June 2009 Archives

Education plays a key role in Intelligent Communities in developing our human capital and our innovation systems. It helps to create an invaluable cluster, concentrating skilled and creative workers and infrastructure for innovation. The presence of higher education in any region, in combination with a strong local primary and secondary school system and applied research capability is beneficial for economic, social and cultural development and helps facilitate stronger collaborative work and capacity building. With globalization, this recipe helps cities and regions become more innovative and globally competitive and is the second key ingredient in my twelve steps to a successful intelligent community.

This is all the more important since we have just witnessed a major shift in our global economy with significant unemployment on the rise. While retraining is in order, a more strategic approach to help transform into a knowledge-based economy is critical in the long run. In many places around the world people are wondering if their former traditional manufacturing-based jobs will ever return. For many the answer is - at least not in the form they are familiar with today. Our community leaders and decision-makers will need to tie their businesses and educational sectors more closely together if they want to ensure that the skills we derive from our educational institutions can be transferred into sustainable jobs. While colleges and polytechnics around the world appear to be are more aligned today with the needs of businesses and industry, universities are also listening.

For example, in the Waterloo region, the Intelligent Community of the Year in 2007, they are blessed with the kind of educational opportunities that many the world over would love to have in their communities. In addition to post-secondary education, there are also private institutions, especially the think tanks that add immeasurably to the Waterloo region. As David Johnston, President of the University of Waterloo, puts it, the area around the famous whiskey distillery site called Seagram's has gone from "grains to brains". No less than 150 think tanks exist in the area, most notably the Perimeter Institute, the Centre for International Governance Innovation, and soon to be built Ballsille School of International Affairs. In addition, the primary and secondary school system is well recognized as providing students across the Waterloo region with excellence in education. So why bother worrying about education in this intelligent community?

In a word - competition. Economists and educators have written that in some centers around the world, most notably in Asia, the students there are vigorous in their appetite to learn and excel. Partly tradition and cultural, it is also their door to a better life and they know it. Accordingly, communities around the world must recognize the value and importance of education; properly fund their educational institutions from pre-school to graduate programs; and demand excellence from our school boards, teachers and students to be able to be on top of their game. Remember the fuss about out-sourcing? According to Thomas Friedman, "eastern nations now have the capability to literally breed and nurture students who have ultimately become experts in the fields of science and engineering, better than their western counterparts". Companies, especially multi-national firms, were simply globally sourcing the best quality in services at the lowest price and were finding these abroad. Education is a major part of the value chain along with productivity leading to wealth creation. Global sourcing is as much about the search for talent as it is about labor arbitrage. A strategy that attracts, creates and now more importantly "retains talent" in the Intelligent Community will be our greatest resource as we look into the future.

The economic crisis today faced by communities on every continent on the globe may force them to shift into becoming a "center of knowledge" in their region, simply in order to survive in the future. Imagine a community where a significant number of its citizens have higher education accreditation; where they apply their skills in a way that encourages continual education and helps to reinforce replenishment of skills to keep up with societal needs? That goal must be attainable by each of these "centres of knowledge" in order for them to be able to compete globally and to succeed. Universities and colleges are major drivers of economic development and contribute to the community through the type and extent of research and training that is done. Each provides a piece of the puzzle. Universities reach out to ask the right questions; colleges train the skilled workers to meet the demands that these questions try to answer.

As John F. Kennedy once said: "Our progress as a nation can be no swifter than our progress in education. The human mind is our fundamental resource." To which I would add that as communities wish to see success, it is measured best by the depth and breadth of its focus on education at all levels. While natural resources may be few in some intelligent communities, their contribution and greatest natural resource is probably in their people who have helped to transform and position their communities as centres of global excellence. Going back to the example of Waterloo, the Intelligent Community Forum (ICF) recognized this community in 2007, not for efforts to transform a failing economy, but for its commitment to fostering institutions that drive technology innovation and share its benefits with the community at large.

ICF feels that this is an area of such great importance that it will be dedicating its next year's theme around this topic. Watch for more to come on this topic.

It started when an unusual package crossed my desk the other day. Arriving by express mail, it contained a set of checks in the name of an organization I manage.  They were made out to various individuals I had never heard of, in amounts ranging from a few hundred dollars to many thousands.  The organization's name and address were correct, as was the bank and its routing number. But it was not a normal pre-printed business check.  Everything on it had been printed on the same low-quality, dot-matrix printer.  And the account number was for an account that had been closed over a year before - because of fraud.

