Andrey V.

Semenov

Innovation by default

LUBIN 2010

PACE
 1. Should treat others
according to how one would
like others to treat one's
self (positive, passive
form)
2. Treat others as you would
like to be treated
(positive, active form)
3. One should not treat
others in ways one would
not like to be treated
(prohibitive, passive
form)
4. Do not treat others in
ways you would not like to
be treated (prohibitive,
active form. Also called
the Silver Rule)

……………
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In my paper I would like to give broad view on technological innovation and its role in financial
architecture for XXI century. But first thing first: Let’s start from the simple question:” How
technological innovation has influenced finance in recent years? “In my mind answer to that
question is simple and complex at the same time.

Simple, because, as I believe, technological innovation cannot change the human nature , No
matter how far humanity develops its technology on the end of the day it still be humanity with
its distinct patterns of behavior .

Roots for understanding human nature and it`s behavioral patterns was, as I think, excellent
presented in famous work of Edward Osborne Wilson: Sociobiology: The New Synthesis 1975.

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

Sociobiology is defined as the scientific or systematic study of the biological basis of all forms of
social behavior, in all kinds or organisms including man, and incorporating knowledge from
ethnology, ecology, and genetics, in order to derive general principles concerning the biological
properties of entire societies. "If humankind evolved by Darwinian natural selection, genetic
chance and environmental necessity, not God, made the species." "The brain [and the mind] exists
because it promotes the survival and multiplication of the genes that direct its assembly."
The two apparent dilemmas we face therefore are:

(1) We lack any goal external to our biological nature (for even religions evolve to enhance the
persistence and influence of their practitioners). Will the transcendental goals of societies dissolve,
and will our post-ideological societies regress steadily toward self-indulgence?

(2) Morality evolved as instinct. "Which of the censors and motivators should be obeyed and which
ones might better be curtailed or sublimated?"

Although much human diversity in behavior is culturally influenced, some has been shown to be
genetic - rapid acquisition of language, human unpredictability, hypertrophy (extreme growth of
pre-existing social structures), altruism and religions. "Religious practices that consistently enhance
survival and procreation of the practitioners will propagate the physiological controls that favor the
acquisition of the practices during single lifetimes." Unthinking submission to the communal will
promotes the fitness of the members of the tribe. Even submission to secular religions and cults
involve willing subordination of the individual to the group. Religious practices confer biological
advantages.[1]

Wilson used sociobiology and evolutionary principles to explain the behavior of the social insects
and then to understand the social behavior of other animals, including humans, thus established
sociobiology as a new scientific field. He argued that all animal behavior, including that of humans,
is the product of heredity, environmental stimuli, and past experiences, and that free will is an
illusion. He has referred to the biological basis of behavior as the "genetic leash."[2] The
sociobiological view.[3]

The controversy of sociobiological research is in how it applies to humans. The theory established
a scientific argument for rejecting the common doctrine of tabula rasa, which holds that human
beings are born without any innate mental content and that culture functions to increase human
knowledge and aid in survival and success. In the final chapter of the book Sociobiology and in the
full text of his Pulitzer Prize-winning On Human Nature, Wilson argues that the human mind is
shaped as much by genetic inheritance as it is by culture (if not more). There are limits on just how
much influence social and environmental factors can have in altering human behavior. [4]

Complex , because , never before something that start so simple in the beginning – idea that
people can communicate openly without any borders – became “impossible to control “ and
involve in products so complex with the chains from borrower to end-investor so long , that
thorough due diligence was impossible .” A proper understanding of typical collateralized debt
obligation (CDO) would have required reading 30,000 pages of documentation.” [5]
Fundamentally it became so complex that it almost destroyed world economy as we know it in
2007-2008 , and as I believe radical changes should be made or … well I hop`s I’m wrong .
let`s start from beginning:

The financial services sector in the United States is experiencing an era of rapid innovation. These
changes are fueled by the rapid improvements in the two technologies -- data processing and
telecommunications -- that are at the heart of financial services. The financial services sector is also
one of the most heavily regulated sectors in the U.S. economy -- despite two decades of
widespread deregulation.

Technological improvements and innovations are almost always healthy and beneficial for an
economy, they can place serious strains on the incumbents in a particular industry or sector on
which they are focused, and they may create challenges for public policy, especially in a heavily
regulated industry. This has certainly been true for financial services. Further, the heavy overlay of
government regulation on the financial services sector has certainly influenced the course of
financial innovation and, in turn, been influenced by it.[6]

First, the underlying technologies of finance -- data processing and telecommunications -- have
themselves undergone near-revolution, becoming dramatically more powerful and less costly on
almost a daily basis. These improved technologies have allowed "financial engineers" better to
Accumulate data, assess risks, and thereby design new products and services that can better meet
the financial demand for individuals and enterprises. These products and services can be offered
across wide geographic areas. The securitization of many categories of previously illiquid loans --
most notably, residential real estate mortgages and credit card receivables -- and the offering of
credit card services nationally from remote locations (e.g., South Dakota) are good illustrations of
these developments.

Second, legal and regulatory changes -- generally in the direction of less restrictiveness and
Less protectionism (i.e., deregulation) -- have reinforced these technological improvements by
yielding heightened levels of competition throughout the financial services sector. In turn, these
greater competitive pressures have forced incumbents to find improved and less costly ways of
providing financial services; Deregulation has made it easier for innovators to enter these markets.

