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Tuesday, November 23, 2021

Philosophy of mind

From Wikipedia, the free encyclopedia
A phrenological mapping of the brainphrenology was among the first attempts to correlate mental functions with specific parts of the brain although it is now largely discredited.

Philosophy of mind is a branch of philosophy that studies the ontology and nature of the mind and its relationship with the body. The mind–body problem is a paradigmatic issue in philosophy of mind, although a number of other issues are addressed, such as the hard problem of consciousness and the nature of particular mental states. Aspects of the mind that are studied include mental events, mental functions, mental properties, consciousness, the ontology of the mind, the nature of thought, and the relationship of the mind to the body.

Dualism and monism are the two central schools of thought on the mind–body problem, although nuanced views have arisen that do not fit one or the other category neatly.

  • Dualism finds its entry into Western philosophy thanks to René Descartes in the 17th century. Substance dualists like Descartes argue that the mind is an independently existing substance, whereas property dualists maintain that the mind is a group of independent properties that emerge from and cannot be reduced to the brain, but that it is not a distinct substance.
  • Monism is the position that mind and body are ontologically indiscernible entities (not dependent substances). This view was first advocated in Western philosophy by Parmenides in the 5th century BCE and was later espoused by the 17th-century rationalist Baruch Spinoza. Physicalists argue that only entities postulated by physical theory exist, and that mental processes will eventually be explained in terms of these entities as physical theory continues to evolve. Physicalists maintain various positions on the prospects of reducing mental properties to physical properties (many of whom adopt compatible forms of property dualism), and the ontological status of such mental properties remains unclear. Idealists maintain that the mind is all that exists and that the external world is either mental itself, or an illusion created by the mind. Neutral monists such as Ernst Mach and William James argue that events in the world can be thought of as either mental (psychological) or physical depending on the network of relationships into which they enter, and dual-aspect monists such as Spinoza adhere to the position that there is some other, neutral substance, and that both matter and mind are properties of this unknown substance. The most common monisms in the 20th and 21st centuries have all been variations of physicalism; these positions include behaviorism, the type identity theory, anomalous monism and functionalism.

Most modern philosophers of mind adopt either a reductive physicalist or non-reductive physicalist position, maintaining in their different ways that the mind is not something separate from the body. These approaches have been particularly influential in the sciences, especially in the fields of sociobiology, computer science (specifically, artificial intelligence), evolutionary psychology and the various neurosciences. Reductive physicalists assert that all mental states and properties will eventually be explained by scientific accounts of physiological processes and states. Non-reductive physicalists argue that although the mind is not a separate substance, mental properties supervene on physical properties, or that the predicates and vocabulary used in mental descriptions and explanations are indispensable, and cannot be reduced to the language and lower-level explanations of physical science. Continued neuroscientific progress has helped to clarify some of these issues; however, they are far from being resolved. Modern philosophers of mind continue to ask how the subjective qualities and the intentionality of mental states and properties can be explained in naturalistic terms.

However, a number of issues have been recognized with non-reductive physicalism. First, it is irreconcilable with self-identity over time. Secondly, intentional states of consciousness do not make sense on non-reductive physicalism. Thirdly, free will is impossible to reconcile with either reductive or non-reductive physicalism. Fourthly, it fails to properly explain the phenomenon of mental causation.

Mind–body problem

The mind–body problem concerns the explanation of the relationship that exists between minds, or mental processes, and bodily states or processes. The main aim of philosophers working in this area is to determine the nature of the mind and mental states/processes, and how—or even if—minds are affected by and can affect the body.

Perceptual experiences depend on stimuli that arrive at our various sensory organs from the external world, and these stimuli cause changes in our mental states, ultimately causing us to feel a sensation, which may be pleasant or unpleasant. Someone's desire for a slice of pizza, for example, will tend to cause that person to move his or her body in a specific manner and in a specific direction to obtain what he or she wants. The question, then, is how it can be possible for conscious experiences to arise out of a lump of gray matter endowed with nothing but electrochemical properties.

A related problem is how someone's propositional attitudes (e.g. beliefs and desires) cause that individual's neurons to fire and muscles to contract. These comprise some of the puzzles that have confronted epistemologists and philosophers of mind from the time of René Descartes.

Dualist solutions to the mind–body problem

Dualism is a set of views about the relationship between mind and matter (or body). It begins with the claim that mental phenomena are, in some respects, non-physical. One of the earliest known formulations of mind–body dualism was expressed in the eastern Samkhya and Yoga schools of Hindu philosophy (c. 650 BCE), which divided the world into purusha (mind/spirit) and prakriti (material substance). Specifically, the Yoga Sutra of Patanjali presents an analytical approach to the nature of the mind.

In Western Philosophy, the earliest discussions of dualist ideas are in the writings of Plato who suggested that humans' intelligence (a faculty of the mind or soul) could not be identified with, or explained in terms of, their physical body. However, the best-known version of dualism is due to René Descartes (1641), and holds that the mind is a non-extended, non-physical substance, a "res cogitans". Descartes was the first to clearly identify the mind with consciousness and self-awareness, and to distinguish this from the brain, which was the seat of intelligence. He was therefore the first to formulate the mind–body problem in the form in which it still exists today.

Arguments for dualism

The most frequently used argument in favor of dualism appeals to the common-sense intuition that conscious experience is distinct from inanimate matter. If asked what the mind is, the average person would usually respond by identifying it with their self, their personality, their soul, or another related entity. They would almost certainly deny that the mind simply is the brain, or vice versa, finding the idea that there is just one ontological entity at play to be too mechanistic or unintelligible. Modern philosophers of mind think that these intuitions are misleading, and that critical faculties, along with empirical evidence from the sciences, should be used to examine these assumptions and determine whether there is any real basis to them.

The mental and the physical seem to have quite different, and perhaps irreconcilable, properties. Mental events have a subjective quality, whereas physical events do not. So, for example, one can reasonably ask what a burnt finger feels like, or what a blue sky looks like, or what nice music sounds like to a person. But it is meaningless, or at least odd, to ask what a surge in the uptake of glutamate in the dorsolateral portion of the prefrontal cortex feels like.

Philosophers of mind call the subjective aspects of mental events "qualia" or "raw feels". There are qualia involved in these mental events that seem particularly difficult to reduce to anything physical. David Chalmers explains this argument by stating that we could conceivably know all the objective information about something, such as the brain states and wavelengths of light involved with seeing the color red, but still not know something fundamental about the situation – what it is like to see the color red.

If consciousness (the mind) can exist independently of physical reality (the brain), one must explain how physical memories are created concerning consciousness. Dualism must therefore explain how consciousness affects physical reality. One possible explanation is that of a miracle, proposed by Arnold Geulincx and Nicolas Malebranche, where all mind–body interactions require the direct intervention of God.

Another argument that has been proposed by C. S. Lewis is the Argument from Reason: if, as monism implies, all of our thoughts are the effects of physical causes, then we have no reason for assuming that they are also the consequent of a reasonable ground. Knowledge, however, is apprehended by reasoning from ground to consequent. Therefore, if monism is correct, there would be no way of knowing this—or anything else—we could not even suppose it, except by a fluke.

The zombie argument is based on a thought experiment proposed by Todd Moody, and developed by David Chalmers in his book The Conscious Mind. The basic idea is that one can imagine one's body, and therefore conceive the existence of one's body, without any conscious states being associated with this body. Chalmers' argument is that it seems possible that such a being could exist because all that is needed is that all and only the things that the physical sciences describe about a zombie must be true of it. Since none of the concepts involved in these sciences make reference to consciousness or other mental phenomena, and any physical entity can be by definition described scientifically via physics, the move from conceivability to possibility is not such a large one. Others such as Dennett have argued that the notion of a philosophical zombie is an incoherent, or unlikely, concept. It has been argued under physicalism that one must either believe that anyone including oneself might be a zombie, or that no one can be a zombie—following from the assertion that one's own conviction about being (or not being) a zombie is a product of the physical world and is therefore no different from anyone else's. This argument has been expressed by Dennett who argues that "Zombies think they are conscious, think they have qualia, think they suffer pains—they are just 'wrong' (according to this lamentable tradition) in ways that neither they nor we could ever discover!"

Interactionist dualism

Portrait of René Descartes by Frans Hals (1648)

Interactionist dualism, or simply interactionism, is the particular form of dualism first espoused by Descartes in the Meditations. In the 20th century, its major defenders have been Karl Popper and John Carew Eccles. It is the view that mental states, such as beliefs and desires, causally interact with physical states.

Descartes' argument for this position can be summarized as follows: Seth has a clear and distinct idea of his mind as a thinking thing that has no spatial extension (i.e., it cannot be measured in terms of length, weight, height, and so on). He also has a clear and distinct idea of his body as something that is spatially extended, subject to quantification and not able to think. It follows that mind and body are not identical because they have radically different properties.

Seth's mental states (desires, beliefs, etc.) have causal effects on his body and vice versa: A child touches a hot stove (physical event) which causes pain (mental event) and makes her yell (physical event), this in turn provokes a sense of fear and protectiveness in the caregiver (mental event), and so on.

Descartes' argument depends on the premise that what Seth believes to be "clear and distinct" ideas in his mind are necessarily true. Many contemporary philosophers doubt this. For example, Joseph Agassi suggests that several scientific discoveries made since the early 20th century have undermined the idea of privileged access to one's own ideas. Freud claimed that a psychologically-trained observer can understand a person's unconscious motivations better than the person himself does. Duhem has shown that a philosopher of science can know a person's methods of discovery better than that person herself does, while Malinowski has shown that an anthropologist can know a person's customs and habits better than the person whose customs and habits they are. He also asserts that modern psychological experiments that cause people to see things that are not there provide grounds for rejecting Descartes' argument, because scientists can describe a person's perceptions better than the person herself can.

Other forms of dualism

Four varieties of dualism. The arrows indicate the direction of the causal interactions. Occasionalism is not shown.
Psychophysical parallelism

Psychophysical parallelism, or simply parallelism, is the view that mind and body, while having distinct ontological statuses, do not causally influence one another. Instead, they run along parallel paths (mind events causally interact with mind events and brain events causally interact with brain events) and only seem to influence each other. This view was most prominently defended by Gottfried Leibniz. Although Leibniz was an ontological monist who believed that only one type of substance, the monad, exists in the universe, and that everything is reducible to it, he nonetheless maintained that there was an important distinction between "the mental" and "the physical" in terms of causation. He held that God had arranged things in advance so that minds and bodies would be in harmony with each other. This is known as the doctrine of pre-established harmony.

