Intelligent Communities

Albert Einstein supposedly once wrote that "Insanity is doing the same thing over and over again but expecting different results."  Whether or not the Smartest Man in the World actually said it or Rita Mae Brown wrote it in 1983, it is famous because we have all been there.  Nothing could be more human than to repeat a failing strategy because it feels so much more comfortable than looking at a new set of facts.  

Case in point: the International City/County Management Association recently published the results of its Economic Development 2009 Survey, conducted in October of last year.  Over 700 members - 22% of the sample group of cities and counties with more than 10,000 people - completed the survey.  The results spoke volumes about how we prefer the familiar and ineffective to the new and promising.

When asked if their local government has a written small business development plan, 84.5% of respondents said "no."  How about a written business retention plan?  Seventy-three percent said "no."  Does your jurisdiction have special technology zones designed to encourage technology-related industries and businesses to move there?  Eighty percent did not. And what are the two biggest barriers to local economic growth?  The availability of land for development and the cost of that land.  

As I reported in a post on July 28, the latest research in the United States shows that nearly all net job growth since 1977 (practically the Stone Age) has been created by start-ups in their first year of business.  Other research stretches that period of strong job creation to five years, but the point is the same.  Getting a Fortune 1000 company to locate a facility in your community will make you a hero for a day.  But by itself, it will not ensure the prosperity of your economy.       

What do startups need?  Being new and fragile, they need access to management expertise and high-quality employees.  They need credit and capital, and connections with potential customers, strategic partners and investors.  The good news is that, if they survive and grow, retaining them is easy: startups tend to stay where they were founded unless they cannot get what they need there.  Given the fact that technology in all its forms is a part of nearly every process, service and product today, they are very likely to be technology-related in some way.  And while they may eventually need land to construct that signature building that signals their success, that's somewhere at the bottom of the priority list.  

This mismatch between the needs of the most desirable employers in the broadband economy, and the perceptions of people in economic development, is breathtaking.  I am also glad to say that there is little sign of it in Chattanooga, Tennessee, USA, where I spent two days last week.  The municipally-owned Electric Plant Board (EPB) of Chattanooga is deploying a fiber-to-the-premises network to every home and business in their service area.  The driver for the project is the implementation of smart grid technology.  It is EPB's ambition to gather data and send instructions in real time to every element of the distribution network, as well as to thermostats, hot water heaters and other equipment on customer premises.  The dirty little secret of electric generation and distribution today is that the network is run by guesswork, and maintains its reliability by massive over-building of capacity to handle peak loads.  EPB expects that full implementation of smart-grid technology throughout their network will let them reduce costs enough to justify the fiber deployment on that basis alone, with the revenue from data, voice and video services adding icing to the cake as well as fulfilling EPB's mandate to support the city's economy.    

I was invited to Chattanooga by the city's political, administrative, nonprofit and business leaders, who want to understand how to leverage this asset to accelerate the community's economy and bridge its economic and social differences.  This is a place that was named the most polluted city in America in 1969.  The pollution was caused by metal foundries that subsequently went out of business, leaving the economy on life support.  From that low point, the city has fought its way back.  The rebuilding of the downtown and riverfront, which restored civic faith and pride, also taught Chattanooga's leaders how to collaborate.  They have turned to nurturing local arts and local entrepreneurship, and targeted their business attraction efforts to wind turbine and other clean energy firms, on which foundation they hope to build a competitive business cluster.   

While giving speeches and offering advice, I was pleased to see a place with so many pieces of Intelligent Community development in place.  And I was thrilled by their understanding of the need to turn those pieces into a functioning whole, an ecosystem in which broadband, knowledge work, innovation and digital inclusion can reinforce each other and drive inclusive prosperity for many years.  Stay tuned to news from Chattanooga, as the EPB shows us how to add intelligence to the grid and the city does the same for its economy.

I have been thinking a lot about real estate lately.  Money has a wonderful power to concentrate the mind.  

A year from now, our 10-year lease on about 2,000 square feet of office space in downtown Manhattan will end.  When we moved in nine years ago, that space was clearly necessary for our small team.  Today, most of us are out of the office several days a week.  Desks and their PCs stand idle, trash baskets do not fill, a conference room is largely empty.  But the monthly bill from the landlord keeps coming in, costing enough to fund almost two salaried positions.  

So, when our lease is up, we will radically downsize our space.  We hope to turn the mobility that is wasting so much money into an asset instead.  

And I find that we are not alone.  According to James Rickman, a blogger on mobile office trends, the number of American workers performing administrative tasks in an office has fallen 12% in just the past two years.  

John Vivadelli, President & CEO of AgilQuest, a consulting company that helps companies "right-size" their facilities, writes that the most successful mobile workspace solutions can support seven employees with a single desk.  AgilQuest customer Ernst & Young saves over $40 million each year on real estate by using a mobile workplace management solution at 60+ facilities.  Consultant Richard Donkin writes of a company in Newmarket, Digital in the UK, where the people-to-desk ratio has risen from 2:1 in the late 1980s to 12:1 today.  

This trend, if it holds up, poses some interesting challenges to business incubators, those workhorses of innovation in Intelligent Communities.  (In the course of writing this, I learned that they are called incubators because the first one, which opened in 1959 in Batavia, New York, USA, had a chicken hatchery as a tenant.  True or not, it's a good story.)  