Third, the U.S. economic environment changed sharply. After two postwar decades of relatively
steady economic growth, low inflation rates, low interest rates, and fixed foreign exchange rates --
an economic world of modest fluctuations and apparently low risks -- the U.S. economy began
experienced period of more volatile stagnations. Inflation rates became higher and more variable
in the late 1960s and the following decade and a half, as did interest rates. Foreign exchange rates
were unfixed in 1971 fluctuated since then. In sum, the world had become a much riskier place by
the early 1970s, and the demand for financial instruments to buffer and hedge some of these
heightened risks grew commensurately. The development of financial futures and options, most
notably by the exchanges located in Chicago, was a direct response to this demand.[6]

Fourth, the dense regulatory structure that envelopes much of the financial sector has also been
influential in inducing innovation.[7] In the 1970s, especially, some important innovations were
inspired by efforts to avoid or circumvent regulatory restrictions. For example, the Banking Act of
1933 required that the Federal Reserve (through its "Regulation Q") restrict the interest that banks
could pay on deposits.[8] In the inflationary and higher-interest rate environment of the 1970s,
these constraints became tightly binding, which motivated a number of radical innovations. Three
notable innovations were the development of the money market mutual fund, the offering of
interest-paying checking accounts by credit unions and by savings banks in the Northeast, and the
development of the "sweep account" by commercial banks (whereby banks would "sweep", on an
overnight basis, idle checking account funds of their customers into interest-bearing securities).[9]
Similarly, the Glass-Steagall Act of 1933 has prevented securities firms from owning and operating
a commercial bank (and vice versa).[10] This constraint was part of the motivation for Merrill Lynch
to develop (and to patent) its "Cash Management Account" (CMA), which allowed customers to
buy and sell securities, earn interest on idle funds, write checks, and have a credit card -- all linked
to a common account. Since the late 1980s the progressive easing of many regulatory restrictions
has in turn encouraged financial innovation; the development of customized swaps, hedges, and
other derivative instruments in the late 1980s and early 1990s -- by commercial banks as well as by
securities firms -- is a good illustration of the results of this regulatory loosening. [6] Financial
innovation has been influenced by a number of important changes however as I believe, human
sociopatterns remains the same independently form economic and IT technological innovation and
without proper understanding of them we risk to miss another elephant in a glass store.

We can ask ourselves: “How important innovations are? “ Well I think the best answer was given
by The Commission of the European Communities in September 2006: “Our future depends on
innovation” [10]I think it`s fair to say - our survival depends on innovation .

William Baumol has provided striking evidence indicating that private innovative activity has
been divided by market forces between small firms and large,. Even though the preponderance of
private expenditure on research and development (R&D) is provided by the giant business
enterprises, a critical share of the innovative breakthroughs of recent centuries has been
contributed by firms of very modest size. These radical inventions then have been sold, leased or
otherwise put into the hands of the giant companies, which have then proceeded to develop
them—adding capacity, reliability, user friendliness and marketability more generally—to turn
them into the novel consumer products that have transformed the way Americans live. [11] A
comprehensive description of the term “innovation” was given by Myers and Marquis in 1969:
Innovation is not a single action but a total process of interrelated sub processes. It is not just the
conception of a new idea, nor the invention of a new device, nor the development of a new
market. The process is all these things acting in an integrated fashion. [12]

The Commission of the European Union summarizes the present economic situation as follows:
“In a remarkably short period of time, economic globalization has changed the world economic
order, bringing new opportunities and new challenges. In this new economic order, Europe cannot
compete unless it becomes more inventive, reacts better to consumer needs and preferences and
innovates more. [13] Research shows that small firms make significant contributions to economic
environment and Innovations. With the significant advances being made in Information and
Communication Technologies (ICTs), the Internet has become very important to many small firms,
enabling them to overcome various inadequacies attributed to factors such as firm size, availability
of resources and other technological, operational and managerial shortfalls. Despite the
contributions that the adoption of Internet technology can make, research shows that many small
firms have not yet embraced the technology in ways that will allow them to capitalize on potential
benefits. It is therefore important for firms and researchers to understand the factors that enable
(or hinder) the adoption of various technologies. [14]

Innovation activity leads to technological progress in two distinct ways. Purposeful research and
development can result in the invention of completely new products and processes. This kind of
innovative activity moves the global technological frontier and still mainly occurs in developed
countries. But innovation also consists of the adoption and adaptation of existing technology,
which closes the gap between countries converging towards the global technological frontier and
those on the leading edge, pushing the world frontier. Innovation shares a strong connection with
the provision of financial services. Invention and adoption of technology are costly and risky
activities, which require financing. It is therefore natural to study the impact of a country’s financial
development on TFP via the innovation channel.

The adoption of a technology (in this case, the Internet) can be viewed as an innovation for a firm,
where that technology represents something that is new to the adopting organization
(Damanpour, 1991). Thus, adopting the Internet for e-mail could be seen as an innovation, so too
Web browsing and engaging in electronic commerce (e-commerce) to sell or purchase goods.
Innovation theory suggests that the adoption of an innovation may have a number of stages. For
example, Zaltman, Duncan and Holbek (1973) suggested the adoption of an innovation may take
place in two stages: the initiation stage, involving knowledge and awareness of the innovation, the
formation of attitudes toward the innovation and decision making (i.e., whether to adopt the
innovation); this is followed by the implementation stage, when the actual implementation of the
technology takes place. Rogers (2003) proposed a similar view of adoption; namely, the
innovation-decision process, which comprises the stages of knowledge, persuasion, decision,
implementation and confirmation. It is at the decision stage that the organization determines
whether to accept or reject the innovation.

But let`s forget about theory and look at several examples of how innovation technology is an
enabler of entrepreneurial activity as it applies to the world of finance.

Paypal Inc. - Peter Thiel and Max Levchin founded PayPal in 1999 under the name Confinity. The
idealistic vision of the company was one of a borderless currency free from governmental controls.
PayPal enables any business or consumer with an email address to securely, conveniently, and
cost-effectively send and receive payments online. They network builds on the existing financial
infrastructure of bank accounts and credit cards to create a global, real-time payment solution.
PayPal deliver a product ideally suited for small businesses, online merchants, individuals and
others currently underserved by traditional payment mechanisms. PayPal Inc., a subsidiary of
online auctioneer eBay, Inc., provides users with a means of exchanging funds via the Internet, a
revolutionary step in the development of electronic commerce. By obtaining a PayPal account,
consumers and businesses may send and receive payments via e-mail. PayPal users make
payments securely online using credit cards or bank transfers, as well as by maintaining funds in
personal interest-bearing PayPal accounts. [16] PayPal handled approximately $71 billion in
payments in 2009. Let’s look at the pattern of innovation: innovation {started by simple idea}-can
be grown in multimillion dollar Enterprise - in just a few years.
 We will see that pattern over and over again in different business , different fields , different
continent and time zones .As I think it`s safe to say innovation usually starts form small , simple
idea , and all it takes to grow it in successful business is simple group of dedicated , enthusiastic
people not afraid of difficulties , people who try to REALLY DO something in the lives .

