Romanian Distribution Committee Magazine, Volume 12, Issue 2, Year 2021

Magazi ne

Romani an Di st r i but i on Commi t t ee

PROFESSORNI COLAEI STUDOR RECTOROFTHEBUCHARESTUNI VERSI TYOFECONOMI CSTUDI ES ASE PRESI DENTOFTHEASSOCI ATI ONOFFACULTI ESOFECONOMI CSI NROMANI A AFER EDI TOROFTHEVOLUME“ PAGESFROM THEROMANI ANECONOMI CHI GHEREDUCATI ON HI STORY, 1843 2013” VI CE PRESI DENTOFTHEROMANI ANDI STRI BUTI ONCOMMI TTEE

VOL UME12 I S S UE2 2021

CONTENTS Bus i nes sEducat i onal Par t ner s hi p,Doi ngWor kBet t er Ac r os sTi meandSpace,I nt egr at i ngt heGr owt hTr i pl ePl ay ,and Teamwor k i ngf orPer f or mance TheodorVal ent i nPURCĂREA

10

I nf or mat i onandCommuni cat i onsTec hnol ogyi sMer gi ngDat aSc i ence andAdv ancedAr t i f i c i al I nt el l i genceTowar dst heCor eofKnowl edge Bas edSoc i et y-Par t21 4 Vi c t orGREU

Augment edMar k et i ng:Del i v er i ngTec hEmpower edHumanI nt er ac t i on Cos mi nTĂNASE 28 TheGr owt hofECommer ce,Di s r upt i v eTec hnol ogi esand Mar k et er s ’ Conv er s at i onal St r at egy I oanMat ei PURCĂREA

33

I ns t or eGr eenhous es( Kauf l andRomani a ) ,Honorf orGGl obal , Gl obal Goal s ,Appoi nt mentNi t r a/ Sl ov ak i a,I nnov at i onDr i v er s , FOCv er s usFl ags hi pSt or es ,Cov i d+Cocooni ng,St r engt hofI ndi a, Tr ac i ng&Tr ac k i ng,Pr ogr es s i ngDi gi t al l y ,andI magi nat i ons / Dr eams 44 Ber ndHALLI ER

RDCM Per sonal i aCor ner “ Pos i t i v e&nor mat i v eandr eal &nomi nal i nt heeconomi canal y s i s ” 57 Luc i anC.I ONESCU

“ Pl ugar ul ”di nVad–Țar aFăgăr aș ul ui .Far mec ul per enal obi cei ur i l or popul ar eances t r al e( The“ Pl owman”f r om Vad–Fagar asCount r y .

ThePer enni al Char m ofAnces t r al Fol kCus t oms ) 7 4 Tudor i ţ aALBU

Ro ma n i a nDi s t r i b u t i o nCo mmi t t e eMa g a z i n eVo l u me1 2 , I s s u e2 , Y e a r2 0 2 1 T h er e s p o n s i b i l i t yf o rt h ec o n t e n t so f t h es c i e n t i f i ca n dt h ea u t h e n t i c i t y o f t h ep u b l i s h e dma t e r i a l sa n do p i n i o n se x p r e s s e dr e s t swi t ht h ea u t h o r .

Editorial: Business-Educational Partnership, Doing Work Better Across Time and Space, Integrating the Growth Triple Play, and Teamworking for Performance

Focusing on what matters most now living in a so-called pandemic era, while being at the intersection of digital transformation and digital entrepreneurship, let us think of the right to learn (including by re-imagining the campus experience for a hybrid world, and transforming the learning function), expecting to move up in a world where it is a hard life for most people looking at what skills do employers look for. According to Garcez, Silva and Franco (2021), organizations and the world in general are changed by the digital transformation caused by the digital technology, the social, environmental and cultural changes in velocity being also experienced by the higher education institutions challenged to adapt accordingly in the current digital economy where knowledge is both intensive, and disruptive.

The retailing’s giant Walmart Inc. (NYSE: WMT), a leader in sustainability, corporate philanthropy and employment opportunity (this largest U.S. private employer is employing 2.2 million associates worldwide; almost 10,500 stores and clubs under 48 banners in 24 countries and eCommerce websites), announced on July 27, 2021 that it will pay 100% of college tuition and books for associates (who can earn college degrees or learn trade skills, starting Aug. 16, meaning approximately 1.5 million part-time and full-time Walmart and Sam’s Club associates in the U.S.) through its Live Better U (LBU, launched in 2018) education program (Walmart, 2021). Beyond its already existing partners (Brandman University, Penn Foster, Purdue University Global, Southern New Hampshire University, Wilmington University and Voxy EnGen), Walmart is adding four new academic partners (Johnson & Wales University, University of Arizona, University of Denver and Pathstream). It was also interesting to note that within a traditional RetailWire’s discussion organized just two days later, one of the participants, Principal and Founder, Retail Strategy Group, stated: “Investing in employees through education and personal growth can only benefit the retailer as the employee will be empowered to stay with the brand for years. It’s authentic, it’s valuable, and it’s a way for retailers to truly give to invest in their communities and it will be reciprocated. I love this and hope that more retailers bring on these type of programs” (Anderson, 2021).

10

Now it’s time for organizations to see new approaches to development and changing issues, becoming learning organization by faster adapting as technology capabilities evolve and achieving better outcomes with data driven decision-making, doing work better across time and space (both, digital and physical), confirming this way the lessons learned from COVID-19 pandemic and shaping a robust operating model maximizing your time and energy (De Smet et al., 2021). The operating model must also consider the so-called by Forrester’s valuable “Customer obsession” approach (VanBoskirk and Leaver, 2021), which amplifies the business model, helping to pursue in a responsible and consistent way companies’ growth opportunities, based on both what is convenient to organization’s expression of customer obsession (what customers want from companies with each expression such as: “Count on us”, “At your service”, “On your side”), and applying the hallmarks of this approach (growth strategies being customer led, insights driven, fast, and connected, so as to be more sustainable) to organization’s best options to determine how to proceed along (how it applies to the growth strategy), customer obsession sustaining growth strategies, delivering effectively value to customers (as confirmed

by Forrester’s The State Of Customer Obsession 2021 survey).

In order to lead, shape, and drive the growth agenda (according to June 2021McKinsey Global Institute report, “Getting tangible about intangibles: The future of growth and productivity?”; more than 860 executives across the globe were surveyed with regard to how they are prioritizing investments and capabilities helping accelerate growth), 78% of CEOs are now depending on marketing leaders (CMOs) in these “no normal” times (Cvetanovski et al., 2021). By integrating the so-called “growth triple play” (creativity, analytics, and purpose) across marketing activities’ full spectrum, CMOs can take advantage of this opportunity to ensure rapid value creation and sustainable growth, taking into account the following aspects concerning the most successful CMOs (based on their achieved level of customer knowledge): they are using already the precision and rigor of analytics in a clever way, and this in order to anticipate and satisfy customer needs; they can better understand their customers’ motivation and can identify customer behavior changes nearly before these changes manifest.

We are all consumers knowing that our behavior is influenced by a mix of social, economic, and technological trends, some of us also knowing how trend forecasts are used by designers to develop scenarios envisioning our probable responses to changes across sectors and markets, while a company – in order to better connect with us as consumers and serve us – could expand its goods and services beyond the core, offering us (with the help of designers) distinct value, what involves (within the context in which the company’s business ambitions and capabilities are aligned with high-growth areas as the foundation stones of an ecosystem strategy focused on these areas) a design-led approach to ecosystem planning (Joshi, Khan and Rab, 2021). McKinsey’s expertise has confirmed that as the global pandemic accelerated consumers’ migration to digital, it was an obvious increase of the appeal of ecosystems (defined as “interconnected sets of services through which users can fulfill a variety of cross-sectoral needs in one integrated experience”), an ecosystem adoption having three phases (strategy definition,

11

ecosystem design, ecosystem building), and being more likely to succeed with design-led ecosystems if a company is keeping some principles in mind as those shown in the figure below:

Figure no. 1: Companies that keep the following principles in mind are more likely to succeed with design-led ecosystems Source: Joshi, N. H., Khan, H. and Rab, I., 2021. A design-led approach to embracing an ecosystem strategy. [pdf] McKinsey & Company, Design Practice, July, p. 6 (work cited)

And allow us to end only by making reference to another significant approach of McKinsey’s representatives, presented twenty years ago and entitled “Teamwork at the top” (Herb, Leslie and Price, 2001), in which it was highlighted (as shown in the figure below), among other aspects, that: “One reason for the difficulty of improving a team’s performance is that interaction, direction, and renewal are interdependent – teams need to go forward simultaneously on all three fronts to make real progress”.

Figure no. 2: Three dimensions of performance Source: Herb, E., Leslie, K., and Price, C., 2001. Teamwork at the top. [pdf] The McKinsey Quarterly, 2001, Number 2, McKinsey & Company, p. 35 (work cited)

12

Indeed, a great team consists of great people, proving individual commitment to this team effort of translating to great performance…

A quote from “Twenty Years After”, by Alexandre Dumas, come to my mind: “Great people only thank you for doing the impossible; what’s possible, they say they can effect themselves”.

Theodor Valentin Purcărea Editor-in-Chief References Anderson, G., 2021. What can rival retailers learn from Walmart’s free college degree program?

RetailWire, July 29. [online] Available at: <https://www.retailwire.com/discussion/what-canrival-retailers-learn-from-walmarts-free-college-degree-program/> [Accessed 29 July 2021].

Cvetanovski, B., Gregg, B., Hazan, E., Jojart, O. and Perrey, J., 2021. The growth triple play: Creativity, analytics, and purpose. [pdf] McKinsey & Company, Marketing & Sales Practice, pp.

2, 9, 11. Available at: <the-growth-triple-play-creativity-analytics-and-purpose> [Accessed 23 June 2021].

De Smet, A., Mysore, M., Reich, A. and Sternfels, B., 2021. Return as a muscle: How lessons from COVID-19 can shape a robust operating model for hybrid and beyond. [pdf] McKinsey Quarterly, July, pp. 1, 7. Available at: <return-as-a-muscle-how-lessons-from-covid-19-canshape-a-robust-operating-model-for-hybrid-and-beyond.pdf> [Accessed at 13 July 2021].

Garcez, A., Silva, R. and Franco, M., 2021. Digital transformation shaping structural pillars for academic entrepreneurship: A framework proposal and research agenda. The Education and Information Technologies Journal, pp. 16-17. https://doi.org/10.1007/s10639-021-10638-5.

Herb, E., Leslie, K., and Price, C., 2001. Teamwork at the top. [pdf] The McKinsey Quarterly, 2001, Number 2, McKinsey & Company, pp. 32. Available at: <teamwork at the top.pdf> [Accessed at 25 July 2021].

Joshi, N. H., Khan, H. and Rab, I., 2021. A design-led approach to embracing an ecosystem strategy. [pdf] McKinsey & Company, Design Practice, July, pp. 1-3, 6. Available at: <a-designled-approach-to-embracing-an-ecosystem-strategy.pdf> [Accessed at 23 July 2021].

VanBoskirk, S. and Leaver, S., 2021. The Intelligent Approach To Growth Customer Obsession Sustains Growth Strategies. [pdf] Forrester Report, May 20, pp. 1-2. Available at: <The Intelligent Approach To Growth.pdf> [Accessed 21.07.2021].

Walmart, 2021. Walmart To Pay 100% of College Tuition and Books for Associates, Walmart, Bentonville, Ark., July 27. [online] Available at: <https://corporate.walmart.com/newsroom/2021/07/27/walmart-to-pay-100-of-college-tuitionand-books-for-associates> [Accessed 29 July 2021].

13

Information and Communications Technology is Merging Data Science and Advanced Artificial Intelligence Towards the Core of Knowledge Based Society -Part 2-

Prof. Eng. Ph.D. Victor GREU Abstract The paper approaches the complex processes of the information and communication technology (ICT) and Knowledge Based Society (KBS) context, leading to the Data Science (DS) concept, aiming to reveal the essential links between the DS, advanced artificial intelligence (AI) and refining knowledge at Earth ecosystem scale as the core of KBS. These premises, due to the scientific, technical and economical reasons of optimizing the mentioned processes, further link the ICT/KBS context with the necessary concept of Cyberinfrastructure, we consequently have to approach. We analysed this concept keeping in mind our title point on knowledge (DS, advanced AI and core of KBS), aiming to emphasize its main components, complex interactions and mutual-supporting mechanisms, which are usually shadowed by the well-known resonance of the term infrastructure.

Based on appropriate references for confirmation, we showed that, beyond the usual approach that involves research activities, the Cyberinfrastructure should contain people and scholarly activities more generally, including teaching and learning, i.e., the whole education fields, which in the Big Data era became not only important, but part of the most difficult processes of decision. Another finding is that ICT advances impact not only the humankind activity fields, but also the people’s thinking, generally for understanding all practical implications of using AI/ICT features/applications, but, essentially, we consider them an expression of the golden rule AI/ICT have to implement in order to maintain its race toward better performance: re-invent itself all the time by leveraging people’s creation skills and thinking. This goal is double fold, aiming apparently to leverage user capacity to fully exploit the designed AI (machine learning algorithms) potential, but eventually this will increase experts’ capacities to use their imagination in order to improve (re-invent) AI instruments performance.

Consequently, the complex (mutual-supporting) relations between Cyberinfrastructure components are approached from the human side, considering their crucial role in the actual World context where USA and EU agreed on the strategic importance of the acquired technological advances (i.e., supposing the associated economic, political and social consequences, but also the cyber-security). It resulted that the need for highly skilled people raised the importance and role of the human component for Cyberinfrastructure and then for AI/ICT/KBS, but the complex relations between them represent the most complicate problem to be further considered, by the need to timely analyse all the consequence of ICT exponential development and impact at Earth scale and on human behaviour and evolution, approaching the ICT-human complex relations and impact on KBS.

14

Continuing to follow the ICT rule of re-inventing itself, we consider that, beyond the new hard/soft performant technologies, in the future we have to look for other leveraging ideas, mainly on improving the output of the computer-human relation by refining knowledge by more subtle criteria of performance. In a concrete manner, the perpetual informational transition where the engineers have to work, is updated to the actual computer-human relation/technology, where the knowledge is refined. The knowledge exchange between researchers is in fact the area that pushes the World ahead with the greatest impact, but also with the most of generation and refining problems, which are worth to be analysed in order to identify prominent mechanisms that could contribute to the optimization of AI/ICT/KBS development in the Big Data era, taking into account the actual challenges and expectations which are naturally associated with the unprecedented advances already reached, but difficult to be improved. Knowing those problems could contribute to the configuration of the actual and the emerging context of developing AI/ICT/KBS, providing this way a useful base for the analyses/decisions, irrespective how these could/will be. One of the main mechanisms of progress, for AI/ICT/KBS, is refining knowledge at Earth ecosystem scale, which is essentially depending on human capacity of creation and integration of the advanced technology in new models, with a larger view of the complex and dynamic processes of generating/perceiving data, information and knowledge in the emerging World of KBS, where the relativity and the probabilistic computing approach [19] are inherent features.

We concluded that understanding the unlimited dynamic AI/ICT/KBS optimization processes is a long and winding road, full of surprises, we have to face with timely analyses and … imagination.

Keywords: cyberinfrastructure, explainable artificial intelligence, cyberspace, computer-centred humans, knowledge based society, big data, knowledge refining JEL Classification: L63; L86; M15; O31; O33

“Artificial intelligence will not destroy this planet, irresponsible human intelligence will” ― Abhijit Naskar

1. From cyberinfrastructure to knowledge Even at their early steps, humans faced the decisions processes and challenges, but, naturally, the difficulty of such problems could become overwhelming in a probable future, as their complexity and implications increase exponentially in the context created by the society general development, where information and communication technology (ICT) became the main driving factor of the human society by the complex consequences of ICT services, products and applications, when supporting the Information Society (IS) on its way toward the Knowledge Based Society (KBS)[3].

Although this ICT/KBS context features seem evident, it is interesting to observe that the difficulty of decisions increases not only with the complexity and the importance of the problem, but also with the contextual information level/uncertainty involved each time.

Now, the role of the ICT advances, where artificial intelligence (AI) is by far the most expected instrument for data/information high level processing in the data deluge and Big Data context, became essential and led to the Data Science (DS) concept [3].

Based on these observations, the main parts of our title point (DS, advanced AI and core of KBS) could be associated in fact with complex processes of the ICT/KBS context, in a circle evolution and mutual-supporting relations, with crucial and complicate consequences (mainly benefic) for the Earth ecosystem.

These premises could explain why, due to the scientific, technical and economical reasons of optimizing the mentioned processes, many references perceive this ICT/KBS context linked with the necessary concept of Cyberinfrastructure [2][5][8][16].

15

The reason for which we also consider important to analyse this concept, keeping in mind our title point on knowledge (DS, advanced AI and core of KBS), is to emphasize its main components, complex interactions and mutual-supporting mechanisms, which are usually shadowed by the well-known resonance of the term infrastructure.

The extent and the importance, for the link between the AI/CT/KBS context and the stage of what cyberinfrastructure could provide, are also revealed by an actual example [1]: “IBM named a Leader Gartner releases 2021 Magic Quadrant for Data Science and Machine Learning Platforms…

IBM Watson® Studio empowers data scientists, developers and analysts to build, run and manage AI models, and optimize decisions anywhere on IBM Cloud Pak® for Data. Unite teams, automate AI lifecycles and speed time to value on an open multicloud architecture.”

Even the condensed (by the density of black boxes/applications) style of the above text shows something (like an iceberg tip!) about the undergoing complexity that could support large and promising fields of human activity, by automation of AI and speed time.

