Hint, the answer so simple, you can’t even see it.
The Paradox of Invisibility:
A firefighter may be worth a million dollars per hour when there is a fire and they courageously save lives and salvage property. The value of the firefighter is derived from the severity of the fire. On the other hand, a fire protection engineer can design a thousand buildings that cannot burn. But the true economic value of the engineer cannot be measured in the absence of a fire. The same can be said of aircraft that do not crash, bridges that do not collapse, and pandemics that do not spread, etc.
What single problem must all engineers solve?
Answer: engineers remove risk from complex systems. This is true for every single engineer and may even serve as an adequate definition for engineering at large. Engineers increase human productivity by reducing the risk to human life and property when confronted with the natural constraints such as gravity, temperature, impact, etc. The value of engineering is literally immeasurable.
But wait, risk can be measured. Insurance companies and financial institutions do it all the time. The method is a little bit counterintuitive, but actually quite simple and well suited for computational analysis. A simple example is presented below to lay out the data process which may be scaled by machine learning and instrumentation. All data must be true and validated in order for the math to work out. Here goes:
A Simple Example:
Consider 10 identical cabins in the forest. Each has a replacement cost of $10,000 dollars. It is well documented that one will burn down every year but nobody knows which one is next. So each owner needs to hold $10,000 dollars in the bank in case their cabin burns down. Because all of the cabins have the same replacement value and all have the same likelihood of burning, the cabin owners determine that they can each throw $1000 into a pooled savings account every year and whosever cabin burns can use the money to rebuild. So instead of tying up $10K each, cabin owners must only hold $1K each. The remaining $90K total can be released for investments and economic growth. This is called a “mutual”and it is the foundation of the insurance industry.
Engineers solve risk in 3 ways:
Engineers follow a similar thought pattern when addressing problems — this is so natural that they often don’t realize they are doing it.
- They first invent ways to identify the existence of a peril.
- Then they invent ways to reduce the probability that the peril will happen.
- Finally, they invent ways to reduce the severity of consequences if the peril does happen.
Each of these actions are identifiable, verifiable, and measurable.
The Innovation Bank:
The Innovation Bank would serve as a data logger to curate the validated claims of all fire protection engineers which can be analyzed to estimate how much risk has been removed from the fire economy. This value can be represented as a cryptographic token that may be purchased by banks, insurance companies, municipalities, corporations and property owners to access the database to better understand their specific risk exposures across a wider spectrum of ignition sources.
The value of the tokens compensates the engineers to perform more comprehensive fire safety surveys and mitigation strategies. This positive feedback loop eventually reducing total risk the near zero.
This same token can be applied to all engineers and scientist for all applicable physical and environmental risk reduction.
The World is on Fire
The example above describes only one example of one peril related to one engineering discipline. The reality that confronts civilization today include multiple complex global systemic risks impacting nearly every facet of life on Earth. These include, but are not limited to climate change, pandemics, political instability, grinding debt, wealth inequality, and more.
The only way to untangle every contributing risk exposure and replace it with comprehensive solutions that do not break the bank is to introduce a parallel financial system that hedges the one currently being stretched to the limits. A digital token that represents Engineering and Scientific risk mitigation would be mutually convertible with national currencies and therefore taxable and transparent to regulatory standards. The two currencies would hedge each other. This is what a balanced budget could look like.
Thank you for your time reading this article. please continue reading articles from this blog. Our juried paper published by the American Society of Professional Engineers called: The Innovation Bank; Blockchain Technology and the Decentralization of the Engineering Professions. Also, please see our other publications at: Select Publications and Lectures .
Please contact us if you have any questions or ideas. Again, thank you.