According to a report from the Anderson School of Management at the University of New Mexico, there were about 1,100 incubators in the US in 2006, up from only 12 in 1980.  There were about 5,000 worldwide.  In 2005, US incubators were estimated to have supported 27,000 start-ups, which employed 100,000 people and generated $17 billion in annual revenues.  Their average cost of job creation was about $1,100 compared with over $10,000 for other public job creation programs.  And of greatest importance to communities, 84% of incubated firms in the study remained in the place of their founding.  

So incubators work.  But is it the cheap office space that makes the difference?  Increasingly, I would bet against it.  Some startups clearly need dedicated physical space, whether for laboratories or manufacturing or inventory.  All occasionally need meeting places to spur collaboration.  But if there is one thing that broadband can contribute to the innovation needed for economic growth, it is connecting people regardless of their location.  

My favorite example is a Cisco executive with that increasingly rare perk, an administrative assistant.  The unusual part is that she and he are located several hundred miles apart.  Visit his office and you will find a monitor at her desk, facing outward.  There she is on the monitor, at a different desk far away, via Web video.  Speak with her and she responds through the video circuit.  But, like the rest of us, most of her interaction with her boss and others at Cisco is via email, telephone and Web conferencing.  And as an added bonus, she never has to fetch him coffee.  

Clearly, I'm not the only one thinking about this.  Try doing a Google search on "virtual incubator."  I found "virtual incubator" networks in southern California, Arizona, Idaho, New York and many other places.  The term seems have been co-opted as well by for-profit Web portals, from the Microsoft Incubation Network to Officescape, which have no ties to a physical community.  If incubators are part of your community's economic growth strategy, I suggest you keep an eye on this development.  The virtue of being virtual is that, in theory at least, you can extend the benefit of incubator support programs throughout your community or region.  Whether that can produce the same results as physical incubators remains to be seen. 

While I was on vacation far away, something took place in New York City that made me proud to work there and contribute as a taxpayer.  

On August 3, Mayor Michael Bloomberg made a speech.  He spoke about the decision of a public commission to allow development of an Islamic cultural center and mosque in lower Manhattan, within walking distance of the World Trade Center site.  Mayor Bloomberg was followed at the podium by Christine Quinn, Speaker of the New York City Council, and by a series of religious leaders of the major faiths, who spoke all with one voice.

The decision to build an Islamic cultural center so close to the Ground Zero of 911 was taken by some as an insult to the memories of those who died there.  For them, Muslims are the enemy, and to welcome them within the area sanctified by the blood of the innocent is a desecration.  

The Mayor disagreed.  "On September 11, 2001," he said, "thousands of first responders heroically rushed to the scene and saved tens of thousands of lives. More than 400 of those first responders did not make it out alive. In rushing into those burning buildings, not one of them asked 'What God do you pray to?' 'What beliefs do you hold?'  The attack was an act of war - and our first responders defended not only our city but also our country and our Constitution. We do not honor their lives by denying the very Constitutional rights they died protecting. We honor their lives by defending those rights - and the freedoms that the terrorists attacked."

"There is nothing in the law," he said, "that would prevent the owners from opening a mosque.  Should government attempt to deny private citizens the right to build a house of worship on private property based on their particular religion? That may happen in other countries, but we should never allow it to happen here."

The day was a heartening example of political courage.  In making these speeches, the city's elected leaders strode calmly and purposefully into the heart of ugly controversy.  They also used all the usual rhetorical flourishes, from frequent references to America's greatness to the assertion, in the Mayor's words, that New York is "the freeist city on earth."  Hey, what can I saw?  Americans in general and New Yorkers in particular have been congratulating themselves on their greatness for two and a half centuries.  I thank our friends around the world for continuing to put up with it graciously and with good humor.  

But something great truly was happening that day.  Only, it is not unique to the Intelligent Community of New York City.  Watching the video, it occurred to me that ICF needs to add another success factor to our list of best practices.  We have described the importance of strong leadership and effective collaboration among business, government and institutions.  We believe that economic and social progress requires a focus on long-term sustainability.  To that list I propose to add one more item: tolerance.  

Richard Florida writes of the value of tolerance in fostering a "creative class."  If we are going to have crazy, creative types around, we need to tolerate and even embrace their eccentricities.  We need to be places where they feel at home, because our economy needs them.

I see a broader value in tolerance.  It is in opening up communities to the world.  In the broadband economy, communities are intimately connected across geographic barriers and national boundaries, whether they like it or not.  They cannot avoid the negative impacts: the flight of jobs and investment to the most attractive markets, the rising pressure for better skills and the increased social stresses it brings.  In a world where local success depends on global forces, communities have to seize the positive opportunities.  Embrace the global economy.  Make your community a good place to start a company and invest in its growth.  Equip your people with the skills needed to be world-class.  Bring the best that the world has to offer into your classrooms and congregations, your municipal government and businesses.  

No community can do this difficult work without a fundamental willingness to tolerate differences.  We need the flexibility to see that people who look different, speak differently, and worship differently may, underneath it all, be our brothers and sisters.  We may not agree.  We may not even like each other.  But we must be open to the possibility that we can learn from each other and teach each other, and so both gain from the experience of sharing a world.

Council Speaker Quinn put it this way: "If you try to eliminate one religion from one neighborhood in New York City, you are trying to eliminate every religion from New York City and from that neighborhood.  We cannot allow that to happen."

I spent half of last week in the US states of Arkansas, Louisiana and Texas.  I was there to help the Coordinating and Development Corporation - an economic development agency serving a region called the Ark-La-Tex, which bridges parts of all three states - launch an Intelligent Community initiative.  

