to create lasting complex, multi-stakeholder solutions than the existing governance system.

A key assumption the new governance model rests comes from results captured from successful citizen assembly experiments that aimed to make consequential electoral reform decisions in Canada and the Netherlands. To date, these have been the most intensive participatory and deliberative process yet implemented and included diverse members with opposing viewpoints. In them, examiners found that even when constituents from ideologically opposed camps strongly disagreed on the content or ideological foundations of a particular reform proposal, and even when their side lost the reform vote, they fully respected the other sides right to seek the changes they expressed and committed to adopting those policies – which they fundamentally disagreed with – almost entirely because they believed in the immutability and integrity of the process for arriving at the solution it ultimately did. In other words, a fully transparent and participatory process that to them appeared to be impartial, incorruptible, and immutable, allowing all sides’ views to be considered equally, was the necessary condition for accepting to adopt any solution that the process created, even when the solution did not conform to one side’s ideological viewpoints. The examiners also conducted tests on participants of this group and tested a control group that did not undergo the same experience and same degree of participation in expressing their preferences for electoral reform. They found that participants in the citizen assembly expressed the sentiment that their trust of all other participants, irrespective of political orientation, grew significantly more than the views expressed by non-participants of others in their closed experiment.

Finally, examiners used political engagement proxies to measure the degree of engagement expressed amongst participants and non-participants of citizen assemblies, to highlight any significant differences. Examiners predetermined four political engagement proxies: 1) attitudes, 2) interest, 3) attention, and 4) information, and found that on all of these proxies, there was a significant increase among citizen assembly participants whereas these changes in these proxies with the control group were absent. Examiners also noticed a significant delta and differences between the two groups.

These results help inform the design of the new governance system, lead us to believe that the solutions created will enjoy greater adoption and less policy failure because the process and institutions we are proposing to create help constituents to arrive at solutions in a much more participatory, fair, transparent, agile, collaborative, and equitable manner than today’s current model.

In the future, the new forms of ideation, deliberation, consensus formation, and voting will have more integrity, trust, and stickiness making them more appealing than current models, helping increase their likelihood of adoption as a possible means for decision-making in the future.

Resources and Financing
Financing options can include one or a combination of the following options:

Proof of concept – Donations and grants from key foundations, institutions, and HNWI can act as seed and pilot funding until important proof points can be verified
Self-financing – citizen who value and use the system, voluntarily pay into its maintenance fees. In some progressive countries, citizens receive a tax rebate for their contributions
ICO – the institutions that are exchanging value can create a token pegged to a popular cryptocurrency in order to create the necessary liquidity to fund the system and fund the implementation of various solutions developed by it.
Eventually, taxes diverted to funding this system as people recognize using this system over other systems is a fundamental requirement for the creation of policies or the management of local, national policy in a decentralized manner.
In the short-term, these new institutions will provide a platform for bottom-up, citizen-led input into the creation of solutions to city-specific, national and international challenges. They will effectively debate and counterbalance what these institutions should be doing, helping bring to the forefront the will of the people. They can be financed through grants and other contributions and their solutions piloted in special economic and political zones set up specifically for experimentation purposes.

In the long term, as participation increases in these institutions, they will organically build popularity and authority, competing against other realms of institutional sovereignty. Future financing options can include tax contributions from cities and nations, tax rebates for solutions developed through these platforms, the creation of a unique cryptocurrency and liquidity created through and Initial Coin Offering (ICO). In the future, through creative financing mechanisms, these institutions will build the legitimacy to compete against existing institutions for the creation of solutions to local, national and international challenges requiring multi-stakeholder concessions, agreement, and sacrifice.

Trust and Insight
The design of this governance system taps into emerging trends from the rise of the cryptocurrency and decentralization movements.

All opinions expressed, decisions, votes, ratifications, identities, financial flows, impact measurement data, examples of success or failure in this new system will all be documented on a decentralized blockchain and accessible to anyone using the blockchain.

This degree of transparency designed into this new governance system goes over and above anything we have experienced at an organizational level before, helping create strong appeal and adoption for the new protocol.

Flexibility
The system will be developed in phases, across different physical and online environments and jurisdictions and with different volumes of scale to see if necessary assumptions and proof points can be achieved.

Only after a period of considerable testing and technological and methodological iterations, will there be plans to build a social and cultural movement to spread these tools and institutions to complement or replace existing governance institutions and decision-making protocols and processes.

There will be ample opportunities to change aspects of these institutions if real-world results demonstrate a misalignment between what they are producing versus what we had intended them to produce.

Protection against the Abuse of Power
The assumptions used to design this system are grounded in concepts of dynamic liquid democracy and as well as the wisdom of the crowds, and crowd intelligence, emphasizing the more diversity of participation and viewpoints expressed, the better the quality of end solutions created.

A liquid democracy design will allow for the rapid and dynamic distribution of power from one issue to another, helping create tighter feedback loops between empowering an intermediary and keeping them accountable to the decisions they claim to make on others’ behalf. A liquid democracy inspired design also prevents concentration of power for a prolonged period of time. It is a system that is designed to reward merit and knowledge, not postures and positions, which is a fundamental break from our current representative democracy based governance institutions (which conversely work well at concentrating power, delaying feedback loops and creating opportunities for abuse of power).

We see collective intelligence as an antidote to concentrated power in the hands of like-minded people; an antidote to current existing systemic inconsistencies that create numerous abuse of power opportunities.

