1. bengin 1 © 2006 bengin.com Evolutionary Economics bengin Evolutionary Economics Improved Metrics for better Value Maps © 2006 Peter Bretscher, Eggersriet, Switzerland – peter.bretscher@bengin.com eve02_e New 2015 - this content is now part of: -Project NEMO (New/Next Economic Model) http://project-nemo.orghttp://project-nemo.org -INSEDE (Institute for Sustainable Economic Development) http://insede.orghttp://insede.org -Business Engineering Systems (MindWare, Basics, Structures) http://bengin.net/bes/http://bengin.net/bes/ You are welcome to take advantage of progress, support us and be part of this voyage of discoveries.

2. bengin 2 © 2006 bengin.com Evolutionary Economics (2, 3, n-dimensional) $ % i$ 2. Qualitative Metrics hot, cold...... AAA, A+, B, C 3. Quantitative Metrics (linear) $ Why Metrics? - comparing, comprehensible, reproducible - Making rationale (and indirect) communication easier. 1. Normative "Metrics" Principles,....The xx "Commandments" Axis of time Measures reduce need for interpretation Strong need for interpretation $ % i$ $ Possible to calculate with and visualize 2D-Values Difficult to visualize. No tools and rules for numerical or graphical calculations. Development of (economic) Value-Metrics (Compound Value-Metric System with the subjective, implicit Value axis)

3. bengin 3 © 2006 bengin.com Evolutionary Economics Resources Objects Numbers tangible intangible Real Numbers Unit: SFR, $, € Objective Numbers Complex Numbers Unit: SFR/iSFR, $/i$, €/i€ Vector Imaginary Numbers Unit: iSFR, i$, i€ Subjective Numbers Implicit values Explicit values Objects, Properties, Value-Measures combined

4. bengin 4 © 2006 bengin.com Evolutionary Economics "Objective" Value [$] Subjective Value/Benefit, weigted *) Vector as a Compound Value Metric for Arithmetic in Behavioral Finance, strategic controlling, risk management.. Evolutionary Economics *) relative [%] or absolute [i$] Metric System

5. bengin 5 © 2006 bengin.com Evolutionary Economics Intangible Assets or Shareholders Profit Expectation? 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 implicit value [i - Mia] explicit value [Mia] - McDonald's Microsoft IBM Ford CocaCola The explicit Value and the implicit Value together draw a complete picture about the company’s value and its development. The question remains: Is the implicit Value given by the real Value of the company? Is it given by some marketing tricks? Which part of it is made by the Shareholders Value Expectation?

6. bengin 6 © 2006 bengin.com Evolutionary Economics A better model for new decisions Investors: Attention! Management could use the potential more effective.

7. bengin 7 © 2006 bengin.com Evolutionary Economics Tracking the development of an enterprise Question: "What happened in the year 1996?“ Answer: Part of enterprise sold. 2 nd Question: Is this loss of intangible values compen- sated by the price received for the sold part of enterprise. Answer: ?  Ask Auditor – if he’s still available….

8. bengin 8 © 2006 bengin.com Evolutionary Economics 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00 0.0020.0040.0060.0080.00100.00120.00 mV Food Media Services Electronic Information Technology Mechanical Industries Insurance Steel Electricity, Gas Wood Industries Bank Automobil Real estate Health iV Source: Morgan & Stanley Capital International World Index; Cited in: Sveiby, Wissenskapital; Seite 23; Mi-Verlag 1998 14 types of industry (Sveiby)

9. bengin 9 © 2006 bengin.com Evolutionary Economics Overpriced Papers? Is the Vector a prognostic tool? Stock Exchange Value 0 2000000000 4000000000 6000000000 8000000000 10000000000 12000000000 199019911992199319941995199619971998 1999 96 97 98 99....a year before the downturn of the classic curve.......the Vector Map indicated a change of Coca Cola Amatil.........

10. bengin 10 © 2006 bengin.com Evolutionary Economics Transformation (M to I) Q I Q I: Transform -M / +I - New projects - Revisions of Offerings - Insourcing/merging - +I -M in out R&D +M in Q II Q II:Generation +M / +I - Daily business - Selling, dispatch - (Re)Production - Value Generation -I out Q III Q III: Transform -I / +M - Outsourcing - leaner - Transformation (I to M) Q IV Q IV:Degeneration -I / -M - Graveyard - Value Degeneration The four Quadrants of Value generation

11. bengin 11 © 2006 bengin.com Evolutionary Economics Stock exchange mV [$] Time Enterprise Classic Economy M (tangible) Balance M (tangible) In & out I c -Function Intangible Economy I (intangible) In & out I (intangible) Balance mV iV Intro iV for implicit Value mV [$] iV [i$] (Ortskurve, TEV) Value Track REV (Real Enterprise Value) SPE (Shareholders Profit Expectation) mV [$] iV [i$] REV + SPE = TEV TEV = Total Enterprise Value = “Shareholder Value” Structure * ) *) Structure as proposed by: Balanced Scorecard and other existing Solutions for structuring (intangible) Assets. We recommend BE-Systems. Next Economy Economic Value Architecture & Engineering

12. bengin 12 © 2006 bengin.com Evolutionary Economics Thank You http://www.bengin.com http://pma.bengin.com http://bh.bengin.com (re)cognising real Values, mapping, developing, using, tracking…. bengin Beyond Limits of Classic Business Paradigms