Presented by Jim Damicis, Rupam Shrivastava, and Virginia Gibbs In 2012 and 2013, two COTF panels introduced the concept of the emergence of a Creative Molecular Economy (CME) at the World Future Society conference. New ideas such as a Future Forward Workforce, Leadership for an Emerging New Economy and Building Interlocking Entrepreneurial Networks were introduced. This session continues to introduce new practical practices for a CME to include a 21st Century System of Venture Capital and how to create regional centers able to build capacities for a CME.

1. Reconstituting the
Middle Class
Prepared for World Future Society
Annual Conference - July 2014
Presentation By:
Virginia Gibbs, President & CEO, Fayette Chamber of Commerce
Jim Damicis, Senior Vice President, Camoin Associates
Rupam Shrivastava, Director, ePlanet Capital

2. Panelists
Jim Damicis
Senior Vice
President
Camoin Associates
Rupam
Shrivastava
Director
ePlanet Capital
Moderator
Virginia Gibbs
President/CEO
Fayette Chamber of
Commerce

3. Session Overview
 Economic Trends and The Middle Class
 Capacity Building for Transformational
Community Development
 A New Approach for Economic and
Workforce Development
 New Methods of Financing Economic Growth
and Job Creation

4. 3 economies in transition
 Industrial economy
 Knowledge economy
 Creative Molecular economy
Definition: “An economy based on the
integration of emerging radical technologies,
with creative individuals, small groups and
companies organized in interlocking networks,
connecting and disconnecting constantly in
processes of continuous innovation.”

5. Shrinking US Middle Class
Percent of adults self-identifying as each social class
0%
10%
20%
30%
40%
50%
60%
2008 2010 2012 2014
Middle Class
Upper
Lower
Source: Pew Research Center

6. % of Aggregate US Household
Income
1972 2012
Upper class 44% 51%
Upper middle class 24.5% 23%
Middle class 17% 14.4%
Lower middle class 10.4% 8.3%
Lower class 4.1% 3.2%
Source: US Census

7. Median US Household Income
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

8. Median US Household Income
in 2012 dollars
$45,788
$56,080
$51,017
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000 1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

9. Decreasing Manufacturing
Jobs
 In 1979, there were 20
million manufacturing
jobs in the US
 Today there are 12.1
million manufacturing
jobs nationwide
 During that time, the
total workforce grew
from 98.3 million to
145.8 million
 In Georgia,
manufacturing peaked
in 1997 with 556,700
jobs
 Today there are roughly
361,000 manufacturing
jobs in Georgia
Source: Atlanta Journal Constitution, June 2014

10. Top Employment Sectors
Fayette County, Ga
2003
1) Retail
2) Manufacturing
3) Construction
2013
1) Retail
2) Healthcare and
social services
3) Accommodations
and Food Services

11. Capacity Building:
Transformational Community
Development
 21st century Leadership Development
 Future focused community conversations
 Adaptive planning
 Interconnectedness/interlocking networks

12. 21st Century Leadership Skills
 Ability to spot weak signals & emerging trends
 Future focused
 Use “and/both” thinking
 Parallel paths
 Comfortable with ambiguity
 Deep Collaboration
 Highly developed interlocking networks
 No silver bullet

13. Community Conversations
 Facilitated
 Future Focused
 Ask appropriate questions
 Diverse panels (age, gender, race, etc.)
Example of Question: “How do we prepare
students for future jobs which don’t yet exist?”

14. Adaptive Planning
 Establish framework
 DICE Method (Design, Identify, Connect,
Emerge)
 Allow for ebb and flow of human engagement
 Need high level of trust and accountability

15. Capacity Building:
Transformational Community
Development
 21st century Leadership Development
 Future focused community conversations
 Adaptive planning
 Interconnectedness/interlocking networks

16. “We are unsettled to the very roots of our being. There
isn’t a human relation, whether of parent and child,
husband and wife, worker and employer, that doesn’t
move in a strange situation…There are no precedents
to guide us, no wisdom that wasn’t made for a simpler
age. We have changed our environment more quickly
than we know how to change ourselves.”
Walter Lippmann
Pulitzer Prize winning journalist
1914

17. Reconstituting the Middle Class
Networks and Entrepreneurship
Prepared for World Future Society Annual Conference
July 2014
Presentation By:
Jim Damicis
Senior Vice President
jim@camoinassociates.com
www.camoinassociates.com
Twitter: @jdamicis
Linkedin: www.linkedin.com/in/jdamicis
Blog: www.camoinassociates.com/blog/
17