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

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

Financial Architecture Int. - It became evident that without proper scale for human behavioral
patterns financial architecture cannot be sustainable build. I started the company Financial
Architecture Int. 6 years ago with simple and at the same time difficult task - analyze stock
market as a fractal entity and find estimate for human behavioral patterns and We find it. We
found set of rules , and combined it to self learning mathematical algorithm, which give us
estimate for Human Fear and Greed behavioral patterns and most beautiful thing is that our
algorithm will work for any financial instrument , stock’s , bond’s , Interest Rate Swaps , futures ,
currencies , options, basically any financial instruments traded publicly, existed now or created in
the future . Our algorithm also can be used as a tool for understanding phenomenon known as S-
curves or other data , basic principles will be the same change is only in the nature of data . We
find the way which gives us most vulnerable points in time and prices where essential Fear and
Greed or Bulls and Bears have equal strength. We create “Intelligent software” on basis of leading
since projects in Mathematics, Computer Science and Financial management. We believe we can
not only revolutionize investment and trading activities, but also give new essential instrument for
financial architecture of XXI century. Our innovation path therefore will be the same - innovation
{started by simple idea}-will be grown in multimillion dollar Enterprise - in just a few years.

It always arguable that if we thinking about entrepreneurship and innovation, does size matter?

Traditionally, the thinking goes, small, nimble firms have an advantage over large, established
organizations because they can get things done faster, with less red tape. Especially in industries
where time-to-market is critical, size can be the difference between cutting-edge and also-ran.
Some companies, however, are bucking the trend. They’re especially adept at what’s known as
“entrepreneurship” – encouraging divisions and individuals within the organization to think like
entrepreneurs and implement breakthrough innovations. [18] I believe that technological
innovations for large firms easier and more difficult at the same time compare to small firms. More
easy simply because that big firms have good reputation , or at least they trying to have it, which
is path to mass recondition and human confidence in a product,. Most of new projects usually
became more easily acceptable by mass and that’s lead `s to chance of commercial successes . On
the other hand that technological innovation for financial firm can became isolate simply by size of
the company. Large companies have to sustain growth at all cost, so sometimes they sacrifice
innovation to growth. By doing that companies became redundant really soon, as I think it can be
easily seen in graphic interpretation of that human sociophenomenon known as S-curve.

Most large companies start as small companies by creating something new, something needed
for the market. It is like a guy who first created a sword; we can call it – radical innovation .Well, it
good to have a sword then you opponent have a stick and bone. Swords become accepted by
market really fast. The guy who invented sword - create something new simple and desirable. We
are on a starting point of your curve. After invention of the sword coming faze of replication and
improvements- where can be added new fetchers to the sword or make a swords more sharp – this
phase is faze of incremental innovations .Eventually everyone who want, need or desire a sword
got it - this is a point of stabilization on our curve. Swordsman firm became big and well known,
but now someone new come up with a gun. Our swordsman now old , rich and probably not even
noticed invention of the gun until demand for the swords did not reduces rapidly .Now our
swordsman have two options : radically innovating again or slowly bleed as a business entity . But
now sward industry is huge with slow responsiveness to change in customers’ needs. Will our
swordsman survive or not depends form the speed and wiliness our swordsman to innovate.

Until 2001, and particularly during the mid- and late-90s, investments in IT were relatively high
and the industry boasted fantastic growth rates .However recently instead of considering IT as a
powerful tool of innovation, many companies became wary because of its related expenses and
low ROI. In some cases innovation has been perceived as a high –risk investment due to the well-
known incapacity of implementation in the IT industry as well as the gap between what the
customers expect and what IT can truly deliver. IT technological innovations for a large financial or
any other type of firm is like innovations for old swordsman , most large firms start as a relatively
small firm by introducing something new , something needed by the market , eventually most of
them grew in to a huge organizations with its own culture , traditions and customs – they create
really good “swords “( aka CDO , Swaps , Credit derivatives), Financial Architecture Int , just
invented a gun ,will you still use a sword ? And will ours “swordsmen’s” survive or not depends
form the speed and wiliness our “swordsman” to innovate. Recent examples of AIG and Bern
Sterns give us, as I think, good examples of how difficult it can be.

The Bear Stearns Companies, Inc - based in New York City, was a global investment bank and
securities trading and brokerage, until its collapse and fire sale fire to JPMorgan in 2008. Bear
Stearns was involved in Securization and issued huge amounts of asset-backed securities, which in
the case of mortgages were pioneered by Lewis S. Ranieri, "the father of mortgage securities". [19]
As investor losses mounted in those markets in 2006 and 2007, the company actually increased its
exposure, especially the mortgage-backed assets that were central to the subprime mortgage
crisis. In March 2008, the Federal Reserve Bank of New York provided an emergency loan to try to
avert a sudden collapse of the company. The company could not be saved, however, and was sold
to JPMorgan Chase for as low as ten dollars per share, a price far below the 52-week high of
$133.20 per share, traded before the crisis, although not as low as the two dollars per share
originally agreed upon by Bear Stearns and JP Morgan Chase.[20]

American International Group, Inc.- AIG suffered from a liquidity crisis when its credit ratings
were downgraded below "AA" levels in September 2008. The United States Federal Reserve Bank
on September 16, 2008 created an $85 billion credit facility to enable the company to meet
increased collateral obligations consequent to the credit rating downgrade, in exchange for the
issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. The Federal
Reserve Bank and the United States Treasury by May 2009 had increased the potential financial
support to AIG, with the support of an investment of as much as $70 billion, a $60 billion credit line
and $52.5 billion to buy mortgage-based assets owned or guaranteed by AIG, increasing the total
amount available to as much as $182.5 billion.[21] AIG subsequently sold a number of its
subsidiaries and other assets to pay down loans received, and continues to seek buyers of its
assets. NY Attorney General Andrew Cuomo has stated he wants to disclose names of those
receiving bonuses. [22]

It is clear that the financial services industry has some particular characteristics that make is more
difficult to innovate radically in comparison to other industry .One important characteristic that
inhibits disruptive technologies is the barriers to new entrants . It means that even when a
particular company has a very innovative business model based on new technologies , the hurdles
to overcome are so difficult that they prefer to either focus on niche markets or sell the idea to the
whole industry and work as a technical partner offering the innovation to the whole industry.