As I looked at the checks, I thought, this bad guy gives the word "stupid" a whole new meaning.  Sending me bad checks for my signature, expecting that I would sign them and mail them to the recipients without giving it a thought?  I alerted the bank and sent them the checks and the envelope, which believe it or not had a return address.

Then my phone began to ring.  First it was a man in Cedar Rapids, Iowa who had sold something on E-Bay and received a similar check in payment.  It looked odd to him, so he called to verify.  (The perpetrator included the correct phone number for some reason.)  Fortunately, he had not shipped the goods yet, so no harm done.   Another call came an hour later from a liquor store in Atlanta, Georgia.  A woman had tried to cash another one of these checks, and the clerk was suspicious enough to contact me.  He told me that, according to the woman, it was a paycheck she had received for online work.

There were more calls over the next couple of days, all with similar stories, then nothing.  Perhaps the perpetrator has given up on this particular dodge, or may just have set it aside for a while to let things cool down.  Or maybe the bank information has been sold on to someone else, probably online, together with thousands of other accounts.

There is a lot of concern in some circles about trust on the Web.  I have read respected thinkers who insist that it is a make-or-break issue: if we cannot create some kind of "trusted space" on the Web, where we can be sure that people are who they say they are and keep their promises, then e-commerce is doomed.  In their view, the Internet is just too dangerous a place for normal people wander about on their own.

To which I can only say: what planet do you live on?  Here on planet Earth, there is no such trusted space, where all people are who they claim to be and can be counted to keep their promises.  Not in the physical world, at least, and certainly not in the digital one.

Check fraud is as old as commercial checking, though this perpetrator was not exactly Frank Abagnale Jr. in that movie, Catch Me If You Can.  In the first case, he or she tried to cheat an E-Bay seller.  The seller was savvy in the ways of commerce and the Web, and made the right decision.  In the second case, it seemed to be about getting a person to perform work of some kind and then paying for it with a bad check.  The online "employee" believed what she was told, presumably did the work, whatever it was, and was cheated out of payment.  I would guess that she is a new user of the Web, who still believes - in the words of a friend of mine - that if it's on the Internet, it must be true.  Or at least, she used to believe it.

There's no question that the anonymity of the Web makes things a bit easier for the bad guys.  The ability to approach millions of potential victims a day by email does extend their reach.  But the virtual world plays essentially by the same rules as the physical world.   The solution to online fraud isn't better software.  It's better "wetware," that term for the human beings who use the software.

The work of digital inclusion - helping those who are outside the digital economy to join it - usually focuses on providing technology, making it affordable and training people to use it.  But it also needs to focus on using it sensibly, with realistic expectations.  So to all new users out there: the good news is that the broadband Web can open great vistas of knowledge, opportunity and connection to others.  The bad news is that on the other end of the circuit are the same old human beings you deal with every day.  So the next time your email lights up with a promise that you can Make Good Money Working From Home Just a Few Hours a Week!, it will pay you to consider the motives of the person on the other end of the line. 

"The core lesson of these events is that the Iranian regime is fragile at the core. Like all autocratic regimes, it has become rigid, paranoid, insular, insecure, impulsive, clumsy and illegitimate. The people running the regime know it, which is why the Revolutionary Guard is seeking to consolidate power into a small, rigid, insulated circle. The Iranians on the streets know it. The world knows it."

Those words were written by New York Times columnist David Brooks in a June 19 editorial.  For me, Brooks' words immediately resonated with another bit of news from a June 17 news story on National Public Radio's Morning Edition.

That story by Laura Siddell reported on how Iranians protesting the recent presidential vote are using Web tools including Facebook and Twitter to send the story of their protests, and the government's reaction, around the world.  It is a game of cat-and-mouse.  Iran links to the Internet through a central, controlled gateway, which theoretically gives the government the power to block Web sites and filter traffic.  But with the help of "hacktivists" from around the world, protesters have found ingenious ways around the best efforts of censors.

Siddell interviewed a software engineer in Oklahoma who turned his computer into a proxy server for Iranians seeking to reach blocked sites.  They go to the proxy, which offers them unrestricted access to the Web.  This worked until the Iranian authorities caught on and blocked his computer's Internet address.  But he is only one of many hactivitists working together, and a colleague soon brought up another proxy server.  It will work until the authorities discover it and block its address.  And on it goes.  News of the proxy addresses passes by word of mouth among the computer literate in Iran.  So do the addresses of the growing number of sites that can broadcast Twitter "tweets" in addition to Twitter.com.    