Occasionalism

Occasionalism is the view espoused by Nicholas Malebranche as well as Islamic philosophers such as Abu Hamid Muhammad ibn Muhammad al-Ghazali that asserts all supposedly causal relations between physical events, or between physical and mental events, are not really causal at all. While body and mind are different substances, causes (whether mental or physical) are related to their effects by an act of God's intervention on each specific occasion.

Property dualism

Property dualism is the view that the world is constituted of one kind of substance – the physical kind – and there exist two distinct kinds of properties: physical properties and mental properties. It is the view that non-physical, mental properties (such as beliefs, desires and emotions) inhere in some physical bodies (at least, brains). Sub-varieties of property dualism include:

  1. Emergent materialism asserts that when matter is organized in the appropriate way (i.e. in the way that living human bodies are organized), mental properties emerge in a way not fully accountable for by physical laws. These emergent properties have an independent ontological status and cannot be reduced to, or explained in terms of, the physical substrate from which they emerge. They are dependent on the physical properties from which they emerge, but opinions vary as to the coherence of top–down causation, i.e. the causal effectiveness of such properties. A form of emergent materialism has been espoused by David Chalmers and the concept has undergone something of a renaissance in recent years, but it was already suggested in the 19th century by William James.
  2. Epiphenomenalism is a doctrine first formulated by Thomas Henry Huxley. It consists of the view that mental phenomena are causally ineffectual, where one or more mental states do not have any influence on physical states or mental phenomena are the effects, but not the causes, of physical phenomena. Physical events can cause other physical and mental events, but mental events cannot cause anything since they are just causally inert by-products (i.e. epiphenomena) of the physical world. This view has been defended by Frank Jackson.
  3. Non-reductive physicalism is the view that mental properties form a separate ontological class to physical properties: mental states (such as qualia) are not reducible to physical states. The ontological stance towards qualia in the case of non-reductive physicalism does not imply that qualia are causally inert; this is what distinguishes it from epiphenomenalism.
  4. Panpsychism is the view that all matter has a mental aspect, or, alternatively, all objects have a unified center of experience or point of view. Superficially, it seems to be a form of property dualism, since it regards everything as having both mental and physical properties. However, some panpsychists say that mechanical behaviour is derived from the primitive mentality of atoms and molecules—as are sophisticated mentality and organic behaviour, the difference being attributed to the presence or absence of complex structure in a compound object. So long as the reduction of non-mental properties to mental ones is in place, panpsychism is not a (strong) form of property dualism; otherwise it is.
Dual aspect theory

Dual aspect theory or dual-aspect monism is the view that the mental and the physical are two aspects of, or perspectives on, the same substance. (Thus it is a mixed position, which is monistic in some respects). In modern philosophical writings, the theory's relationship to neutral monism has become somewhat ill-defined, but one proffered distinction says that whereas neutral monism allows the context of a given group of neutral elements and the relationships into which they enter to determine whether the group can be thought of as mental, physical, both, or neither, dual-aspect theory suggests that the mental and the physical are manifestations (or aspects) of some underlying substance, entity or process that is itself neither mental nor physical as normally understood. Various formulations of dual-aspect monism also require the mental and the physical to be complementary, mutually irreducible and perhaps inseparable (though distinct).

Experiential dualism

This is a philosophy of mind that regards the degrees of freedom between mental and physical well-being as not synonymous thus implying an experiential dualism between body and mind. An example of these disparate degrees of freedom is given by Allan Wallace who notes that it is "experientially apparent that one may be physically uncomfortable—for instance, while engaging in a strenuous physical workout—while mentally cheerful; conversely, one may be mentally distraught while experiencing physical comfort". Experiential dualism notes that our subjective experience of merely seeing something in the physical world seems qualitatively different from mental processes like grief that comes from losing a loved one. This philosophy is a proponent of causal dualism, which is defined as the dual ability for mental states and physical states to affect one another. Mental states can cause changes in physical states and vice versa.

However, unlike cartesian dualism or some other systems, experiential dualism does not posit two fundamental substances in reality: mind and matter. Rather, experiential dualism is to be understood as a conceptual framework that gives credence to the qualitative difference between the experience of mental and physical states. Experiential dualism is accepted as the conceptual framework of Madhyamaka Buddhism.

Madhayamaka Buddhism goes further, finding fault with the monist view of physicalist philosophies of mind as well in that these generally posit matter and energy as the fundamental substance of reality. Nonetheless, this does not imply that the cartesian dualist view is correct, rather Madhyamaka regards as error any affirming view of a fundamental substance to reality.

In denying the independent self-existence of all the phenomena that make up the world of our experience, the Madhyamaka view departs from both the substance dualism of Descartes and the substance monism—namely, physicalism—that is characteristic of modern science. The physicalism propounded by many contemporary scientists seems to assert that the real world is composed of physical things-in-themselves, while all mental phenomena are regarded as mere appearances, devoid of any reality in and of themselves. Much is made of this difference between appearances and reality.

Indeed, physicalism, or the idea that matter is the only fundamental substance of reality, is explicitly rejected by Buddhism.

In the Madhyamaka view, mental events are no more or less real than physical events. In terms of our common-sense experience, differences of kind do exist between physical and mental phenomena. While the former commonly have mass, location, velocity, shape, size, and numerous other physical attributes, these are not generally characteristic of mental phenomena. For example, we do not commonly conceive of the feeling of affection for another person as having mass or location. These physical attributes are no more appropriate to other mental events such as sadness, a recalled image from one's childhood, the visual perception of a rose, or consciousness of any sort. Mental phenomena are, therefore, not regarded as being physical, for the simple reason that they lack many of the attributes that are uniquely characteristic of physical phenomena. Thus, Buddhism has never adopted the physicalist principle that regards only physical things as real.

Monist solutions to the mind–body problem

In contrast to dualism, monism does not accept any fundamental divisions. The fundamentally disparate nature of reality has been central to forms of eastern philosophies for over two millennia. In Indian and Chinese philosophy, monism is integral to how experience is understood. Today, the most common forms of monism in Western philosophy are physicalist. Physicalistic monism asserts that the only existing substance is physical, in some sense of that term to be clarified by our best science. However, a variety of formulations (see below) are possible. Another form of monism, idealism, states that the only existing substance is mental. Although pure idealism, such as that of George Berkeley, is uncommon in contemporary Western philosophy, a more sophisticated variant called panpsychism, according to which mental experience and properties may be at the foundation of physical experience and properties, has been espoused by some philosophers such as Alfred North Whitehead and David Ray Griffin.

Phenomenalism is the theory that representations (or sense data) of external objects are all that exist. Such a view was briefly adopted by Bertrand Russell and many of the logical positivists during the early 20th century. A third possibility is to accept the existence of a basic substance that is neither physical nor mental. The mental and physical would then both be properties of this neutral substance. Such a position was adopted by Baruch Spinoza and was popularized by Ernst Mach in the 19th century. This neutral monism, as it is called, resembles property dualism.

Physicalistic monisms

Behaviorism

Behaviorism dominated philosophy of mind for much of the 20th century, especially the first half. In psychology, behaviorism developed as a reaction to the inadequacies of introspectionism. Introspective reports on one's own interior mental life are not subject to careful examination for accuracy and cannot be used to form predictive generalizations. Without generalizability and the possibility of third-person examination, the behaviorists argued, psychology cannot be scientific. The way out, therefore, was to eliminate the idea of an interior mental life (and hence an ontologically independent mind) altogether and focus instead on the description of observable behavior.

Parallel to these developments in psychology, a philosophical behaviorism (sometimes called logical behaviorism) was developed. This is characterized by a strong verificationism, which generally considers unverifiable statements about interior mental life pointless. For the behaviorist, mental states are not interior states on which one can make introspective reports. They are just descriptions of behavior or dispositions to behave in certain ways, made by third parties to explain and predict another's behavior.

Philosophical behaviorism has fallen out of favor since the latter half of the 20th century, coinciding with the rise of cognitivism.

Identity theory

Type physicalism (or type-identity theory) was developed by Jack Smart and Ullin Place as a direct reaction to the failure of behaviorism. These philosophers reasoned that, if mental states are something material, but not behavioral, then mental states are probably identical to internal states of the brain. In very simplified terms: a mental state M is nothing other than brain state B. The mental state "desire for a cup of coffee" would thus be nothing more than the "firing of certain neurons in certain brain regions".

The classic Identity theory and Anomalous Monism in contrast. For the Identity theory, every token instantiation of a single mental type corresponds (as indicated by the arrows) to a physical token of a single physical type. For anomalous monism, the token–token correspondences can fall outside of the type–type correspondences. The result is token identity.

On the other hand, even granted the above, it does not follow that identity theories of all types must be abandoned. According to token identity theories, the fact that a certain brain state is connected with only one mental state of a person does not have to mean that there is an absolute correlation between types of mental state and types of brain state. The type–token distinction can be illustrated by a simple example: the word "green" contains four types of letters (g, r, e, n) with two tokens (occurrences) of the letter e along with one each of the others. The idea of token identity is that only particular occurrences of mental events are identical with particular occurrences or tokenings of physical events. Anomalous monism (see below) and most other non-reductive physicalisms are token-identity theories. Despite these problems, there is a renewed interest in the type identity theory today, primarily due to the influence of Jaegwon Kim.

Functionalism

Functionalism was formulated by Hilary Putnam and Jerry Fodor as a reaction to the inadequacies of the identity theory. Putnam and Fodor saw mental states in terms of an empirical computational theory of the mind. At about the same time or slightly after, D.M. Armstrong and David Kellogg Lewis formulated a version of functionalism that analyzed the mental concepts of folk psychology in terms of functional roles. Finally, Wittgenstein's idea of meaning as use led to a version of functionalism as a theory of meaning, further developed by Wilfrid Sellars and Gilbert Harman. Another one, psychofunctionalism, is an approach adopted by the naturalistic philosophy of mind associated with Jerry Fodor and Zenon Pylyshyn.

Mental states are characterized by their causal relations with other mental states and with sensory inputs and behavioral outputs. Functionalism abstracts away from the details of the physical implementation of a mental state by characterizing it in terms of non-mental functional properties. For example, a kidney is characterized scientifically by its functional role in filtering blood and maintaining certain chemical balances.

Non-reductive physicalism

Non-reductionist philosophers hold firmly to two essential convictions with regard to mind–body relations: 1) Physicalism is true and mental states must be physical states, but 2) All reductionist proposals are unsatisfactory: mental states cannot be reduced to behavior, brain states or functional states. Hence, the question arises whether there can still be a non-reductive physicalism. Donald Davidson's anomalous monism is an attempt to formulate such a physicalism. He "thinks that when one runs across what are traditionally seen as absurdities of Reason, such as akrasia or self-deception, the personal psychology framework is not to be given up in favor of the subpersonal one, but rather must be enlarged or extended so that the rationality set out by the principle of charity can be found elsewhere."