Wachovia - Starting in 2009, the Wachovia brand is being absorbed into the Wells Fargo Wells
brand, in a process that was initially estimated to last three years. In July 2009, Wachovia Securities
became Wells Fargo Advisors. The merger of Wells Fargo and Wachovia [23] bank charters was
completed on March 20, 2010 and this formally dissolved Wachovia as a separate entity.[24] States
containing both brands (not converted already) will convert in 2010 and all remaining branches will
re-brand by 2011 to the Wells Fargo brand. All Texas branches became Wells Fargo on August 1,
2010. Wachovia dealer services became Wells Fargo dealer services as of April, 2010.

Bloomberg LP- The Bloomberg Terminal is a computer system provided by Bloomberg LP . that
enables financial professionals to access the Bloomberg Professional service through which users
can monitor and analyze real-time financial market data movements and place trades.[25] The
system also provides news, price quotes, and messaging across its proprietary secure network.
Most large financial firms have subscriptions to the Bloomberg Professional service. Many
exchanges charge their own additional fees for access to real time price feeds across the terminal.
The same applies to various news organizations. All Bloomberg Terminals are leased in 2 year cycle,
with leases based on how many displays are connected to each terminal. A subscription is around
US$1500 per month.[26] Most Bloomberg setups are either 2 or up to 4 displays. There are
currently 287,500 Bloomberg Terminal subscribers worldwide. [27]

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

the classical sense of the term?

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

to development growth and wealth creation. Moreover, we know the enormous impact of
innovation on society and its power to work social change (Kuhn, Schumpeter) However, from the
enterprise perspective, the common good brought by innovation is not an effective incentive to
invest in it. No matter the particular characteristics of a certain industry, innovation sooner or later
arrives and changes the entire business. Industrial sectors can be conservative or technologically
saturated but almost always we can find disruptive changes through innovations. (Christensen)
 Firms can act differently when dealing with IT innovation compare to strategic management in
the classical sense of the term. Firms can chose any role for them - pioneers, followers, or even
laggards, but they cannot ignore the impact of their technology strategies on their future successes
or failures.

Particularly large IT organizations might have a well distinct strategy for technology innovation
compare to the classical rivals. Utterback emphasizes “the dangers inherent in large scale , which
often leads to overemphasis on tending to current well-established business , a lack of
entrepreneurial dynamism , and vulnerability to innovative competitors”.

Many authors also studied the fate of failure for well-established competitors when new
competitors with disruptive technologies came into the market (Foster, Christensen). In fact, the
traditional competitors directly face increasing constraints from the growing web of relationships,
binding product, and process change together. In other words, they suffer the burden of the legacy
value. But I think it is common for both strategic management of IT technological innovation as
much as for strategic management in the classical sense of the term, well at least it`s arguable as I
think. Saying exist that God created the world in just seven days because He had no legacy system
to adapt. From the innovation perspective, we should probably add to saying legacy customers,
suppliers, internal culture, common corporate norms, etc.

Porter points out “…newcomers are outside the system of social constraints and may be less
aware or less concerned about the disruptive nature of the changes that they promote to the
existing web of mutual obligations and understood limits”

When we apply the innovation dynamics discusses above to financial services, the key question is
whether or not it is possible to create a disruptive (radical) innovation that could change
dramatically the industry. From history examples we can see sometimes it can be almost
impossible ( AIG , Bern Stern ) Although the cases where it happened in financial services were not
as clear or as revolutionary as some examples in the IT or biotech industries we could find , some
cases within past decades .[28] One example is CIO in Brazil – in the 70s, a large retail bank in
Brazil decided to open new braches offering the convenience of parking lots to their customers,
which was not common practice for Brazil in 70s. As the economy in Brazil was growing very fast at
that period, parking lots became a real issue to most people, and the service offered by that bank
turned to be as important as financial services fees and interest rates .There was most likely other
reasons for their success but the fact is that they increased they customer base enormously and by
the beginning of the 1980s they were the largest retail bank in Brazil.[29]

Strategic management of IT innovation sometimes easily can be slowed by corporate culture and
by unwillingness people to change and learn new things. Sometimes it becoming almost impossible
to fight arrogance of people who simply don`t want to change or not ready to change as fast as the
world around them evolved. Way of solving that problem in my mind is the biggest task not only
for strategic managers for creating IT technological innovation but also for strategic managers in
the classical sense of the term. This is simply the biggest problem that business society faces now
and most likely will faces in the near future, or at least I believe it will be so.

Form my own example I know how it difficult to manage IT innovation but also I know how it is
sometimes almost impossible to implement it. People, in the mass, don`t like changes especially if
they didn’t understand them. So if we try to innovate in something that regular human didn’t
understand … well we have a problem. How it can be explain to someone who redundant to
changes that future is now? How you can explain that if he or she will not learn new thing he or
she become obsolete? How you can explain to someone that he or she is outdated and only way to
solve that problem is path of open-mindedness and cooperation if they not open-minded and not
cooperative? How you can fight it if even professor in graduate schools think that “he too old to
learn new things “? Well questions remains but I think every manager should solve it if he or she
expect to achieve any goals not only in IT industry but also in most others industries as well.

Let’s examine S-curve more closely.