On the other hand, a systemic approach, for such complex and important concept (cyberinfrastructure), should begin from definitions.

A good point of starting is to use some reference examples for revealing the content, limits and even challenges of Cyberinfrastructure definitions [2]: “Cyberinfrastructure consists of computational systems, data and information management, advanced instruments, visualization environments, and people, all linked together by software and advanced networks to improve scholarly productivity and enable knowledge breakthroughs and discoveries not otherwise possible…

The value of any definition lies in its ability to identify that which it calls out and to distinguish those entities that do not meet the definition. The above definitions of cyberinfrastructure are helpful in that they each have three distinct elements relating to technology, people, and effect…”

Here we have to notice that beyond the usual approach that involves research activities, we have to consider people and scholarly activities more generally, including teaching and learning, i.e., the whole education fields, which in the Big Data era became not only important, but part of the most difficult processes of decision [5][7][8][10][6][3][9][15].

More than this general and comprehensive definition, the links and implications of Cyberinfrastructure in KBS are further revealed by quoting Fran Berman, director of the San Diego Supercomputer Center, as [2]: “The component parts of Cyberinfrastructure are human, software, hardware, instrument, and other resources coordinated so as to interoperate “end-to-end” and to support multiple users simultaneously. At scale, this complex structure will need to involve appropriate user incentive structures, effective organizational frameworks, policy and privacy constraints, and a wealth of other social mechanisms to ensure stability, performance, and usefulness” This way we have just arrived to the top of the picture for the systemic approach, confirming our paper title point, as it is clearly expressed that the high level of analyses and decisions, for this complex AI/CT/KBS context, is including effective organizational frameworks, policy and privacy constraints, and a wealth of other social mechanisms to ensure stability, performance, and usefulness.

16

Approaching the “iceberg” inside, i.e., the Cyberinfrastructure components and their complex relations, we can make it, essentially, in two steps.

First, considering the hard/soft resources and instruments, we could extend the above prominent example of IBM Watson Studio, now having a larger perspective and entering one of the most complex and relevant of its features (explainable AI), with impact on AI development and performances [1]: “Explainable AI is a set of processes and methods that allows human users to comprehend and trust the results and output created by AI algorithms, including its expected impact and potential biases…

Explainable AI is used to describe an AI model, its expected impact and potential biases. It helps characterize model accuracy, fairness, transparency and outcomes in AIpowered decision making. Explainable AI is crucial for an organization in building trust and confidence when putting AI models into production. AI explainability also helps an organization adopt a responsible approach to AI development.”

With other words, here we could witness one of the subtle ways ICT advances impact not only the humankind activity fields, but also the people’s thinking, as we repeatedly expressed [11][3].

Concretely, we notice that one of the prominent features/applications of IBM Watson Studio is oriented by design toward helping users (including the most skilled of them, i.e., the AI experts!) to understand all practical implications of those black box-s we above remarked: “As AI becomes more advanced, humans are challenged to comprehend and retrace how the algorithm came to a result. The whole calculation process is turned into what is commonly referred to as a “black box" that is impossible to interpret. These black box models are created directly from the data. And, not even the engineers or data scientists who create the algorithm can understand or explain what exactly is happening inside them or how the AI algorithm arrived at a specific result.

There are many advantages to understanding how an AI-enabled system has led to a specific output. Explainability can help developers ensure that the system is working as expected, it might be necessary to meet regulatory standards, or it might be important in allowing those affected by a decision to challenge or change that outcome.”

About the benefits of these features/applications, there is a lot to say, but, essentially, we consider them an expression of the golden rule AI/ICT have to implement in order to maintain its race toward better performance: re-invent itself all the time.

In fact, here we just switched to the second step of the above-mentioned systemic approach, as, after considering Cyberinfrastructure hard/soft resources and instruments, we point the human component, because, in the IBM example, to implement explainable AI means to leverage the human potential.

It is very important to observe that this goal is double fold, aiming apparently to leverage user’ capacity to fully exploit the designed AI (machine learning algorithms) potential, but eventually this will increase experts’ capacities to use their imagination in order to improve (re-invent) AI instruments performance. On the other hand, the complex (mutual-supporting) relations between Cyberinfrastructure components are also revealed.

In order to conclude the short approach of Cyberinfrastructure, the top of the picture for the systemic approach, we just mentioned above, should also be confirmed at least by one

17

more reference that points similar effective organizational frameworks, policy and privacy constraints, and a wealth of other social mechanisms to ensure stability, performance, and usefulness.

More than these, observing the prominent news of our days and trying to see even beyond Covid 19 pandemic or regional crises, we could notice that both EU and USA concluded that the future of the World will strongly depend on the acquired technological advances and their economic, political and social consequences, but the cyber-security was also pointed.

Here it is worth to recall a reference that is not only relevant and actual in spite of the passed years, but also backed by prestigious organizations [4]: ”One way to think of the Information Technology revolution is to think of cyberspace as a new continent - equivalent to discovery of the Americas 500 years ago. Cyberspace is transforming the old world with new goods and services. It is changing the way we learn, work and play….

Since long-term research is a public good, it needs to be funded as such: making all the boats rise together. That is why funding should come in part from society: industry is paying a tax by doing long-term research; but, the benefits are so great that society may want to add to that, and fund university research. Funding university research has the added benefit of training the next generations of researchers and IT workers. I do not advocate Government funding of industrial research labs or government labs without a strong teaching component…”

Although this arguments for Cyberspace funding support could appear utopian versus the actual mentioned World context, further there are given arguments which must also be considered, at least for an accurate analysis: “…One might argue that US Government funding of long-term research benefits everyone in the world. So why should the US fund long-term research? After all, it is a social good and the US is less than 10% of the world. If the research will help the Europeans and Asians and Africans, the UN should fund long-term research.

The argument here is either altruistic or jingoistic. The altruistic argument is that long-term research is an investment for future generations world-wide. The jingoistic argument is that the US leads the IT industry. US industry is extremely good at transforming research ideas into products – much better than any other nation.

To maintain IT leadership, the US needs people (the students from the universities), and it needs new ideas to commercialize. But, to be clear, this is a highly competitive business, cyberspace is global, and the workers are international. If the United States becomes complacent, IT leadership will move to other nations.“ It is also obvious that the example of the USA could be considered not of universal relevance, but it is still the most complex case and this way important for the World, as it reveals almost all challenges for the complicate problem of Cyberinfrastructure funding approach.

In addition, the need for highly skilled people (including students from the universities) is pointing again the crucial importance and role of the human component for Cyberinfrastructure and then for AI/ICT/KBS, but the complex relations between them represent the most complicate problem to be further analysed.

18

2. Evolutions to knowledge-centered computers and humans In our days almost nothing could surprise when speaking about ICT evolutions, including the ways humans are involved, as users or creators of the new products, applications or services emerging from ICT advances like AI, cloud, Big Data, IoT, 5G etc.

Still, the idea of Computer-Centered Humans [5] seems a little shocking and we also repeatedly expressed the need to timely analyse all the consequence of ICT exponential development and impact at Earth scale and on human behaviour and evolution [18][9][11].

Fortunately, in a World of Data Deluge, we have to see the details before jump into conclusions, but, in this case, Computer-Centered Humans surely could inspire for a new and useful approach of the ICT-humans complex relations and impact on KBS. Perhaps the best start is to enter the original details and then to observe the issues associated with the general approach of optimizing the AI/ICT/KBS context and development [5]: “The technology development of Artificial Intelligence (AI) in the U.S. Department of Defense (DoD) is proceeding at an unprecedented pace, with record breaking levels of funding to support unprecedented breakthroughs. As these technologies progress through technology readiness levels and make their way into the hands of human beings, however, the need for human-centered design practices will become more evident.

It is difficult to overstate just how prevalent discussions involving AI have become across the entire spectrum of warfighting and defense capabilities. But while the speed of research in the technology of AI is clearly increasing, research in human-AI interaction does not appear to be keeping pace. Issues such as usability, interaction modalities, visualization, and knowledge representation techniques are vital parts of a coherent technology integration strategy. While it is critical that the United States keep pace with its near-peer allies and adversaries by developing advanced technologies, it is also vital that these technologies are developed in ways that humans can understand and use appropriately…”

Beyond the defense use of AI, we have to notice again, as we earlier mentioned [11], the necessity to follow the ICT pace (human-AI interaction does not appear to be keeping pace) with the appropriate analyses of its consequences.

It is also worth to observe, as being written in a more subtle expression, the importance of using AI in the critical infrastructures/applications by humans (way into the hands of human beings) and this way revealing why this example is relevant beyond the defense field: “…two principal reasons why research in the psychology of human-AI interaction and human-centered design work needs to keep pace with technology development in the DoD: to ensure AI systems that are safe and reliable for humans to use, and to ensure these systems are integrated in ways that do not inject new kinds of error and risk to existing systems.”

Although it appears that here the point is mainly on humans/users safety, it is clear that the impact of these powerful technologies is way beyond, covering strategic issues (error and risk to existing systems) at Earth scale.

19

This way our systemic analysis is starting again from the top (as we have mentioned above, when expressing the strategical options for acquiring technological advances), explaining also why we have selected a defense example for approaching the ICT-humans complex relations and impact on KBS. Continuing to follow the ICT rule of re-inventing itself, we consider that this example showed that, beyond the new hard/soft performant technologies, in the future we have to look for other leveraging ideas, mainly on improving the output of the computer-human relation by refining knowledge by more subtle criteria of performance.

An integrative approach of this idea is well reflected bellow, as it also presents face to face the pros and the cons of refining knowledge from … old knowledge [7]: “I was listening recently to some engineering graduates talking about their current research efforts…These engineers were really skilled. I was greatly impressed by their depth of knowledge and facility with analysis. How did they learn so much in their few years of university training? After all, there is so much more to know now than there used to be, and every year it gets ever more overwhelming. • One explanation is that, as new knowledge accumulates, some old knowledge becomes irrelevant and falls off the knowledge stack.

Almost all the college course work I took long ago is now useless in itself, although what remains is an engineering mind-set and a mathematical grounding. Perhaps every course should have a sell-by date. Indeed, in retrospect I now realize that a number of the courses I took were already well past their sell-by dates when I took them…”

Confirming the unprecedent increase of knowledge, the challenge of refining knowledge is also recognized as very complicate: “The problem is that we never quite know when a particular course or book will become obsolete. But the purging of obsolete knowledge is probably insufficient in itself to make room for the new stuff, as there seems to be an exponential increase in knowledge. The complexity of our work is always increasing, similar to the increase in entropy decreed by the second law of thermodynamics. For many decades we've been driven by Moore's Law, which has urged us to embrace and exploit complexities that were unthinkable in previous decades.

Even as Moore's Law wanes, I feel sure that the general law of exponential increase will continue the trend.”

In a concrete manner, the perpetual informational transition where the engineers have to work, is updated to the actual computer-human relation/technology, where the knowledge (accumulated by others) is refined: “New engineers often enter fields that have become well plowed, and so find themselves pushing against physical and theoretical limitations. The issues are complex, and the incremental gains may be small…I frequently hear about engineers employing machine learning in some new and creative way. As the new engineers come out of school, they are also empowered by the continual rise of new tools. They work with networked computers, whose software embeds the knowledge and techniques of analysis and design accumulated by others. I remember when we used to wander down the halls asking other engineers how to solve some problem. Now we put our questions to the computer, and by doing so, ask all the other engineers and scientists of the networked world. You don’t have to know everything yourself, only how to ask the questions. So, the challenge is great, but these graduates are up

20

to it. I’m thinking, however, that there must be some value in the experience of older engineers.”

We have to notice that, in spite of the pros and cons, the conclusion is pointing the crucial role of knowledge exchange between people, even in the era when we put our questions to the computer, because there must be some value in the experience of older engineers.

The knowledge exchange between researchers is in fact the area where the knowledge that pushes the World ahead has the greatest impact, but also the most of generation and refining challenges, as it is next and detailed approached [8]: “Scientists in many disciplines have begun revolutionizing their fields by using computers, digital data, and networks to replace and extend their traditional efforts. The calculations that can be performed and the information that can be archived and used are exploding. In the not-too-distant future, the contents of the historic scientific literature will fit on a rack of disks, and an office computer will provide more computing than all the supercomputing centers together today. The results of today’s largest calculations and most sizable collections will take seconds to transmit using the fastest known network technologies. New technology-mediated, distributed work environments are emerging to relax constraints of distance and time. These new research environments are linking together research teams, digital data and information libraries, high-performance computational services, scientific instruments, and arrays of sensors. In many cases these emerging environments for knowledge work are essential, not optional, to the aspirations of research.”

Speaking of emerging environments for knowledge work, here we have to observe the clear confirmation of the crucial role of this subject, also emphasized by our paper title, as being essential, not optional, and the arguments for this necessity is further provided as a comprehensive picture of the future: “…some shifts in current research practice: • The classic two approaches to scientific research, theoretical/ analytical and experimental/observational, have been extended to in silico simulation and modelling to explore new possibilities and to achieve new precision.

• The enormous speedups of computers and networks have enabled simulations of far more complex systems and phenomena, as well as visualizing the results from many perspectives.

• Advanced computing is no longer restricted to a few research groups in a few fields such as weather prediction and high-energy physics, but pervades scientific and engineering research, including the biological, chemical, social, and environmental sciences, medicine, and nanotechnology.

• Crucial data collections in the social, biological, and physical sciences are now online and remotely accessible – modern genome research would be impossible without such databases, and soon astronomical research will be similarly redefined through the National Virtual Observatory.”

The mentioned new World research trends/features could impact all science areas, but more than this, they will mainly improve the instruments, efficacity and performance of outputs:

21

“…The trends represented by these examples will only accelerate. In the future, we might expect researchers to: • Combine raw data and new models from many sources, and utilize the most up-to-date tools to analyse, visualize, and simulate complex interrelations.

• Collect and make widely available far more information (the outputs of all major observatories and astronomical satellites, satellite and land-based weather data, threedimensional images of anthropologically important objects), leading to a qualitative change in the way research is done and the type of science that results.

• Work across traditional disciplinary boundaries: environmental scientists will take advantage of climate models, physicists will make direct use of astronomical observations, social scientists will analyse interactive behavior of scientists as well as others.

• Simulate more complex and exciting systems (cells and organisms rather than proteins and DNA; the entire earth system rather than air, water, land, and snow independently).

• Visualize the results of complex data sets in new and exciting ways, and create techniques for understanding and acting on these observations.”

Because time is the main enemy of Earth ecosystem when confronted, as we repeatedly mentioned [18][11], with hard challenges as climate changes, resource fading or social unbalances, here the conclusion is pointing the necessity to act now, based on specified benefits: “…We believe that several key thresholds have recently been reached in the use of IT … including networking, supercomputing, human interfaces, collaboration environments, and information management: • Closed-form analytic solutions are available for a decreasing fraction of interesting research challenges; often only a numeric computation can produce useful results.

• Moore’s law has led to simulations that begin to match the complexity of the real world, with fully three-dimensional, time-dependent modelling with realistic physical models opening up a vast range of problems to qualitative attacks. They range from cosmology to protein folding – problems formerly considered far too complex to address directly.

• In an increasing fraction of cases, it is faster, cheaper, and more accurate to simulate a model than construct and observe a physical object.

• Increasingly ubiquitous networking and interoperability of information formats and access make high-quality remote collaboration feasible.

The practical value and the importance of the same conclusion (act now) is completed by also identifying some associated risks to be considered: “There are also significant risks and costs if we do not make a major move at this time: • Absent coordination, researchers in different fields and at different sites will adopt different formats and representations of key information, which will make it forever difficult or impossible to combine or reconcile.

• Absent systematic archiving and curation of intermediate research results (as well as the polished and reduced publications), data gathered at great expense will be lost.

• Effective use of cyberinfrastructure can break down artificial disciplinary boundaries, while incompatible tools and structures can isolate scientific communities for years…”

22

Again, we consider important to stress that, in spite of the excess of optimism or utopia, such points of view have the merit of expressing a lot of the details that could contribute to the configuration of the actual and the emerging context of developing AI/ICT/KBS, providing this way a useful base for the analyses/decisions, irrespective how these could/will be.

In fact, these details identify prominent mechanisms that could contribute to the optimization of AI/ICT/KBS development in the Big Data era, considering the actual challenges and expectations which are naturally associated with the unprecedented advances already reached, but difficult to be improved [12][14][16][17].

As we already have mentioned, one of the main mechanisms of progress, for AI/ICT/KBS is refining knowledge at Earth ecosystem scale [11], which is essentially depending on human capacity of creation and integration of the advanced technology in new models.