Davidson uses the thesis of supervenience: mental states supervene on physical states, but are not reducible to them. "Supervenience" therefore describes a functional dependence: there can be no change in the mental without some change in the physical–causal reducibility between the mental and physical without ontological reducibility.

Non-reductive physicalism, however, is irreconcilable with self-identity over time. The brain goes on from one moment of time to another; the brain thus has identity through time. But its states of awareness do not go on from one moment to the next. There is no enduring self – no “I” (capital-I) that goes on from one moment to the next. An analogy of the self or the “I” would be the flame of a candle. The candle and the wick go on from one moment to the next, but the flame does not go on. There is a different flame at each moment of the candle’s burning. The flame displays a type of continuity in that the candle does not go out while it is burning, but there is not really any identity of the flame from one moment to another over time. The scenario is similar on non-reductive physicalism with states of awareness. Every state of the brain at different times has a different state of awareness related to it, but there is no enduring self or “I” from one moment to the next. Similarly, it is an illusion that one is the same individual who walked into class this morning. In fact, one is not the same individual because there is no personal identity over time. If one does exist and one is the same individual who entered into class this morning, then a non-reductive physicalist view of the self should be dismissed.

Because non-reductive physicalist theories attempt to both retain the ontological distinction between mind and body and try to solve the "surfeit of explanations puzzle" in some way; critics often see this as a paradox and point out the similarities to epiphenomenalism, in that it is the brain that is seen as the root "cause" not the mind, and the mind seems to be rendered inert.

Epiphenomenalism regards one or more mental states as the byproduct of physical brain states, having no influence on physical states. The interaction is one-way (solving the "surfeit of explanations puzzle") but leaving us with non-reducible mental states (as a byproduct of brain states) – causally reducible, but ontologically irreducible to physical states. Pain would be seen by epiphenomenalists as being caused by the brain state but as not having effects on other brain states, though it might have effects on other mental states (i.e. cause distress).

Weak emergentism

Weak emergentism is a form of "non-reductive physicalism" that involves a layered view of nature, with the layers arranged in terms of increasing complexity and each corresponding to its own special science. Some philosophers[who?] hold that emergent properties causally interact with more fundamental levels, while others maintain that higher-order properties simply supervene over lower levels without direct causal interaction. The latter group therefore holds a less strict, or "weaker", definition of emergentism, which can be rigorously stated as follows: a property P of composite object O is emergent if it is metaphysically impossible for another object to lack property P if that object is composed of parts with intrinsic properties identical to those in O and has those parts in an identical configuration.

Sometimes emergentists use the example of water having a new property when Hydrogen H and Oxygen O combine to form H2O (water). In this example there "emerges" a new property of a transparent liquid that would not have been predicted by understanding hydrogen and oxygen as gases. This is analogous to physical properties of the brain giving rise to a mental state. Emergentists try to solve the notorious mind–body gap this way. One problem for emergentism is the idea of "causal closure" in the world that does not allow for a mind-to-body causation.

Eliminative materialism

If one is a materialist and believes that all aspects of our common-sense psychology will find reduction to a mature cognitive neuroscience, and that non-reductive materialism is mistaken, then one can adopt a final, more radical position: eliminative materialism.

There are several varieties of eliminative materialism, but all maintain that our common-sense "folk psychology" badly misrepresents the nature of some aspect of cognition. Eliminativists such as Patricia and Paul Churchland argue that while folk psychology treats cognition as fundamentally sentence-like, the non-linguistic vector/matrix model of neural network theory or connectionism will prove to be a much more accurate account of how the brain works.

The Churchlands often invoke the fate of other, erroneous popular theories and ontologies that have arisen in the course of history. For example, Ptolemaic astronomy served to explain and roughly predict the motions of the planets for centuries, but eventually this model of the solar system was eliminated in favor of the Copernican model. The Churchlands believe the same eliminative fate awaits the "sentence-cruncher" model of the mind in which thought and behavior are the result of manipulating sentence-like states called "propositional attitudes".

Mysterianism

Some philosophers take an epistemic approach and argue that the mind–body problem is currently unsolvable, and perhaps will always remain unsolvable to human beings. This is usually termed New mysterianism. Colin McGinn holds that human beings are cognitively closed in regards to their own minds. According to McGinn human minds lack the concept-forming procedures to fully grasp how mental properties such as consciousness arise from their causal basis. An example would be how an elephant is cognitively closed in regards to particle physics.

A more moderate conception has been expounded by Thomas Nagel, which holds that the mind–body problem is currently unsolvable at the present stage of scientific development and that it might take a future scientific paradigm shift or revolution to bridge the explanatory gap. Nagel posits that in the future a sort of "objective phenomenology" might be able to bridge the gap between subjective conscious experience and its physical basis.

Linguistic criticism of the mind–body problem

Each attempt to answer the mind–body problem encounters substantial problems. Some philosophers argue that this is because there is an underlying conceptual confusion. These philosophers, such as Ludwig Wittgenstein and his followers in the tradition of linguistic criticism, therefore reject the problem as illusory. They argue that it is an error to ask how mental and biological states fit together. Rather it should simply be accepted that human experience can be described in different ways—for instance, in a mental and in a biological vocabulary. Illusory problems arise if one tries to describe the one in terms of the other's vocabulary or if the mental vocabulary is used in the wrong contexts. This is the case, for instance, if one searches for mental states of the brain. The brain is simply the wrong context for the use of mental vocabulary—the search for mental states of the brain is therefore a category error or a sort of fallacy of reasoning.

Today, such a position is often adopted by interpreters of Wittgenstein such as Peter Hacker. However, Hilary Putnam, the originator of functionalism, has also adopted the position that the mind–body problem is an illusory problem which should be dissolved according to the manner of Wittgenstein.

Naturalism and its problems

The thesis of physicalism is that the mind is part of the material (or physical) world. Such a position faces the problem that the mind has certain properties that no other material thing seems to possess. Physicalism must therefore explain how it is possible that these properties can nonetheless emerge from a material thing. The project of providing such an explanation is often referred to as the "naturalization of the mental". Some of the crucial problems that this project attempts to resolve include the existence of qualia and the nature of intentionality.

Qualia

Many mental states seem to be experienced subjectively in different ways by different individuals. And it is characteristic of a mental state that it has some experiential quality, e.g. of pain, that it hurts. However, the sensation of pain between two individuals may not be identical, since no one has a perfect way to measure how much something hurts or of describing exactly how it feels to hurt. Philosophers and scientists therefore ask where these experiences come from. The existence of cerebral events, in and of themselves, cannot explain why they are accompanied by these corresponding qualitative experiences. The puzzle of why many cerebral processes occur with an accompanying experiential aspect in consciousness seems impossible to explain.

Yet it also seems to many that science will eventually have to explain such experiences. This follows from an assumption about the possibility of reductive explanations. According to this view, if an attempt can be successfully made to explain a phenomenon reductively (e.g., water), then it can be explained why the phenomenon has all of its properties (e.g., fluidity, transparency). In the case of mental states, this means that there needs to be an explanation of why they have the property of being experienced in a certain way.

The 20th-century German philosopher Martin Heidegger criticized the ontological assumptions underpinning such a reductive model, and claimed that it was impossible to make sense of experience in these terms. This is because, according to Heidegger, the nature of our subjective experience and its qualities is impossible to understand in terms of Cartesian "substances" that bear "properties". Another way to put this is that the very concept of qualitative experience is incoherent in terms of—or is semantically incommensurable with the concept of—substances that bear properties.

This problem of explaining introspective first-person aspects of mental states and consciousness in general in terms of third-person quantitative neuroscience is called the explanatory gap. There are several different views of the nature of this gap among contemporary philosophers of mind. David Chalmers and the early Frank Jackson interpret the gap as ontological in nature; that is, they maintain that qualia can never be explained by science because physicalism is false. There are two separate categories involved and one cannot be reduced to the other. An alternative view is taken by philosophers such as Thomas Nagel and Colin McGinn. According to them, the gap is epistemological in nature. For Nagel, science is not yet able to explain subjective experience because it has not yet arrived at the level or kind of knowledge that is required. We are not even able to formulate the problem coherently. For McGinn, on other hand, the problem is one of permanent and inherent biological limitations. We are not able to resolve the explanatory gap because the realm of subjective experiences is cognitively closed to us in the same manner that quantum physics is cognitively closed to elephants. Other philosophers liquidate the gap as purely a semantic problem. This semantic problem, of course, led to the famous "Qualia Question", which is: Does Red cause Redness?

Intentionality

John Searle—one of the most influential philosophers of mind, proponent of biological naturalism (Berkeley 2002)

Intentionality is the capacity of mental states to be directed towards (about) or be in relation with something in the external world. This property of mental states entails that they have contents and semantic referents and can therefore be assigned truth values. When one tries to reduce these states to natural processes there arises a problem: natural processes are not true or false, they simply happen. It would not make any sense to say that a natural process is true or false. But mental ideas or judgments are true or false, so how then can mental states (ideas or judgments) be natural processes? The possibility of assigning semantic value to ideas must mean that such ideas are about facts. Thus, for example, the idea that Herodotus was a historian refers to Herodotus and to the fact that he was a historian. If the fact is true, then the idea is true; otherwise, it is false. But where does this relation come from? In the brain, there are only electrochemical processes and these seem not to have anything to do with Herodotus.

Philosophy of perception

Philosophy of perception is concerned with the nature of perceptual experience and the status of perceptual objects, in particular how perceptual experience relates to appearances and beliefs about the world. The main contemporary views within philosophy of perception include naive realism, enactivism and representational views.

Philosophy of mind and science

Humans are corporeal beings and, as such, they are subject to examination and description by the natural sciences. Since mental processes are intimately related to bodily processes, the descriptions that the natural sciences furnish of human beings play an important role in the philosophy of mind. There are many scientific disciplines that study processes related to the mental. The list of such sciences includes: biology, computer science, cognitive science, cybernetics, linguistics, medicine, pharmacology, and psychology.

Neurobiology

The theoretical background of biology, as is the case with modern natural sciences in general, is fundamentally materialistic. The objects of study are, in the first place, physical processes, which are considered to be the foundations of mental activity and behavior. The increasing success of biology in the explanation of mental phenomena can be seen by the absence of any empirical refutation of its fundamental presupposition: "there can be no change in the mental states of a person without a change in brain states."