Both the rate of a technology`s performance improvement and the rate at which the technology
is adopted in the marketplace repeatedly have been shown to conform to an s-shape curve.
Though s-curves in technology performance are related (improvements in performance may foster
faster adoption, and greater adoption may motivate further investment in improving performance,
they are fundamentally different processes. Financial firms offer products and services that are, in
many instances, similar to competitor firms. Often, these new innovations in finance (e.g.,
collateralized mortgage obligations, arbitrage, etc.) have a ‘life cycle’ where they are born, thrive,
and are then replaced by some new product or service. In the same way, IT innovations follow
similar S-curves throughout their useful lives. [30]

S-curve model suggest that a certain product improvement or introducing new product (financial,
IT or most others) in a given time period or due to a given amount of engineering effort is likely to
differ if we try to plot it against effort scale .In a financial industry . In the first stage, the innovation
needs high investment (FTEs per weeks and capital expenditure) to accomplish a low rate of
improvement or technological acceptance. Further , as technology or financial instrument becomes
more diffused , controlled and understood , the cost are lower and the adoption rate is much
higher. In the third stage , we do not see so much innovation or acceptance and the performance
asymptotically reaches a limit ,regardless of the extra efforts invested .[28] Basically it the same
patterns that that we saw in our swordsman example- Similar pattern, matching form and same
basic logics.

Understanding these dynamics has been a long-standing topic among students of innovation.
However, easily immitigable nature of financial innovation may not lend itself to these models.
Merton characterizes the dynamics of innovation in the financial service world using a metaphor of
“financial innovation spiral” in which one innovation became the corner stone for the next one.*31]
Also the same pattern can be seen when we consider that the trading of standardized exchange –
traded products facilitates the creation of custom-designed OTC products , which in turn
stimulates even greater volume of trading ,lowering transaction costs and making possible
creation of the new products. A variant of this concept would help explain how rival investment
banks created a set of increasingly improved preferred stocks that would maintain a relatively
constant principal values, by copying and improving the prior products.[32] Warther and Persons
(1997) model the innovation spiral in which adoption of financial innovations provides other
participants with information about the profitability of innovation, creating waves of innovation
and its S-curve shape of adoption.[33]

From the newcomer perspective, we can identify three sequential steps in the evolution of most
new technologies or products, independently from the sector there technology or product been
created. In the first phase, the challenge is to create a new product or technology capable of
fulfilling the needs of a particular customer segment and if such product or technology succeed in
covering demand of the market, when product or service experience the transition phase which
strongly based on capital expenditures to capture and keep market share, through quality, product
performance aka - incremental innovations. In the last phase if interest of the market will not be
shaped by new radical innovation , incremental innovations became not sufficient , market
interest will shift to new product or service existed on market or just created .In this sense of the
term ‘life cycle’- the new financial innovation (e.g., collateralized mortgage obligations, arbitrage,
etc.) where they are born, thrive, and then replaced by some new product or service is quite
similar to living cycle of most IT innovation , they follow the same basic pattern of logic .Only
difference is probably the ‘life time “ of financial innovations and the speed with which financial
innovation introduced , grow , and became obsolete . It becomes evident that without proper
scale for S-curve shape of adoption it will become increasingly difficult to analyze future
perspective not only new IT innovation or innovation in finance, but also most likely ‘life-cycles ‘of
majority innovations in XXI Century. Without proper scale (if I can put it this way) it will become
almost impossible to expect legitimately estimate valuable life-time for most of the innovations.
That was the underlying reason for Financial Architecture Int. to create the scale, or map, for
human socio (Fear and Greed) patterns .Without proper understanding of human nature and it`s
evolutionary stapes taken to evolve and without proper understanding why they was taken, it`ll be
increasingly difficult to expect proper understanding of human progress or how we know them –
Innovations. Understanding that lead Financial Architecture Int. to creation algorithm which gives
estimate for useful life of innovation and points in time there new radical innovation is most
valuable , needed and important or decline of human confidence , interest and Greed is almost
inevitable.
 Underlying reason for that phenomenon is quite simple if you put a lot of talented people who
thinking about the future because, well they have no other options but innovate, you`ll get the
Street. So essential pattern of greed and fear will remain the same but will be more isolate and
vulnerable as technology evolved. But as I said in the beginning of my paper - technological
innovation cannot change human nature and anything started by the humans for the humans
will obey essentially the same set of laws, independently from the field where it was created – In
the place where the money coming to the game, well it`s Fear and Greed time. More-money-more-
fear-more-greed faster something made becoming something needed and faster something
needed in the past becoming obsolete. With proper scale from Financial Architecture it becomes
possible for innovators to succeed. I gave example on base of euro future contract, but the same
logic applies to most others financial instruments which are essentially - physical interpretation for
people estimate of the future. As I said {no matter how far humanity develops its
technology, on the end of the day it still be humanity with its distinct patterns of
behavior}. [34]

……………
}
If you were a manager in charge of training programs for new hires (at all levels), what IT
technologies do you think should these new hires have some measure of fluency in? Is there a
dominant IT technology that should be ‘mastered’ by key employees of the firm? What it it and
how does it influence the overall performance of the firm? 1 full page.

{
……………
Albert Einstein-

The laws of physics are

the same for all observers
in uniform motion relative
to one another (principle
of relativity),
The speed of light in a
vacuum is the same for all
observers, regardless of
their relative motion or
of the motion of the
source of the light.

