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Ladies and Gentlemen
Some time ago I promised Kalle and others that I would stick in my 2 cents, so this is long overdue.
I cannot contribute much at the deep technical level of the database design and the embedded analytical processes, but I have very strong feelings about how Big Data needs to be organized in order to be a lot more effective for people, profit and planet ... the Triple Bottom Line. What we have at the moment is dominated by processes and reporting for optimization of profit for business organizations, stock prices for investors and GDP growth for policy makers.
I argue that we need a data framework that has a discreet economic activity at its center. An economic activity is implemented by an organization, it is financed by an organization, it is located in a place, and it is associated with product/products. It may be small or large, but it is understandable.
The economic activity has money accounting data around revenues, costs and profits. It also has impacts: it consumes resources (valuedestruction), creates product (value / valuadd), employs people, satisfies needs, creates waste (land pollution), uses/pollutes water, generates carbon, etc.
An economic activity in a place can be held accountable because it is discreet and the issues can be understood and the responsible parties identified.
The data ... profit performance, impact on people, impact on planet ... related to an economic activity can be aggregated (consolidated) by the implementing organization, by the financing organization, by the place, and by the product / products.
Organizations already aggregate their profit performance as part of their regular accounting and profit optimizing activities, but this detail is closely guarded inside the organization. An organization's impact on people and planet may be observed from the outside at the level of the economic activity in a place. This may or may not be done with the cooperation of the organization.
People and planet come together in an economic activity in a place. People get wages, have workplace issues, have a quality of life that can be improved or degraded depending on the economic activities in the place. For planet, resources get depleted by economic activity in the place, and there are impacts on the carrying capacity of the environment as a result of economic activity ... land pollution, water pollution, air pollution (CO2, SO2, NO2, particulates, etc).
Value and valueadd needs to be quantified in a simple but meaningful way. There are ways of doing this along the lines of a 'standard value' more or less along the lines of a 'standard cost' in cost accounting. This will start out not very good, but over time it can become quite functional. What is clear that treating important things as not-quantifiable is the same as saying they are valued at zero, which is clearly in most cases wrong.
Another concept in this framework is borrowed from double entry accounting and the idea of balance sheet and the profit and loss account. In the double entry accounting method a profit can be computed in two ways: (1) it is the result of adding up all the revenue transactions and deducting all the cost transactions during a period; or, (2) it is the difference between the balance sheet at the beginning of the period and the balance sheet at the end of the period.
This has important implications in the context of this initiative. It is far easier to get some meaningful data about the state of something by looking at the balance sheet, than it is by the analysis of transactions. Furthermore, a balance sheet changes rather slowly over time while transactions are fleeting ... here now and soon gone.
Progress is the change in the value based balance sheet of society ... of the place where economic activity (with all its transactions) is going on. This is a powerful concept important in accountancy and almost totally ignored in economics and most policy analysis at high levels.
Another idea in this mix is that change is a result of decisions. The big change in the modern world that is needed relates to people's choices and mainly in what people buy and consume ... and then put into the post use waste value chain. Product is the point of decision making that needs to be informed not only by advertising and PR encouraging purchasing, but also by objective data about the impact of this product on people and planet all the way through its life cycle value chain, through the supply chain, the use period and the post use waste chain.
Many parts of this framework are already emerging. Something like Google maps is a snapshot of the state of the place ... adding relevant state, progress and performance data on top of all these places may be one of the ways forward. Organizations like BazaarVoice have all sorts of review data about products and TruCost and others have looked into the impact of a range of products through supply chains. CSRhub is developing an interesting database about the impact performance of organizations. There are hundreds of initiatives arising.
I believe the framework I have described hangs together in a coherent way and has an architecture that will encourage beneficial change. I will not bore you with how my thinking on this has emerged over a period of many years, but will happily justify its elements at a suitable time for anyone particularly interested.
Peter Burgess TrueValueMetrics
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