Within the field of neurobiology, there are many subdisciplines that are concerned with the relations between mental and physical states and processes: Sensory neurophysiology investigates the relation between the processes of perception and stimulation. Cognitive neuroscience studies the correlations between mental processes and neural processes. Neuropsychology describes the dependence of mental faculties on specific anatomical regions of the brain. Lastly, evolutionary biology studies the origins and development of the human nervous system and, in as much as this is the basis of the mind, also describes the ontogenetic and phylogenetic development of mental phenomena beginning from their most primitive stages. Evolutionary biology furthermore places tight constraints on any philosophical theory of the mind, as the gene-based mechanism of natural selection does not allow any giant leaps in the development of neural complexity or neural software but only incremental steps over long time periods.

Since the 1980s, sophisticated neuroimaging procedures, such as fMRI (above), have furnished increasing knowledge about the workings of the human brain, shedding light on ancient philosophical problems.

The methodological breakthroughs of the neurosciences, in particular the introduction of high-tech neuroimaging procedures, has propelled scientists toward the elaboration of increasingly ambitious research programs: one of the main goals is to describe and comprehend the neural processes which correspond to mental functions (see: neural correlate). Several groups are inspired by these advances.

Computer science

Computer science concerns itself with the automatic processing of information (or at least with physical systems of symbols to which information is assigned) by means of such things as computers. From the beginning, computer programmers have been able to develop programs that permit computers to carry out tasks for which organic beings need a mind. A simple example is multiplication. It is not clear whether computers could be said to have a mind. Could they, someday, come to have what we call a mind? This question has been propelled into the forefront of much philosophical debate because of investigations in the field of artificial intelligence (AI).

Within AI, it is common to distinguish between a modest research program and a more ambitious one: this distinction was coined by John Searle in terms of a weak AI and strong AI. The exclusive objective of "weak AI", according to Searle, is the successful simulation of mental states, with no attempt to make computers become conscious or aware, etc. The objective of strong AI, on the contrary, is a computer with consciousness similar to that of human beings. The program of strong AI goes back to one of the pioneers of computation Alan Turing. As an answer to the question "Can computers think?", he formulated the famous Turing test. Turing believed that a computer could be said to "think" when, if placed in a room by itself next to another room that contained a human being and with the same questions being asked of both the computer and the human being by a third party human being, the computer's responses turned out to be indistinguishable from those of the human. Essentially, Turing's view of machine intelligence followed the behaviourist model of the mind—intelligence is as intelligence does. The Turing test has received many criticisms, among which the most famous is probably the Chinese room thought experiment formulated by Searle.

The question about the possible sensitivity (qualia) of computers or robots still remains open. Some computer scientists believe that the specialty of AI can still make new contributions to the resolution of the "mind–body problem". They suggest that based on the reciprocal influences between software and hardware that takes place in all computers, it is possible that someday theories can be discovered that help us to understand the reciprocal influences between the human mind and the brain (wetware).

Psychology

Psychology is the science that investigates mental states directly. It uses generally empirical methods to investigate concrete mental states like joy, fear or obsessions. Psychology investigates the laws that bind these mental states to each other or with inputs and outputs to the human organism.

An example of this is the psychology of perception. Scientists working in this field have discovered general principles of the perception of forms. A law of the psychology of forms says that objects that move in the same direction are perceived as related to each other. This law describes a relation between visual input and mental perceptual states. However, it does not suggest anything about the nature of perceptual states. The laws discovered by psychology are compatible with all the answers to the mind–body problem already described.

Cognitive science

Cognitive science is the interdisciplinary scientific study of the mind and its processes. It examines what cognition is, what it does, and how it works. It includes research on intelligence and behavior, especially focusing on how information is represented, processed, and transformed (in faculties such as perception, language, memory, reasoning, and emotion) within nervous systems (human or other animal) and machines (e.g. computers). Cognitive science consists of multiple research disciplines, including psychology, artificial intelligence, philosophy, neuroscience, linguistics, anthropology, sociology, and education. It spans many levels of analysis, from low-level learning and decision mechanisms to high-level logic and planning; from neural circuitry to modular brain organisation. Rowlands argues that cognition is enactive, embodied, embedded, affective and (potentially) extended. The position is taken that the "classical sandwich" of cognition sandwiched between perception and action is artificial; cognition has to be seen as a product of a strongly coupled interaction that cannot be divided this way.

Near-death research

In the field of near-death research, the following phenomenon, among others, occurs: For example, during some brain operations the brain is artificially and measurably deactivated. Nevertheless, some patients report during this phase that they have perceived what is happening in their surroundings, i.e. that they have had consciousness. Patients also report experiences during a cardiac arrest. There is the following problem: As soon as the brain is no longer supplied with blood and thus with oxygen after a cardiac arrest, the brain ceases its normal operation after about 15 seconds, i.e. the brain falls into a state of unconsciousness.

Philosophy of mind in the continental tradition

Most of the discussion in this article has focused on one style or tradition of philosophy in modern Western culture, usually called analytic philosophy (sometimes described as Anglo-American philosophy). Many other schools of thought exist, however, which are sometimes subsumed under the broad (and vague) label of continental philosophy. In any case, though topics and methods here are numerous, in relation to the philosophy of mind the various schools that fall under this label (phenomenology, existentialism, etc.) can globally be seen to differ from the analytic school in that they focus less on language and logical analysis alone but also take in other forms of understanding human existence and experience. With reference specifically to the discussion of the mind, this tends to translate into attempts to grasp the concepts of thought and perceptual experience in some sense that does not merely involve the analysis of linguistic forms.

Immanuel Kant's Critique of Pure Reason, first published in 1781 and presented again with major revisions in 1787, represents a significant intervention into what will later become known as the philosophy of mind. Kant's first critique is generally recognized as among the most significant works of modern philosophy in the West. Kant is a figure whose influence is marked in both continental and analytic/Anglo-American philosophy. Kant's work develops an in-depth study of transcendental consciousness, or the life of the mind as conceived through the universal categories of understanding.

In Georg Wilhelm Friedrich Hegel's Philosophy of Mind (frequently translated as Philosophy of Spirit or Geist), the third part of his Encyclopedia of the Philosophical Sciences, Hegel discusses three distinct types of mind: the "subjective mind/spirit", the mind of an individual; the "objective mind/spirit", the mind of society and of the State; and the "Absolute mind/spirit", the position of religion, art, and philosophy. See also Hegel's The Phenomenology of Spirit. Nonetheless, Hegel's work differs radically from the style of Anglo-American philosophy of mind.

In 1896, Henri Bergson made in Matter and Memory "Essay on the relation of body and spirit" a forceful case for the ontological difference of body and mind by reducing the problem to the more definite one of memory, thus allowing for a solution built on the empirical test case of aphasia.

In modern times, the two main schools that have developed in response or opposition to this Hegelian tradition are phenomenology and existentialism. Phenomenology, founded by Edmund Husserl, focuses on the contents of the human mind (see noema) and how processes shape our experiences. Existentialism, a school of thought founded upon the work of Søren Kierkegaard, focuses on Human predicament and how people deal with the situation of being alive. Existential-phenomenology represents a major branch of continental philosophy (they are not contradictory), rooted in the work of Husserl but expressed in its fullest forms in the work of Martin Heidegger, Jean-Paul Sartre, Simone de Beauvoir and Maurice Merleau-Ponty. See Heidegger's Being and Time, Merleau-Ponty's Phenomenology of Perception, Sartre's Being and Nothingness, and Simone de Beauvoir's The Second Sex.

Topics related to philosophy of mind

There are countless subjects that are affected by the ideas developed in the philosophy of mind. Clear examples of this are the nature of death and its definitive character, the nature of emotion, of perception and of memory. Questions about what a person is and what his or her identity have to do with the philosophy of mind. There are two subjects that, in connection with the philosophy of the mind, have aroused special attention: free will and the self.

Free will

In the context of philosophy of mind, the problem of free will takes on renewed intensity. This is the case for materialistic determinists. According to this position, natural laws completely determine the course of the material world. Mental states, and therefore the will as well, would be material states, which means human behavior and decisions would be completely determined by natural laws. Some take this reasoning a step further: people cannot determine by themselves what they want and what they do. Consequently, they are not free.

This argumentation is rejected, on the one hand, by the compatibilists. Those who adopt this position suggest that the question "Are we free?" can only be answered once we have determined what the term "free" means. The opposite of "free" is not "caused" but "compelled" or "coerced". It is not appropriate to identify freedom with indetermination. A free act is one where the agent could have done otherwise if it had chosen otherwise. In this sense a person can be free even though determinism is true. The most important compatibilist in the history of the philosophy was David Hume. More recently, this position is defended, for example, by Daniel Dennett.

On the other hand, there are also many incompatibilists who reject the argument because they believe that the will is free in a stronger sense called libertarianism. These philosophers affirm the course of the world is either a) not completely determined by natural law where natural law is intercepted by physically independent agency, b) determined by indeterministic natural law only, or c) determined by indeterministic natural law in line with the subjective effort of physically non-reducible agency. Under Libertarianism, the will does not have to be deterministic and, therefore, it is potentially free. Critics of the second proposition (b) accuse the incompatibilists of using an incoherent concept of freedom. They argue as follows: if our will is not determined by anything, then we desire what we desire by pure chance. And if what we desire is purely accidental, we are not free. So if our will is not determined by anything, we are not free.

Self

The philosophy of mind also has important consequences for the concept of "self". If by "self" or "I" one refers to an essential, immutable nucleus of the person, some modern philosophers of mind, such as Daniel Dennett believe that no such thing exists. According to Dennett and other contemporaries, the self is considered an illusion. The idea of a self as an immutable essential nucleus derives from the idea of an immaterial soul. Such an idea is unacceptable to modern philosophers with physicalist orientations and their general skepticism of the concept of "self" as postulated by David Hume, who could never catch himself not doing, thinking or feeling anything. However, in the light of empirical results from developmental psychology, developmental biology and neuroscience, the idea of an essential inconstant, material nucleus—an integrated representational system distributed over changing patterns of synaptic connections—seems reasonable.

Energy conservation

From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/Energy_conservation

Energy conservation is the effort made to reduce the consumption of energy by using less of an energy service. This can be achieved either by using energy more efficiently (using less energy for a constant service) or by reducing the amount of service used (for example, by driving less). Energy conservation is a part of the concept of Eco-sufficiency. Energy conservation measures (ECMs) in buildings reduce the need for energy services and can result in increased environmental quality, national security, personal financial security and higher savings. It is at the top of the sustainable energy hierarchy. It also lowers energy costs by preventing future resource depletion.

Energy can be conserved by reducing wastage and losses, improving efficiency through technological upgrades, and improved operation and maintenance. On a global level, energy use can also be reduced by the stabilization of population growth.