The weather was breathtakingly hot.  When I returned to New York City, the weather was also breathtakingly hot. It has apparently been breathtakingly hot in Germany, the UK and other parts of northern Europe.  Hotter than in Athens, Rome or the other normal hot spots.  

Weather is like that.  Frequently surprising and always local.  Weather connects us all, but the connections are astoundingly complex. If you want to know what tomorrow's weather will be, find out the direction and strength of the prevailing winds and then look upwind to see what weather they are having over there today.  Then feed that information, and a great deal more, into a powerful computer.       

Speaking of information processing, the US government has recently released a data set called Business Dynamics Statistics. The Kaufman Foundation has used it as the basis for a new report, "The Importance of Startups in Job Creation and Job Destruction."  It contains news both surprising and important at the local level.  

Given how much time Americans spend claiming that their country is unique and exceptional, it is proper to ask whether people in other countries should care about this new information.  But I believe that the results apply to any place where the barriers to business creation are not too high, and government does not make the destruction of jobs prohibitively expensive (with the unintended consequence of stunting job creation).  

Previous studies have shown that, in the US, all net job growth comes from companies less than five years old.  More established companies are net destroyers of jobs.  This is an astounding statistic, because it means the 80% of economic development resources, which communities typically devote to attracting established businesses from outside, essentially goes to waste.  Attracting an employer with 500 new jobs makes great headlines.  But if that employer is 10 or 20 or 50 years old, the odds are that its total employment is shrinking - because it has become expert at doing more with less, year after year.  That shrinkage may not affect your community in the short term.  But then, your weather can be balmy while communities upwind of you are being pummeled by storms.  It's just a matter of time until the weather comes your way.    

The headline of the most recent study is even more astounding.  Nearly all net jobs in the US since 1977 have been created by start-ups in their first year of business.  In every other year of life, companies in the aggregate destroy more jobs than they create.  The graph below shows average job creation and loss by company age from 1992 to 2006.  Startups created 3 million jobs and destroyed none in their first year.  That statistic seems unlikely, until you give it some thought.  Startups create jobs by definition, whether it is just a sole proprietor or a venture-backed team.  How many burn out in the first year?  Effectively, none.  It is in later years that success and failure become apparent and job destruction begins.  Job creation continues but job destruction proceeds just a bit faster, with new startups in new industries increasing the overall base of employment. 


The implications are profound.  The way to improve the odds of good economic weather in your community is to make it a hot spot for startups.  That's much easier said than done.  In the Ark-La-Tex, there are a few successful examples of incubators for technology and manufacturing companies.  Ideally, other communities will see their success and try to imitate them.  But this is a region whose economy was based on timber and low-skilled manufacturing, both of which have shrunk drastically in the past decade, not technology and entrepreneurship.  

The discovery of natural gas shale is also creating new economic opportunity.  That is a more comfortable fit for a place where resource extraction was one of the major industries.  If it spurs startups in exploration, production and new gas technologies, it will become a blessing to the entire region.  If the mineral wealth is cornered by a few existing companies, it will produce little long-term benefit.  A small number of organizations and people will get rich.  Exploration and production will produce a number of good-paying jobs for the low-skilled.  But little will change in the region's overall prosperity unless natural gas becomes a driver of widespread innovation.    

American author Mark Twain once wrote that "Everybody talks about the weather but nobody does anything about it."   The good news is that, in the Ark-La-Tex as in Intelligent Communities around the world, they are giving it a serious try. 

It was a story that would stop any Intelligent Community in its tracks.  

Economists at the University of Chicago studied the educational outcomes of children in low-income families who were given vouchers to help buy computers.  "We found a negative effect on academic achievement," said assistant professor Ofer Malamud, "I was surprised, but as we presented our findings at various seminars, people in the audience said they weren't surprised, given their own experiences with their school-age children."

In "Computers at Home: Educational Hope vs. Teenage Reality," Randall Stross reports on several studies in Romania and the United States that all point to the same thing.  Simply giving a computer and broadband access to low-income students does nothing, on average, to improve educational achievement - except for helping them acquire the skills needed to play online games and use social media.

A Duke University study of middle school students, which ran from 2000 to 2005, actually found that broadband and education can conflict.  Students posted significantly lower math test scores after the first broadband service providers showed up in their neighborhood, and significantly lower reading scores when the number of broadband providers passed four.  Not exactly what we were hoping for from greater competition in the broadband market.  As with the U Chicago study, the effects were confined to lower-income households.  

What's going on?  Social scientists are understandably wary about speculating in this delicate area.  The Duke study authors did suggest that in low-income households, parental supervision might be spottier.  After all, the students may be the first computer users in the family, which puts them in a position of authority.  (Haven't we all turned to a 12-year-old for technology advice at some point?)  

A volunteer installer for the Eastserve project in Manchester, England told me a story of being called into a home by a woman who said her subsidized PC wasn't working.  When he visited, she had the PC set up in the living room and her five children sitting in a row before it.  He checked it and everything seemed to be working.  Rubbish, said Mom.  It's not doing anything.  "Make it go," she demanded.  She apparently thought it was some variant on a television, which would switch on and entertain the kids without need for effort on anyone's part.  Not an unreasonable assumption, really.  Just wrong.  

We all know how easy it is to waste time on the Web and with computer games.  They are like the television only so much more engaging because they are interactive.  So it really shouldn't be surprising that putting technology into the hands of the untrained and under-supervised may produce the opposite of what we hope for.  