18. Trends Contributing to Loss of Middle Class
• Loss of Manufacturing Jobs – movement from low skill to higher skill jobs
that require education/training
• Loss of Government Jobs
• Rise of Service Economy – lower wages, less benefits, less full-time
• Healthcare – rising costs – less being paid by employer
• Decrease of Unions and their Influence
• Housing – now a riskier investment – harder to enter market
• Increased Globalization – increased supply of workers
• Growth of Independent Contracting and Contingent Workers
• Rising Cost of Education
• Increase in Skills Gap
• Job Replacement Through Technology – Technological Unemployment
18

19. 19
Self Employment
Source: America’s Self-Employment Landscape, Joshua Wright, Economic Modeling Specialist Inc.,
February 6th, 2014, http://www.economicmodeling.com/2014/02/06/americas-self-employment-
landscape/

20. 20
The “Freelance Economy”
The Freelance Economy- One in three Americans,
roughly 42 million, are estimated to be freelancers.
By 2020, freelancers are expected to make up 50%
of the full time workforce. Independent work is
becoming more common across all generations.
The Part-Time, Freelance, Collaborative Economy, Newgeography, Roger Selbert 03/26/2014 -
http://www.newgeography.com/content/004222-the-part-time-freelance-collaborative-economy

21. 21
“The Gig Economy”
• It is estimated that contingent
workers made up over 11% of
the labor force in 2005
• Most new jobs since 2001 have
been under contingent
arrangements
The Rise of the Gig Economy, the Rise of the Gig Economy, Gerald Friedman, Dollars &
Sense, March/April 2014, http://dollarsandsense.org/archives/2014/0314friedman.html

22. 22
Richard Florida on the Service Class
• “More than 60 million American workers - 45 percent of the
work force.”
• “Projected to make up more than half of projected new jobs to
2018 - 7.1 million new jobs”
“We have to make service class jobs good
jobs - sources of innovation, continuous
improvement, and productivity gains”
Source: Where Service Jobs Will Be, The Atlantic Cities, August 23 2010 -
www.theatlantic.com/business/archive/2010/08/where-service-jobs-will-
be/61465/#.UF5wQzqgxMQ.mailto

23. 23
Technological Unemployment
From McKinsey Global as referenced in Now even the big banks are talking about
technological unemployment, James Pethokoukis, May 30, 2014
http://www.aei-ideas.org/2014/05/now-even-the-big-banks-are-talking-about-
technological-unemployment/#mbl
• “Historically, when labor-saving technologies were
introduced, new and higher value-adding jobs were created.
This usually happens over the long term.”
• “However, productivity without the innovation that leads
to the creation of higher value-added jobs results in
unemployment and economic problems.”

24. 24
What This All Means for Economic Growth and
The Middle Class?
Cannot Rely on or Wait for Recovery to Enable
Large Companies and Institutions to Create and
Sustain Full-time, Permanent, Wage Jobs!

25. 25
Two Opportunities for Transformation to
Reconstitute the Middle Class:
Building Capacity and Diversity Among Workers
and the Middle Class for:
•Networks – Diverse, Interlocking, Self-Organizing
•Entrepreneurship and Innovation

26. 26
Characteristics of the Creative Molecular Economy:
•Regional & Global Innovation Networks
•Crowdsourced and Continuous Innovation
•Future Forward Workforce – adaptable
• Crowdsourced Start-up Financing
• New Technologies Transforming Production
• Identifying Weak Signals
• Broad-band infrastructure capable of uploading and
downloading massive amounts of data

27. 27
“More than 90 percent of all American
entrepreneurs came from middle-class or
lower.”
Ewing Marion Kauffman Foundation (July 2009)
Entrepreneurship and The Middle Class

28. 28
Entrepreneurial Networks
“Entrepreneurship often is a lonely, emotional,
and challenging process that evolves over time.”
“To be successful, entrepreneurs need
connections to potential mentors, networks for
learning, and emotional support from peers at all
stages of the entrepreneurial process”.
The Dos and Don'ts of Local Entrepreneurship Promotion, Kaufman Foundation,
Entrepreneurship Policy Digest www.kauffman.org

29. 29
The Future Worker -Self-Organized Networks
“The confluence of advances in social, mobile and cloud
technologies has begun to shift economic power from large-
scale institutions that dominated the industrial age through
sheer size and economies of scale to self-organizing
individuals and loosely governed networks. The ability to
self-organize in order to produce and repurpose products
and information has reduced the efficacy of long-standing
business frameworks, processes and decision-making.”
The Rise of The Empowered Employee, Maria Ogneva, By yammer in Tips & Guides,
March 16, 2012. https://about.yammer.com/yammer-blog/the-rise-of-the-
empowered-employee/