Energy can only be transformed from one form to Another, such as heat energy to motive power in cars, or kinetic energy of water flow to electricity in hydroelectric power plants. However, machines are required to transform energy from one form to another. The wear and friction of the components of this machine while running cause losses of very high amounts of energy and very high related costs. It is possible to minimize these losses by adopting green engineering practices to improve the life cycle of the components.

Energy conservation day has been celebrated on December 14 every year since 1991.

Energy tax

Some countries employ energy or carbon taxes to motivate energy users to reduce their consumption. Carbon taxes can motivate consumption to shift to energy sources with fewer emissions of carbon dioxide, such as solar power, wind power, hydroelectricity or nuclear power while avoiding cars with combustion engines, jet fuel, oil, fossil gas and coal. On the other hand, taxes on all energy consumption can reduce energy use across the board while reducing a broader array of environmental consequences arising from energy production. The state of California employs a tiered energy tax whereby every consumer receives a baseline energy allowance that carries a low tax. As for usage increases above that baseline, the tax increases drastically. Such programs aim to protect poorer households while creating a larger tax burden for high energy consumers.

Developing countries specifically are less likely to impose policy measures that slow carbon emissions as this would slow their economic development. These growing countries may be more likely to support their own economic growth and support their citizens rather than decreasing their carbon emissions.[6]

The following pros and cons of a carbon tax help one to see some of the potential effects of a carbon tax policy.

Pros of Carbon Tax include:

Cons of Carbon Tax include:

  • Businesses claim higher taxes which can discourage investment and economic growth.
  • A carbon tax may encourage tax evasion as firms may pollute in secret to avoid a carbon tax.
  • It may be difficult to measure external costs and how much the carbon tax should truly be.
  • There are administration costs in measuring pollution and collecting the associated tax.
  • Firms may move production to countries in which there is no carbon tax.

Building design

Occupancy sensors can conserve energy by turning off appliances in unoccupied rooms.

One of the primary ways to improve energy conservation in buildings is to perform an energy audit. An energy audit is an inspection and analysis of energy use and flows for energy conservation in a building, process, or system with an eye toward reducing energy input without negatively affecting output. This is normally accomplished by trained professionals and can be part of some of the national programs discussed above. Recent development of smartphone apps enables homeowners to complete relatively sophisticated energy audits themselves.

Building technologies and smart meters can allow energy users, both commercial and residential, to visualize the impact their energy use can have in their workplaces or homes. Advanced real-time energy metering can help people save energy by their actions.

Elements of passive solar design, shown in a direct gain application

In passive solar building design, windows, walls, and floors are made to collect, store, and distribute solar energy in the form of heat in the winter and reject solar heat in the summer. This is called passive solar design or climatic design because, unlike active solar heating systems, it does not involve the use of mechanical and electrical devices.

The key to designing a passive solar building is to best take advantage of the local climate. Elements to be considered include window placement and glazing type, thermal insulation, thermal mass, and shading. Passive solar design techniques can be applied most easily to new buildings, but existing buildings can be retrofitted.

Businesses implementing ECMs in their commercial buildings often employ Energy Service Companies (ESCOs) experienced in energy performance contracting. This industry has been around since the 1970s and is more prevalent than ever today. The US-based organization EVO (Efficiency Valuation Organization) has created a set of guidelines for ESCOs to adhere to in evaluating the savings achieved by ECMs. These guidelines are called the International Performance Measurement and Verification Protocol (IPMVP).

Transportation

In the United States, suburban infrastructure evolved during an age of relatively easy access to fossil fuels, which has led to transportation-dependent systems of living. Zoning reforms that allow greater urban density, as well as designs for walking and bicycling, can greatly reduce energy consumed for transportation. The use of telecommuting by major corporations is a significant opportunity to conserve energy, as many Americans now work in service jobs that enable them to work from home instead of commuting to work each day. Environmental impacts consist of a reduction in greenhouse gas emissions. After limiting the access of cars to the city center in Madrid, nitrogen oxide levels fell by 38% and carbon dioxide fell by 14.2% in the city center. Environmental impacts consist of a reduction in greenhouse gas emissions. After limiting the access of cars to the city center in Madrid, nitrogen oxide levels fell by 38% and carbon dioxide fell by 14.2% in the city center.

Consumer products

An assortment of energy-efficient semiconductor (LED) lamps for commercial and residential lighting use. LED lamps to use at least 75% less energy, and last 25 times longer, than traditional incandescent light bulbs.

Homeowners implementing ECMs in their residential buildings often start with an energy audit. This is a way homeowners look at what areas of their homes are using, and possibly losing energy. Residential energy auditors are accredited by the Building Performance Institute (BPI) or the Residential Energy Services Network (RESNET). Homeowners can hire a professional or do it themselves or use a smartphone to help do an audit.

Energy conservation measures are often combined into larger guaranteed Energy Savings Performance Contracts to maximize energy savings while minimizing disruption to building occupants by coordinating renovations. Some ECMs cost less to implement yet return higher energy savings. Traditionally, lighting projects were a good example of “low hanging fruit” that could be used to drive implementation of more substantial upgrades to HVAC systems in large facilities. Smaller buildings might combine window replacement with modern insulation using advanced building foams to improve energy for performance. Energy dashboard projects are a new kind of ECM that relies on the behavioral change of building occupants to save energy. When implemented as part of a program, case studies (such as that for the DC Schools) report energy savings up 30%. Under the right circumstances, open energy dashboards can even be implemented for free to improve upon these savings even more.

Consumers are often poorly informed of the savings of energy-efficient products. A prominent example of this is the energy savings that can be made by replacing an incandescent light bulb with a more modern alternative. When purchasing light bulbs, many consumers opt for cheap incandescent bulbs, failing to take into account their higher energy costs and lower lifespans when compared to modern compact fluorescent and LED bulbs. Although these energy-efficient alternatives have a higher upfront cost, their long lifespan and low energy use can save consumers a considerable amount of money. The price of LED bulbs has also been steadily decreasing in the past five years due to improvements in semiconductor technology. Many LED bulbs on the market qualify for utility rebates that further reduce the price of the purchase to the consumer. Estimates by the U.S. Department of Energy state that widespread adoption of LED lighting over the next 20 years could result in about $265  billion worth of savings in United States energy costs.

The research one must put into conserving energy is often too time-consuming and costly for the average consumer when there are cheaper products and technology available using today's fossil fuels. Some governments and NGOs are attempting to reduce this complexity with Eco-labels that make differences in energy efficiency easy to research while shopping.

To provide the kind of information and support people need to invest money, time and effort in energy conservation, it is important to understand and link to people's topical concerns. For instance, some retailers argue that bright lighting stimulates purchasing. However, health studies have demonstrated that headache, stress, blood pressure, fatigue and worker error all generally increase with the common over-illumination present in many workplace and retail settings. It has been shown that natural daylighting increases productivity levels of workers, while reducing energy consumption.

In warm climates where air conditioning is used, any household device that gives off heat will result in a larger load on the cooling system. Items such as stoves, dishwashers, clothes dryers, hot water, and incandescent lighting all add heat to the home. Low-power or insulated versions of these devices give off less heat for the air conditioning to remove. The air conditioning system can also improve efficiency by using a heat sink that is cooler than the standard air heat exchanger, such as geothermal or water.

In cold climates, heating air and water is a major demand for household energy use. Significant energy reductions are possible by using different technologies. Heat pumps are a more efficient alternative to electrical resistance heaters for warming air or water. A variety of efficient clothes dryers are available, and the clothes lines requires no energy- only time. Natural-gas (or bio-gas) condensing boilers and hot-air furnaces increase efficiency over standard hot-flue models. Standard electric boilers can be made to run only at hours of the day when they are needed by means of a time switch. This decreases energy use vastly. In showers, a semi-closed-loop system could be used. New construction implementing heat exchangers can capture heat from wastewater or exhaust air in bathrooms, laundry, and kitchens.

In both warm and cold climate extremes, airtight thermal insulated construction is the largest factor determining the efficiency of a home. Insulation is added to minimize the flow of heat to or from the home, but can be labor-intensive to retrofit to an existing home.

Global Impact

On a global basis energy efficiency works behind the scenes to improve our energy security, lower our energy bills and move us closer to reaching our climate goals. According to the IEA, some 40% of the global energy efficiency market is financed with debt and equity. Energy Performance Investment are one financing mechanism by which ECMs can be implemented now and paid for by the savings realized over the life of the project. While all 50 states, Puerto Rico and Washington, D.C., have statutes allowing companies to offer energy savings performance contracts, success varies because of variations in the approach, the state’s degree of involvement, and other factors. Homes and businesses are implementing energy-efficiency measures that include low-energy lighting, insulation, and even high tech energy dashboards to cut bills by avoiding waste and boosting productivity.

Energy conservation by countries

Asia

Despite the vital role energy efficiency is expected to play in cost-effectively cutting energy demand, only a small part of its economic potential is exploited in Asia. Governments have implemented a range of subsidies such as cash grants, cheap credit, tax exemptions, and co-financing with public-sector funds to encourage a range of energy-efficiency initiatives across several sectors. Governments in the Asia-Pacific region have implemented a range of information provision and labeling programs for buildings, appliances, and the transportation and industrial sectors. Information programs can simply provide data, such as fuel-economy labels, or actively seek to encourage behavioral changes, such as Japan's Cool Biz campaign that encourages setting air conditioners at 28-degrees Celsius and allowing employees to dress casually in the summer.

European Union

At the end of 2006, the European Union (EU) pledged to cut its annual consumption of primary energy by 20% by 2020. The 'European Union Energy Efficiency Action Plan' is long-awaited. Directive 2012/27/EU is on energy efficiency.

As part of the EU's SAVE programme, aimed at promoting energy efficiency and encouraging energy-saving behavior, the Boiler Efficiency Directive specifies minimum levels of efficiency for boilers utilizing liquid or gaseous fuels.

In 2050, energy savings in Europe can reach 67% of the 2019 baseline scenario, amounting to a demand of 361 Mtoe in an 'energy efficiency first' societal trend scenario. A condition is that there be no rebound effect, for otherwise the savings are 32% only or energy use may even increase by 42% if techno-economic potentials are not realized.

India

The Petroleum Conservation Research Association (PCRA) is an Indian governmental body created in 1978 that engages in promoting energy efficiency and conservation in every walk of life. In the recent past, PCRA has done mass media campaigns in television, radio, and print media. This is an impact-assessment survey by a third party that revealed that due to these larger campaigns by PCRA, the public's overall awareness level has gone up leading to the saving of fossil fuels worth crores of rupees, besides reducing pollution.

The Bureau of Energy Efficiency is an Indian government organization created in 2001 that is responsible for promoting energy efficiency and conservation.