This reality is considered, as we have mentioned above, by the EU incumbents, confirming this way that KBS is a strategic goal and intensive studies are made just to optimize the road to it, as it is next expressed [10]: <<Knowledge and how people acquire knowledge has fascinated human beings from the ancient Greeks to our day. With the emergence of the so-called knowledge economy, knowledge has become one of the most fashionable terms in the political and managerial sphere. As Weiler … put it: “The politics of knowledge become less and less separable from the politics of production and profit, arguably the most powerful political dynamics in today’s world”. Halal’s … enthusiastic words show this central role of knowledge in the new way of seeing the organization: “We see now that knowledge is the most strategic asset in enterprise, the source of all creativity, innovation and economic value”.>> Although the management is considered first (at EU level), here we can observe an interesting analysis of the knowledge basics, which could have useful impact for identifying best practice approaches: <<The main focus will be on knowledge management approaches, since this field of study has been very much involved in relating knowledge to managerial practices. Managing knowledge can be seen as the crucial aspect of the so-called “knowledge economy”, and hence it has strong influence on innovative practices … Three main approaches to epistemology are proposed in a broad sense: innatist/introspection, empiricism/behaviorism and critical philosophy/constructivism. Special emphasis is placed on constructivism since it is argued that it is the predominant view nowadays…The first distinction, commonly addressed in the literature, is between knowledge, information, data and expertise … Data constitute the bricks from which the pyramid of knowledge is built. Davenport et al. … define data as “a set of discrete, objective facts about events”. Most of the knowledge management literature agrees with this definition (see Tuomi … for a review). Data constitute all the empirical reality that is presented to us in our daily experience, the “ocean of impressions” in Kant’s terms. In managerial terms, data are that which are available without much restriction in the knowledge society, on the Internet, in databases, and in daily activities. Bender and Fish … point out that data become information only when they have been imbued with meaning, understanding, relevance and purpose…>>

23

Beyond the appearance of theoretical issues, we consider that presenting the different approaches of generating/perceiving data, information and knowledge could reveal important elements to be used when optimizing these processes in the computer-human relation and generally in the AI/ICT/KBS: <<While general information is data that are organized and structured, contextual information is created by filtering and organizing general information to meet the requirements of a specific community of users. Information is transformed into knowledge when the individual processes it and internalizes it. New information has to be integrated into the individual’s existing knowledge structure in order to produce learning. In Piaget’s terms, the new information can be either accommodated or assimilated. If the new information is assimilated there is a change in the content of the schema. We add the information into our schema, but the schema does not change dramatically. If accommodation occurs, the new information triggers a change in the structure of the schema. A new schema means that the reality that the information refers to is looked upon in a different way. In this way, schemas “form the basis for comparing and interpreting incoming data” (Shute…). Finally, if one masters a certain subject or area of knowledge, s/he will become an expert…>> If initially there was no clear link with AI/ICT/KBS optimization processes, we consider that finally we have to notice here a valuable set of available rules in the generation and exploit of knowledge, but more than these, we find a practical description of the expertise/expert in this emergent and difficult field of human activity: <<Alexander…, in her review of psychology research on expertise, maintains that experts are people who: • possess extensive and highly integrated bodies of domain knowledge, • are effective at recognizing the underlying structure of domain problems, • select and apply appropriate problem-solving procedures for the problem at hand, and • can retrieve relevant domain knowledge and strategies with minimal cognitive effort.

Wiig … refers to the proficiency dimension to explain levels of expertise with regard to knowledge. He proposes seven different categories from beginner to “grand master”. He differentiates between expertise and wisdom. Expertise refers to “specialized knowledge and skills in a particular area” … whereas wisdom involves, in addition to a high level of knowledge in a specific area, certain personal characteristics such as the willingness to learn or to be flexible. Tuomi … criticizes this classical hierarchical conception of knowledge and information. He argues that all these models consider knowledge as a “higher form of information” ... For Tuomi …, “data emerge last – only after knowledge and information are available. There are no ‘isolated peaces of simple facts’”. He turns the pyramid upside-down.

Once knowledge is articulated, verbalized and structured, it is transformed into information.

Information is transformed into data when it is placed within certain predefined structures…>> Regarding the (Tuomi) shocking opinion, last presented, we consider that as an opening to a larger view of the complex and dynamic processes of generating/perceiving data, information and knowledge in the emerging World of KBS, where the relativity and the probabilistic computing approach, we already presented [19], are inherent features.

24

With other words, we have to agree that understanding the unlimited dynamic AI/ICT/KBS optimization processes is a long and winding road, full of surprises, we have to face with timely analyses and … imagination.

3. Conclusions Analysing the role of the ICT advances, where artificial intelligence (AI) is by far the most expected instrument for data/information high level processing in the data deluge and Big Data context, leading to the Data Science (DS) concept, is a way to reveal the essential links between the main parts of our title point (DS, advanced AI and core of KBS) with the complex processes of the ICT/KBS context, in a circle evolution and mutual-supporting relations, having crucial and complicate consequences (mainly benefic) for the Earth ecosystem. These premises, due to the scientific, technical and economical reasons of optimizing the mentioned processes, further link the ICT/KBS context with the necessary concept of Cyberinfrastructure, we consequently have to approach. We analysed this concept keeping in mind our title point on knowledge (DS, advanced AI and core of KBS), aiming to emphasize its main components, complex interactions and mutual-supporting mechanisms, which are usually shadowed by the well-known resonance of the term infrastructure.

Using appropriate references for confirmation, we concluded that, beyond the usual approach that involves research activities, the Cyberinfrastructure should contain people and scholarly activities more generally, including teaching and learning, i.e., the whole education fields, which in the Big Data era became not only important, but part of the most difficult processes of decision.

Another finding is that ICT advances impact not only the humankind activity fields, but also the people’s thinking, generally for understanding all practical implications of using AI/ICT features/applications, but, essentially, we consider them an expression of the golden rule AI/ICT have to implement in order to maintain its race toward better performance: re-invent itself all the time by leveraging people’s creation skills and thinking.

Concretely, in a systemic approach, after considering Cyberinfrastructure hard/soft resources and instruments, we pointed the human component, starting from the IBM example (Implement explainable AI) [1], meaning the aim of leveraging the human potential.

It is very important to observe that this goal is double fold, aiming apparently to leverage user’ capacity to fully exploit the designed AI (machine learning algorithms) potential, but eventually this will increase experts’ capacities to use their imagination in order to improve (re-invent) AI instruments performance.

Consequently, the complex (mutual-supporting) relations between Cyberinfrastructure components are approached from the human side, considering their crucial role in the actual World context where USA and EU agreed on the strategic importance of the acquired technological advances (i.e., supposing the associated economic, political and social consequences, but also the cyber-security). It resulted that the need for highly skilled people raised the importance and role of the human component for Cyberinfrastructure and then for AI/ICT/KBS, but the complex relations between them represent the most complicate problem to be further considered, by the need to timely analyse all the consequence of ICT

25

exponential development and impact at Earth scale and on human behaviour and evolution, approaching the ICT-human’s complex relations and impact on KBS. Continuing to follow the ICT rule of re-inventing itself, we consider that, beyond the new hard/soft performant technologies, in the future we have to look for other leveraging ideas, mainly on improving the output of the computer-human relation by refining knowledge by more subtle criteria of performance.

In a concrete manner, the perpetual informational transition where the engineers have to work, is updated to the actual computer-human relation/technology, where the knowledge is refined. The knowledge exchange between researchers is in fact the area that pushes the World ahead with the greatest impact, but also with the most of generation and refining problems, which are worth to be analysed in order to identify prominent mechanisms that could contribute to the optimization of AI/ICT/KBS development in the Big Data era, taking into account the actual challenges and expectations which are naturally associated with the unprecedented advances already reached, but difficult to be improved.

Knowing those problems could contribute to the configuration of the actual and the emerging context of developing AI/ICT/KBS, providing this way a useful base for the analyses/decisions, irrespective how these could/will be.

One of the main mechanisms of progress, for AI/ICT/KBS, is refining knowledge at Earth ecosystem scale, which is essentially depending on human capacity of creation and integration of the advanced technology in new models, with a larger view of the complex and dynamic processes of generating/perceiving data, information and knowledge in the emerging World of KBS, where the relativity and the probabilistic computing approach [19] are inherent features.

We concluded that understanding the unlimited dynamic AI/ICT/KBS optimization processes is a long and winding road, full of surprises, we have to face with timely analyses and … imagination.

REFERENCES [1] *** , IBM Watson Studio, 2021, https://www.ibm.com/cloud/watsonstudio?p1=Search&p4=43700052310836558&p5=b&gclid=CjwKCAjwiLGGBhAqEiwAgq3 q_kVnog-GfCMmo417Tjt9fX_PrUyfS3QWUVB3QD1VAg2MwYhte183BoC90gQAvD_BwE&gclsrc=aw.ds [2]Craig A. Stewart et all, What is Cyberinfrastructure?, SIGUCCS’10, October 24–27, 2010, Norfolk, Virginia, USA, https://www.researchgate.net/publication/49471518 [3]Victor Greu, Information and communications technology is merging data science and advanced artificial intelligence towards the core of knowledge based society -(Part 1), Romanian Distribution Committee (affiliated to the “International Association of the Distributive Trade”-scientific association – A.I.D.A. Brussels) Magazine(international; electronic; covered in RePEc International Data Base), Volume 12, Issue 1, Year 2021.

[4]Jim Gray, What Next?A Dozen Information-Technology Research Goals, Microsoft Research, June 1999, Technical Report MS-TR-99-50 [5]E. S. Vorm, Computer-Centered Humans: Why Human-AI Interaction Research Will Be Critical to Successful AI Integration in the DoD, IEEE Intelligent Systems ( Volume: 35, Issue: 4, July-Aug. 1 2020)

26

[6]Florin Enache, Victor Greu, Petrică Ciotîrnae, Florin Popescu, Model and Algorithms for Optimizing a Human Computing System Oriented to Knowledge Extraction by Use of Crowdsourcing, 2020, 13th International Conference on Communications (COMM), (Politehnica University of Bucharest, Military Technical Academy, IEEE Romania), (COMM 2020 is covered in IEEE Explore Database and ISI Web of Science in the Conference Proceedings Citation Index) [7] Robert W. Lucky, The expiration date of knowledge, IEEE Spectrum, vol. 56, no. 09, pp.

21-21, Sept. 2019 [8]Daniel E. Atkins et al, Revolutionizing Science and Engineering Through Cyberinfrastructure: Report of the National Science Foundation Blue-Ribbon Advisory Panel on Cyberinfrastructure, 2003, https://www.nsf.gov/cise/sci/reports/atkins.pdf [9]Victor Greu, Using the information and communications technology data deluge from a semantic perspective of a dynamic challenge: What to learn and what to ignore?

– (Part 2), Romanian Distribution Committee (affiliated to the “International Association of the Distributive Trade”-scientific association – A.I.D.A. Brussels) Magazine(international; electronic; covered in RePEc International Data Base), Volume 10, Issue 4, Year 2019.

[10]Ernesto Villalba, The Concept of Knowledge for a Knowledge-based Society From knowledge to learning, European Commission Joint Research Centre © European Communities, 2007 [11]Victor Greu, The information and communications technology is driving artificial intelligence to leverage refined knowledge for the World sustainable development – (Part 2), Romanian Distribution Committee (affiliated to the “International Association of the Distributive Trade”-scientific association – A.I.D.A. Brussels) Magazine(international; electronic; covered in RePEc International Data Base), Volume 10, Issue 1, Year 2019.

[12]Gerbrand Tholen, The problem with a knowledge-based society, November 26th 2017, https://blog.oup.com/authors/gerbrand-tholen/ [13]Victor Greu, Extending information and communications technologies’ impact on knowledge based society through artificial and collective intelligence –(Part 3), Romanian Distribution Committee (affiliated to the “International Association of the Distributive Trade”scientific association – A.I.D.A. Brussels) Magazine(international; electronic; covered in RePEc International Data Base), Volume 9, Issue 3, Year 2018.

[14] Bhupinder Kour, The Rise of Machine Learning and AI is Improving Lives in 2018, https://www.smartdatacollective.com/rise-of-machine-learning-ai-improving-lives/ [15]Victor Greu et all, Human and artificial intelligence driven incentive-operation model and algorithms for a multi-purpose integrated crowdsensing-crowdsourcing scalable system, Proceedings of International Conference Communications 2018, (Politehnica University of Bucharest, Military Technical Academy, IEEE Romania), June 2018(COMM 2018 is covered in IEEE Explore Database and ISI Web of Science in the Conference Proceedings Citation Index).

[16]Fran Berman, Current Working Definitions Of Cyberinfrastructure, 2005, https://www.researchgate.net/publication/49471518_What_is_Cyberinfrastructure/link/0912f 51085bdceaf0a000000/download [17]Gordon Bell, Tony Hey, Alex Szalay, Beyond the Data Deluge, Science Vol 323, 6 March 2009.

[18]Victor Greu, Searching the right tracks of new technologies in the earth race for a balance between progress and survival, Romanian Distribution Committee Magazine, [19] Victor Greu, Information and Communications Technology new paradigm of probabilistic computing could inspire our thinking through a future World of uncertainty --(Part 3), Volume 11, Issue 4, Year 2020.

27

Augmented Marketing: Delivering Tech-Empowered Human Interaction

by Cosmin TĂNASE Abstract Customer interface - the way customers communicate with companies - is a big part of the customer experience. In industries such as hospitality, healthcare, professional services, and even high-tech, some customer interfaces are mainly fronted by humans. The concierges, nurses, consultants, and key account managers are critical resources in their fields, and machines are not a match for their abilities to deliver the right experience. But it takes years to recruit and develop the competencies of these people before they can perform their best. The circumstance makes companies challenging to scale, essentially creating a limit to growth. Augmented marketing offers a solution to this problem. Digital interfaces can provide new alternative ways for customers to interact with brands and companies. Although a digital interface cannot wholly replace human-to-human interaction, it can make the scarce human resources work faster and smarter.

Keywords: Customer Interface, Digital Tools, Knowledge Bases, Tiered Services, Virtual Assistance JEL Classification: L81, M31, 031, O33, O35 28

Knowing precisely what and how to teach computers will enable human coaches to realize their full potential. This premise leads to a technology development movement known as intelligence amplification (IA). As opposed to artificial intelligence (AI), which aims to replicate human intelligence, IA seeks to augment human intelligence with technology. In IA, humans remain the ones making decisions, albeit supported by robust computational analysis. In marketing, the application of IA makes perfect sense in areas where humans are still dominant and computers can only become the support systems. Thus, augmented marketing focuses on marketing activities that heavily involve human-to-human interfaces, such as selling and customer service. In these human resources– intensive jobs, the role of technology is to increase productivity by taking over low-value tasks and helping humans make smarter decisions.

The rise of Generation Y and Generation Z fueled in the last years the need for augmented marketing. These two generations see the Internet as an indispensable part of their lives and technology as an extension of themselves. In fact, they see no borders between the physical and digital worlds. They call it the “phygital” world. The need for speed and on-demand delivery will make way for digital interfaces. Augmented marketing starts with a clear definition of how technologies can add value to frontline operations. One way to improve productivity is to create a tiered interface system. Mixing the digital and human interfaces within a structured pyramid allows businesses to scale up. Companies can free human resources to work on worthwhile tasks.

Tiered Sales Interfaces In the selling process, the most common customer interface tiering is based on the customer lifecycle across the sales funnel. B2B companies can capture and nurture early leads via a digital interface while pursuing qualified leads and hot prospects with a team of salespeople. With this approach, businesses can have a broader reach with lead generation. At the same time, they can refocus the sales force efforts into closing the deals. This arrangement is optimal since the final step in the sales funnels usually requires strong communication and negotiation skills. Retail businesses can also leverage tiered sales interfaces with omnichannel presence. Digital channels are used to build awareness, create attraction, and encourage trials.

Customers can browse through a catalog of products on the website or mobile app and select what they like. Companies like Sephora and IKEA use augmented reality (AR) to enable potential buyers to “try on” the product digitally. That way, when customers come to the brick-and-mortar outlet, the interest has built up and it is easier for store attendants to sell. The division of labor between human and machine in the sales process is based on activity specialization across the funnel. This hybrid model uses various sales channels from those with the lowest cost to the most expensive ones. Each channel plays a specific role that drives prospects from the top to the bottom of the funnel.

Tiered Customer Service Interfaces In the customer service process - in other words, when dealing with existing customers—the most common basis for customer tiering is the customer lifetime value (CLV) or customer loyalty status. The CLV is a projected net income generated from each customer based on the estimated length of tenure.

Customers with low CLV or status only have access to the digital interface, hence the low cost-to- serve.

On the other hand, customers with high CLV have the privilege to interact with high-cost human assistants.

The service quality tiering provides the incentive for customers to climb up the ladder by making a bigger purchase or committing their loyalty to specific brands. The rich information that can be found on the Internet makes people search for solutions themselves when stumbling into a problem with products and 29

services. Many companies facilitate the self-service trend by providing searchable online resources for their customers. Many also develop support forums or communities where customers can ask one another about their problems. In this social technology application, the volunteers who helped others are rewarded with gamification badges. A longtime best practice for tech companies, the approach is now adopted by businesses in other industries. With a strong knowledge base and support forums, companies can anticipate customer issues, and customers can avoid the unnecessary hassle of contacting customer service.

The knowledge bases from online resources and forums become a big structured data that companies feed to their machine learning algorithms. Instead of searching for answers in support pages or communities, customers can now just ask AI for solutions. The automated customer service interface may be a chatbot or a virtual assistant. It gives customers not only convenience but also the instant solutions that they want. Similarly, scripts and histories from call centers and live chats can now be transferred to the AI engine, essentially providing hassle-free options for customers having basic, frequently asked questions.

Businesses need to take several steps to develop tiered customer support with a solid symbiosis between humans and machines: 1. Build a knowledge base of frequently asked questions. Businesses learn from past histories that most customer inquiries are basic and repetitive. It is inefficient to use customer service reps to respond to these questions. Thus, the first thing that companies must do is compile these questions into a library of information that is easily accessible. A good structure and categorization will help customers navigate through the knowledge base. Companies should use storyboards that utilize actual customer stories—real situations and scenarios that customers face. Moreover, a good knowledge base must have a search function. And finally, it should also be continuously updated with new information.

2. Determine customer tiering model. With analytics, businesses can quickly analyze a large volume of transactions into individual customer records. Companies need to simply determine a set of criteria to evaluate the value of each customer to them. Usually, the tiering involves both financial (revenue, profitability) and nonfinancial measures (share of wallet, tenure, strategic importance). Based on the criteria, companies can group customers into levels. The tiering is dynamic; there must be a mechanism for customers to move up and down. When the tiering is well defined, it is straightforward to determine the cost-to-serve budgets for each tier. The budgets will determine which customer support options each customer can access.