The article brings home to me the value of context.  Intelligent Communities tend to be good at managing this subtle but essential thing.  They know it is not enough to provide access to technology.  Reasonable expectations are required.  The user must be trained.  The trainer of the user must be trained.  The environment must be structured to produce success.  Whether it is deploying a broadband network, creating an innovation program or, yes, promoting digital inclusion, the process is at least as important as the product.

In Cleveland, Ohio, USA, Case Western Reserve University is using its existing campus network to deploy ultrafast broadband and computers into adjoining low-income neighborhoods.  With the network is going a small army of students and professors.  They are providing the context, which is research. While expecting to do good, the university wants to explore how low-income families can actually use broadband to improve their lives, increase their incomes and build community ties.  What the Case Western team discovers will be applied more widely to help reduce the immense gap between the digitally literate and illiterate in modern societies.  

Context is powerful.  That Eastserve volunteer in Manchester told me something else that has stuck with me.  In addition to doing installation and service on the project's low-cost PCs, he also leads training classes.  He told me that the last place he wanted to train people was in a school classroom.  He would go to people's homes, to community centers, to libraries - anywhere other than a school.  I asked why.  Because, he said, most of the people in this poor district had a miserable experience in school.  School was a place where they failed, over and over, and learned to pretend that it didn't matter.  So to make them return there for training was to start them off on the wrong foot.  Just like introducing poor kids to PCs and expecting them learn more than the skills needed for World of Warcraft.

If my colleague Robert Bell is not always certain about the future of the world (see his June 19 blog), who in the world can blame him?  However, fear not for I am in the office right down the hall from my friend here in New York and frequently walk into his air-conditioned office to assure him to keep the faith.  I am pleased to report to you that he mainly does.  (John Jung too!) I assure you that the world and its communities will be fine, not only because we will soon figure out how to make wind turbines  and advance  energy technologies worthy of the serious investments required, and which Robert discusses.  Nor will we be fine simply because a whiz kid somewhere in New York University's Polytechnic Institute, Tallinn, Estonia or the University of Waterloo are well on their way toward inventing the world's next battery - or the next smart soccer ball (one which hopefully will guide the kicks of aging players on Italy's football team into the net at the NEXT World Cup!).  These innovations, as they arrive, will do what innovations and technologies do for societies fortunate enough to have them: they will make work more productive and daily physical life increasingly convenient, while underpinning robust economic activity.  (By the way, if recent studies are accurate: we will all work longer and harder as a result.) For those in the rest of the world's communities it will also turn out fine, over time, because this has increasingly been the trend.  Long-suffering peoples rise up.  Over the past 17 years nearly one billion people have been lifted from abject poverty in Asia.  One of the goals of the Intelligent Community Association, stated in its first board meeting in New York, is to reach out to other communities to share knowledge and best practices.  To bring the rest of us along, and to keep the faith that our tribes, when enlightened with strong ideas, can restore each of us to the point of balance. I am frequently accused of having faith.  It is not the blind faith which allows any snake oil to be consumed at any cost.  It reflects, I believe, what poet and former Czech president Vaclav Havel once suggested was a cautiously chalky brightness.  Havel noted that to hope in a sober way is not to act with the conviction that something will turn out well but with the certainty that something makes sense, regardless of how it turns out.   To make sense and to act accordingly are embedded in our nature and in our spirit.  We are built to persist, no matter what.  Like a good battery, we seem built to last.  As a species we have much in our selves, in our cultures and in our communities to rely on, although a long way to go to be confident enough to rely on them totally.  William Faulkner famously got it right in his often quoted 1950 Noble Prize speech when he conferred upon humanity final victory.  He said that humankind will "not simply endure its existence, but rather prevail over it."  I have never doubted this.  It was said by wiser folks long before Faulkner got around to identifying it as his reason to get out of bed and make coffee in the morning.   As I see more of the world, and am allowed the privilege to go inside its remarkable Intelligent Communities and discuss the hope filled plans of its leaders and champions, I can tell you that there I see astonishingly bright flares of depth and purpose, as well as awful moments and harsh setbacks.  However you do not leave a place like Windsor or Sunderland or Suwon without confirming the truth of Faulkner's core proposition.  It too is mine and that of all of us here at ICF.  We must, in our age of the "new tribalism," take a cue from our elders and our mentors and stop wringing our hands.   Another person who has a Nobel Prize somewhere in his home, The Dalai Lama, notes quite frequently that human beings are designed for joy.  Think of it.  Here is monk who was literally chased out of his native country the same year that Faulkner offered his vision of light, while nearby Korea was being shredded by civil war, never to return.  He would have every reason to mourn the loss of his beloved community and to be despondently negative about the future of humanity.  Rather than wring his hands he grabbed his meditation beads.  He chose light.  He chooses still the universal mandate to build.  To be fine.  To say "OK."  I do not know how this will turn out.  But it will turn toward light.  Like the earth.  He is not different in his inner mandate to build than Kristina Verner, Scot Rourke, Amirzai Sangin, and Andre Santini are in their approach to build broadband communities and tribes that connect to the rest of the enlightened communities we are gathering each year through our awards program.   If William Faulkner, Vaclav Havel, the Dalia Lama, and Robert Bell and John Jung aren't authorities with high enough standing for you, I finally cite even HIGHER authorities:  my mother and father, who as they entered their eighth decades of life reminded me with conviction as their community suffered that "We are never given more by our creator than we are able to bear."   Indeed.  Keeping the faith is to keep the tribe intact. As I anticipate the 2011 submissions for Intelligent Community of the Year, what do I expect?  Prevailing may not mean, entirely, complete economic prowess in one generation.  Faulkner believed that prevailing meant, first, a dedication to overcoming fear and thus to recall "old verities and truths of the human heart."   This is step one toward becoming a healthy Intelligent Community.   While we study and award the impact of access technologies on communities and other criteria, ICF is also, I see, repackaging old truths with a new vocabulary.  A great deal of the new vocabulary is written by people like you, who submit Smart21 nominations to ICF and share with us your stories of challenge and responses to the challenges.  Never underestimate how powerful your story is, nor how "fine" you have become on your way to sending us your submission.  You would be surprised! In my remarks during the Intelligent Community of the Year Awards Luncheon in May I said that I believed that what was failing us at this hour of history were national governments and national leaders.  Their predilection to use heavy tones of fear as their way to focus collective attention is not only working poorly, it is undermining the essential cue we must take to nourish our communities and our spirits.  We need a cue to move forward with hope.   Moments after I said this, Professor Cheol-Soo Park took the stage and in perfect English and with the timing of an actor thrilled the audience as he accepted Suwon's award as the Intelligent Community of the Year.  He not only proved that Suwon had overcome the fallout from a serious national debt crisis of the late 1990's, and that the small nation of Korea itself had prevailed over the ravages of nearly 50 years of occupation, civil war and the challenges of a backward, insular nation, gosh darn it all Suwon had also become "happy!"  Happy Suwon.  A place of faith, where the rising light of a future that was better for its children than it had been for its elders had emerged.  Who knew?  Happy Suwon is a place Faulkner, the Dalai Lama and Pietro and Aquila Zacharilla would claim as a community they could feel at home in these days too. There are hundreds of others out there like Suwon (I just know it), and if you are one of them, we want to know that you are "OK."  Send in your nominations and, if you have time, drop me an email to let me know what anchors your faith in your community for 2011 and beyond!