Protection and Conservation of Natural Resources are done by Community Natural Resources Management (CNRM).

Japan

Advertising with high energy in Shinjuku, Japan.

Since the 1973 oil crisis, energy Zeesun conservation has been an issue in Japan. All oil-based fuel is imported, so domestic sustainable energy is being developed.

The Energy Conservation Center promotes energy efficiency in every aspect of Japan. Public entities are implementing the efficient use of energy for industries and research. It includes projects such as the Top Runner Program. In this project, new appliances are regularly tested on efficiency, and the most efficient ones are made the standard.

Lebanon

In Lebanon and since 2002 The Lebanese Center for Energy Conservation (LCEC) has been promoting the development of efficient and rational uses of energy and the use of renewable energy at the consumer level. It was created as a project financed by the International Environment Facility (GEF) and the Ministry of Energy Water (MEW) under the management of the United Nations Development Programme (UNDP) and gradually established itself as an independent technical national center although it continues to be supported by the United Nations Development Programme (UNDP) as indicated in the Memorandum of Understanding (MoU) signed between MEW and UNDP on 18 June 2007.

Nepal

Until recently, Nepal has been focusing on the exploitation of its huge water resources to produce hydropower. Demand-side management and energy conservation were not in the focus of government action. In 2009, bilateral Development Cooperation between Nepal and the Federal Republic of Germany has agreed upon the joint implementation of the "Nepal Energy Efficiency Programme". The lead executing agencies for the implementation are the Water and Energy Commission Secretariat (WECS). The aim of the program is the promotion of energy efficiency in policymaking, in rural and urban households as well as in the industry. Due to the lack of a government organization that promotes energy efficiency in the country, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has established the Energy Efficiency Centre under his roof to promote energy conservation in the private sector. The Energy Efficiency Centre is a non-profit initiative that is offering energy auditing services to the industries. The Centre is also supported by Nepal Energy Efficiency Programme of Deutsche Gesellschaft für Internationale Zusammenarbeit. A study conducted in 2012 found out that Nepalese industries could save 160,000-megawatt hours of electricity and 8,000 terajoules of thermal energy (like diesel, furnace oil, and coal) every year. These savings are equivalent to annual energy cost cut of up to 6.4 Billion Nepalese Rupees. As a result of Nepal Economic Forum 2014, an economic reform agenda in the priority sectors was declared focusing on energy conservation among others. In the energy reform agenda, the government of Nepal gave the commitment to introduce incentive packages in the budget of the fiscal year 2015/16 for industries that practices energy efficiency or use efficient technologies (incl. cogeneration).

New Zealand

In New Zealand the Energy Efficiency and Conservation Authority is the Government Agency responsible for promoting energy efficiency and conservation. The Energy Management Association of New Zealand is a membership-based organization representing the New Zealand energy services sector, providing training and accreditation services with the aim of ensuring energy management services are credible and dependable.

Nigeria

In Nigeria, the Lagos State Government is encouraging Lagosians to imbibe an energy conservation culture. In 2013, the Lagos State Electricity Board (LSEB) ran an initiative tagged "Conserve Energy, Save Money" under the Ministry of Energy and Mineral Resources. The initiative is designed to sensitize Lagosians around the theme of energy conservation by influencing their behavior through do-it-yourself tips. In September 2013, Governor Babatunde Raji Fashola of Lagos State and the campaign ambassador, rapper Jude 'MI' Abaga participated in the Governor's conference video call on the topic of energy conservation.

In addition to this, during the month of October (the official energy conservation month in the state), LSEB hosted experience centers in malls around Lagos State where members of the public were encouraged to calculate their household energy consumption and discover ways to save money using a consumer-focused energy app. To get Lagosians started on energy conservation, solar lamps and energy-saving bulbs were also handed out.

In Kaduna State, the Kaduna Power Supply Company (KAPSCO) ran a program to replace all light bulbs in Public Offices; fitting energy-saving bulbs in place of incandescent bulbs. KAPSCO is also embarking on an initiative to retrofit all conventional streetlights in the Kaduna Metropolis to LEDs which consume much less energy.

Sri Lanka

Sri Lanka currently consumes fossil fuels, hydro power, wind power, solar power and dendro power for their day to day power generation. The Sri Lanka Sustainable Energy Authority is playing a major role regarding energy management and energy conservation. Today, most industries are requested to reduce their energy consumption by using renewable energy sources and optimizing their energy usage.

Turkey

Turkey aims to decrease by at least 20% the amount of energy consumed per GDP of Turkey by the year 2023 (energy intensity).

United States

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The United States is currently the second-largest single consumer of energy, following China. The U.S. Department of Energy categorizes national energy use in four broad sectors: transportation, residential, commercial, and industrial.

Energy usage in transportation and residential sectors, about half of U.S. energy consumption, is largely controlled by individual consumers. Commercial and industrial energy expenditures are determined by businesses entities and other facility managers. National energy policy has a significant effect on energy usage across all four sectors.

Another aspect of energy conversation is using Leadership in Energy and Environmental Design (LEED). This program is not mandatory, it is voluntary. This program has many categories, Energy and Atmosphere Prerequisite, applies to energy conservation. This section focuses on energy performance, renewable energy, energy performance, and many more. This program is designed to promote energy efficiency and be a green building, which is part of conservation. As mentioned above “energy conservation is efforts made to reduce the consumption of energy.”
U.S. Green Building Council (2013). LEED Reference Guide for Building Design and Construction (v4 ed.). U.S. Green Building Council. pp. 318–466. ISBN 978-1932444186.

Small business

From Wikipedia, the free encyclopedia
 
Small businesses on Dalrymple Street in Girvan, Scotland

Small businesses are privately owned corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to apply for government support and qualify for preferential tax policy varies depending on the country and industry. Small businesses range from fifteen employees under the Australian Fair Work Act 2009, fifty employees according to the definition used by the European Union, and fewer than five hundred employees to qualify for many U.S. Small Business Administration programs. While small businesses can also be classified according to other methods, such as annual revenues, shipments, sales, assets, or by annual gross or net revenue or net profits, the number of employees is one of the most widely used measures.

Small businesses in many countries include service or retail operations such as convenience stores, small grocery stores, bakeries or delicatessens, hairdressers or tradespeople (e.g., carpenters, electricians), restaurants, guest houses, photographers, very small-scale manufacturing, and Internet-related businesses such as web design and computer programming. Some professionals operate as small businesses, such as lawyers, accountants, dentists, and medical doctors (although these professionals can also work for large organizations or companies). Small businesses vary a great deal in terms of size, revenues, and regulatory authorization, both within a country and from country to country. Some small businesses, such as a home accounting business, may only require a business license. On the other hand, other small businesses, such as day cares, retirement homes, and restaurants serving liquor are more heavily regulated and may require inspection and certification from various government authorities.

Characteristics

Small businesses in the Central Zone of São Paulo

Researchers and analysts of small or owner-managed businesses generally behave as if nominal organizational forms (e.g., partnership, sole-trader, or corporation), and the consequent legal and accounting boundaries of owner-managed firms are consistently meaningful. However, owner-managers often do not distinguish between their personal and business interests. Lenders also often skirt organizational (corporate) boundaries by seeking personal guarantees or accepting privately held assets as collateral. Because of this behavior, researchers and analysts may wish to be cautious in assessing the organizational types and implied boundaries relating to owner-managed firms. This includes the analysis of traditional accounting disclosures and studies that treat the firm as defined by a formal organizational structure.

Concepts of small business, self-employment, entrepreneurship, and startup

Portici di Sottoripa, Genova, Italy. Galleries tend to form clusters of small business owners over time.

The concepts of small business, self-employment, entrepreneurship, and startup overlap but also carry important distinctions. These four concepts are often conflated.Their key differences can be summarized as:

  • self-employment: an organization created primarily to provide income to the founders, i.e. sole proprietor operations.
  • entrepreneurship: all new organizations.
  • startup: a new organization created to grow (and have employees).
  • small business: an organization that is small (in employees or revenue) and may or may not have the intention to grow.

Many small businesses are sole proprietor operations consisting only of the owner, but many also have additional employees. Some small businesses that offer a product, process or service, do not have growth as their primary objective. In contrast, a business that is created to become a big firm is known as a startup. Startups aim for growth and often offer an innovative product, process, or service. The entrepreneurs of startups typically aim to scale up the company by adding employees, seeking international sales, and so on, a process which is often but not always financed by venture capital and angel investments. Successful entrepreneurs have the ability to lead a business in a positive direction by proper planning, adapting to changing environments, and understand their own strengths and weakness. Spectacular success stories stem from startups that expanded in growth. Examples would be Microsoft, Genentech, and Federal Express which all embody the sense of new venture creation on small businesses.

Self-employment provides work primarily for the founders. Entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to grow big or become registered, but startups refer to new businesses that intend to grow beyond the founders, to have employees, and grow large.

Size definitions

The legal definition of "small business" varies by country and by industry. In addition to the number of employees, methods used to classify small companies include annual sales (turnover), the value of assets and net profit (balance sheet), alone or as a combination of factors.

  • In India, all the manufacturing and service enterprises having investment "Not more than Rs 10 crore" and Annual Turnover "not more than Rs 50 crore" come under this category.
  • In the United States, the Small Business Administration establishes small business size standards on an industry-by-industry basis but generally specifies a small business as having fewer than 500 employees for manufacturing businesses and less than $7.5 million in annual receipts for most non-manufacturing businesses. The definition can vary by circumstance—for example, a small business having fewer than 25 full-time equivalent employees with average annual wages below $50,000 qualifies for a tax credit under the health care reform bill Patient Protection and Affordable Care Act. By comparison, a medium-sized business or mid-sized business has fewer than 500 employees.
  • The European Union generally defines a small business as one that has fewer than fifty employees and either turnover or balance sheet less than €10 m. but the European Commission is undertaking a review of this definition. By comparison, a medium-sized business has fewer than 250 employees and either turnover less than €50 m. or balance sheet less than €43 m.
  • In Australia, a small business is defined by the Fair Work Act 2009 as one with fewer than fifteen employees. By comparison, a medium-sized business or mid-sized business has fewer than two hundred employees.
  • In South Africa, the National Small Business Amendment Act (Act 26 of 2003) defines businesses in a variety of ways using five categories previously established by the National Small Business Act (Act 102 of 1996), namely, standard industrial sector and subsector classification, size of class, equivalent of paid employees, turnover and asset value excluding fixed property.

Small businesses usually do not dominate their field.

The following table serves as a guide to business size nomenclature.