3. Create multitier customer support options. Companies can leverage the knowledge base for several customer service channels. The first is to create a self-service option by putting the knowledge base on the website. When the knowledge base has flowing storyboards, it can be easily transferred to both the chatbots and virtual assistant platforms. When customers fail to get answers having gone through these machine interfaces, companies should provide an option to escalate to human-to-human interfaces. Forums and communities are great ways to empower customers. But ultimately, customer service reps must be ready to give answers when nobody else can, either via email, live chat, or phone call. Companies should not provide all these options to everyone. Low-tier customers will typically get access to self-service options (online resources and forums) while high-tier customers will get all types of access depending on their preferences.

Providing Digital Tools for Frontliners Augmented marketing is not only about the division of labor. Digital tools can empower frontline employees who have direct interactions with customers. Today, despite all the buzz surrounding e30

commerce and online shopping, the majority of retail sales still happen in brick- and-mortar stores. Most customers are still webrooming—search online and shop offline. Thus, when well-informed customers who have spent hours researching products online eventually come to the store, they expect equally knowledgeable frontline staff to interact with them. A similar trend happens in the services industry, too.

Customers are accustomed to reading reviews before coming to hotels, professional services firms, or education institutions to explore further. These smarter customers have high expectations, and that makes the job of frontline employees more challenging. Frontline personnel are crucially important, especially in high- contact environments such as the retail and services sectors. Even in low-contact industries, frontline staff often become the last line of defense in terms of service recoveries. They can often become the source of differentiation and the face of the brands. It is vital to empower employees with the right knowledge that companies have on their customers.

Customer-facing employees are the most important medium to educate the customers on the things that are difficult to convey through other means. With a wealth of insights, frontline staff can be more productive. They can focus on sales conversion, cross-selling, and upselling rather than making smart guesses about the customers. Transaction histories and AI-generated product recommendations are some of the information that will help employees understand what to offer the customers. Being able to anticipate customer needs is essential for frontline work. Equally important is to be able to provide personalized interactions and build relationships as if they have known the customers for a long time. Digital tools in the brick-and-mortar stores also help reduce friction for companies aiming to provide omnichannel experience.

Consider the Sephora Digital Makeover Guide. A customer can book an appointment with a makeup artist.

Once in-store, the customer can browse the online lookbook for a makeover inspiration. The artist uses a small scanner called Color IQ to capture the skin tone to determine the perfect shade for the customer. With the information from the lookbook and Color IQ, the artist can look for and scan products that fit the customer profile. Once the makeover is completed, the artist can email the customer the list of steps and products that have been used—useful for a repeat purchase.

Businesses need to build not only a digital interface for the customers but also a matching one for the employees. The delivery of customer information can be made via either mobile devices or wearables.

Hotels, for instance, may allow customers to make requests via in-room tablets or their smartphones, and those requests can reach the housekeeping, kitchen, or concierge directly or via a connecting chatbot. It facilitates faster response and hence creates a better customer experience.

There are several steps for companies to provide the right digital tools to support frontline employees: 1. Understand employee frustration points. The biggest mistake companies make in implementing digital tools in frontline operations is to focus on the technology and not the reason for implementing it. Understanding employee experience (EX) is equally essential as understanding customer experience (CX). Thus, the first step is to map the employee experience journey as complementary information to the customer experience map. Frontline work is both difficult and stressful. But it also holds a lot of insight. Businesses need to listen to the voice of customer-facing employees and pinpoint their frustrations. Similar to customers, employees are usually frustrated with inefficiencies—activities that are time- consuming for them—and potential service failures—inability to give customers what they want, which leads to complaints.

31

2. Identify how technology can be a solution. Once the frustration points have been identified, companies need to find technology solutions that work. Most of the time, companies focus on the solutions that can be integrated into the entire information technology system. But the key to making the right selection, however, is to involve employees in the process. Tests need to be carried out with employee support. It will help companies anticipate potential issues in the execution early on and increase buy-in.

Understanding how frontline workers use technology is critical, too. Companies need to choose the right hardware. Smartphones and tablets are standard digital tools for some tasks. But for other roles that require hands-free applications, wearables might make more sense.

3. Focus on change management. Unlike other Marketing elements, augmented marketing requires close collaboration between frontline employees and technology enablers. The biggest challenge, especially for businesses with a large number of frontline workers, is the resistance to change. Not all customers are tech-savvy; likewise, not all employees are digital-ready. Not everyone is comfortable being augmented by technology. Training to upgrade digital skills is critical to success. But the learning is not only about the skills but also the digital mindset. Monitoring execution hurdles and fixing them is also something that businesses must pay attention to in the rollout.

Conclusion One of the areas where human–machine symbiosis provides the best outcome is in the customer interface. For basic and straightforward inquiries, digital interfaces suffice. But for more consultative interactions, computers have yet to outperform human-to-human interface. Thus, a division of labor within a tiered structure makes sense. In the sales process, the top and middle of the funnel can be delegated to machines while the bottom one is carried out by the salesforce. In customer service, the digital and selfservice interface is used to serve the mass of customers while the customer support reps are reserved for the most valuable customers. Businesses should utilize narrow artificial intelligence to ensure the quality of digital interactions. Augmented marketing is also about empowering frontline employees with digital technologies. Smart and always-on customers must be matched by well-informed employees. Making datadriven insights available at the point of interaction allows employees to tailor their approach to every customer. A two-way interface between customers and employees also reduces friction and ultimately improves customer experience.

References [1] Antéblian, B., Filser, M., & Roederer, C. (2014). Consumption experience in retail environments: A literature review.

Recherche et Applications en Marketing, 28(3), 82–109.

[2] Bertacchini, F., Bilotta, E., & Pantano, P. (2017). Shopping with a robotic com- panion. Computers in Human Behavior, 77, 382–395.

[3] Dacko, S. G. (2017). Enabling smart retail settings via mobile augmented reality shopping apps. Technological Forecasting and Social Change, 124, 243–256.

[4] Grewal, D., Roggeveen, A. L., & Nordfält, J. (2017). The future of retailing. Journal of Retailing, 93(1), 1–6.

[5] Huang, T.-L., & Liao, S. (2015). A model of acceptance of augmented-reality interactive technology: The moderating role of cognitive innovativeness. Electronic Commerce Research, 15(2), 269–295.

[6] Kamran-Disfani, O., Mantrala, M. K., Izquierdo-Yusta, A., & Martínez-Ruiz, M. P. (2017). The impact of retail store format on the satisfaction-loyalty link: An empirical investigation. Journal of Business Research, 77, 14–22.

[7] Kotler, P., Setiawan, I., Kartajaya, H. (2021), Marketing 5.0 – Technology for Humanity. John Wiley & Sons Inc., 172-182 [8] Kannan, P. K., & Li, H. (2017). Digital marketing: A framework, review and research agenda. International Journal of Research in Marketing, 34(1), 22–45.

32

The Growth of E-Commerce, Disruptive Technologies and Marketers’ Conversational Strategy

Drd. Ioan Matei PURCĂREA Abstract There are significant options for retailers if they are wishing a position of advantage while considering consumers’ ongoing shifts in their purchasing and consumption patterns, and raising including their better mobile-first experience. It is very important to implement an effective always on conversational commerce strategy, and to consider the hybrid AI shopper journey, e-commerce growth driven by the digital evolution, and the stages on a valuable e-commerce maturity spectrum. Without doubt, ecommerce sales are supported by the forward-thinking consumer-product companies, which need to also take into account the increased uncertainty around shopper behavior putting more pressure on retail category managers. There is also no doubt that e-commerce is both necessity, and viability, being imperative to consider the impact of the implicit capabilities behind e-commerce on change, and to make the effort to build the organization of the future, a data organization.

Keywords: E-Commerce; Disruptive Technologies; Marketers’ Conversational Strategy; Hybrid AI shopper journey; Omni channel; Data organization JEL Classification: D83; L21; M21; M31; M37; O31; O33

Retailers’ options if they are wishing a position of advantage while considering consumers’ ongoing shifts in their purchasing and consumption patterns, and raising including their better mobile-first experience In our latest RDC Magazine issue we showed how e-commerce has accelerated growth and adoption within the context of the current pandemic, retailers needing to challenge their imagination while investing in the future of retail, taking into account digital consumers’ increased expectations, and the synergy between e-commerce and e-marketplaces, mobile/app

33

commerce, and social media marketing, getting the maximum advantage from new digital technology (Purcarea, 2021). Very new research from McKinsey revealed the competitive advantage of the retailers with tech-forward business models (already before the new coronavirus crisis), the huge shift of value to online been now obvious (in USA, more than 80% of all value created in retail have been generated by only 5 retailers in McKinsey retail index, nearly 60% of those gains being ensured by Amazon alone; 98% of gains in retail market capitalization in China have been generated by only four players), and the so-called Super 25 retailers (without including Amazon whose valuation multiples are beyond those of traditional retailers, being comparable with those of technologies companies) being classified into four categories (homeeconomy players, value retailers, online specialists, and platform players), and being expected ongoing shifts (influenced consumers’ gained value from adopting the new channels or behaviors, consumers’ enjoyable experiences, and consumers’ material investments involved by the adoption of new ways of consuming) in purchasing and consumption patterns. In the opinion of McKinsey’ s representatives retailers’ options are clear if they are wishing a position of advantage: assuming the challenge of the great acceleration, preparing to compete with plentifully capitalized mega platforms (considering the fact that platform players, from Walmart and Home Depot to Alibaba and JD.com, are not only expanding their offerings, but also deepening relationships with both consumers, and businesses, obviously changing this way the retail’s competitive landscape), starting dealing with channels, rethinking portfolios in accordance with the performance appraisal and measurement, fundamentally changing the direction of a business if a wind blowing from behind can move growth, and taking full advantage of the opportunities whenever and wherever they present themselves (Bradley, et al., 2021).

As more technologies and channels were emerging for shoppers to engage with retailers, consumer behavior was constantly evolving, consumers’ adoption of digital channels increasing and revealing the coincidence with the growth of e-commerce, and services like BOPIS (Buy Online, Pickup in Store), curbside pickup (an order online order placed online and driving then to the store to pick it up), ship from store or Last Mile Delivery (delivering items to the to the doorstep of the end-customer as fast as possible) , and BORIS (Buy Online, Return In-Store) addressing convenience and customer experience (CX) helped by enhanced data analytics (the increasingly used AI-powered data analytics systems allowing both managing all of data, and extracting useful insights from it so as to optimize omnichannel programs) confirming the acceleration of the omnichannel shopping behavior during the COVID-19 pandemic (Zebra, 2021). In the same time, retailers must pay attention to consumers continuously seeking of not only convenient, but also frictionless, contactless and personalized shopping experiences, and also to raise consumers’ mobile experience considering the increasing online traffic coming via mobile and apps, connecting with them at each stage of their lifecycle, and, for instance, ensuring consumers’ engagement and education with convenient and connected cross-channel journeys, showing them (and keeping on showing at every touchpoint) the value, and sending them the right messages so as to build the right relations with them (Airship, 2021).

34

Implementing an effective always on conversational commerce strategy. The hybrid AI shopper journey. E-commerce growth driven by the digital evolution, and the stages on a valuable e-commerce maturity spectrum An InMoment White Paper (2021) brought to our attention the importance of better learning from customers’ journeys (motivations for purchasing, consideration process, emotions, way of arrival at the point of purchasing, valorizing of course the customer feedback), the customers’ broad perspective (channel experiences, product experiences, marketing communications, moments of truth etc.) driving a fundamental part of building customer loyalty, by predicting customers’ concerns and behaviors (going beyond only identifying silent customers who may be dissatisfied or upset) and achieving dynamic offers and personalized incentives. In their opinion (taking the example of the well-known “You may also like” recommendations pioneered by e-commerce giant Amazon), there is a great opportunity to manage to predict and proactively meet the needs of an organization’s customers. And in order to listen and understand their customers’ needs every organization (either its goal is focused on cross-sell, upsell, retention, or acquisition opportunities), must have not only its proper systems, data, and human expertise, but also the data and its findings to transform customer experiences (CX), as well as both processes, and greater strategies enabling organization to make the necessary changes for present and future customers.

According to Q2 2021 CPC Report from Pacvue (based on data sourced from Pacvue’s proprietary Amazon keyword tracking database), in response to the increase in eCommerce spending in U.S. the most brands increase their investment in Amazon advertising, advertisers continuing to move budgets into Amazon advertising (Pacvue, 2021).

As argued by Spectrm (2021), consumers can be engaged and converted 24/7 both on their preferred channels, and at their preferred time) with the help of the ecommerce marketing bots which offer the opportunity not only to personalize one to one messaging with consumers at scale, but also in real time, this conversational marketing (as a feedback-driven process) enables marketers to identify consumers’ needs, wants and desires, taking into account their expectations of having personalized, instant and effortless online shopping experiences, as shown in the figure below:

Figure no. 1: Benefits of conversational ecommerce marketing Source: Spectrm, 2021. The D2C Conversational Marketing Playbook For Ecommerce. [pdf] Spectrm, eCOMMERCE BEST PRACTICES, p. 4 (work cited)

35

Spectrm’s expertise and inspiration made possible the necessary clarifications with regard to the involvement of different parts of a ecommerce marketing technology stack at each customer journey’s steps, by coining the so-called A-B-C framework, which defines chatbot marketing components (as shown in the figure below), allowing to create and implement on this basis an effective always on conversational commerce strategy. The full funnel solution offered this way by the ecommerce marketing bots (so as to capture all kinds of customer insights based on declared data) ensures the desired customers’ engagement and conversion, valorizing new messaging channels and opportunities, and continuously optimizing the high-performance bots.

Figure no. 2: The Chatbot Marketing Funnel Source: Spectrm, 2021. The D2C Conversational Marketing Playbook For Ecommerce. [pdf] Spectrm, eCOMMERCE BEST PRACTICES, p. 5 (work cited)

A McKinsey’s executive editor in the New York office Monica Toriello, underlined (on the occasion of a conversation with McKinsey partners Bryan Hancock (the global leader of McKinsey’s work on talent) and Ashish Kothari about the future of work) that: “Technology is, of course, a huge factor affecting the future of work: e-commerce and digital channels, contactless solutions, automation and robotics in both stores and warehouses—all of these are having and will continue to have a major impact on what work looks like in the consumer sector”( Hancock, Kothari and Toriello, 2021). According to Rethink Retail (2021), there is a continuous move in directions like (not only) increased remote work, (but also) online shopping and food delivery, and the accelerated movement toward reducing direct personal contact. They highlighted the example of AiFi, the leader in autonomous stores (by using artificial intelligence software and other emerging technologies these autonomous stores can run almost independently), that is able to compete with the e-commerce giant which introduced in 2018 the first truly large-scale automated store Amazon Go (and it has already an advantage over

36

Amazon, AiFi has launched in the U.S. the largest camera-only store as opposed to sensor fusion combining cameras with weighted shelves still used by Amazon Go, as the original design of autonomous shopping). They also showed that: AiFi’s Co-founder and CEO argued that the next step to revolutionize the market will be AI commerce (see the hybrid AI shopper journey in the figure below); OASIS, the AiFi’s platform, can be customized to fit all sizes, either an international giant or an aspiring to growth modest mid-sized store.

Figure no. 3: The Hybrid AI Shopper Journey Source: Rethink Retail, 2021. Rethinking Grocery: Why Smart Grocers Are “Checking Out” Autonomous Stores. [pdf] Rethink Retail, p. 6 (work cited)

Allow us to remember within this context that:

37

• At the beginning of this year, during the presentations on the occasion of the US National Retail Federation’s 2021 virtual-only show (where the most presentations approached marketing technology and the future of retail after COVID-19) many of the talks had as topics of main interest digital transformation, personalized CX, and using customers’ data to understand what they want and how they want to buy it (Treasure Data, 2021). It is also interesting to note that within this framework it was discussed (by Nicole Leinbach Reyhle, the Founder of RetailMinded, and Treasure Data’s Thomas Kurian), for instance, the rise of call centers as a critical selling channel (retailers’ solutions to close sales without physical contact, by giving the associate call centers full customer profiles and personalized recommendations, as shown by Kurian) due to the COVID-19 pandemic; • As Nielsen already in February this year showed (NielsenIQ, 2021), the COVID-19 pandemic made possible the transformation of digital transitions into digital revolutions across industries, in the case of CPG industry: disruption’s magnitude being “unlike anything since perhaps the birth of category management”; this industry being placed on top of a digital critical point by the quick growth of online commerce; companies making an effort to optimize their customers’ digital experience, spending in this regard a lot of money into new technologies (becoming fundamental expectations and increasing digital transformation), assets, and personnel. According to Nielsen, e-commerce growth is driven by the digital evolution, being identified five stages on a valuable e-commerce maturity spectrum (Brochureware, Single-party selling, Multichannel, Omnichannel, Headless), and merchants, brands, and markets being categorized into these above-mentioned stages.

E-commerce sales supported by the forward-thinking consumer-product companies.

The increased uncertainty around shopper behavior putting more pressure on retail category managers There is no doubt about businesses’ need of being truly consumer centric, and shifting under this significant pressure to the new normal today which is omnichannel (whose end-to-end planning is requiring changes to forecasting, inventory, and information flow), what involves forcing consumer-product companies to rethink their supply chain ecosystem (Graf et al., 2021).