The software engineer, Anthony Papillon, said, "The ordinary everyday person, when he sees this work, is going to be a much bigger threat to oppressive governments, and I think we're going to start seeing a lot more citizen activism and a lot of change very quickly."   

I like his optimism, but I don't expect broadband to beat bullets any time soon.  What's going on in Iran, however, dramatizes a central truth about the Broadband Economy we live in.  Governments are powerful, but knowledge is a mighty power as well, and the broadband Web has multiplied that power a thousand-fold.   

I think there's a lesson for community leaders, too.  I am sure your community contains people like Iran's Web-savvy protesters.  They are already using the tools of the broadband Web - from social networks to mash-ups to digital mapping - in ways that could benefit the whole community.  On the other hand, they may be using the same tools to spread misinformation, to sow doubt and promote fear and hate.  Which is it?  Or is it both?  If you don't know - if you are ignoring your community's "online life" - you are not only missing out on a home-grown resource, you may be storing up trouble for the future as well.

At a recent global biotech convention in Atlanta, Georgia, 27 US states each paid as much as $100,000 for a place on the exhibition floor, just for the chance to promote themselves as prime locations for biotech companies.  They did this because, across the US, communities have been pouring public money into developing biotech parks.  In an article in the June 11 issue of The New York Times ("Despite the Odds, Cities Race to Bet on Biotech"), Shaila Dewan reported that Palm Beach County in Florida used $510 million to attract a research institute employing 545 people, in hopes that it will become the center of a cluster employing tens of thousands.  In Kannapolis, North Carolina, a real estate developer talked the state and city into investing nearly $200 million in rent and infrastructure at his biotech campus, which currently stands half-empty.

Don't get me wrong.  In our book Broadband Economies, I wrote that Intelligent Communities need to set ambitious goals.   To paraphrase the poet Robert Browning, their reach needs to exceed their grasp.  The big challenge for community leaders is deciding what to reach for.  That's a hard job for businesspeople with years of experience in a market.  For politicians, city administrators and economic development officers, it's that much harder to get it right.  

Is biotech the next gold rush?  Maybe so.  According to the OECD's 2009 statistics on biotech, US companies had $554 billion in sales in 2006, up 74% from 2004.  Biotech R&D employment rose from 985,000 in 2004 to 1.36 million in 2006, a 38% growth rate in just two years.   

But here's the thing.  According to Ms. Dewan's article, the US industry is already highly concentrated in a few major centers, including Boston, San Diego and San Francisco.  And it is still a pretty small industry.  The OECD says that the US has over 3,000 biotech companies, but only 43 of them employ more than 1,000 people, according to the consulting firm BioAbility.  In a 2007 article looking at the government's role in innovation, The Economist wrote this about the effort to jumpstart a sector by building real estate: "Typically governments pick a promising part of their country, ideally one that has a big university nearby, and provide a pot of money that is meant to kick-start entrepreneurship under the guiding hand of benevolent bureaucrats.  It has been an abysmal failure... "

I hope that the bets being placed by Palm Beach County, Kannapolis, Shreveport, New York City and the other communities in Ms. Dewan's article pay off handsomely.  They are dreaming big dreams and placing big bets.  But if I were in their shoes, I might be looking for ways to diversify.  I would be preparing to adapt to changing times.  There are some human activities that make perfect sense when a few people do them, which make no sense at all when everybody does them.  Subprime lending comes to mind.  Ten years ago it was investing in dot-com companies that had never earned a penny of revenue.  Generally speaking, when everybody has the same business plan, it may be time to get out of the business.  

Mayors, city managers and Councils deal every day with a natural tension between the mandarins and the mavens.

"Mandarins" were the bureaucrats of Imperial China.  They made it possible for the Emperor to exercise central control over that vast land.  They also lent their name to what is today China's official language.  The word "maven" comes to us from Hebrew via Yiddish. It describes a person with knowledge who seeks to pass it on to others.  If there's a "go to" guy or gal you rely on for help, that person is a maven.

When it comes to managing a community, the mandarins view it as a system, often a hellishly complex one, but still a mechanism of interconnected parts, each influencing the others.  With this systems view, they want to identify where the gears mesh and where they don't.  They seek to rationalize the use of resources and develop intricate plans with scenarios and rules for responding to them.  They tend to like city management systems and e-government, one-stop call centers and inter-agency consultation.