Business size definitions (by number of employees)


AUS US CAN EU
Minute/micro 1-2 1-6 1-4 <10
Small <15 <250 1-99 <50
Medium <200 <500 100-499 <250
Large <500 <1000 >500 <1000
Enterprise >500 >1000 N/A >1000
  • Most cells reflect sizes not defined in legislation.
  • Some definitions are multi-parameter, e.g., by industry, revenue, or market share.

Demographics

In 2016 a study that examined the demographic of small business owners was published. The study showed that the median American small business owners were above the age of 50. The ages were distributed as 51% over 50 years old, 33% between the ages 35–49, and 16% being under the age of 35. As for sex: 55% were owned by males, 36% by females, and 9% being equal ownership of both males and females. As for race: 72% were white/Caucasian, 13.5% were Latinos, 6.3% were African American, 6.2% were Asian, and 2% as other. As for educational background: 39% had obtained a bachelor's degree or higher, 33% had some college background, and 28% received at least a high school diploma.

The United States census data for the years 2014 and 2015 shows the women's ownership share of small businesses by firm size. The data explains percentages owned by women along with the number of employees including the owner. Generally, the smaller the business, the more likely it to be owned by a woman. The data shows that about 22% of small businesses with 100-500 employees were owned by women, a percentage that rises the smaller the business. 41% of businesses with just 2-4 employees were run by women, and in businesses with just one person, that person was a woman in 51% of cases.

Franchise businesses

Franchising is a way for small business owners to benefit from the economies of scale of the big corporation (franchiser). McDonald's and Subway are examples of a franchise. The small business owner can leverage a strong brand name and purchasing power of the larger company while keeping their own investment affordable. However, some franchisees conclude that they suffer the "worst of both worlds" feeling they are too restricted by corporate mandates and lack true independence. It is an assumption that small business is just franchisees, but the truth is many franchisers are also small businesses, Although considered to be a successful way of doing business, literature has proved that there is a high failure rate in franchising as well, especially in the UK, where research indicates that out of 1658 franchising companies operating in 1984, only 601 remained in 1998, a mere 36%.

Retailers' cooperative

A retailers' cooperative is a type of cooperative that employs economies of scale on behalf of its retailer members. Retailers' cooperatives use their purchasing power to acquire discounts from manufacturers and often share marketing expenses. They are often recognized as "local groups" because they own their own stores within the community. It is common for locally-owned grocery stores, hardware stores, and pharmacies to participate in retailers' cooperatives. Ace Hardware, True Value, and NAPA are examples of a retailers' cooperative. Retail cooperatives also allow consumers to supply their own earnings and gain bargaining power outside of the business sector. Retail cooperatives mainly reside within small communities where local businesses are often shut down.

Advantages

Small business in Bursa, Turkey. One of the claimed advantages of small business owners is the ability to serve market niches not served by mass production industries. Consider how few major corporations would be willing to deal with the risks and uncertainty that small antique store deals with buying and selling non-standardized items and making quick assessments of the value of rare items.

Many small businesses can be started at a low cost and on a part-time basis, while a person continues a regular job with an employer or provides care for family members in the home. In developing countries, many small businesses are sole-proprietor operations such as selling products at a market stall or preparing hot food to sell on the street, which provide a small income. In the 2000s, a small business is also well suited to Internet marketing; because, it can easily serve specialized niches, something that would have been more difficult before the Internet revolution which began in the late 1990s. Internet marketing gives small businesses the ability to market with smaller budgets. Adapting to change is crucial in business and particularly small business; not being tied to the bureaucratic inertia associated with large corporations, small businesses can respond to changing marketplace demand more quickly. Small business proprietors tend to be in closer personal contact with their customers and clients than large corporations, as small business owners see their customers in person each week.

One study showed that small, local businesses are better for a local economy than the introduction of new chain stores. By opening up new national level chain stores, the profits of locally owned businesses greatly decrease and many businesses end up failing and having to close. This creates an exponential effect. When one store closes, people lose their jobs, other businesses lose business from the failed business, and so on. In many cases, large firms displace just as many jobs as they create.

Independence

Independence is another advantage of owning a small business. A small business owner does not have to report to a supervisor or manager. Also, many people desire to make their own decisions, take their own risks, and reap the rewards of their efforts. Small business owners possess the flexibility and freedom to make their own decisions within the constraints imposed by economic and other environmental factors. However, entrepreneurs have to work for very long hours and understand that ultimately their customers are their bosses.

Small businesses (often carried out by family members) may adjust quicker to the changing conditions; however, they may also be closed to the absorption of new knowledge and employing new labor from outside.

Financial reporting

Small businesses benefit from less extensive accounting and financial reporting requirements than those faced by larger businesses.

The European Union's Directive on annual financial statements of 2013 aims to "limit administrative burdens and provide for simple and robust accounting rules, especially for small and medium-sized enterprises (SMEs)". In the UK, the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 transposed the EU Directive into UK law and amended the reporting regime for reduced disclosure accounts for any accounting period commencing on or after 1 January 2016. "Abbreviated accounts" were permitted for smaller entities under "FRSSE", the Financial Reporting Standard for Smaller Entities). Until 2015, companies deemed small under the UK Companies Act 2006 were allowed to use this standard. For accounting years ending on or after 1 January 2016, FRSSE is no longer available, but there are options known as "abridged accounts" and "filleted accounts":

  • Abridged accounts: accounting for profit / loss begins with the declaration of gross profit or loss, not turnover
  • Filleted financial statements or filleted accounts: profit and loss accounts are excluded, but balance sheet and balance sheet notes are to be disclosed.

Alternatively, the smallest companies are able to file "micro-entity accounts". FRS 105 is a Financial Reporting Standard applicable to the Micro-entities Regime.

Challenges

Small businesses often face a variety of problems, some of which are related to their size. A frequent cause of bankruptcy is under capitalization. This is often a result of poor planning rather than economic conditions. It is a common rule of thumb that the entrepreneur should have access to a sum of money at least equal to the projected revenue for the first year of business in addition to his or her anticipated expenses. For example, if the prospective owner thinks that he or she will generate 100,000 in revenues in the first year with 150,000 in start-up expenses, then he or she should have not less than 250,000 available. Start-up expenses are often grossly underestimated adding to the burden of the business. Failure to provide this level of funding for the company could leave the owner liable for all of the company's debt should he or she end up in bankruptcy court, under the theory of undercapitalization.

In addition to ensuring that the business has enough capital, the small business owner must also be mindful of contribution margin (sales minus variable costs). To break even, the business must be able to reach a level of sales where the contribution margin equals fixed costs. When they first start, many small business owners underprice their products to a point where even at their maximum capacity, it would be impossible to break even. Cost controls or price increases often resolve this problem.

In the United States, some of the largest concerns of small business owners are insurance costs (such as liability and health), rising energy costs, taxes, and tax compliance. In the United Kingdom and Australia, small business owners tend to be more concerned with perceived excessive governmental red tape.

Contracting fraud has been an ongoing problem for small businesses in the United States. Small businesses are legally obligated to receive a fair portion (23 percent) of the total value of all the government's prime contracts as mandated by the Small Business Act of 1953. Since 2002, a series of federal investigations have found fraud, abuse, loopholes, and a lack of oversight in federal small business contracting, which has led to the diversion of billions of dollars in small business contracts to large corporations.

Another problem for many small businesses is termed the 'Entrepreneurial Myth' or E-Myth. The mythic assumption is that an expert in a given technical field will also be an expert at running that kind of business. Additional business management skills are needed to keep a business running smoothly. Some of this misunderstanding arises from the failure to distinguish between small business managers as entrepreneurs or capitalists. While nearly all owner-managers of small firms are obliged to assume the role of capitalist, only a minority will act as entrepreneurs. The line between an owner-manager and an entrepreneur can be defined by whether or not their business is growth-oriented. In general, small business owners are primarily focused on surviving rather than growing; therefore, not experiencing the five stages of the corporate life cycle (birth, growth, maturity, revival, and decline) as an entrepreneur would.

Another problem for many small businesses is the capacity of much larger businesses to influence or sometimes determine their chances for success. Business networking and social media has been used as a major tool by small businesses in the UK, but most of them just use a "scattergun" approach in a desperate attempt to exploit the market which is not that successful. Over half of small firms lack a business plan, a tool that is considered one of the most important factors for a venture's success. Business planning is associated with improved growth prospects. Funders and investors usually require a business plan. A plan also serves as a strategic planning document for owners and CEOs, which can be used as a "bible" for decision-making. 

An international trade survey indicated that the British share of businesses that are exporting rose from 32% in 2012 to 39% in 2013. Although this may seem positive, in reality, the growth is slow, as small business owners shy away from exporting due to actual and perceived barriers. Learning the basics of a foreign language could be the solution to open doors to new trade markets, it is a reality that not all foreign business partners speak English. China is stated to grow by 7.6% in 2013 and still, 95% of business owners who want to export to China have no desire and no knowledge to learn their local language.

Bankruptcy

When small business fails, the owner may file for bankruptcy. In most cases, this can be handled through a personal bankruptcy filing. Corporations can file bankruptcy, but if it is out of business and valuable corporate assets are likely to be repossessed by secured creditors, there is little advantage to going to the expense of a corporate bankruptcy. Many states offer exemptions for small business assets so they can continue to operate during and after personal bankruptcy. However, corporate assets are normally not exempt; hence, it may be more difficult to continue operating an incorporated business if the owner files bankruptcy. Researchers have examined small business failures in some depth, with attempts to model the predictability of failure.

Social responsibility

Small businesses can encounter several problems related to engaging in corporate social responsibility, due to characteristics inherent in their size. Owners of small businesses often participate heavily in the day-to-day operations of their companies. This results in a lack of time for the owner to coordinate socially responsible efforts, such as supporting local charities or not-for-profit activities. Additionally, a small business owner's expertise often falls outside the realm of socially responsible practices, which can contribute to a lack of participation. Small businesses also face a form of peer pressure from larger forces in their respective industries, making it difficult to oppose and work against industry expectations. Furthermore, small businesses undergo stress from shareholder expectations. Because small businesses have more personal relationships with their patrons and local shareholders, they must also be prepared to withstand closer scrutiny if they want to share in the benefits of committing to socially responsible practices or not.

Job quality

While small businesses employ over half the workforce in the US and have been established as a main driving force behind job creation, the quality of the jobs these businesses create has been called into question. Small businesses generally employ individuals from the Secondary labor market. As a result, in the U.S., wages are 49% higher for employees of large firms. Additionally, many small businesses struggle or are unable to provide employees with benefits they would be given at larger firms. Research from the U.S. Small Business Administration indicates that employees of large firms are 17% more likely to receive benefits including salary, paid leave, paid vacation, bonuses, insurance, and retirement plans. Both lower wages and fewer benefits combine to create a job turnover rate among U.S. small businesses that is three times higher than large firms. Employees of small businesses also must adapt to the higher failure rate of small firms, which means that they are more likely to lose their job due to the firm going under. In the U.S. 69% of small businesses last at least two years, but this percentage drops to 51% for firms reaching five years in operation. The U.S. Small Business Administration counts companies with as much as $35.5 million in sales and 1,500 employees as "small businesses", depending on the industry. Outside government, companies with less than $7 million in sales and fewer than five hundred employees are widely considered small businesses.