As revealed by McKinsey’ representatives the stores are being used by the forward-thinking consumer-product companies not only to reinforce their brands’ positioning, but also both educate consumers on product offerings, and support e-commerce sales. This kind of approach take into account different aspects such as: companies’ supply chain ecosystem should be an end-to-end collaboration (which involves all stakeholders, from suppliers to consumers); information must be shared along the entire value chain (all network assets and capabilities being fully valorized) so as companies to be able to deliver on ever-changing consumer requirements; key enablers of an omnichannel supply chain are technology and effective data-and-analytics strategies which incorporate the right partners; a starting point for the consumer-product

38

companies’ omnichannel transformation presupposes a structured maturity assessment on the building blocks (shown in the figure below) which combine best practices with digital innovation.

Figure no. 4: The seven key building blocks of future omnichannel supply chains combine best practices with digital innovation Source: Graf, C., Lange, T., Seyfert, A. and Van der Wijden, Noortje., 2021. Into the fast lane: How to master the omnichannel supply chain. [pdf] McKinsey & Company, Consumer & Retail Practice, July, p. 3 (work cited)

It is worth mentioning here that as argued by a Coresight Research report (2021), a critical role in determining the long-term success of grocery retailers and Consumer Packaged Goods (CPG) companies will be played by shopper-centricity, being imperative for these companies to remain fully informed about how their products perform across stores by rapidly adapting to changing consumer habits, and avoid this way risk losing their category share to more digitally adept competitors, taking into account, of course, the impact of COVID-19 pandemic on both the increased uncertainty around shopper behavior (putting more pressure on retail category managers), and the increased need of having flexible and responsive supply chains. They expressed within this framework their belief in the dependence of: the success in category management not just on advanced technologies but on their effective usage; the future of retail category management on technology, data and analytics (see the figure below).

39

Figure no. 5: Skills for Succeeding in Retail Category Management: Level of Importance Today, Perceived Change in Importance over the Past Five Years and Expected Change in Importance over the Next Five Years (% of Respondents) Source: Coresight Research, 2021. The Age of Precision Category Management: Hyper-Localized Assortment Optimization Using Advanced Technologies. [pdf] Coresight Research Report, p. 7 (work cited)

This new Coresight Research report also underlined that a pre-requisite for good retailersupplier (n CPG companies) collaboration is represented by the speed in decision-making, better understanding the importance of delivering optimal customer experience. The report is recommending HIVERY, as a provider of AI-driven solutions for optimizing category management processes (like rapid category simulation, assortment planning, promotion, pricing, space planning and planogram generation), HIVERY’s solutions’ benefits extending to both retailers and CPG companies. An analysis of the HIVERY’s market positioning, current opportunities in the market, its key growth drivers and unique attributes, has been made by Coresight Research (see the figure below: HIVERY: Competitive Advantage Matrix).

Figure no. 6: HIVERY: Competitive Advantage Matrix Source: Coresight Research, 2021. The Age of Precision Category Management: Hyper-Localized Assortment Optimization Using Advanced Technologies. [pdf] Coresight Research Report, p. 14 (work cited)

40

Conclusions: E-commerce, necessity and viability. The impact of the implicit capabilities behind e-commerce on change. Building the organization of the future, a data organization In our latest RDC Magazine issue we also showed: how e-commerce is getting the maximum advantage from new digital technology, making also reference to both CPG companies’ turning movement to DTC, and to retail’s digital critical point; with regard to Romania, how research findings from Statista (being cited as source: GPeC; eMAG; ID 1129945; Conducted by: eMAG; GPeC; Survey period: 2018 to 2020; Published by: GPeC; Publication date: February 2021) revealed that on the eMAG marketplace platform (ranked as the third most popular store for FMCG products in Romania, after Carrefour and Kaufland, in October 2020) there were over 23 thousand online sellers last year.

A recent analysis by Nielsen (2021), entitled “Europe’s next step in e-commerce growth”, revealed: Europe’s entering an e-commerce (which was always destined to transform retail) period that is just beginning, accelerated by the COVID-19 pandemic; the necessity and viability of e-commerce proved by the year 2020 (beyond the digital access expansion and business models’ testing in the past years), one hand, and its chances to grow significantly (particularly in food); retailers’ and manufacturers’ ways to prepare for the next phase of ecommerce growth, better understanding both the playing field, and e-commerce maturity stage (and how to engage in the pursuit of the next level), making the omnichannel experience simpler and more effective to win both online and offline, fighting for shoppers’ attention (and increasing sales and loyalty), and last mile fulfillment frenzy (within customers’ growing expectation for convenience and fast delivery).

According to eMarketer, the top five 5 countries, ranked by retail ecommerce sales growth (see the figure below), is this year as follows: India, 27.0%; Brazil, 26.8%; Russia, 26.1%; Argentina, 26.0, and Mexico, 21.1% (Ceurvels, 2021). Latin America will continue to be in 2021 the number one world’s fastest-growing regional retail ecommerce market (25.6%), but next year the Middle East and Africa will be ranked as No. 1.

Figure no. 7: Top 5 Countries, Ranked by Retail Ecommerce Sales Growth, 2021 Source: Coresight Research, 2021. The Age of Precision Category Management: Hyper-Localized Assortment Optimization Using Advanced Technologies. [pdf] Coresight Research Report, p. 14 (work cited)

41

Bryan Pearson (2021), an internationally recognized expert, author and speaker on customer loyalty and marketing, stated: “Retailers thought digital shopping would forever alter consumer behavior, but actually, it’s the implicit capabilities behind e-commerce that are feeding more widespread, and potentially daunting, change. The power of shared information from everyday consumers via social media, the ability to buy with digital money, the resulting awareness of how our data is being used – these offspring of digital commerce are now encircling it, reshaping it and requiring fluid change” (Pearson, 2021). Pearson highlighted five gradually developing trends (all of them are being the result of by technology made possible events): “Innovation Will Deliver These Predicted Trends; More retail rewards programs will switch from points to cryptocurrency; Fragmentation is generating a new influencer industry; A new network effect will take effect (“Virtual data sharing” or McKinsey’s “data ecosystems”); Social responsibility is growing on par with price, product and people”. We have referred in part to these trends in our last RDCM issues.

The above-mentioned McKinsey’s executive editor in the New York office Monica Toriello had another conversation (on the occasion of an episode of the McKinsey on Consumer and Retail podcast), this time (June 2021) with John Straw (seen as a “technonomist”, a technologist and economist), a senior adviser to McKinsey based in London, and about how technology will revolutionize retail (Straw and Toriello, 2021). From the very beginning, the edited transcript of their conversation underlined the following aspects: “The retailer of the future will harness the power of data, quantum computing, artificial intelligence, and augmented reality, says serial entrepreneur and technology expert John Straw”. And it ends as follows: “…

I am expecting (John Straw) to have a smart bot that is very reactive and that can triage what my problem is. The technology is there. A lot of organizations struggle with it because they don’t have the data for the machine-learning algorithms to learn from… So it comes back to that datacompatibility issue all over again… Because data is going to become product. Data turns into product. And I’ve seen so many organizations that think they’ve got great amounts of data and then realize they can’t format that data and extract it to put it into a data lake where it becomes usable. For me, that’s where investment should be going right now. Because then you’re building the organization of the future, which is a data organization”. Do you have a strong argument to change this Expert’s Point of View?

References Airship, 2021. Mobile strategies that boost retail’s sales & retention. [pdf] How to build better mobilefirst experiences for retail, pp.1-21. Available at <Retail-ebook-2021>. [Accessed 29 July 2021].

Bradley, C., Kohli, S., Kuijpers, D. and Smith, T. R., 2021.Why retail outperformers are pulling ahead. [pdf] McKinsey & Company, Consumer & Retail Practice, July, pp. 1-10. Available at: <why-retailoutperformers-are-pulling-ahead.pdf> [Accessed 9 July 2021].

Ceurvels, M., 2021. Top 5 countries for retail ecommerce sales growth in 2021, eMarketer, Jul 14. [online] Available at: <https://www.emarketer.com/content/top-5-countries-retail-ecommerce-salesgrowth-2021?> [Accessed 15 July 2021].

42

Coresight Research, 2021. The Age of Precision Category Management: Hyper-Localized Assortment Optimization Using Advanced Technologies. [pdf] Coresight Research Report, pp. 6-8, 10, 12, 14.

Available at: <The-Age-of-Precision-Category-Management-Hyper-Localized-Assortment-OptimizationUsing-Advanced-Technologies-FINAL.pdf> [Accessed 17 June 2021].

Graf, C., Lange, T., Seyfert, A. and Van der Wijden, Noortje., 2021. Into the fast lane: How to master the omnichannel supply chain. [pdf] McKinsey & Company, Consumer & Retail Practice, July, pp. 1-6, 10.

Available at: <into-the-fast-lane-how-to-master-the-omnichannel-supply-chain-vf.pdf> [Accessed 20 July 2021].

Hancock, B., Kothari, A., Toriello, M., 2021.Why retail outperformers are pulling ahead. [pdf] McKinsey & Company, Consumer & Retail Practice, July, pp. 1-10. Available at: <why-retail-outperformers-arepulling-ahead.pdf> [Accessed 10 July 2021].

InMoment, 2021. Understand and Predict Your Customers’ Needs with Customer Journey Analytics. [pdf] InMoment White Paper, pp. 3-4, 7-8. Available at: <DM-01435-01-GB_CustomerJourneyAnalyticsWhitepaper> Accessed 15 July 2021].

NielsenIQ, 2021. Technology adoption is driving an e-commerce boom, with huge implications for CPG, NielsenIQ, 25 February. [online] Available at: <https://nielseniq.com/global/en/insights/education/2021/technology-adoption-is-driving-an-e-commerceboom/> [Accessed 2 July 2021].

NielsenIQ, 2021. Europe’s next step in e-commerce growth, NielsenIQ, 15 June. [online] Available at: <https://nielseniq.com/global/en/insights/analysis/2021/its-time-for-the-next-stage-of-e-commercegrowth-in-europe/> [Accessed 2 July 2021].

Pacvue, 2021. Q2 2021 CPC . [PDF] Pacvue, p. 1-2. Available at: <Pacvue Q2 2021 CPC Report.pdf> [Accessed 15 July 2021].

Pearson, B., 2021. Tech Is Enabling These 5 Shopper Trends. Is Retail Ready? CustomerThink, July 15.

This article originally appeared in Forbes. [online] Available at: < https://customerthink.com/tech-isenabling-these-5-shopper-trends-is-retail-ready/?> [Accessed 22 July 2021].

Purcarea, I. M., 2021. E-Commerce Retailers’ Competition, Digital Technology and the FastApproaching Future of a New Standard Consisting of Cryptocurrency’s Commercial Us, Romanian Distribution Committee Magazine, vol. 12(1), pp. 32-50, April.

Rethink Retail, 2021. Rethinking Grocery: Why Smart Grocers Are “Checking Out” Autonomous Stores. [pdf] Rethink Retail, pp. 1-7, 9-10. <Rethink_Grocery_by_Checking_Out_Autonomous_Stores.02> [Accessed 9 July 2021].

Spectrm, 2021. The D2C Conversational Marketing Playbook For Ecommerce. [pdf] Spectrm, eCOMMERCE BEST PRACTICES, pp. 1-23. Available at: <w_spei01> [Accessed 31 July 2021].

Straw, J., Toriello, M., 2021. How tech will revolutionize retail. [pdf] McKinsey & Company, Retail Practice, June, pp. 1-2, 7. Available at: <how-tech-will-revolutionize-retail.pdf> [Accessed 26 June 2021].

Treasure Data, 2021. NRF 2021: Digital Transformation, High Heels, & Luxury as Pandemic ‘Oreo Cookies’, Treasure Data, January 28. [online] Available at: < https://blog.treasuredata.com/blog/2021/01/28/nrf-2021-digital-transformation-high-heels-luxury-aspandemic-oreo-cookies/> [Accessed 5 July 2021].

Zebra, 2021. Delivering on Retail’s Future … With the Help of Analytics. [pdf] Zebra Prescriptive Analytics™, Total Retail, NAPCO Research, pp.1-10. Available at <w_zebb16.pdf> [Accessed 25 July 2021].

43

Instore Greenhouses (Kaufland Romania), Honor for G-Global, Global Goals, Appointment Nitra /Slovakia, Innovation Drivers, FOC versus Flagship Stores, Covid + Cocooning, Strength of India, Tracing & Tracking, Progressing Digitally, and Imaginations/Dreams

Prof. Dr. Bernd HALLIER

Prof. Dr. Bernd Hallier, President of the European Retail Academy (ERA: http://www.european-retail-academy.org/), an Honorary Member of the Romanian Distribution Committee, and distinguished Member of both the Editorial Board of “Romanian Distribution Committee Magazine”, and the Editorial Board of RAU “Holistic Marketing Management” brought to our attention other great events happening in the last time, and allowed us to present them. It is also worth remembering that: immediately after visiting Romania for the first time on the occasion of the 24th International Congress of the International Association for the Distributive Trade (AIDA Brussels), Prof. Dr. Bernd Hallier sent us, in May 1998, a memorable letter we have referred initially in the Journal of the Romanian Marketing Association (AROMAR), no. 5/1998, and also later, in 2010, in the first issue of the Romanian Distribution Committee Magazine; the Romanian-American University (RAU) has awarded Prof. Dr. Bernd Hallier a “Diploma of Special Academic Merit”; the “Carol Davila” University of Medicine and Pharmacy, Bucharest, has awarded Prof. Dr. Bernd Hallier a “Diploma of Excellence”.

44

Instore Greenhouses Kaufland Romania is testing in Bucharest in 5 stores micro-greenhouses. Consumers can find various fresh plants growing in those stores. The micro-greenhouse is basically a miniature compact greenhouse that is using vertical indoor farming technologies: offering fresh agricultural production available instore at any time of the year ( MORE ).

Prof. Dr. Bernd Hallier sees in that approach a combination of several advantages: “small enough to be used in supermarkets and restaurants”, the process is independent from price variations at wholesale level”, “the system smartly is using the air-conditioning of the stores/no additional power consumption is needed”, “a single urban gardener can take care for 4 microgreenhouses”, “less logistic services because the seed takes less space in transportation than plants”.

45

Honor for G-Global Being initiated by the first President of Kazakhstan, N. Nazarbayev, G-Global has enriched G7/8 and G20 by incorporating also the other nations around our globe into a neutral dialogue about the political and economic problems around the world. Now those efforts have been awarded by the permission for a Representative Office in China.

Prof. Dr. Bernd Hallier for a decade has been gratefully a supporter of the different GGlobal initiatives. In an official statement he congratulates the Management of the International

46

G-Global Secretariat for this remarkable step as until now only about 30 organizations like the UN, WHO and WTO have been honored like this. ________________________________________ Global Goals Prof. Dr. Bernd Hallier demands fulfillment of Global Goals instead of outdated Geopolitics. “Geopolitical Thinking belongs to the last century when Colonialism dominated World Politics” the President of the European Retail Academy explained his philosophy. “Today we should act as a Global Community of Equals knowing that we should share respectfully the resources of the one planet on which we live all. We have to optimize together a world-model of economics, ecology and ethics”.

As the best set of tools Prof. Dr. Bernd Hallier sees at the moment the UN Goals 2030.

“Independently from political or religious views of people from different countries this is a box of instruments which can be individually selected from to define own ways of fulfillment or which also globally can be used as a benchmark to compare the status quo scientifically: it reflects and respects global diversity - but aiming a global optimization; and last but not least it allows organizations of civil society, businesses, political bodies and science to participate with its input” Prof. Dr. Bernd Hallier defines the statement of the European Retail Academy. ________________________________________

47

Appointment Nitra /Slovakia In 2011 the Agricultural University in Nitra/Slovakia founded the Visegrad University Association (VUA) to create cross-border summer-schools and joint MA- and PhD-programs.

Now the President of the European Retail Academy, Prof. Dr. Bernd Hallier, is appointed member of the International Editorial Board of its scientific “Visegrad Journal on Bioeconomy and Sustainable Development in the Agrisector of V4-Countries and Cooperating Regions”. The journal is published twice a year (digitally and as print version). ________________________________________

48

Innovation Drivers After the slow-downs/lock-downs in 2020 and 2021 the retail-industry now has to look forward to increase again its productivity/efficiency targets in 2022/2023! Covid 19 has reshaped structures and processes: new challenges for competition according to Prof. Dr. Bernd Hallier.

“With the annual EuroCIS event and its three-annual umbrella exhibition EuroShop we fortunately have two internationally well-known brands as platforms for technology innovations. They will help in the Post Covid Period to accelerate the transformation from theory to applied sciences to bring business again to top-performances” Prof. Dr. Bernd Hallier stated reviewing for an international seminar of the European Retail Academy EuroShop 2020 and the latest business-cycles (see: link YouTube Innovation Drivers). ________________________________________ FOC versus Flagship Stores According to Prof. Dr. Bernd Hallier traditionally “Mill-Stores” had been associated with local sales mainly of fashion-production. In the 70/8o-ies of the last century in the USA and Western Europe a new type of “Designer Outlet/Factory Outlet” started: agglomerations of at least five label-producers within a minimum of 4.500 square meters sales area. Beside the general tendency to be on average about 15 percent lower in its sales-prices additionally slogans

49

are run like “over run”, “factory seconds”, “damaged”, “past season, “samples” , “discontinued items”.