Mavens, on the other hand, see the community as a collection of people, often hellishly complex in their individual needs and aims, virtues and vices.  With this individualist view, they are skeptical of grand plans and the human capacity to create anything really rational.  They tend to believe in teaching, in empowering individuals to create change for themselves, and in working with the mess you have instead of designing something exquisite that is only destined to turn into a bigger mess.

As the leaders of our Top Seven Intelligent Communities can tell you, putting all your weight on either end of this seesaw is a recipe for failure.  Some aspects of community leadership benefit from heavy analysis, planning and central execution.  It's tough to build and manage a broadband network, for instance, by letting a thousand flowers bloom.  But other challenges respond best to the human touch.  It is pretty clear that reducing digital exclusion or increasing innovation are less about systems than about changing what goes on between people's ears.  When faced with a new challenge, I like to think first about who should be in charge of meeting it.  Is a problem for the mandarins or one for the mavens?  The answer to that question determines how you attack the challenge.

I began thinking about this while editing ICF's next book.  It's called Future Cities and will be published in September.  Future Cities is a collection of essays by a George Washington University professor and futurist, and senior executives at two global consulting firms.  It offers a 50,000-foot-view of the city's role in innovation.  How to integrate security and safety into city life.  Design principles for the future "Internet City."  In short, it's hog heaven for the mandarins.  But if you're a maven, you may roll your eyes at these very smart people who seem to think that every problem can be solved with a bigger, better, more integrated architecture.

That's OK.  People who manage Intelligent Communities have to be good at riding the seesaw without letting either end bump on the ground.  I like to think that our first book, Broadband Communities, contains some good, in-depth analysis, but at heart it's for the mavens out there.  In September, we'll be letting the mandarins out of their box.  In the meantime, what do you think?  Are you a mandarin or a maven?  And which do you think should be in charge of meeting the most urgent challenges your community faces today?  

Americans like to think of themselves as being different from other people.  Professors have a term for it.  They call it "American exceptionalism."  It's not a new phenomenon.  It was Governor John Winthrop of the Massachusetts Bay Colony who wrote in 1630, "For we must consider that we shall be as a City upon a hill. The eyes of all people are upon us."

This national trait also expresses itself on the state and local level.  In New York City, it's an article of faith.  Rare is the New York politician who is able to say the name of the town without immediately adding, "the greatest city on earth."  I have traveled a bit, and I have not yet been to another place where they claim world civic supremacy quite so easily.

But I suffer from American exceptionalism myself.  When I hear my fellow citizens moaning helplessly about recession, global warming or some other unsolvable problem, my first reaction is "Hey, we're Americans.  We'll figure it out."

For whatever reason, goofy optimism flows through American veins, whether your family has been here for ten generations or your parents arrived a few years ago.  It is that belief in being able to figure it out that brought the little rural city of Bristol, Virginia through our awards process all the way to the Top Seven Intelligent Communities of 2009.  It was on display at our summit this month, when I interviewed the Mayor in front of the audience.  He announced that Bristol had an exciting new technology he wanted to show us right there and then.  Up jumped the IT manager for Bristol Virginia Utilities, and he and the Mayor proceeded to demonstrate two red cans connected by string. We all loved it.  We also got the point: All that little Bristol may have, compared to much bigger cities, is cans and string.  But they can still figure it out.

But there are bad things about thinking you're different.  You tend to believe that the experiences of others don't hold any lessons for you.  I'm concerned right now that the US Federal Communications Commission may be making that mistake.  On March 27, the acting Chairman of the FCC, Michael Copps, released a report on broadband strategy for rural America.  A copy is available from www.fcc.gov.  Now, I applaud the fact that the US is moving at last to create a broadband policy, and salute the Acting Chairman's efforts. The report makes preliminary recommendations including enhancing coordination among agencies, reviewing existing Federal programs to identify barriers to deployment; coordinating broadband program terminology.  (Excuse me while I gently doze off.)  But in all the bureaucrat-speak, there's one thing missing so far: taking a look at other countries - the ones that have had national broadband policies in place for years - and learning what they have done right and done wrong.

The US is playing catch-up when it comes to broadband, make no mistake about it.  But that provides a hidden advantage.  It gives America a chance to learn from the experiences of others and then leapfrog them. That's how so many developing nations have accelerated their economies in recent decades, by picking up technology and public policies painstakingly invented somewhere else and adapting them for use at home.  I can only hope that, as broadband policy continues to develop, the FCC follows their example - instead of going on doing things the good old American way.