It was one hundred three degrees Fahrenheit (39° C.) in New York City's Central Park on Wednesday.  The temperature set records.  A newspaper reporter tried but failed to fry an egg on the pavement of Times Square.  

But you know what didn't happen?  New York's electrical grid did not go down, despite logging some of the highest demand in its history.  No more than 4,000 customers in a city of 8 million lost power for some hours.  That's it.  

From the vantage point of my air-conditioned office in the Financial District, I can point to at least one reason.   The connectivity revolution.

In 1977, during a heat wave lasting many days, lightning strikes took out electrical generators and triggered a 2-day blackout that affected almost every neighborhood in the city.  America was deep in recession and the city was in the midst of a fiscal crisis.  The blackout led to riots, looting and vandalism that made headlines across the US.  It was one of those touchstone events that long-time New Yorkers can still talk about with dread.  

A smaller version, during another heat wave in 2006, killed power to 100,000 customers for more than a week.  It happened because the utility, Consolidated Edison, made poor decisions based on poor information about its aging infrastructure and current demand.     

But it didn't happen on Wednesday.  This time, Con Ed had the right management systems, connectivity and a rudimentary smart-grid system in place.  From its command center, Con Ed responded to a substation that caught fire by instantly dispatching a replacement generator.  It arranged for horse-racing to be called off in Belmont Park and for trains to slow down in order to save electricity.  

Con Ed signaled building managers throughout the city, including mine, to help.  Shortly before noon, we heard over the public address system that elevator service was being reduced by 25%, and lights turned off in common areas.  We were asked to turn off any nonessential lights and equipment.      

Using radio technology installed by Carrier, the air-conditioning manufacturer, Con Ed signaled 20,000 residential air-conditioners to cycle on and off more slowly - only once every 30 minutes - to reduce demand.  

All told, by using ICT effectively and staying ahead of the potential crisis, Con Ed shaved 400 megawatts off total demand, which would otherwise have exceeded 13,500 megawatts.  It made all the difference.    

In 2001, ICF named New York City as its Intelligent Community of the Year.  And the Con Ed story shows an Intelligent Community at its best: collaboration among multiple government agencies, for-profit businesses and individual citizens, enabled by information and communications technology, to master a crisis and maintain quality of life.  

There are stories like these in communities around the world, and we want to hear them.  ICF has opened its 2011 Intelligent Community Awards cycle.  Communities have until the 24th of September to nominate themselves.  In October, we will announce our Smart21 Communities in Suwon, South Korea, our current Intelligent Community of the Year.  Three months later, we will narrow it to the Top Seven, announced at a ceremony at the Pacific Telecommunications Council conference in Honolulu, Hawaii. And at our own Building the Broadband Economy conference, one will be named the Intelligent Community of the Year.  

The payoff for communities is substantial.  Just ask our "alumni" - the more than 80 Smart21, Top Seven and ICs of the Year - about the image value, the local excitement and the regional pride they earned.  Not to mention the affirmation of the path they are on.  And now, there is another benefit: the opportunity to join the new Intelligent Community Association, whose members are all honorees of our program.   Together, they will be raising the bar for us all.   

A few years ago, I acquired property on the coast of the state of Maine.  Soon after, a neighbor invited me to "walk the line," as he put it.  The only time I had heard the phrase before was in a Johnny Cash song.  But it turned out that he meant walking together along the property line separating his place from mine, so that the new guy (me) would be clear on what was mine and what was not.  I took it in the neighborly way it was intended, and was glad to learn about another custom of my native land. 