30. 30
The Future Worker -Self-Organized Networks
Socially aware businesses are embracing the Peer-to-Peer
approach; first and foremost, people want to talk to other
people in organizations. Employees have personal and
portable networks they can tap in order to get work done,
thus weakening their dependencies on company resources.
By joining creation spaces and communities, individuals can
now create products, content and even movements, based on
their passions and find solutions that they wouldn’t find on
their own.
The Rise of The Empowered Employee, Maria Ogneva, By yammer in Tips & Guides,
March 16, 2012. https://about.yammer.com/yammer-blog/the-rise-of-the-
empowered-employee/

31. 31
A New Approach for the Middle Class
• Developing skills and leveraging networks to create your own
business/job
• Used to be much higher risk then wage employment (working
for someone else) but not so much anymore
• Programs and policies to support entrepreneurship and
innovation grew in the past 20 years through growth in
knowledge economy
• We must now make entrepreneurship and innovation a
pervasive culture – everyone can do it and practice it in our
institutions, companies, jobs, and in developing their own
capacities

32. 32
A New Approach for the Middle Class, Cont.
• Support capacity building among lower and middle class to
learn and leverage the tools developed by the freelance, gig,
and knowledge economy
• Including through schools, open-public places such as libraries,
for all kinds of people including immigrants, the unemployed,
workers – not just for the intellectual, entrepreneurial elite
• Extend beyond manufacturing and high-tech to service
economy

33. 33
New measurements/focus for economic
development, growth, and workforce – not jobs
and businesses created but:
• Networks – reach and depth
• Peer to peer learning and collaboration
• For businesses but also people/workers
• Diversity of participation
A New Approach for the Middle Class, Cont.

34. 34
Ultra-rich man’s letter: “To My Fellow Filthy Rich Americans: The Pitchforks
Are Coming” Nick Hanauer, politico - June 30, 2014
Why We Must Transform and Reconstitute the
Middle Class: “The Pitchforks are Coming”
“If we don’t do something to fix the glaring inequities in this
economy, the pitchforks are going to come for us. No society
can sustain this kind of rising inequality. In fact, there is no
example in human history where wealth accumulated like
this and the pitchforks didn’t eventually come out. You show
me a highly unequal society, and I will show you a police state.
Or an uprising. There are no counterexamples. None. It’s not
if, it’s when.”

35. 35
What Else?
•All of this requires new approaches to
financing business and economic
growth.

36. New funding sources for the
Creative Molecular Economy future
Rupam Shrivastava

37. Innovation is central to the concept of a Creative Molecular Economy
Innovation and entrepreneurship in CME
 New tenets of CME are inherently
entrepreneur friendly
 Market participants and business leaders
need to be comfortable with uncertainty,
ambiguity, and nonlinear activities(1)
 Frequent changes in ideas and direction are
central to this innovative process
 Developed markets:
 Reached current economic levels by
innovation – e.g. industrial revolution in
the mid 1800s and technology
revolution in late 1900s
 Emerging markets:
 Lot of recent growth playing ‘catch-up’
 Future growth dependent on
innovation
(1) Creative Molecular Economy Innovation Model: McAllen, Texas.
Creative Molecular Economy model(1)

38. CME Company
Innovation
focus
Harnessing
local talent /
ecosystem
Smaller and
more nimble
Integrated
with the local
ecosystem
Locally
financed and
owned
More
employee
focused
38
CME companies will be different from current start-ups as they will have a larger local footprint
CME companies



Ways how CME start-ups will be
different from those today

39. 39
CME companies will be well integrated with the local ecosystem , which will develop into an
“innovation center” or “CME Region”
CME Regions
CME
Companies
Stakeholders:
Employees,
investors
Investors:
Angels, Banks,
Accelerators
Business
partners:
Other
companies,
customers
Liquidity
sources:
Acquirers,
public markets
CME Regions will be similar to innovation districts of
today
 Semiconductors and IT in Silicon Valley
 High-tech. and life sciences in Research Triangle Park in
North Carolina
 Biotech in the Boston area
However, a CME Region would not only be self reliant on
indigenous innovation, but local funding and exit sources
as well. Only Silicon Valley comes close today

40. 40
While new innovative funding sources are being experimented, sources of liquidity are still the
traditional public markets and acquirers
Evaluation of current financing sources for CME Companies
Self,
friends,
family
Angels /
Accelerators /
Crowd-
funding
Venture
capital
Bank loans
and
guarantees
Public
markets
Acqui-
rers
OTC
exchanges
CME
Ideal
Funding source req. Funding side Exit side
Adequacy of size X X X X X X
Liquidity X X X X
Transparency X X X X X X
Company charac. Funding side Exit side
Innovation focus X X X X X X
Small and nimble X X X X X X
Integrated with local eco. X X X X
Locally financed X X X X
Employee focused X X X
 Innovative funding sources have been developed to address the hitherto dearth of investment
capital
 Liquidity sources – i.e. public market, acquirers and OTC exchanges cannot handle the kind of CME
companies that will emerge soon