In analogy to shopping-center developers also specialists for FOCs were formed; for small and medium-sized cities “Village Style Outlet Centers” got some profile for urban revitalization: very vulnerable now in the wind of change with e-commerce as a strong competitor in this market-segment. “Real labels are better off with flagship-stores creating more value to the brand” is the opinion of Hallier discussing his first EHI-report about FOCs in 1999 versus the present situation. _______________________________________ Covid + Cocooning “The Covid-Waves result in the US and Europe in lock-downs of fashion-shops; no sales in the affluent society results to zero-production in the developing countries; which means no income and hunger” Prof. Dr. Bernd Hallier explains in a lecture about the global effects.

“Additionally consumer habits in Europe have changed due to home-office in 2020/2021: people

50

improved their homes and gardens - cocooning gets a revival! This has promoted DIY and furniture-businesses.”

“Another target-group of spending in the affluent society are pets which are getting an increased share of attention during the Covid-isolation as social partner as the alternative for human beings! Within a radius of 300 meters in the well-off Cologne-suburb Roesrath/Germany a new cluster of pet-food, pet-tools, pet-beauty and vet for pets opened new outlets!” For Prof.

Dr. Bernd Hallier this is another important sign for the widening gap of spending power and targeting in the global society. ________________________________________ Strength of India “India has changed tremendously in the last fifty years: having seen students learning in Delhi at night using the light of electrical lamps at public places in 1973 because they did not have it at home – India has become in the last twenty years one of the world’s leading resources for IT-specialists whose services are used by the internet as a tool globally around the world. By its GNP and by Sector Competences like IT all India has moved from the status “developing country” towards high ranks of G-global. Having taken part for several years in the Indian Retail Forum (IRF) in Mumbai and getting to know entrepreneurs like Kishore Biyani from the Future Group and his competitors the author of this contribution knows how powerful Indian companies have become and how Indian Business Schools and Universities have contributed to the

51

excellent performance of those entities” Prof. Dr. Bernd Hallier says on the occasion of the Annual International Seminar in New Dehli.

On the other hand, travelling through India shows that the different regions have their own cultural approaches and tastes – and that a uniform behavior cannot be expected all over such a Subcontinent. This fragmentation is part of the charm of India (like the different mix of curries) but in times of pandemics like Covid 19 sometimes more central power could lead to more efficiency. But judging long-run perspectives like Consumption 2050 also myths and religions play an important role: even death is seen in India as part of a new start into the eternity of a never-ending cycle of lives. And exactly this mentality might be the Strength of India

52

despite all the present problems of Covid 19. Buying shares at the Stock Exchange my advice would be: Buy now at falling prices – because India has still a bright future to come!” More about India: (link) ________________________________________ Tracing & Tracking In 1994 at the outbreak of the British Cow Disease (BSE) international health authorities expected that in the UK up to 10.000 people could be killed by Creutzfeldt Jacob virus in that pandemic at that time. As meat was traded cross-border without resources marked a team of Prof. Dr. Bernd Hallier designed and tested an anti-crisis system of tracing & tracking for cows and beef (Read More).

53

“In Germany due to our political federal constitution food security is linked to the administration of our 16 counties” Prof. Dr. Bernd Hallier explained. “Further on there had been no electronic data banks in neither county” he added. “Due to our retail competences and knowledge about bar-coding systems our team designed the EHI-label for tracing and tracking and we created together with the agribusiness a joint venture with the name ORGAINVENT to demonstrate that our ideas for applied sciences could work in reality. By those actions and permanent PR, the EU took our design of ear-marking for cows as a compulsory EU-regulation.

By this procedure we wrote historically an unique law case as due to the decision in Brussels also the German Central Authorities could act and advise the 16 counties to take action to be in harmony with the EU-Regulation” Prof. Dr. Bernd Hallier explained. ________________________________________ Progressing Digitally “The Covid pandemic has changed Academic Conferences of our ERA-partners tremendiously" Prof.Dr.Hallier stated quoting two upcoming events in India and Croatia. The Delhi School of Professional Studies and Research (DSPSR) affiliated to GGS Indraprastha University is organizing its XXIII Annual International Seminar in June 12/13th as Online Conference in collaboration with WSG University in Bydgoszcz /Poland (more at).

The BLMM2021 Conference is again organized by the Josip Juraj Strossmayer University of Osijek (Faculty of Economics) / Croatia. “Logistics is one of the innovators in the Covid pandemic and will be one of the most important keys in competition. I am thrilled to see the incoming proposals” Prof. Dr. Bernd Hallier said as a comment for the Call for Papers. ________________________________________

54

Imaginations/Dreams The period of Student Life is for Prof. Dr. Bernd Hallier not only a time for learning but also to create as a young person dreams/imaginations: “It is a period of self-determined shaping the own personality: we have multiple choices to spend our time on different research fields and vocational skills: I did choose macroeconomics with the special of developing countries as this was one of the big topics of the 68' generation of the last century” Hallier reflects his studies.

“Therefore, I also joined the student organization of AIESEC which created traineeships with companies at home for foreign students - and on a reciprocal basis we could go abroad - getting to know more about our target-countries” Hallier explained his traineeships and cultural trips of the summer-vacations 1968-1973 to Turkey, Israel, USA, South Africa and Japan. In the 70ies AIESEC as a student volunteer-organization exchanged about 5.000 students to 50 countries worldwide.

“On our 1973-trip to Japan we passed on the way to Tokyo on the south route coral islands in the Pacific Ocean and on the way home via Anchorage/Alaska the ice of the North Pole: our student band played Jazz life during the flights and we had free access to the cockpit of the plane! We were empowered by our challenges and had the feeling we could rock the whole world” Prof. Dr. Bernd Hallier remembers that time “Now in 2020/21 the big impact on student life is Corona and its lockdowns for studies, traineeships and job-opportunities! This will hit us mentally at least for one decade: because the damages for the souls and characters will be longlasting” Prof. Hallier concludes his experiences and observations. ________________________________________

55

56

● Lucian C. IONESCU – “Positive & normative and real & nominal in the economic analysis”

Note from the Editor-in-Chief Prof. Dr. Lucian C. Ionescu is well-known for his major fields of specialization: International monetary and financial system, Monetary policy & foreign exchange (convertibility, exchange rate, balance of payments), Banking issues (especially the central bank’s role), Economic cycles & history of economic thinking, and Economic and Monetary Union etc. He was a member of the Board of Directors at the National Bank of Romania between 1991-1998. In 1992, it was mandated by the National Bank of Romania and the Romanian Association of Banks (RAB) management to establish and to coordinate the activity of some institutions for professional training and financial-banking university education. Thus, the Romanian Banking Institute (IBR) was created, on which L.C. Ionescu led and organized it, fulfilling the functions of General Manager, President and Rector.

Between 1993 and 2005, IBR included in its structure a university banking college and the Financial-Banking University (UFB).

Lucian C. Ionescu launched relatively recent his latest book, entitled “Economicfinancial cycles in the evolution of the international monetary system, Studies/essays on international monetary issues”, INTEGRAL Publishing House, Bucharest, 2019. In the last RDCM issue we presented the introduction in the deep relationship between financial cycle and economic cycle within the economic financial crisis.

In the current RDCM issue we publish some significant parts of this valuable book, such as “Positive and normative approaches – contradictory relationship and complementarity; Towards a symbiosis between positive and normative in economic analysis; The rift between the real and nominal facets of the contemporary world economy”, also considering the author’s opinion on the fact that: “The economic and financial crisis of 2020, aggravated by the COVID pandemic and being in the downward phase of a semisecular cycle, will accentuate the stringent nature of the need for organic recorrelation between the real and the nominal economy”.

57

“Positive & normative and real & nominal in the economic analysis” Lucian C. IONESCU Abstract This paper is dwelling on the relation between the positive and normative dimensions of the economic process. On the one hand, it is analyzed both the contradictory and the complementary aspects of the two approaches and, on the other hand, there is a pleading for the positive/ normative symbiosis. A complementary approach is regarding the necessary symbiosis between real and nominal aspects of the economy. Taking into consideration the tribulations of the world economy, the author considers that economic science is confronted with the urgent need for a new paradigm. In this context, there are identified two conceptual “triads” which could ease the way to a new paradigmatic structure of economic theory, able to contribute substantially to restoring the ecological equilibrium and to an equitable social distribution of incomes and wealth.

The structure of this paper is as follows: Positive and normative approaches – contradictory relationship and complementarity; Towards a symbiosis between positive and normative in economic analysis; The rift between the real and nominal facets of the contemporary world economy.

JEL classification: A1, B1, B2, E2, E3, P5.

As it is ever more obvious, the world economy is evolving during the descending/stagnant phase of a long cycle since the crisis which burst in 2007/2008.1 The quite modest results or even failure of different economic policy scenarios intended to stimulate a new growth trajectory have been a peremptory evidence that the economic science is facing the necessity of a “revolution” concerning its fundamental paradigms.2 In our view, this complex process has a key constituent in rethinking the relation between positive & normative and real & nominal dimensions of the economic system and methodology.

1. Positive and normative approaches – contradictory relationship and complementarity The use of the terms positive and normative became effective since the beginning of the 20th century. The increasing role of monopolies and oligopolies seriously affected the functioning of free competition. By that time, John Neville Keynes observed “two broadly distinguished schools, one of which describes political economy as positive, abstract and deductive, while the other describes it as ethical, realistic and inductive”.3 However the implicit 1

L.C. Ionescu, The Interdependence between monetary and real economy in the context of the international financial crisis, in UFB Review, no.1 / 2011.

2 In the meaning of Th. Kuhn’s terminology (The Structure of Scientific Revolutions, Second edition, The University of Chicago, 1970).

3 J. N. Keynes, The Scope and Method of Political Economy (fourth edition in 1917), Batoche Books, Kitchener, 1999, p. 11.

58

meaning of the two types of economic approach could be remarked ever since the dispute between mercantilism and physiocratic school (XVI to XVIII centuries). Since that historical period, one could identify a subtle correlation between normative approach and nominal economy within mercantilism and between positive approach and real economy in the case of physiocrats.

Pleading for state intervention in the favour of economic agents involved in international trade, the mercantilist followers4 laid the foundations of economic policy in a normative meaning. Beside the protectionist industrial policy, they underlined the importance of a substantial trade balance surplus, awarding a special role to money supply growth and advocating the benefits of money circulation, while opposing passive saving (nonproductive thrift).

After a relatively short historical period, the physiocrat school5 was set up which underscored the importance of “the net product” obtained by labour in agriculture and by processing agricultural produce. Although initially focused on agricultural economy, the physiocrat theory gradually paved the way for the economic interpretation of the first industrial revolution. In this sense, the main emphasis of economic analysis was shifted from nominal to real economy, while trade liberalism was preferred to state protectionism and interventionism.

According to this historical filiation, “mainstream” economists consider that “economics …can be used to make correct predictions about the consequences of any change in circumstances.”6 The opposite tendency – to overemphasize the normative approach – reached a paroxysm in the countries which witnessed the totalitarian state socialism, where the Stalinist economic model almost eliminated the positive economic analysis, so that the political economy was transformed into an apologia of the economic policy specific to a command economy.

Therefore “economics can do great harm, but… it can do good, too. It is a sharp twoedged sword to be mastered and handled with care.”7 Far from belonging only to the history of economic thought, the controversy between mercantilism and physiocrat school represent the genetic basis for the main economic doctrines during the last three centuries. Relevant cases: Adam Smith turned into account physiocrat ideas in the period of classical liberalism, while J.M. Keynes promoted a “neo-mercantilism” as a means of surpassing the effects of the 1930s depression. It is obvious that a complex economic theory cannot be exclusively constructed either based on a positive approach or on a normative one. However economic liberalism and

4

Th. Mun, W. Petty, W. Stafford, J. Steuart (England), A. Beccaria, A. Serra (Italy), A. de Montchretien and, especially, Jean-Baptiste Colbert (France).

5 Fr. Quesnay, Dupont de Nemours, A. R. J. Turgot (France), Arthur Young (England), Th. Jefferson (USA).

6 The Philosophy of Economics – an anthology, ed. D.M. Hausman, Cambridge University Press, 2008, p. 148.

7 D.M. Hausman & M.S. Pherson, The Philosophical Foundations of Mainstream Economics, ibid., p. 226/227.

59

also neoliberalism tended to idealize the market virtues of self-regulation by free competition (starting from perfect competition model). Under such prerequisites, any macroeconomic policy would be useless or even harmful. It would result that only a positive approach could contribute to the development of economic science. Despite his refined analysis of the economic realm, Milton Friedman considered that “positive economics is… an ‘objective’ science, in precisely the same sense as any of the physical sciences” (ibidem). As already mentioned, this interpretation reflects a certain inferiority complex toward the “precision” of the laws specific to the so-called “exact sciences” However social sciences necessarily reflect the specific traits of humane society, characterized by tendencies, probability and uncertainty.8 Nevertheless the positive approach is undoubtedly necessary for analyzing and interpreting economic phenomena and processes, but the finality of economic study implies the normative approach. The tendency of the representatives of the “mainstream economics” to overestimate the role of the positive approach indirectly reveals the intention to deal with social economy in a “sterilized” way, avoiding the social “blood, sweat and tears”: “Positive economics is in principle independent of any particular ethical position or normative judgments. (…) Its task is to provide a system of generalities that can be used to make correct predictions about the consequences of any change in circumstances.” (idem) A careful analysis of theories and schools of economic thought demonstrates a wide range of relations and correlations between the two main approaches of economic science, involving a gradual transition from one type to another or interpenetrating each other. Even if positive economics is focused on facts and normative economics on objectives and effects of economic policies, including cultural and moral considerations, these approaches should be perceived as complementary, not conflicting.

However, a source of tension between the two approaches resides in an intricate relationship between “objective” and “subjective” in the methodology of economic science. The structure itself of the so-called pyramid of human & social needs/necessities often leads to different or divergent interpretations (from base to top): vital needs (for surviving), social necessities (according to cultural traditions and degrees of civilization), spiritual aspirations (education, arts, religion), personal preferences and desires (highly individual). If an objective conditioning is relatively easy to identify at the base of that “pyramid”, the purely subjective elements are preponderant toward the top. This peculiar process reflects the dual nature of human beings and society determined by the interaction of reasoning, intuition and instincts.9 This is why social sciences have to pay the necessary attention to the subjective dimension of the human decisions and relations. For example, the neo-Austrian economic school warned that treating economic science similar to natural/physical sciences may lead to ignoring and distorting important characteristics of economic theory (economics or political economy).

Likewise, a tendency to absolutize the individualist subjectivism would have a baleful influence on the scientific character of economic theory. A relevant case is represented by marginalism: 8 9

At present, Heisenberg’s uncertainty principle has a special resonance for social sciences.

It is significant that different strata and components of human brain are reminding key stages of phyllogenesis.

60

beyond its valuable contributions to the development of economic theory, the exclusive emphasis on individual preferences exaggerated the role of subjective elements for economic analysis, while minimizing or ignoring the importance of objective factors. In fact, this is one source of the rapid expansion of the “consumer society” which began to dominate the economic evolution.

The economic hedonism has reached its climax at the end of the 20th century and beginning of the 21th century, being characterized by the obsessive pursuit of short-term profit, while ignoring total social costs of production and trade, gravely impairing natural environment.

The risk of a scission between positive and normative approaches was accentuated by the fiery controversies over “welfare economics” and, especially, over the role of welfare state.

Although the frontal attack was launched by the neoliberalism in the 1980s (the period of president Reagan and prime-minister Thatcher), the origins of this doctrinaire dispute can be already found toward the end of the interwar period, when J. Hicks and N. Kaldor had been underscoring the difference between the problems of production and efficiency, on the one hand, and the problems of social distribution of incomes and wealth of a country, on the other hand.10 An extreme position was represented by those neoclassical economists who argued that economic theory should be concerned only with the ways production of goods and services could be increased, while the distribution of the national income and wealth would be the prerogative of politicians and theoreticians of social moral.

According to neoclassical and/or neoliberal theories, free competition (as near as possible to perfect competition model) together with individual preferences and rational expectations represent the necessary and sufficient condition for economic efficiency, for a macroeconomic equilibrium and for an equitable income distribution. This conception raises a troublesome question: does it really correspond to social processes and phenomena characteristic to contemporary world? To give a significant example, the supporters of the institutional economics have considered that “neoclassical theory was blind to real markets and, consequently, to their virtues or vices.”11 Not by accident, neoclassical/ neoliberal economists have an obvious propensity to underscoring the importance of macroeconomic equilibrium, considered a sacrosanct concept, promoted and even feverishly imposed by the main international monetary & financial institutions.

2. Towards a symbiosis between positive and normative in economic analysis For economic theory – the systematized expression of an important social science, the interdependence of positive and normative dimensions is a defining trait, being a constituent part of its genetic structure and a prerequisite of its creative development. This study endeavours to point out correlations between main pillars of economic science.

10

J. Hicks, The Foundations of Welfare Economics, in “Economic Journal”, no. 49 / 1939.

J. Hicks, The Foundations of Welfare Economics, in “Economic Journal”, no. 49 / 1939.

1 bis G. M. Hodgson in “Journal of Economic Issues”, vol. 34, June 2000.

11

61

2.1 – Historically microeconomic analysis preceded macro-economy and was correlated with real economy, using especially a positive approach of economic phenomena. Once macroeconomic analysis matured, nominal economy and normative approach gained importance.

However, this evolution was not linear, but had an undulatory profile. From the ancient Greek elements of economic thought until mercantilism, positive and normative approaches constantly blended – with various significances, in different proportions. Mercantilist economists/ theoreticians awarded a special role to normative approach, while physiocrats adopted a predominant positive approach. Nevertheless, the other approach was not eliminated but had a secondary role. Only the classical political economy and afterwards the neoclassical economic theory (including marginalism) caused a deepening methodological split between positive and normative, having implications on the relation between micro- & macro-economy, as well as real and nominal economy. In reality, micro- and macro-economy are interrelated, representing two fundamental levels for analyzing the complexity of economic activity.