Cyber crime

Cybercrime in the business world can be broken down into 4 main categories. They include loss of reputation and consumer confidence, cost of fixing the issue, loss of capital and assets, and legal difficulties that can come from these problems. Loss of reputation and consumer confidence can be impacted greatly after one attack. Many small businesses will struggle to gain confidence and trust in their customers after being known for having problems prior. The cost of fixing the cyber attack would require experts outside of their field to further the investigation and find the problem. Being down for a business means losing money at the same time. This could halt the online operations and mean the business could potentially be down for a long period of time. Loss of capital and assets ties well in with the cost of fixing the issue. During a cyberattack, a business may lose its funds for that business. Worst-case scenario, a business may actually lose all its working capital and funds. The legal difficulties involved with cybercrime can become pricy and hurt the business itself for not having standard security measures and standards. Security not only for the business but more importantly the customer should be the number one priority when dealing with security protocol.

The monetary dollar damage caused by cybercrime in 2016 equaled out to be over 1.33 billion dollars in the United States alone. In 2016, California alone had over 255 million dollars reported to the IC3. The average company this year in the United States amounted to 17.36 million dollars in cybercrime attacks. Certain cyber attacks can vary on how long it takes to solve a problem. It can take upwards to 69 days for an average everyday attack on a business. The types of attacks include viruses and malware issues. Employee activities within the workspace can also render a cyber attack. Employees using mobile devices or remote work access off the job makes it easier for a cyber attack to occur.

Marketing

Although small businesses have close relationships with their existing customers, finding new customers and reaching new markets is a major challenge for small business owners. Small businesses typically find themselves strapped for time to do marketing, as they have to run the day-to-day aspects of the business. To create a continual stream of new business and find new clients and customers, they must work on marketing their business continuously. Low sales (the result of poor marketing) is one of the major reasons for small business failure. Common marketing techniques for small business include business networking (e.g., attending Chamber of Commerce events or trade fairs), "word of mouth" promotion by existing customers, customer referrals, Yellow pages directories, television, radio, and outdoor ads (e.g., roadside billboards), print ads, and Internet marketing. TV ads can be quite expensive, so they are normally intended to create awareness of a product or service. Another means by which small businesses can advertise is through the use of "deal of the day" websites such as Groupon and Living Social. These Internet deals encourage customers to patronize small businesses.

Example of keyword analysis based on market competition

Many small business owners find internet marketing more affordable. Google AdWords and Yahoo! Search Marketing are two popular options of getting small business products or services in front of motivated web searchers. Social media has also become an affordable route of marketing for small businesses. It is a fraction of the cost of traditional marketing and small businesses can do it themselves or find small social marketing agencies that they can hire out for a small fee. Statistically, social media marketing has a higher lead-to-close rate than traditional media. Successful online small business marketers are also adept at utilizing the most relevant keywords in their website content. Advertising on niche websites that are frequented by potential customers can also be effective, but with the long tail of the Internet, it can be time-intensive to advertise on enough websites to garner an effective reach.

Creating a business website has become increasingly affordable with many do-it-yourself programs now available for beginners. A website can provide significant marketing exposure for small businesses when marketed through the Internet and other channels. Some popular services are WordPress, Joomla, Squarespace, and Wix. Social media has proven to be very useful in gaining additional exposure for many small businesses. Many small business owners use Facebook and Twitter as a way to reach out to their loyal customers to give them news about specials of the day or special coupons, generate repeat business and reach out to new potential clients. The relational nature of social media, along with its immediacy and twenty-four-hour presence lend an intimacy to the relationships small businesses can have with their customers while making it more efficient for them to communicate with greater numbers. Facebook ads are also a very cost-effective way for small business owners to reach a targeted audience with a very specific message. In addition to the social networking sites, blogs have become a highly effective way for small businesses to position themselves as experts on issues that are important to their customers. This can be done with a proprietary blog and/or by using a back-link strategy wherein the marketer comments on other blogs and leaves a link to the small business' own website. Posting to a blog about the company's business or service area regularly can increase web traffic to a company website.

Marketing plan

  • Market research – To produce a marketing plan for small businesses, research needs to be done on similar businesses, which should include desk research (done online or with directories) and field research. This gives an insight into the target group’s behavior and shopping patterns. Analyzing the competitor’s marketing strategies makes it easier for small businesses to gain market share.
  • Marketing mix – Marketing mix is a crucial factor for any business to be successful. Especially for a small business, examining a competitor’s marketing mix can be very helpful. An appropriate market mix, which uses different types of marketing, can help to boost sales.
  • Product life cycle – After the launch of the business, crucial points of focus should be the growth phase (adding customers, adding products or services, and/or expanding to new markets) and working towards the maturity phase. Once the business reaches the maturity stage, an extension strategy should be in place. Re-launching is also an option at this stage. Pricing strategy should be flexible and based on the different stages of the product life cycle.
  • Promotion techniques – It is preferable to keep promotion expenses as low as possible. ‘Word of mouth’, ‘email marketing’, ‘print-ads’ in local newspapers, etc. can be effective.
  • Channels of distribution – Selecting an effective channel of distribution may reduce the promotional expenses as well as overall expenses for a small business.

Contribution to the economy

In the US, small businesses (fewer than five hundred employees) account for more than half the non-farm, private GDP and around half the private sector employment. Regarding small business, the top job provider is those with fewer than ten employees, and those with ten or more but fewer than twenty employees comes in as the second, and those with twenty or more but fewer than one hundred employees comes in as the third (interpolation of data from the following references). The most recent data shows firms with fewer than twenty employees account for slightly more than 18% of the employment.

According to "The Family Business Review", "there are approximately seventeen million sole-proprietorship in the US. It can be argued that a sole-proprietorship (an unincorporated business owned by a single person) is a type of family business" and "there are twenty-two million small businesses (fewer than five hundred employees) in the US and approximately 14,000 big businesses". Also, it has been found that small businesses created the newest jobs in communities, "In 1979, David Birch published the first empirical evidence that small firms (fewer than 100 employees) created the newest jobs", and Edmiston claimed that "perhaps the greatest generator of interest in entrepreneurship and small business is the widely held belief that small businesses in the United States create most new jobs. The evidence suggests that small businesses indeed create a substantial majority of net new jobs in an average year." The U.S. Small Business Administration has found small businesses have created two-thirds of net new private-sector jobs in the US since 2007. Local businesses provide competition to each other and also challenge corporate giants. Of the 5,369,068 employer firms in 1995, 78.8 percent had fewer than ten employees, and 99.7 percent had fewer than five hundred employees.

Sources of funding

Small businesses in Biloela, Central Queensland, Australia, 1949
 

Small businesses use various sources available for start-up capital:

  • Self-financing by the owner through cash savings, equity loan on his or her home, and or other assets
  • Loans or financial gifts from friends or relatives
  • Grants from private foundations, government, or other sources
  • Private stock issue
  • Forming partnerships
  • Angel investors
  • Loans from banks, credit unions, or other financial institutions
  • SME finance, including collateral-based lending and venture capital, given sufficiently sound business venture plans

Some small businesses are further financed through credit card debt—usually a risky choice, given that the interest rate on credit cards is often several times the rate that would be paid on a line of credit at a bank or a bank loan and terms can change unpredictably. Recent research suggests that the use of credit scores in small business lending by community banks is surprisingly widespread. Moreover, the scores employed tend to be the consumer credit scores of the small business owners rather than the more encompassing small business credit scores that include data on the firms as well as on the owners. Many owners seek a bank loan in the name of their business; however, banks will usually insist on a personal guarantee by the business owner.

On October 2010, Alejandro Cremades and Tanya Prive founded the first equity crowdfunding platform for small businesses in history as an alternative source of financing. The platform operates under the name of Rock The Post.

Government support

Several organizations in the United States also provide help for the small business sector, such as the Internal Revenue Service's Small Business and Self-Employed One-Stop Resource. The Small Business Administration (SBA) runs several loan programs that may help a small business secure loans. In these programs, the SBA guarantees a portion of the loan to the issuing bank, and thus, relieves the bank of some of the risk of extending the loan to a small business. The SBA also requires business owners to pledge personal assets and sign as a personal guarantee for the loan. The 8(a) Business Development Program assists in the development of small businesses owned and operated by African Americans, Hispanics, and Asians.

Canadian small businesses can take advantage of federally funded programs and services. See Federal financing for small businesses in Canada (grants and loans).

In the United Kingdom, the Small Business Commissioner (SBC) provides information and advice for small businesses and deals with complaints resolution with specific reference to late payment problems and other unfavourable payment practices. The SBC's role is to make non-binding recommendations advising on how the parties can resolve a dispute.

Small businesses are also encouraged per public policy on taxation. For example, from January 1, 2020, Armenia introduced a special micro-entrepreneurship tax system with a non-taxable base of 24 million AMD. Accordingly, a micro-business will be exempted from taxes other than income tax which will not exceed 5,000 AMD per employee. 

Business networks and advocacy groups

Small businesses often join or come together to form organizations to advocate for their causes or to achieve economies of scale that larger businesses benefit from, such as the opportunity to buy cheaper health insurance in bulk. These organizations include local or regional groups such as Chambers of Commerce and independent business alliances, as well as national or international industry-specific organizations. Such groups often serve a dual purpose, as business networks to provide marketing and connect members to potential sales leads and suppliers, and also as advocacy groups, bringing together many small businesses to provide a stronger voice in regional or national politics. In the case of independent business alliances, promoting the value of locally owned, independent business (not necessarily small) through public education campaigns is integral to their work.

The largest regional small business group in the United States is the Council of Smaller Enterprises, located in Greater Cleveland.

United Kingdom Trade and Investment gives out research in different markets around the world, and research in program planning and promotional activities to exporters. The BEXA's (British Exporters Association) role is to connect new exporters to expert services. It can provide details about regional export contacts, who could be made informally to discuss issues. Trade associations and all major banks often provide links to international groups in foreign markets, and some help set up joint ventures and trade fairs.

Several youth organizations, including 4-H, Junior Achievement, and Scouting, have interactive programs and training to help young people run their own small business under adult supervision.

Entropy (classical thermodynamics)

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