A tavern is a place where

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

Study of Codes Ctetology Study of The Inheritance of Acquired Characteristics Cytology Study of Living Cells Dactyliology Study of
Rings Dactylography The Study of Finger Prints Dactylology Study of Sign Language Deltiology The Collection and Study of Picture
Postcards Demology Study of Human Behavior Demonology Study of Demons Dendrochronology Study of Tree Rings Dendrology Study of Trees
Deontology The Theory or Study of Moral Obligation Dermatoglyphics The Study of Skin Patterns and Finger Prints Dermatology Study of
Skin Desmology Study of Ligaments Diabology Study of Devils Diagraphics Art of Making Diagrams or Drawings Dialectology Study of
Dialects Dioptrics Study of Light Refraction Diplomatics Science of Deciphering Ancient Writings and Texts Diplomatology Study of
Diplomats Docimology The Art of Assaying Dosiology The Study of Doses Dramaturgy Art of Producing and Staging Dramatic Works
Dysgenics The Study of Racial Degeneration Dysteleology Study of Purposeless Organs Ecclesiology Study of Church Affairs Eccrinology
Study of Excretion Ecology Study of Environment Economics Study of Material Wealth Edaphology Study of Soils Egyptology study of
ancient Egypt Ekistics Study of Human Settlement Electrochemistry Study of Relations Between Electricity and Chemicals Electrology
Study of Electricity Electrostatics Study of Static Electricity Embryology Study of Embryos Emetology Study of Vomiting Emmenology
The Study of Menstruation Endemiology Study of Local Diseases Endocrinology Study of Glands Enigmatology Study of Enigmas Entomology
Study of Insects Entozoology Study of Parasites That Live Inside Larger Organisms Enzymology Study of Enzymes Ephebiatrics Branch of
Medicine Dealing With Adolescence Epidemiology Study of Diseases; Epidemics Epistemology Study of Grounds of Knowledge Eremology
Study of Deserts Ergology Study of Effects of Work on Humans Ergonomics Study of People at Work Escapology Study of Freeing Oneself
From Constraints Eschatology Study of Death; Final Matters Ethnogeny Study of Origins of Races or Ethnic Groups ethnology study of
cultures Ethnomethodology Study of Everyday Communication Ethnomusicology Study of Comparative Musical Systems Ethology Study of
Natural or Biological Character Ethonomics Study of Economic and Ethical Principles of a Society Etiology The Science of Causes;
Especially of Disease Etymology Study of Origins of Words Euthenics Science Concerned With Improving Living Conditions Exobiology
Study of Extra-Terrestrial Life Floristry The Art of Cultivating and Selling Flowers Fluviology Study of WaterCourses Futurology
Study of Future Garbology Study of Garbage Gastroenterology Study of Stomach; Intestines Gastronomy Study of Fine Dining Gemmology
Study of Gems and Jewels Genealogy Study of Descent of Families Genesiology Study of Reproduction and Heredity Genethlialogy The Art
of Casting Horoscopes Geochemistry Study of Chemistry of Planet Crust Geochronology Study of Measuring Geological Time Geogeny
Science of Formation of Earth's Crust Geogony Study of Formation of The Earth Geography Study of Surface of The Earth and Its
Inhabitants Geology Study of Earth's Crust Geomorphogeny Study of The Origins of Land Forms Geoponics Study of Agriculture
Geotechnics Study of Increasing Habitability of The Earth Geratology Study of Decadence and Decay Gerocomy Study of Old Age
Gerontology Study of The Elderly; Aging Gigantology Study of Giants Glaciology Study of Ice Ages and Glaciation Glossology Study of
Language; Study of The Tongue Glyptography The Art of Engraving on Gems Glyptology Study of Gem Engravings Gnomonics The Art of
Measuring Time Using Sundials Gnosiology Study of Knowledge Gnotobiology Study of Life in Germ-Free Conditions Graminology Study of
Grasses Grammatology Study of Systems of Writing Graphemics Study of Systems of Representing Speech in Writing Graphology Study of
Handwriting Gromatics Science of Surveying Gynaecology Study of Women Physiology Gyrostatics The Study of Rotating Bodies Hagiology
Study of Saints Halieutics Study of Fishing Hamartiology Study of Sin Harmonics Study of Musical Acoustics Hedonics Part of Ethics or
Psychology Dealing With Pleasure Helcology Study of Ulcers Heliology Science of The Sun Helminthology Study of Worms Hematology
Study of Blood Heortology Study of Religious Feasts Hepatology Study of Liver Heraldry Study of Coats of Arms Heresiology Study of
Heresies Herpetology Study of Reptiles and Amphibians Hierology Science of Sacred Matters Hippiatrics Study of Diseases of Horses
Hippology The Study of Horses Histology Study of The Tissues of Organisms Historiography Study of Writing History Historiology Study
of History Homiletics The Art of Preaching Hoplology The Study of Weapons Horography Art of Constructing Sundials Or Clocks Horology
Science of Time Measurement Horticulture Study of Gardening Hydrobiology Study of Aquatic Organisms Hydrodynamics Study of Movement
in Liquids Hydrogeology Study of Ground Water Hydrography Study of Investigating Bodies of Water Hydrokinetics Study of Motion of
Fluids Hydrology Study of Water Resources Hydrometeorology Study of Atmospheric Moisture Hydropathy Study of Treating Diseases With
Water Hyetology Science of Rainfall Hygiastics Science of Health and Hygiene Hygienics Study of Sanitation; Health Hygiology
Hygienics; Study of Cleanliness Hygrology Study of Humidity Hygrometry Science of Humidity Hymnography Study of Writing Hymns
Hymnology Study of Hymns Hypnology Study of Sleep; Study of Hypnosis Hypsography Science of Measuring Heights Iamatology Study of
Remedies Iatromathematics Archaic Practice of Medicine in Conjunction With Astrology Ichnography Art of Drawing Ground Plans
Ichnology Science of Fossilized Footprints Ichthyology Study of Fish Iconography Study of Drawing Symbols Iconology Study of Icons;
Symbols Ideogeny Study of Origins of Ideas Idiomology Study of Idiom, Jargon or Dialect Immunogenetics Study of Genetic
Characteristics of Immunity Immunology Study of Immunity Immunopathology Study of Immunity to Disease Insectology Study of Insects
Irenology The Study of Peace Iridology Study of Iris Kalology Study of Beauty Karyology Study of Cell Nuclei Kidology Study of
Kidding Kinematics Study of Motion Kinesics Study of Gestural Communication Kinesiology Study of Human Movement And Posture Kinetics
Study of Forces Producing or Changing Motion Koniology Study of Atmospheric Pollutants and Dust Ktenology Science of Putting People
to Death Kymatology Study of Wave Motion Labeorphily Collection and Study of Beer Bottle Labels Larithmics Study of Population
Statistics Laryngology Study of Larynx Lepidopterology Study of Butterflies and Moths Leprology Study of Leprosy Lexicology Study of
Words and Their Meanings Lexigraphy Art of Definition of Words Lichenology Study of Lichens Limacology Study of Slugs Limnobiology
Study of Fresh Water Ecosystems Limnology Study of Bodies of Fresh Water Linguistics Study of Language Lithology Study of Rocks
Liturgiology Study of Liturgical Forms and Church Rituals Loimology Study of Plagues and Epidemics Loxodromy Study of Sailing Along
Rhumb-Lines Magirics Art of Cookery Magnanerie Art of Raising Silkworms Magnetics Study of Magnetism Malacology Study of Molluscs
Malariology Study of Malaria Mammalogy Study of Mammals Mariology study of the Virgin Mary Martyrology Study of Martyrs Mastology
Study of Mammals Mathematics Study of Magnitude, Number, And Forms Mechanics Study of Action of Force On Bodies Meconology Study of
Or Treatise Concerning Opium Melittology Study of Bees Mereology Study of Part-Whole Relationships Mesology Ecology Metallogeny
Study of The Origin and Distribution of Metal Deposits Metallography Study of The Structure and Constitution of Metals Metallurgy
Study of Alloying and Treating Metals Metaphysics Study of Principles of Nature and Thought Metapolitics Study of Politics in Theory
or Abstract Metapsychology Study of Nature of The Mind Meteoritics The Study of Meteors Meteorology Study of Weather Metrics Study of
Versification Metrology Science of Weights and Measures Microanatomy Study of Microscopic Tissues Microbiology Study of Microscopic
Organisms Microclimatology Study of Local Climates Micrology Study or Discussion of Trivialities Micropalaeontology Study of
Microscopic Fossils Microphytology Study of Very Small Plant Life Mineralogy Study of Minerals Molinology Study of Mills and Milling
Momilogy Study of Mummies Morphology Study of Forms and The Development of Structures Muscology The Study of Mosses Museology The
Study of Museums Musicology Study of Music Mycology Study of Funguses Myology Study of Muscles Myrmecology Study of Ants Mythology
Study of Myths, Fables, Tales Naology Study of Church or Temple Architecture Nasology Study of The Nose Nautics Art of Navigation
Nematology The Study of Nematodes Neonatology Study of Newborn Babies Neossology Study of Nestling Birds Nephology Study of Clouds
Nephrology Study of The Kidneys Neurobiology Study of Anatomy of The Nervous System Neurology Study of Nervous System
Neuropsychology Study of Relation Between Brain and Behaviour Neurypnology Study of Hypnotism Nidology Study of Nests Nomology The
Science of The Laws; Especially of The Mind Noology Science of The Intellect Nosology Study of Diseases, Classification of Diseases