41.  5 April 2012, President Obama signed the JOBS (Jumpstart Our Business Startups) Act
intended to encourage funding of small businesses by easing various securities
regulations
 Prior to this, US legislation prohibited public solicitation for private companies raising
funds.
 The SEC will regulate crowdfunding in the USA.
JOBS Act – further facilitating funding
 [IN EFFECT] Companies can solicit investments from accredited investors
online
 Accredited investors can invest <$100,000 (per company) annually
 [COMING SOON IN EFFECT] Non-accredited investors may purchase equity
through crowdfunding
 Companies can raise up to $1,000,000 per year
Title II
Title
III

42. 42
Local exchanges will need to overcome the hurdles faced by OTC exchanges, which mainly hover
around transparency and avoidance of fraud. Below are initial areas to consider
Junior exchanges – facilitating exits
Funding sources
and history
Social and
corporate network
validation
Financial reporting
Prior trades and
investments
Insider information
– guarantors,
mentors
Related company
information
Other going
concern related
metrics
Information
exchange
New junior exchanges will be online and automated to reduce establishment and running costs

43. • Weak signals
• New products / services
• Collaborative networks
• Avoid herd mentality
• Local competitive
advantage
• Integration with local
ecosystem
• Web 2.0 / 3.0
• Social media
43
Listing requirements on junior exchanges will be similar to current requirements but will have an
enhanced focus on “CME Characteristics” of the company. These characteristics are:
CME context requirements in exchange listing
Thinking
connectively
Distributive
intelligence
Trend
identification
Self-
organizing
collectives

44. 44
All the important players in the CME ecosystem will work together to create a virtuous cycle of
innovation funding and liquidity
Key players
Investors
•Community banks
•Angel investors
•Equity investors
(institutional and
individuals)
•Relaxed investment
criteria due to
business inter-
connections
Entrepreneurs
•Develop company
with view towards
listing
•Encourage
transparency right
from the start
•Continue relationship-
based business until
listing
Economic
developers
•Develop incentives to
promote
entrepreneurship
•Encourage local
expertise
•Incentivize funding
sources and
encourage individual
investors
•Attract outside
investors
Chambers of
commerce
•Play “SEC type” role
•Develop initial listing
requirements which
are common
nationwide
•Add CME elements to
listing requirements
(important)

45. Each CME Region will be interconnected with other regions and will enable knowledge sharing and
distributive thinking
Regional level inter-connections
Local funding source 1
Accelerator, VC,
Crowdfunding, Banks
Regional Start-up 2
Local Start-up 2
Local Start-up 3
Local funding source 3
Accelerator, VC,
Crowdfunding, Banks
Local funding source 2
Accelerator, VC,
Crowdfunding, Banks
Regional funding source
Large Accelerator, Large
VC, Crowdfunding,
Regional Banks
Regional Start-up 1
Local Start-up 4
Local Junior
exchange 1
Local Junior
exchange 2
Local Junior
exchange 3
Regional public stock
exchange
CME REGION 1
Local Start-up 6
Investors
Investors
Investors
Investors
Investors
Investors
Investors
Area boundary
Collaboration
Funding
Liquidity
CME REGION 3
CME REGION 2

46. Conclusion
 Financing start-ups in the context of CME will involve some evolutionary changes on the funding
side and revolutionary efforts on the liquidity side
 Accelerators, traditional venture capital, crowd-funding platforms are providing enhanced
breadth to the funding side
 Establishment of online junior exchanges will facilitate higher liquidity and transparency
levels
 Success of the above proposal will depend on:
 Smart connected systems for information sharing and collaborative thinking
 Inter-connected nature of investors and trend identification on a larger level between CME
Regions
 Implementation will vary by the development of particular regions:
 Regions with highly developed funding ecosystem will require a liquidity medium via the
junior exchanges
 Other regions will have to develop a funding ecosystem first
There are numerous existing sources of funding and will continue to grow through the JOBS Act.
Junior exchanges will facilitate exits for these startups.

47. Session Summary
 Economic Trends and The Middle Class
 Capacity Building for Transformational
Community Development
 A New Approach for Economic and
Workforce Development
 New Methods of Financing Economic Growth
and Job Creation

48. Q&A

49. Contact
Jim Damicis
Senior Vice President
Camoin Associates
jim@camoinassociates.com
camoinassociates.com
Rupam Shrivastava
Director
ePlanet Capital
Rupam@alum.mit.edu
eplanetcapital.com
Virginia Gibbs
President/CEO
Fayette Chamber of
Commerce
president@fayettechamber.org
FayetteChamber.org