Within this context, there has been manifest a strange tendency of the neoclassical/neoliberal economists to absolutise the role of the so-called “micro-foundations” for the economic science, minimizing the importance of the macroeconomic vision. An edifying case consisted in the virulent attack launched by Robert E. Lucas (the 1995 Nobel prize for Economics) against the neo-Keynesian macroeconomics, recommending the “euthanasia” of this type of macroeconomic analysis.12 In his conception, macroeconomics should be based on aggregating microeconomic models. In this way he contributed to setting up a neoclassical macroeconomics, focused on the famous “rational expectations”. Guided by this type of macroeconomy, at the beginning of 2000s, he considered the depression prevention as being finally resolved. Ironically, a few years after, the most severe financial and economic crisis blew out in 2007/08, frequently compared to the 1930s depression. In our view, that striking failure of R. Lucas’ appreciation was due to the conflicting perception of the relation between both micro- & macro-economy and positive & normative approaches.

This contradictory vision contributed and, gradually, aggravated the rift between real and nominal economy which could be remarked even since 1970s & 1980s, becoming an ever growing danger for the world economy at the transition from 20th century to 21th century.13 If the warnings formulated during the last decade of the previous century14 could be ignored, the crisis broken out in 2007/2008 has dramatically emphasized the deep breach between the nominal and real facets of the economies, which is no longer just a theoretical-methodological problem, but a tremendous brake for the normal evolution of international economy and society.

12

According to Kevin D. Hoover, The Methodology of Empirical Macroeconomics, Cambridge University Press, 2001.

13 Lucian C. Ionescu, Necessity of a new type of symbiosis between nominal and real economy, in “Financial Studies”, vol. 17, issue3 (CCFM – Romanian Academy).

14 E.g., Lucian C. Ionescu, The role of the central bank in a transition economy, in “An Economy in Transition”, CEPR, Cambridge University Press, 1993.

62

The intensity and length of the crisis have determined the governments to seek solutions, especially in the domain which caused the deterioration of real sector of the economy, due to paroxysmal increase of monetary, financial and banking speculations (especially by the so-called financial derivatives). Therefore, central banks, in agreement with the main international institutions,15 have abandoned the “orthodox” practices – most of them imposed during the 1990s, appealing to or “rediscovering”16 techniques of supplying cheap liquidity to monetary, banking and financial markets (in almost unlimited quantity). In fact, this is the key element of the much-debated quantitative easing (QE). In this context, the term quantitative is referring to the growth of money supply and the proportions of central banks’ balance sheet (amplifying assets & liabilities).

Chronologically the first “QE” experiment was implemented by the Bank of Japan, starting in March 2001, trying to counteract the economic stagnation and the prolonged deflationary trend. Thus, the banks could accumulate excess reserves to stimulate the crediting process (nominal aspect) to economic agents (real dimension of the economy). Despite that “unconventional” monetary policy, the effective results were modest. However, the duration of the crisis and its effects have pushed more and more central banks to adopt “quantitative easing” scenarios: the US Federal Reserve System since November 2008 (so far QE 1, QE 2, QE 3); Bank of England since March 2009; European Central Bank since May 2009. There are an increasing number of central banks adopting such “unconventional” monetary policy measures (e.g., Swiss National Bank, National Bank of Sweden). Consequently, the central banks from Northern America and Western Europe have accumulated financial assets of trillions of US dollars and euros in their balance sheets.

Initially considered a monetary policy of force majeure, QE procedures tend to perpetuate in an economic environment characterized by stagnant growth and deflationary trends. In fact, these “unconventional” monetary measures represent an overdose of morphine which reveals the amplitude and depth of decoupling nominal flows from real economy. This conclusion is confirmed by the anemic effects of a decade of QE practice – stagnation, deflation, high employment continues to threaten the present and future of world economy: “Global growth has fallen back further…, as emerging economies have generally continued to slow and as the US economy has grown by less than expected. There have also been considerable falls in the prices of risky assets…”17 The quantitative easing experiment could be successful only if the “excess liquidity” provided to banks would really stimulate a “credit easing” process, meant to productive investment, not for financial speculation. Unfortunately, as long as the expansion of speculative financial funds suffocates the productive capital, the enlarging rift between the nominal and real economy cannot be eliminated or at least reduced.

15

See IMF Staff Note, November 4, 2009.

A rather similar unconventional monetary policy was used in USA toward the end of 1930s and in 1940s (in the conditions of post-depression period).

17 Bank of England, Inflation Report, February 2016.

16

63

2.2 – The fundamental structure of economic science consists of a theoretical & methodological triad and a functional & pragmatic triad. We consider the first triad as being formed by the following conceptual tandems: object – subject (o/s); objective – subjective (o’/s’); individual – social (i/s). The second triad has as constituent parts: micro-economy & macro-economy (m/M); real economy & nominal economy (re/ne); positive approach & normative approach (pa/na). All these concepts generate a network of organic interconnections, defining both the content of economic science and the way an economy is organized and functioning.

The object/subject duality represents a specific characteristic of economic theory within social sciences: human being can be both subject and object of economic activity – alternatively or simultaneously. At a higher level of abstractization, this specificity magnifies the complexity of objective/subjective relation. The mentioned dualities have an impact on interpreting individual/ social correlation, as well as on real/nominal tandem and on the complementarity between positive and normative approaches. This vision renders evident the harmfulness of any rigid, unilateral or absolutist approach. In this way, economic science can avoid both stifling the individual – at microeconomic level – under the pressure of a collectivist society (totalitarian state) and exacerbating aggressive egoism (wild capitalism) to the detriment of entire society – at the macroeconomic level.

The correlations between the presented triads are leading to some considerations regarding the evolution of subject matter of economic science (researching, understanding, explaining), under its historical forms (political economy and economics): from the good administration of resources of an urban community (polis) to the national economy of a country.

From the initial meaning of the term (polis – town, administration of a city state), politics and policy ever more meant the way the power of decision was distributed between different social groups and categories. In consequence, both at the national and international levels, the evolution of economy (as activity and science) cannot be understood and explained just as a “technical” process of identifying and processing economic resources, more or less rare, but also in a straight correlation with the social and political forces which have a determinant role in distributing incomes and wealth accumulated from economic activity.

64

In the middle of the 19th century, J. St. Mill, author of a standard textbook – Principles of Political Economy – stated that political economy considered mankind as being almost exclusively preoccupied with the accumulation and consumption of wealth. After about a century, when political economy had become economics, Lionel Robins appreciated – in An essay on the nature and significance of economic science (in mid 1930s) – that economics is the science dealing with human behaviour as a relation between ends/aims and limited resources/means with alternative uses/ utilities. Although, in the postwar period, that definition was largely used in university manuals, it proved to be rather restrictive. Paul A. Samuelson (Nobel prize for Economics in 1971) completed and refined the definition of economic theory, especially by the numerous editions of his well-known university ECONOMICS (19 editions until 2009, the last ones in cooperation with W. D. Nordhaus). Samuelson’s definition of economics took into consideration all the spheres of economic reproduction, including the distribution of goods and incomes to different social groups and categories. However, in the last decades, dramatic events have impaired both many national economies and world economy as such. A vicious and extremely dangerous circle consists in a continuous degradation of natural environment: grave air, water and land pollution, piling up huge quantities of non-biodegradable waste, massive/criminal deforestation, unlimited fishing, much beyond natural reproduction capacity, disappearance of thousands of animal species. It is dramatically obvious that neither capitalist (more or less) free market and nor the totalitarian state socialism could decisively contribute to preserving ecological equilibrium. Another critical failure of the economic system based on the dominant role of financial capital is the continuous deepening of income & wealth polarization of society in most countries.18 On this worrying background, the content of economic science needs radical changes, including a new paradigm. It is evident that economic science could really contribute to solving the multiple problems facing mankind only if it could offer the model of a durable and sustainable economic and social growth and development, able to preserve and/or to restore ecological equilibria, ensuring an efficient and also equitable turning to account of human, material and financial resources. This vital desideratum can be reached provided the symbiosis of both positive & normative approaches and of real & nominal dimensions of the socio-economic processes and phenomena is effectively realized. That means a good balance between managerial & technological dimension of the economy and moral, ethical, cultural values. Certainly, the revaluation of the positive/normative and real/normative relations should be done within the close connection between the “triads” presented previously.

As it has already been stated, the economic science is facing the urgent need of building up a new paradigm, according to the present historical turning point in mankind evolution, when

18

Statistical data – delivered by UN, World Bank, IMF – show a serious worsening of social polarization. For example, the wealth increase of the richest families representing 1% of the world population is equivalent to the wealth increase for the remaining 99% (!).

65

most markets have a monopolistic structure and functions (“market failures”) and the society is highly polarized, which make it prone to political upheavals.

3. The rift between the real and nominal facets of the contemporary world economy The crisis that burst in 2007/08 had a devastating impact on international monetary & financial system. However, it has also had a stimulating effect on a better understanding of the roots of instability and vulnerability of the present world economy.

The breakdown of the totalitarian socialist system (of the Soviet type) at the end of the 1980s had – among its manifold implications – a tendency to idealize the economy based on capital reproduction, by eluding any serious critical analysis of its functioning. Nevertheless, the amplitude of the crisis and its aftermath has overwhelmingly confirmed the Minskyan financial instability hypothesis, which until recently was mostly ignored.

In Minsky’s vision, instability is an inherent and unavoidable drawback of capitalism: “The financial instability hypothesis is a model of a capitalist economy which does not rely upon exogenous shocks to generate business cycles of varying severity.” (H.P. Minsky, May 1992, p.8). He emphatically identified the roots of his conception in Keynes’s General Theory, especially in the Keynesian meaning of the “veil of money”. Consequently, Minsky’s valuable contributions to economics & political economy have signalized a “return” to the original Keynesian message.

From Keynes to Minsky It is known that the so-called neoclassical synthesis had contradictory effects on the interpretation of Keynesian heritage: on the one hand, it has made easier the assimilation of neoKeynesist ideas & principles by the “establishment” but, on the other hand, it has – at least partially – emasculated the genuine Keynesian analysis of the capitalist economy and society.

Explaining the nature of the 1930s depression, it is relevant that John M. Keynes deeply considered the delimitation of speculation (speculative financial operations) from enterprise (productive investment). For the former, it is characteristic the obsessive target of acquiring profits by speculating on different forms of liquidity (mainly in the short run), while the latter involves a long-term vision and strategy. Although it may seem paradoxical, “as the organization of investment markets improves, the risk of the predominance of speculation does, however, increase.” (J.M. Keynes, 1997, p.158). Keynes warned of the danger that capital development, as a factor of production, could become “a by-product of the activities of a casino”, affecting the functions of stock exchanges themselves. Therefore, “the measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment

66

into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism…” (op. cit., p.159).

The Keynesian assertion was completely acknowledged by the dramatic consequences of the aggressive “de-regulation” campaign advocated by the neoliberalism during 1980s & 1990s.

Exacerbating the “autonomy” of the nominal economy (that is monetary, banking and financial flows and assets, up to “derivatives”) versus the evolution of the real economy (factors of production, goods & services) has represented the basic cause of the crisis phenomena in the last decade, including the present stagnant and recessionary profile of the economic evolution.19 Due to the global expansion of the giant trans- & multinational corporations, detaining oligopolistic and even monopolistic positions, favoured by credit and electronic money proliferation, monetary, financial and foreign exchange speculation have ever more become an aim per se, moving gradually away from the trends and necessities of the real economy.

The rupture between the nominal and real dimensions of the economic activity is ambivalent, distorting both the national & international monetary systems and the factors of production markets. Despite the “generalization” trend of capitalist economic and social model, the nominal /real rift has inoculated a neo-feudal element in the societal structure: various forms of the rent. According to the Keynesian vision, in the economy based on capital, “normally” there should have taken place “the euthanasia of the rentier, of the functionless investor” (Keynes, 1997, p.376). The replacement would have been evolving “gradually”, so that a revolution would have been “useless”: however, that “normal” replacement took place only partially and new types of “functionless investors” appeared.

This failure has not been a historical “accident”. It is intimately linked to an economic and social process specific to the mode of production founded on capital and which, in the 19-th century terminology (especially the Marxist orientation), was called the primitive accumulation.

In James Glassman’s phrasing, “though primitive accumulation is a process that some have considered a historical phase through which societies pass on the way to … social structures based on expanded reproduction, the current state of global affairs makes it evident that it is in fact central to capitalist accumulation in general or else has a much longer period of historical ‘dissolution’ than previously imagined.” (“Progress in Human Geography”, 30, 5/2006, pp.

621/622) Total debt management during long cycles The postwar economic reconstruction tended to re-establish the necessary correlation between the real and nominal flows of the economic circuit. The disintegration of colonial empires and acceleration of international economic growth contributed to a diminishing role of 19

I remarked this danger in the early 1990s and I developed this thesis in different studies and articles, published in different reviews/journal în the 2000s.

67

various types of rent and speculative financial flows, while productive capital assets grew in importance. This tendency would last about two and a half decades (until mid-1970s), corresponding to the ascendant phase of the postwar long cycle (semi secular). Although Minsky’s theory was applied especially to the mid-term or “decennial” business cycles, his ideas are obviously seminal for explaining and understanding the causality of long-term cycles (e.g., the Kondratiev type).

The economic cyclical movement was one of my main research topics during some decades, so I have proposed the following periodization regarding the semi secular cycles of the 20-th & 21-st centuries, made up of a descending/stagnant stage and an ascendant/expansionary stage: descending stage – 1929/30 until 1944/45; expansionary stage – 1946/47 until 1971/72; stagnant stage – 1973/74 until 1990/91; ascendant stage – 1992/93 until 2006/07; descending stage – 2007/08 until, probably, about 2020.20 In his fundamental work – “Stabilizing an unstable economy”, Minsky depicted the double meaning of the instability as a key concept for his theoretical system: a descending instability (crisis/ recession/deflation) followed by an ascendant (exuberant/inflationary) instability which, at its turn, provokes another speculative boom that finally busts. Even if this approach brings a meaningful insight for understanding mid-term business cycles, it has a more profound and complex contribution to revealing the nature of long-term cycles: “The theoretical argument of the instability hypothesis starts from the characterization of the economy as a capitalist economy with expensive capital assets and a complex sophisticated financial system.”

(H.P. Minsky, May 1992, p. 2).

After the ascendant part of the first postwar long cycle, the “oil shocks” of 1973/74 and 1978/79, including the adjacent recessions, marked the prerequisite for a broader and deeper rift between the real and nominal sides of the socio-economic activity: there is not a mere coincidence that the “de-regulation & liberalization” crusade took place during the 1980s and 1990s. Despite the neoliberal propagandistic terminology, this process favored the expansion of the “neo-feudal element” that I mentioned previously, essentially due to the fact that “free competition” has ever more been replaced by oligopolistic and monopolistic structures.

Moreover, since the mid-1980s the earth’s peoples have been using more of the planet’s resource production each year than could be regenerated in that year: “the ecological footprint of global society has overshot the earth’s capacity to provide.” (Donella Meadows, Jorgen Randers, Dennis Meadows, 2004, p.3). The “global” human society would need more than 1.5 planets (of the Terra type) to meet its consuming necessities & habits, leaving aside the huge discrepancies among countries and social categories. In fact, nowadays, the neo-primitive/barbarian accumulation gravely affects “mother nature” and implicitly the life environment on our planet.

20

L.C. Ionescu, “Interdependence between monetary and real economy in the context of the international financial crisis”, in UFB REVIEW, no. 1/2011.

68

This intricate phenomenon has been affecting the evolution of the real economy and, at the same time, has provoked the recrudescence and multiplication of different kinds of socioeconomic and political rent, among which a conspicuous component, in our interpretation, consists in the insidious increase of debts almost all over the world. Historically, total debt tended to grow during the descending or stagnant stages of the long cycles and to decrease (at least relatively) along the ascendant stages. Yet, in the last two decades, a structural deterioration has become more and more obvious: the proportion of the total debt has been continuously amplifying – only its growth rate has varied (in time or from country to country).

In this context, the real/nominal dichotomy has been perverting the normal economic circuit by diminishing the role of productive investment strategy in favour of the overwhelming debt management. As Minsky formulated, “the financial instability hypothesis, therefore, is a theory of the impact of debt on system behavior and also incorporates the manner in which the debt is validated”, but “whether or not liabilities are validated depends on investment” (Minsky, May 1992, p. 6).

Consequently, a troublesome characteristic of the contemporary world economy has been the tremendous increase of different categories of debt in most countries. A significant example is represented by the total debt21 of the ten largest developed mature economies which has been standing at almost 350 % of their GDP in the last years (Global Finance, the 2012-14 collection).

The data refers mainly to 2012 when the financial mid-term crisis was considered generally ended (the business cycle crisis was considered over in 2009). A relevant example: “The length and amplitude of the US financial cycle – … the path of the credit to GDP ratio – have increased markedly since the mid-1980s, partly reflecting financial deregulation.”22 Here are some examples (TIME, the 2012 collection), in a decreasing order (between brackets the government or public debt share, from IMF, WEO database April 2012): Japan – 512% (235.8), UK – 507% (88.4), Spain – 363% (79), France – 346% (89), Italy – 314% (123.4), USA – 279% (106.6), Germany – 278% (79), Canada – 276% (84.7). Moreover, the tendency of an increasing total debt has been preserved in the years to follow. The US economy is presenting a striking case where public (government & intergovernmental) debt has exceeded the GDP, for the first time since the end of World War II (when it stood at 113%). In the postwar period, it slowly diminished until the last 1970s, then increased rapidly again, flattened somehow during the 1990s (while the “New economy” and the Great Moderation were hailed) and clearly worsened in the 2000s, especially after the crisis burst out.