I have been thinking about lines a good deal recently.  As the financial crisis of 2009 became (in the industrialized nations) the recession of 2010 and may become the double-dip recession or even depression of 2011, lines have become a big problem.  In the US, the line between conservative and liberal politics runs right down the center of our national legislature.  The majority swings Democratic or Republican every few years but seldom by more than a few votes.  Canada has a Conservative Prime Minister at the helm of a minority government.  In Britain, an evenly-divided electorate produced the first peacetime coalition government in the nation's history.  Germany has had coalition governments for years.  Across the Continent, with a few notable exceptions, governments are rising and falling on a few small shifts in the electorate. 

So how is it working - governing with a dividing line down the center of the body politic?  Not so great.  How else to explain why governments on both sides of the Atlantic are cutting their budgets in the midst of one of the worst recessions since the 1930s?  The last government in the US that tried to do that was led by Herbert Hoover, and that didn't turn out very well.  To their credit, national governments launched massive fiscal stimulus last year to stop the plunge into the abyss - but being almost evenly divided between political philosophies, they cannot go the distance.  Action produces reaction.  With each vote a swing vote, the more impassioned side at any given moment tends to win.   It reminds me of a wonderful and sad poem by Ethan Coen of the film-making Coen Brothers: "The Drunken Driver Has the Right of Way."  In this case, the drunken drivers are going to experiment with a big dose of fiscal tightening in the midst of the worst recession since 1933.   Fasten your seat belt. 

Fortunately, lines do not always divide.  Sometimes they connect.  In the Broadband Economy, communities can establish vital connections across regional, state, provincial and national boundaries.  

Communities are usually on the receiving end of national and regional policies they can do little to shape.  By engaging with other communities and learning from their example, they can gain a healthy measure of independence. 

When Bristol decided to build its own fiber-to-the-premises network, it was declaring independence from the laws of the US Commonwealth of Virginia that forbid municipalities from doing any such thing.  A legal battle ensued, which cost $2.5 million in fees and required changing laws in the state capitol, but Bristol persevered and won.  When this year's Intelligent Community of the Year - Suwon, South Korea - began to develop an economy based on small-to-midsize companies, it was declaring independence from South Korea's mighty chaebol conglomerates, to which most people look for employment.    When government, business and universities in the Eindhoven region of the Netherlands created the Brainport innovation accelerator, they were declaring independence from the top-down, bureaucratic, bean-counter approach that much economic development in the European Union seems to take. 

Maybe I have independence on the brain because I am writing this on the day after our Fourth of July celebrations in America.  But I have observed that Intelligent Communities have this characteristic in common.  They do not wait instructions from a higher authority.  They do not even particularly want a higher authority to do tell them what to do.  They prefer to take action, to make their own mistakes, to correct them and do better the next time.  They take responsibility for their own destinies. 

When communities take action, they most often turn to other communities for ideas on what works and what does not.  The lines that connect them are usually informal ones - conversations between colleagues, brief email exchanges, chance meetings at workshops.  But sometimes they rise to something more permanent.  In May, fifteen of the Intelligent Communities honored by ICF voted to form the Intelligent Community Association as a permanent global learning network.  Another dozen or more are waiting in the wings.  At a time when our economic fate seems to rest with whoever can shout loudest from his side of the line, I applaud those willing to think differently, and to seek out like-minded allies wherever they may be.  

The World Cup and the Wringing of Hands

As the world's people gather around television sets to watch the World Cup, let us acknowledge that even more popular game now being played throughout the industrialized nations of Europe and North America. 

It is the wringing of hands.  Will the recession ever end?  Which will collapse first: the banks or the governments that bailed them?  Will the folks on the US Gulf Coast drown in oil?  And most galling of all: why are we in this position?  Why aren't we more innovative?  How do we accelerate our ability to create and bring to market the amazing new things we so desperately need if we are to save our jobs, give our children a future and, oh yes, preserve the planet at the same time? 

Well, all of you hand-wringers out there - and I count myself among them - can take a time out.  I'm raising the yellow card.  Courtesy of The Economist, here are three mind-blowing technology innovations - all related to energy - that are coming down the pike now and may shape the economy in your community in the next few years. 

Free Power from Radio Waves.  In the industrialized nations, we are constantly surrounded by electromagnetic energy in the form of radio waves from TV, radio and mobile phones.  A number of young American tech companies are developing technologies to capture this energy, which otherwise goes to waste, in order to power devices.  Sounds like magic, but it is already possible to power tiny sensors this way.  You may have read that we are in the early stages of a sensor revolution, in which tiny devices embedded in materials and machines will vastly improve safety and performance.  The limiting factor until now has been batteries, but it may turn out that all the power these devices need is already there for the taking.

Turning Car Bodies into Batteries.  Speaking of batteries, they are also the Achilles heel of hybrid and electric automobiles.  The problem is that the things weight a lot.  In the 1,200 kg electric Tesla sports car, the batteries make up 38% of the weight.  Which means that a lot of power is consumed just lugging the power source around.  Now, researchers in London and Stockholm are working, with funding from the European Union's STORAGE project, on a means to make the body of the car store energy.  The body in this case is made up of carbon composites instead of old-fashioned sheet steel.  The challenge is to boost the efficiency ("energy density") of this new kind of battery to the levels found in existing technology.  There's a long way to go but progress is swift.  Researchers expect to boost last year's energy density record by 4,000 times before the end of this year.