nostology study of senility Notaphily Collecting of Bank-Notes and Cheques Numerology Study of Numbers Numismatics Study of Coins
Nymphology Study of Nymphs Obstetrics Study of Midwifery Oceanography Study of Oceans Oceanology Study of Oceans Odology Science of
The Hypothetical Mystical Force of Od Odontology Study of Teeth Oenology Study of Wines Oikology Science of Housekeeping Olfactology
Study of The Sense of Smell Ombrology Study of Rain Oncology Study of Tumours Oneirology Study of Dreams Onomasiology Study of
Nomenclature Onomastics Study of Proper Names Ontology Science of Pure Being; The Nature of Things Oology Study of Eggs Ophiology
Study of Snakes Ophthalmology Study of Eye Diseases Optics Study of Light Optology Study of Sight Optometry Science of Examining The
Eyes Orchidology Study of Orchids Ornithology Study of Birds Orology Study of Mountains Orthoepy Study of Correct Pronunciation
Orthography Study of Spelling Orthopterology Study of Cockroaches Oryctology Mineralogy or Paleontology Osmics Scientific Study of
Smells Osmology Study of Smells and Olfactory Processes Osphresiology Study of The Sense of Smell Osteology Study of Bones Otology
Study of The Ear Otorhinolaryngology Study of Ear, Nose and Throat Paedology Study of Children Paedotrophy Art of Rearing Children
Paidonosology Study of Children's Diseases; Pediatrics Palaeoanthropology Study of Early Humans Palaeobiology Study of Fossil Plants
and Animals Palaeoclimatology Study of Ancient Climates palaeolimnology study of ancient lakes palaeolimnology study of ancient fish
Palaeontology Study of Fossils Palaeopedology Study of Early Soils Paleobotany Study of Ancient Plants Paleo-Osteology Study of
Ancient Bones Palynology Study of Pollen Papyrology Study of Paper Parapsychology Study of Unexplained Mental Phenomena Parasitology
Study of Parasites Paroemiology Study of Proverbs Parthenology Study of Virgins Pataphysics The Science of Imaginary Solutions
Pathology Study of Disease Patrology Study of Early Christianity Pedagogics Study of Teaching Pedology Study of Soils Pelology Study
of Mud Penology Study of Crime and Punishment Periodontics Study of Gums Peristerophily Pigeon-Collecting Pestology Science of Pests
Petrology Study of Rocks Pharmacognosy Study of Drugs of Animal And Plant Origin Pharmacology Study of Drugs Pharology Study of
Lighthouses Pharyngology Study of The Throat Phenology Study of Organisms as Affected By Climate Phenomenology Study of Phenomena
Philately Study of Postage Stamps Philematology The Act or Study of Kissing Phillumeny Collecting of Matchbox Labels Philology Study
of Ancient Texts; Historical Linguistics Phoniatrics Study and Correction of Speech Defects Phonology Study of Speech Sounds
Photobiology Study of Effects of Light on Organisms Phraseology Study of Phrases Phrenology Study of Bumps On The Head Phycology
Study of Algae and Seaweeds Physics Study of Properties of Matter And Energy Physiology Study of Processes of Life Phytology Study of
Plants; Botany Piscatology Study of Fishes Pisteology Science or Study of Faith Planetology Study of Planets Plutology Political
Economy; Study of Wealth Pneumatics Study of Mechanics of Gases Podiatry Study and Treatment of Disorders of The Foot; Chiropody
Podology Study of The Feet Polemology Study of War Pomology Study of Fruit-Growing Posology Science of Quantity or Dosage Potamology
Study of Rivers Praxeology Study of Practical or Efficient Activity; Science of Efficient Action Primatology Study of Primates
Proctology Study of Rectum Prosody Study of Versification Protistology Study of Protists Proxemics Study of Man's Need for Personal
Space Psalligraphy The Art of Paper-Cutting To Make Pictures Psephology Study of Election Results and Voting Trends Pseudology Art or
Science of Lying Pseudoptics Study of Optical Illusions Psychobiology Study of Biology of The Mind Psychogenetics Study of Internal
or Mental States Psychognosy Study of Mentality, Personality or Character Psychology Study of Mind Psychopathology Study of Mental
Illness Psychophysics Study of Link Between Mental And Physical Processes Pteridology Study of Ferns Pterylology Study of
Distribution of Feathers on Birds Pyretology Study of Fevers Pyrgology Study of Towers Pyroballogy Study of Artillery Pyrography
Study of Woodburning Quinology Study of Quinine Raciology Study of Racial Differences Radiology Study of X-Rays and Their Medical
Applications Reflexology Study of Reflexes Rhabdology Art of Calculating Using Numbering Rods Rheology Science of The Deformation or
Flow of Matter Rheumatology Study of Rheumatism rhinology study of the nose rhochrematics science of inventory management and the
movement of products runology study of runes sarcology study of fleshy parts of the body satanology study of devil scatology study
of excrement or obscene literature schematonics art of using gesture to express tones sciagraphy art of shading scripophily
collection of bond and share certificates sedimentology study of sediment seismology study of earthquakes selenodesy study of the
shape and features of the moon selenology study of the moon semantics study of meaning semantology science of meanings of words
semasiology study of meaning; semantics semiology study of signs and signals semiotics study of signs and symbols serology study of
serums sexology study of sexual behaviour siderography art of engraving on steel sigillography study of seals significs science of
meaning silvics study of tree's life sindonology study of the shroud of Turin Sinology study of China sitology dietetics sociobiology
study of biological basis of human behavior sociology study of society somatology science of the properties of matter sophiology
science of ideas soteriology study of theological salvation spectrology study of ghosts speleology study and exploration of caves
spermology study of seeds sphagnology study of peat moss sphragistics study of seals and signets sphygmology study of the pulse
splanchnology study of the entrails or viscera spongology study of sponges stasiology study of political parties statics study of
bodies and forces in equilibrium stemmatology study of relationships between texts stoichiology science of elements of animal tissues
stomatology study of the mouth storiology study of folk tales stratigraphy study of geological layers or strata stratography art of
leading an army stylometry studying literature by means of statistical analysis suicidology study of suicide symbology study of
symbols symptomatology study of symptoms of illness synecology study of ecological communities synectics study of processes of
invention syntax study of sentence structure syphilology study of syphilis systematology study of systems taxidermy art of curing
and stuffing animals tectonics science of structure of objects, buildings and landforms tegestology study and collecting of beer mats
teleology study of final causes; analysis in terms of purpose telmatology study of swamps teratology study of monsters, freaks,
abnormal growths or malformations teuthology study of cephalopods textology study of the production of texts thalassography science
of the sea thanatology study of death and its customs thaumatology study of miracles theology study of religion; religious doctrine
theriatrics veterinary medicine theriogenology study of animals' reproductive systems thermodynamics study of relation of heat to
motion thermokinematics study of motion of heat thermology study of heat therology study of wild mammals thremmatology science of
breeding domestic animals and plants threpsology science of nutrition tidology study of tides timbrology study of postage stamps
tocology obstetrics; midwifery tonetics study of pronunciation topology study of places and their natural features toponymics study
of place-names toreutics study of artistic work in metal toxicology study of poisons toxophily love of archery; archery; study of
archery traumatology study of wounds and their effects tribology study of friction and wear between surfaces trichology study of hair
and its disorders trophology study of nutrition tsiganology study of gypsies turnery art of turning in a lathe typhlology study of
blindness and the blind typography art of printing or using type typology study of types of things ufology study of alien spacecraft
uranography descriptive astronomy and mapping uranology study of the heavens; astronomy urbanology study of cities urenology study of
rust molds urology study of urine; urinary tract venereology study of venereal disease vermeology study of worms vexillology study
of flags victimology study of victims vinology scientific study of vines and winemaking virology study of viruses vitrics glassy
materials; glassware; study of glassware vulcanology study of volcanoes xylography art of engraving on wood xylology study of wood
zenography study of the planet Jupiter zoiatrics veterinary surgery zoogeography study of geographic distribution of animals zoology
study of animals zoonomy animal physiology zoopathology study of animal diseases zoophysiology study of physiology of animals
zoophytology study of plant-like animals zootaxy science of classifying animals zootechnics science of breeding animals zygology
science of joining and fastening zymology science of fermentation zymurgy branch of chemistry dealing with brewing and distilling