Under these circumstances, IMF, World Bank and European Commission (EC) focused on the stringent necessity of decreasing public/government debt, starting with tough limits for government budget deficit (a maximum 3% of GDP for EU countries), irrespective of the level 21

Total debt is including public debt (mainly government debt) and private debt (financial institutions, nonfinancial businesses, households).

22 IMF, Strennghening the IMF – a stocktaking, March 2016, p. 15.

69

of development of the countries analyzed. Unfortunately, private debt did not receive the same attention. In a capitalist economy, government debt, in most cases, is a “mirror” of the nature, structure and proportions of the private debt. If we are referring to US – still the most important western economy, it is evident that the government debt had a pronounced countercyclical evolution, but with an ascendant long-term trend since early 1980s. This tendency reveals that public debt is approaching its upper tolerable limits in correlation with an unhealthy augmentation of private debt (particularly that of financial institutions).

This dangerous propensity is recently confirmed by the continuous increase of total debt in most countries. Thus, after about two years (2014/15), total debt has exceeded 600% of Japan’s GDP: even if the so-called “austerity measures may have managed to create (more) budgetary discipline, but without a resolution of private debt there is little hope of avoiding the Japanese scenario of low growth, deflation flirts and stubbornly high unemployment.”23 Beside excessive bureaucratic or corrupted expenditures (“crony capitalism”), the magnitude of government debt reflects specific traits of an economy based on private dominant capital: bailouts – especially for financial institutions considered “too big to fail” – and the tendency of huge corporations to ignore or at least to minimize their social and ecological responsibilities.

Debt and dilemma of economic convergence in EU This complex situation draws again the attention on the nominal/real rift in the economy.

Such a dysfunction can be also traced in the original form of the Treaty on the European Union (the Maastricht Treaty, enacted in 1993), where only the nominal criteria were expressly mentioned for adopting the single currency (Euro) by the EU member states, while the real convergence was considered simply as background. The dramatic events of the last decade (mainly the international financial crisis and its effects on economy) have revealed the decisive importance of a close correlation between the nominal & real criteria for achieving economic convergence, vital for building up an efficient economic and monetary union (EMU). According to the Maastricht Treaty, only the government/public debt was limited to 60% of a member country’s GDP (including some significant “exceptions”).

Paradoxically, after more than a decade since the Euro has become the “single currency” for EU member states, the Euro-area’s average government debt has exceeded the average for the whole European Union – 92.2% vs. 85.9% (data for 2013), marking a worsening trend (88.2% and, respectively, 83.3, at the beginning of 2012). Moreover, private debt in EU represents more than twice the size of sovereign debt.

As long as the two basic dimensions of the EU economic convergence – nominal and real – would evolve de-synchronized or even in contrast, euro would risk being a vehicle for 23

M. Canoy, R. Fransman in “Pieria”, March 26, 2014.

70

speculative monetary-financial flows and only collaterally would stimulate sustainable growth and economic restructuring. The EU single currency could be beneficial for all member states just conditioned by a well-balanced correlation between the nominal and real aspects of the economy.

After the effective failure of the initial versions of the Stability and Growth Pact (including the “revised” form in 2005), there has been set up the Macroeconomic Imbalance Procedure (MIP) for supervising, in a more coherent manner, both nominal and real indicators, involving Alert Mechanism Reports.24 This time 11 indicators have been selected, among which private sector debt share (consolidated) in GDP and changes in total financial sector liabilities.

The threshold for private debt (non-financial businesses and households) has been set at 133% of GDP (a first tentative limit of 160% had also been considered). As regards the financial sector liabilities, only year-on-year changes are analyzed. However, after the first years of MIP, “there has been little progress so far in reducing excessive private debt, although credit flows have been very low or even negative in many countries…”25 In fact, euro-area total private debt has been estimated at over 400% (in 2013). Therefore, the end of the cyclical financial crisis has not resolved the problem of increasing debts, underlining structural causes which should be approached properly.

MIP seems to be a step in the right direction, but one should not neglect that macroeconomic stability cannot be a goal in itself: previous experiences (such as the dramatic 1930s) showed that “macroeconomic equilibrium” may coexist with a strikingly low level of real economic activity which means large quantities of unemployed factors of production. Therefore, a new social danger is looming: the so-called jobless growth (modest GDP growth rates, accompanied by ever higher unemployment levels).26 Normally the post-crisis period should have contributed to the “deleveraging process”, which would have attenuated the tension between real and nominal facets of the economy. In reality, preserving a very low level of the interest rates acted as a stimulus for debtors. A gradual abandon of “unconventional monetary policies” was initially envisaged for 2014/15. The permanent pressure from financial oligarchy within a weak economic conjuncture resulted in a sine die prolongation of non-standard monetary stance.

This specific case updates the essential difference between the productive investment and the speculative investments (such as the famous financial derivatives). If the previous ascending phase of the last semi secular cycle seemed to focus on the expected benefits of the globalization, the present descending/stagnant phase mainly reveals the perils of this contradictory process.

Consequently, the amplifying trend of the total debt has become a world-wide phenomenon. The global indebtedness – comprising both the public and private components – was representing 24

Regulation (EU) of the European Parliament and of the Council, entered into force in December 2011.

European Commission, Alert Mechanism Report, Brussels, 13.11.2013, p. 1.

26 According to Real Time Economics (from The Wall Street Journal), 2013 collection.

25

71

more than 300% of the world GDP (313%) at the beginning of 2013: debt in developed states amounted to almost 160 trillion US dollars (nearly 380% of GDP) and emerging market economies’ debt was over 66 trillion US dollars (more than 220% of GDP). In our vision, the continuous increasing of the total debt is the most visible proof of the deepening of the rift between nominal and real dimensions of the economy. Thus, at the end of 2018, world debt exceeded 318% of GDP. The world debt total represents almost 244 trillion USD (according to the Institute of International Finance). It should be underlined that all component of the global debt are on an upward trend: total government debt exceeded USD 65 trill. in 2018 (USD 37 trill.), more than a decade ago, when the Great Financial Crisis was in full swing), financial sector indebtedness increased to USD 60 trill. (10% up from the crisis period), non-financial corporate grew to USD 72 trill. (almost a record, representing 92% of GDP), household debt rose to USD 46 trill. (especially in emerging markets).

Endeavouring to alleviate this troublesome situation, open market operations (OMO) may be adequate for monetary policy in relation with the government debt and the biggest banks, while the “discount window” should be revitalized for middle & small banks, more directly linked to the investment process of the SMEs. Both the ever higher total debt (public & private) and immense funds “injected” by central banks in economy to alleviate the financial crisis’ consequences seem to indicate that the type of macroeconomic interventions that was relatively successful till the end of the 20-th century, in the last decade has been approaching its upper limits. As H. Minsky concluded at the end of his main work, the fundamental destabilizing nature of capitalist finance would make necessary a periodic and profound restructuring and reforming of the institutional framework of the economy.

In the aftermath of the international financial & economic crisis, the Minskyan vision and critical analysis of capitalism is still seminal for restructuring society:27 monopolies and oligopolies ever more representing a special form of “tax collectors” (as new kinds of rent that have been mentioned before), public control or even public property of large capital intensive production units remains essential for solving vital social problems. The role of the public sector should not be confined to fiscal policies (taxes & expenditures), but it should also involve investment resources in economic activities generating value-added activities, which could finally be self-financing. As the “socialization” of the costs of the crises is already a “fait accompli”, while the profits remain private, it would be only socially fair to “socialize” at least part of the benefits obtained in both the public and private sector (social solidarity).

By knowing and learning both the advantages and the deficiencies or defaults of various national and international experiences, without prejudices, rigidities or imposed uniformity, human society could turn into account historical lessons/experiences and conceive a new socio-

27

See chapters 12 &13 of “Stabilizing an unstable economy” (New Haven: Yale University Press, 1986 or McGraw Hill Professional, 2008).

72

political system/network, able to promote a new and efficient symbiosis between real and nominal dimensions of the economic structure.

The economic and financial crisis of 2020, aggravated by the COVID pandemic and being in the downward phase of a semi-secular cycle, will accentuate the stringent nature of the need for organic recorrelation between the real and the nominal economy.

73

● Prof. Dr. Tudoriţa ALBU – “Plugarul” din Vad – Țara Făgărașului. Farmecul peren al obiceiurilor populare ancestrale Note from the Editor-in-Chief As we remembered on another occasion, in the opinion of Dr. Tudorita ALBU, education means life and civilization transmission, it is how to be prepared for tomorrow, is learning from heart to heart to know how to grow your own flower, the School being the one that provides you with the necessary cultivation, and ensure the nation’s upbringing. School remains the place where each generation will pass on its values. Dr. Tudorita ALBU advocates for promoting both the universal values (love, integrity, justice, support and respect relationships), and national ones (the passion for the recovery of these values and promoting the authentic being obvious). That is why it is our honor to share with our Readers her dedication to our cultural heritage.

o ating or pro oting both the uni ersa a ues an nationa ones. onoring to share the e i ation to our u tura heritage.

74

Prof. Dr. Tudoriţa ALBU – “Plugarul” din Vad – Țara Făgărașului. Farmecul peren al obiceiurilor populare ancestrale *

Obiceiurile și tradițiile sunt componente de bază ale unui “modus vivendi” în cadrul fiecărei epoci istorice. Nu putem vorbi despre o cultură evoluată dacă ignorăm conceptul tradiției și elementele ei arhetipale, obiceiurile și tradițiile constituind autentice verigi în lanțul continuității unui popor.

De-a lungul secolelor, activitatea spirituală a unui popor își găsește expresia într-un complex de obiceiuri, credințe, practici și eresuri, deseori cu un pronunțat caracter mitic.

De altfel, deseori miturile sunt încorporate în diverse practici cotidiene existente la nivelul unor comunități sociale: agrare, pastorale și citadine. În țara noastră întâlnim numeroase straturi ale tradiției populare și ele se regăsesc cu ușurință în componența spiritului rural (în datini, obiceiuri, cântece, în basme, doine, în practici agrare, în momente festive etc.). În epoca informaticii, a ciberneticii și a zborului cosmic, în epoca tehnologizării, într-o lume cuprinsă de spaima globalizării care ar aduce cu sine pierderea identității naționale, este necesar ca, măcar din când în când, să revenim la origini pentru a ne cunoaște și păstra identitatea din care ne tragem seva.

O zonă etnografică de mare rezonanță, asupra căreia ne vom opri atenția în următoarele rânduri, este Țara Făgărașului, “poarta” dintre două ținuturi românești, cu istorie încărcată de evenimente dintre cele mai relevante pentru neamul românesc, prin păstrarea tradiției culturale și a unor obiceiuri pitorești ale căror începuturi se pierd negura vremii. Academicianul David

75

Prodan spunea: “Țara Făgărașului, sau popular Țara Oltului, așezată drept în inima spațiului românesc, sub masivul cel mai spectaculos, șiră a spinării sale străbătută de o rețea întreagă de artere de comunicare, ținut atât de compact și distinct românesc, […] a jucat un rol firesc, un rol capital în istoria poporului nostru.”

Ocupațiile locuitorilor erau agricultura, creșterea vitelor și meșteșugurile.

Insuficiența pământului și fertilitatea scăzută a acestuia au făcut ca oamenii să supraviețuiască numai datoită hărniciei lor. O altă ocupație era cea legată de producția industriei casnice (țesături, alimente, obiecte de uz casnic, unelte) care satisfăceau nevoile gospodărești.

Satul Vad, străbătut de Valea Șincii, aproape de pădurea Dumbrava - unde se află renumita Poiană a Narciselor, este un sat grăniceresc atestat în secolul al XIII-lea. În această zonă etnografică se păstrează încă, aproape nealterat de trecerea timpului profan, “Plugarul” - un obicei agrar anual cu origini precreștine, ce polarizează întreaga colectivitate sătească și atrage privitori entuziaști din toate colțurile țării. Momentul ales pentru această manifestare este corelat pe de o parte cu sărbătoarea creștin-ortodoxă a Paștilor, fiind întotdeauna programat în a doua zi a acesteia, iar pe de altă parte cu începutul anului agrar.

Sărbătoare spirituală a învierii lui Iisus Hristos și celebrarea reînvierii naturii sunt astfel unificate în timpul mitic al “eternei reîntoarceri” despre care vorbește istoricul religiilor, Mircea Eliade.

Plugarul - feciorul cel mai gospodar, care iese cu patru sau șase boi înjugați la plug, împreună cu ceata de feciori, merg la arat și trag prima brazdă din an. Ca să aibă spor la lucru, își iau merinde – “pită” și slănină, dar și ceva de băut (de obicei țuică).

Doi-trei inși din ceata feciorilor mână boii, care sunt împodobiți cu panglici colorate. În drum spre ogor, feciorii ocolesc satul cântând: “Trageți voi, boi, la tânjeală/ Că voi sunteți boi de fală./ Trageți voi, boi, dinainte,/Că voi sunteți boi de frunte.” În repertoriul cetei se mai regăsesc și cântece de cătănie.

76

Sătenii așteaptă alaiul și le ies în cale cu vase pline cu apă, stropindu-i, pentru ca anul să fie mănos.

Feciorii aduc holde de grâu smulse de pe camp și împletesc coronițe care vor împodobi în ziua următoare capul, mâinile și picioarele Plugarului. A doua zi, ceata formată din feciori îl ascunde pe Plugar în gospodăria proprie, în coșul de grâu, simbol al rodniciei anului. Sătenii se adună în curtea Plugarului, însoțiți de lăutarii care întrețin o atmosferă de voie bună, și așteaptă să fie găsit Plugarul pentru pornirea alaiului. În tot acest timp, feciori și fete îmbrăcați în costume populare, joacă și se distrează. Atunci când este găsit, Plugarul iese cu o traistă cu grâu, din care aruncă peste mulțimea adunată. Gestul aruncatului cu grâu este însoțit de strigături specifice care reprezintă urări de fertilitate și belșug adresate întregii comunități. Plugarul este așezat pe o grapă fără colți, purtat pe umeri de către feciori, care ocolesc satul, însoțiți de muzică. Întreg cortegiul se oprește la râu (Valea Șincii). În timp ce este purtat pe umeri de către feciori, Plugarul poartă veșminte speciale: pantaloni albi (“cioareci”), cămașă albă, o haină lungă și pălărie din postav negru. Sprijinit într-o furcă pe grapă, privește în jur cu mândrie. În chip de zeu al fertilității, el se lasă purtat la râu pentru a îndeplini un ritual ancestral. În urma lui vine întregul alai.

77

Odată ajuns la râu, Plugarul este aruncat în apă, coronițele sunt scoase și lăsate să plutească, grapa este și ea aruncată în râu. Feciorii sar să prindă grapa. Plugarul iese cu pălăria plină cu apă și stropește simbolic mulțimea, aruncând în direcția celor patru puncte cardinale, în semnul crucii.

După îndeplinirea acestui ritual, feciorii și fetele, îmbrăcați în costume populare, însoțiți de acorduri muzicale, se prind în horă, în admirația întregii comunități sătești. După aceste momente, Plugarul este dus acasă în alai și strigături, cinstindu-i apoi cu mâncare și băutură pe cei care l-au recunoscut drept cel mai gospodar din acel an.

După masă, tinerii merg prin sat, însoțiți de asemenea de muzică, pe la tinerii căsătoriți în anul respectiv, adresându-le urări de bine și de rodnicie a căsniciei. Ca recompensă, tinerii căsătoriți le oferă dulciuri și băutură, după care, în gospodăria tinerei familii se organizează jocul. Seara, întreaga comunitate sătească se reunește și participă la balul organizat cu acest prilej.

78

Iată cum, asemeni lui Osiris, divinitatea supremă în mitologia egipteană și lui Demeter din mitologia greacă, asemeni zeiței Ceres, zeița grâului și a recoltelor în mitologia romană, Plugarul nostru este un simbol al fertilității și al belșugului, recunoscut și cinstit de întreaga obște.

Perenitatea tradițiilor și a obiceiurilor românești se explică nu doar prin aspectul lor pitoresc și captivant, ci mai ales prin conținutul lor de semnificații profunde, legate de relația omului cu lumea înconjurătoare și cu natura, constituindu-se în elemente distincte ale patrimoniului cultural-spiritual al poporului român.

Se cuvine să aducem un omagiu celui care a pus culoarea câmpului și a florilor în costumele fetelor și ale feciorilor; celui care, fără să aibă înalte studii muzicale, a reușit să creeze melodii de o frumusețe și o valoare artistică inegalabilă; celui care, fără să fie academician sau filozof, a reușit să sintetizeze filozofia vieții în câteva cântece populare; celui care, fără să fie arhitect, a reușit să construiască o casă durabilă și frumoasă; celui care, cu mâinile și cu sufletul, dăruiește formă lutului, și mai ales, celui ale cărui palme bătătorite au întors cu plugul brazdele mănoase care ne hrănesc neîncetat trupul și spiritul.

Oameni simpli, mândri, cu caracter extrem de puternic, vădenii și-au păstrat obiceiurile, indiferent de timpul care a trecut peste ei. Au muncit pământul, un pământ foarte greu, puțin rodnic, dar au făcut-o cu îndârjire.

Astăzi, mândria localnicilor din Vad este la fel de puternică. Mândri de obiceiurile lor, de moștenirea primită, ei caută să insufle generațiilor ce vin dragostea pentru pământ și respectul față de strămoși.

79