Making Wind Power More Reliable.  What's the biggest challenge to the growth of wind power as a meaningful supplier of our energy needs?  The unpredictability of the wind compared with the need for investors to earn a return on their investment and of utility managers to manage their loads.  In Denmark, which gets 20% of its electricity from wind, a change of wind speed of just one meter per second adds or subtracts 450 MW of power on the national grid, equal to the capacity of a coal-fired power station.  Try managing that, as an investor or an operator.  Yet our current methods are not even very accurate when it comes to measuring the wind speed at the top of a windmill tower and even less so when it comes to predicting what a turbine on that tower will experience in the next hour, the next day or the next decade. So entrepreneurs and scientists in the UK and US are developing methods to measure wind speed using pulsed laser beams and upgrading computer models of wind over terrain.  They are creating the tools that will make it possible to generate more power more profitably more of the time from moving air, which will make big difference in the willingness of investors to back wind power projects. 

It was the late management guru Peter Drucker who said that "today's business is the enemy of tomorrow's."  He meant that people in business fail to spend enough time thinking about what their businesses should become, because they are so immersed in managing the problems the business is facing now.  The same is true of communities.  According to a recent video from Sony, the top 10 in-demand jobs in 2010 did not exist in 2004.  The young people growing up in your community today need to be prepared for jobs that don't yet exist.  And your community's economic future will be determined by its ability to create those jobs, even though you don't know what they are.  Exciting times lie ahead if we are just have the strength and faith to get there.  Do we?  I don't know.  It's hard to be certain...  Uh-oh.  There I go, wringing my hands again...?

Live from Building the Broadband Economy #5

We are hearing from Professor Cheol-Soo Parkof SungKyunKwan University in Suwon, who was designated by the city's Mayor to represent him at Building the Broadband Economy.  ICF's co-founder John Jung, who visited Suwon, is leading the discussion. Suwon is the home city of Samsung, which has a big impact on its economy.  The city administration has made massive investments in e-government and networks to create a ubiquitous online environment for connecting to crime prevention, fire prevention, traffic information, e-learning and citizen services.  John pointed out that Asian cities are unique in requiring a large amount of documentation from citizens.  Much of Suwon's work has focused on putting this paper trail online to vastly simplify the lives of citizens.  In the process, they have created a transparent government, in which all processes are visible and the integrity of its operations is assured.  Suwon is also a major investor in business parks and industrial complexes, providing cheap land and attractive commercial terms for developers.  The city government also encourages the formation of large numbers of public-private joint ventures to stimulate the formation of businesses in leading-edge technologies.  The third leg of the stool is an active matching program between labor demand and supply, backed by strong re-education programs to keep employee skills up to date.  Samsung has been an important backer by providing major scholarships for lower-income students to gain an education and get into the pipeline to employment.  Education in Korea is very competitive; it is viewed as the key factor for success in life and the highest priority of society.  Suwon has invested hundreds of millions of dollars in upgrading its educational infrastructure.  This has included the development of international language schools, including one that specifically aims to support the children of expatriates working in South Korea (and making Suwon a particularly attractive location for them).  In Suwon, economic growth has given the community the power to begin sharing their good fortune with other nations.  The city funds development programs for cities in Cambodia to give back some of their good fortune.  The same spirit informs Suwon's programs to provide digital skills training to tens of thousands of low-income and less-educated citizens in order to ensure their inclusion.  One of the first Korean words that foreigner learn is "bali," which means "fast."  Koreans like things to be fast.  Suwon strives to make its society deliver information anywhere, any time to any device to make its citizens' lives productive and happy.

Live from Building the Broadband Economy #4

We are listening to the Mayor Larry O'Brian of Canada's capital city, Ottawa, explain the priorities and practices that helped make the city one of ICF's Top Seven Intelligent Communities of the Year.  When he first became mayor, there were a handful of technology employers with a workforce of less than 2,000.  It was in the telecom meltdown at the beginning of the last decade that the troubles of those companies spawned dozens of start-ups, many of which have become highly successful.  In the current recession, that pattern is being repeated, aiming at the next generation of technologies from renewable energy to wireless networking.  Ottawa is currently spawning five new companies a week. ICF's Lou Zacharilla pointed out that recessions are dangerous because people can vote with their feet by moving away in search of opportunity.  That has not happened in Ottawa partly because of a great quality of life but also because of countermeasures put in place to spur regeneration.  Mayor O'Brian described Lead to Win, a government-funded project that taps technology managers who lose their jobs with big companies, trains them in entrepreneurship, connects them with partners and potential customers, and provides seed funding.  It is programs like this because have allowed Ottawa to replace the 20,000 low-skilled manufacturing jobs lost in the last recession with higher-skilled jobs in engineering and business.  Factoid: JR Booth was one of Ottawa's founders, a lumber baron who created the largest lumber company, not just in Canada, but in the world.  Entrepreneurship has deep roots.  The tradition is being carried forward by Terry Matthews, a serial entrepreneur whose venture company, Wesley Clover, recruits new graduates from local universities, puts them through an entrepreneur's boot camp, matches them with experienced mentors and gives them a year to create a company.  Lou said he saw something remarkable when he was in Ottawa: a cultural presumption that those who know should mentor those who can benefit from their experience.  It permeates the business and entrepreneurial sectors, and has become instrumental in their success.  A digital media cluster has sprung up, powered by the community's strong broadband assets, and has organized itself.  Mayor O'Brian described attending a cluster meeting and being amazed and pleased that none of the companies appeared to have an exit strategy.  None were growing and grooming their companies for sale but expected to be running them for decades.  He found that an inspiring symbol of Ottawa's future.