Logic, logic and logic again.

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

Natural selection is the process by which trakits become more or less

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

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

Let`s come back to our swordsman:

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

A- Will be that our swordsman have now

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

Basic equation just one: AX=B

In order to solve it for swordsman genius, just ask your self „

that is your expectation of future form position of inventor-
innovator:

X=B/A

Well from the beginning if it`s no real value of invention so ,

A=0. In mathematics it`s know as: division_by_zero , in the result you’ll
get “infinite sigma" (more technically: "the variance does not
exist") that usually avoided by substituting unknown variable X by
equation of variables:

Where : x1 , x2 …xn unknown variables that needed to be define as

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

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

Why try to define unknown things by using unclear definitions, I

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

. . . .

. . . .

. . . .
. . . .
 ……………
}

Best regards Andrey.V.A.Semenov FA

 References:

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

2. E. O. Wilson, Consilience: The Unity of Knowledge, New York, Knopf, 1998, pp. 127-128.
3. Wolfe, Tom (1996). Sorry, But Your Soul Just Died. Vol. 158, Issue 13, pp.210ff. Forbes
4. http://en.wikipedia.org/wiki/E._O._Wilson
5. The gods strike back : A special report on financial risk , February 13 th 2010
6. Technological change, financial innovation, and financial regulation in the U.S. : The
challenges for public policy . Lawrence J. White Stern School of Business New NYU
7. Cohen, Wesley M. and Richard C. Levin, "Empirical Studies of Innovation and Market
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