At the dawn of a golden age of service working from home, with same or next day delivery, online education, online doctor visits, individuals have an incentive to buy a great diversity of service and product offerings. Products render service when used in a context, so we focus on service and service innovations.
Some individuals, businesses, and nations have more money than others to benefit from service. Wealth matters when it comes to buying a high-quality service. Purchasing power of responsible entities (people, businesses, nations) varies tremendously even in this golden age we live in, with both billionaires as well as too many chronically under-served populations.
“Fewer than half of working-age Americans have any retirement savings, according to Census data for 2020.” Over the course of their lifetimes, a typical family can easily spend millions on service (70 years x $50K per year = $3.5M). If just 1% of that spending was invested as each purchase was being made, over the same average lifespan of those individuals, then much greater wealth would be achieved ($50K per year spending, with 1% monthly savings at 2% monthly compounding adds $70K for retirement spending or to pass on to heirs). Within four generations, the wealth and purchasing power of retirement age population as a whole would be nudged greater than it is today. Increased purchasing power drives higher-quality service innovations.
Automatic retirement investing is the key to making everyone a bit wealthier. For example, national central banks with a Central Bank Digital Currencies (CBDC) could put in place retirement accounts for every person to facilitate a “buy2invest” program. Consider this – buying a cup of coffee or a fast food meal, could automatically add micro-shares of that company’s stock as well as micro-shares of an index fund to that individual’s central bank retirement account, in the total amount of 1% of the purchase price. If the purchase is made online, then a micro-share of the portal’s stock could also be added to the individual’s retirement account. Could these additions in the level of the retirement accounts happen when taxes are paid – that is a kind of service purchase? Yes, it could. Perhaps adding a few government bonds to the mix (age parameterized of course), as well as additional micro-shares of an index fund. Others have proposed alternative mechanisms. The great variety of alternative mechanisms being proposed suggests that this is a service innovation whose time has come.
How would such a service innovation be paid for? One approach would be to think of it as similar to a credit card fee. Credit cards are an example of a service innovation. Another approach, would be to fund it through quantitative easing, which central banks already do. Quantitative easing is an example of a service innovation as well. Loyalties programs are a service innovation, associated with buying. To learn about other proposed service innovations, you can read this book, or other books in the service systems innovation for business and society book collection.
In the current golden age of service, connecting buying to investing for all individuals is a service innovation whose time has come!
Data Points
20211101 Burger King “Buy and Invest” Loyalty Program with Robinhood. WeBull is a competitor of Robinhood.
20211118 and 20201014 Saule Omarova and proposal for a “People’s Ledger“
Issues
20211203 Educated population is key to success. Starting with kids who learn about budgets and civic responsibility – see First Root. I am often asked what is the most important skill for students to learn to prepare for a 21st century innovation career. My answer is not computer programming, data science, AI, or any of the STEM, or liberal arts skills and degrees, open source, etc. – as important and helpful as these can be… Instead, the next generation needs to learn about investing well and wisely, their time, effort, resources. First Root is a great startup company for getting students educated and prepared for a 21st century innovation careers.
20211203 Why should “buy2invest” be 1% and have micro-shares of an index fund and the stock of what is being purchased? JL Collins explains why index funds best. The stock of what is purchased is a twist on loyalty programs. Also, it helps ensure that the investment is going towards a service that people actually care about and use – grounding in reality of service for service exchanges as the foundation of a society improving service, which is the application of knowledge for mutual benefits.
20210430 Would “buy2invest” lead to more unwise spending and more backruptcy? What is the primary cause of bankruptcy in the USA? Medical costs is a primary bankruptcy factor in USA