Thursday, May 20, 2010

Live from Building the Broadband Economy #3

I just finished a very interesting hour speaking in front of the audience with Anette Scheibe (CEO, Kista Science City, Stockholm), David Gourlay (Director Public Sector Business Development, Oracle), Joanne Hovis (CEO, Columbia Telecom Corp.) and Don Norris (CEO, Strategic Initiatives).  We were talking about whether and how ICT can supercharge educational achievement.  We discussed some cool technologies, from the use of social networking in instruction to dressing up lessons as video games in order to make them relevant to students.  But mostly we talked about leadership, organization and infrastructure.  When Fredericton Mayor Brad Woodside, in the audience, spoke passionately about the need for leadership from local government leaders, the panelists were all nodding their heads in agreement.  The biggest impact that community leaders can have, they said, is through exercising that leadership.  Community leaders need to be relentless about promoting educational achievement, and ensure that education does not stop at the school wall.  The demand for lifelong learning requires that ICT be used to deliver educational content 24x7.  It also requires the community to have broadband infrastructure that can provide serious bandwidth to enable multimedia and online collaboration.  But there's another reason to open up the school walls.  Educational outcomes improve when classrooms connect to local business and institutional expertise, which also tends to keep graduating students in the community, where their skills can contribute to local prosperity.  Information and communications technology is the perfect tool to provide this integration, which is where the payoff really lies.

Live from Building the Broadband Economy #2

Kevin MacRitchie - Cisco vice president and Cisco Fellow - Collaborative Broadband & Educational Technologies - is discussing the megatrends that are changing the world.  Ine developed countries, there is an hourglass shape to the population, with large young and  old populations but a smaller group in the productive working years in the middle.  This contrasts with developing nations, where there is more even distribution and overall population growth.  The emerging markets are moving very rapidly into the mainstream of the global economy and will reshape that economy.  Cisco has identified multiple opportunities created by these changes, from the growing Internet of Things to enabling people to live a connected life in every aspect of work, play and life.  The world isn't flat, he says, it is spiky.  A graph showing where patents are filed, there are huge spikes in big cities in industrialized economies.  Does that mean Africa and Latin America don't matter?  No, it means that we have not yet figured out how to reach them.   Kevin described a project he worked on for the Indian Air Force.  They reserved a portion of their wireless bandwidth to put self-powered kiosks into Indian villages to give them their first exposure to the Web.  There was a big discussion about whether this would ruin their culture, or would it preserve the culture forever.  The villages are now able to sell some of their products and services on the global stage and finding that connectivity does expand and preserve their culture.  They are committed to giving 100% of their citizens access.  In the 1950s, the most complex technology that schools had to work with was the adding machine.  In today's world, the complexity that educators must master before  they can begin to teach is huge.  We tend to teach the technology and think we're done.  Instead, we should be harnessing these tools to teach young people how to learn.  Today, it's about learning in real time and having access to information before we need it.  We looked at early e-learning and said it's never going to work: it was self-contained, did not connect to other resources, and lacked any access to instructors.  Challenging story of education: if today's e-learning produces the same results as live instruction, who needs live instructors?  Today's educators have to know how to teach students to learn, not just convey information to them.  As we move to a world of continuous learning, we have to encompass from preschool to the end of life. More and more educational content needs to be delivered to adults, who need to be training for their next job while they are in their current one.  Kevin talked about his local school board, which wants to have great schools but does not want to connect education to any local business or expertise.  This is a defeatist model; the biggest problem the town has is that everybody grows up and moves away Kevin talked about offering towns a "one-button snow day.'  If the 50 or 100 overlapping networks for voice, data, video, fire safety, police etc. are converged into one network, it becomes possible.  The network knows that if it's a snow day, the thermostats don't need to be turned up.  Teachers can receive emails telling them to say home.  Students can receive emails and voicemails announcing closure.  Converged networks can have major financial impacts.  A study Kevin lead for the State of Michigan, where he lives, showed that a $1bn investment in network convergence would save the state $1bn per year in costs.  That's a no-brainer decision.  Do your children want to learn Chinese?  Why should they have to have a local instructor, when high-def videoconferencing could connect them to instructors in China?  There are billions of learners in cities, rural areas, universities and lifelong learners who need to be served, and smart connected technologies make it possible.

Live from Building the Broadband Economy #1

I'm in the audience at our Building the Broadband Economy summit, where Jerry Hultin, President of Polytechnic Institute, is explaining Polytechnic's incubator program, which is written up in today's Wall Street Journal.   In a story about the City of New York, he told about how the city lost A&T to neighboring New Jersey back in the 1970s, but is now finding that it cannot retain the best and brightest computer scientists by asking them to live in Bedminster or Basking Ridge.  So it is moving its cybersecurity labs back into the City of New York.  The quality of cities is going to determine where people live, in a world where you can live anywhere and work anywhere.  Dr. Hultin also praised China for the seriousness, scale and intensity they are bringing to scientific research, which is identifying all of the critical-path issues facing the world and assembling a research agenda to attack them.  Our master of ceremonies, John Jung, has just introduced a delegation from Chengdu, China, whom he met while traveling in China for the past three weeks.  Nice round of applause for people who have come from the far side of the planet to join us at Building the Broadband Economy.  Up next: a fascinating presentation from Kevin MacRitchie of Cisco Systems.