However, we recognize crowds can be irrational and target minorities on grounds of race, ethnicity, ideology and other diverse factors. Participation in these new institutions will be governed by a rights-based philosophy. Any proposals aimed at marginalizing or negatively impacting certain groups, races, ethnicities on grounds of bias, will not be allowed to be expressed on the website, and we’ll use AI to select keywords and derogatory content to help us intelligently and efficient moderate the platforms. Uncomfortable issues can be discussed respectfully but no proposals marginalizing groups will be entertained; proposals must conform to rights-based doctrines respecting every individual’s inalienable human rights.

Furthermore, to protect against potential hacking, the foundations of this new governance system are built off of decentralized blockchain technology based ID, which will exponentially limit the likelihood of hacking opportunities by those that hope to replace real individuals with fake bots to create the impression of mass participation in order to illegitimately increase the popularity of certain proposals and sway the crowd in one direction or another.

Finally, the piloting phase will be instrumental in understanding where there are inconsistencies in design – where the tools and fundamental values were not fully well designed.

Accountability
The combination of Smart contracts for approved solutions, the real-time implementation tracker, impact tracker, and post-implementation library of failures provide ample checks and balances for fidelity, integrity, and accountability of this new governance system.

Since most inputs into these institutions will be crowd-based and crowd-verified, it radically improves the prospects of upholding accountability than the existing system.

References
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Tags
self-management
decentralisation
decentralized governance
citizen-led-governance
direct democracy
deliberative liquid democracy
ai governance
crowd intelligence
collective intelligence

Swae, A New Model for Global Governance & The New Shape Prize

Swae, A New Model for Global Governance & The New Shape Prize

This coming Saturday and Sunday (May 26th and 27th), Federico Ast, Martin Monin and I will be in Stockholm, Sweden, pitching to a jury of experts about our model for 21st century (and beyond) global governance.

We were selected as 1 of 14 finalists for the New Shape Prize, a $5M USD award looking to support new models of global governance (read more about the foundation, the founder’s story and logic behind the prize, and global risks).

Given what I’ve been working on for the past year or so, I’d heard about this prize, but didn’t imagine we’d get very far. I hesitated to apply, thinking “Governance is so broken and topical today (think Brexit and Trump’s election). I’m sure some Ph.Ds from Stanford or PPE students from Oxford have a brilliant and technologically elegant model to fix it all.” Instead of giving into defeat, however, I decided to apply and treated the application process — a 30+page detailed technical proposal — as an opportunity to elaborate deeply on our ideas, assumptions, implementation plan, and vision. Here we are…

Our Model — High Level

We’re proposing a new model for global governance using a combination of new tools, new actors, and new institutions that helps us circumvent the limitations of our current system and instead facilitates bottom-up AI-supported deliberation and policy creation (read the abstract here).

To help us move past existing solutions created primarily through narrowly defined national interests, the model does three things:

1) Allow much more broad participation and competition in the design of solutions. Better ideas = a normative challenge against the current limited ideas we select from.

2) Provide access to powerful tools that are currently not democratized, so solutions can be properly deliberated, diligenced, simulated in digital environments, and de-risked before the thought of implementation. Well vetted, technically sound ideas with political backing = more tolerance for trying them out.

3) Provide real jurisdictions where ideas can be implemented to see their impacts (e.g. smart cities, communities, special economic zones, micro-nations). Real jurisdictions that would implement good solutions = a testing ground for intended and unintended impacts and a real incentive to participate to propose solutions, instead of simply moaning about the status quo.

In the short term, the model would sit alongside our existing governance system, challenging the solutions it creates, while testing itself out in different environments.

In the long term, this model will replace how we do governance at the local, national and international levels. As the model gains integrity and adoption, is used in different governance settings, more people will demand it be used where it matters most.

Criticism — How Might We Be Wrong?

Of course we could be wrong. We probably are on a number of fronts. Our model has certain assumptions and depends on some trends coming to fruition — about evolving human behaviour and cultural expectations, future of work, technology availability, adoption and trust. Before trying to defend ourselves, let me share some key criticisms we’ve heard and can anticipate:

  • “Democracy apps and civic technology platforms have tried to democratize democracy for the past 5–10 years and largely failed. Why will this be any different?”
  • “This is essentially crowdsourcing. Beyond Wikipedia, crowdsourcing hasn’t produced major breakthroughs. How will this be different?”
  • Even if this could work at the local, city or national level, how does it scale globally? How do it ensure there is impact at the global level where problems are most acute? Can’t leaders just ignore it?
  • “What happens if the policies the system produces don’t work as planned? How do we ensure things don’t get worse?”

We have answers to these criticisms and soon after the competition ends, we’ll open source our entire application (or share as much of it as we feel comfortable sharing) in order to invite as much constructive criticism and thoughtful debate about the model as possible. If there are some major holes or potential unintended consequences our model may create, we want to be aware of them and design solutions to mitigate them. If there are any burning criticisms I missed, feel free to share them below or DM me.

Our Next Steps (Win or Lose)

Win or lose, this opportunity allows us to work closely with some really excellent potential partners and collaborators (see other finalists) who each have a powerful tool or model to contribute to the problem. Of course, the process and recognition is a great source of validation — that we’re working on something that matters and could have global consequences — and the funding would be an enormous boost, helping us move beyond the bootstrapping stage we’re in. But the biggest benefit could be the relationships we build, the assumptions we adjust, new models we create out of these initial frameworks to create be even better, more fit-for-purpose system, that more practically addresses our governance shortcomings.

Whatever the outcome, we’re super excited and honoured to participate in the forum. We’ll be tweeting from Saturday onwards, from our Swae twitter account and from my own account.

Wish us luck (and best of luck to the other finalists)!

 

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