August 2009 Archives

Listen to the podcast

The future is never like the past.  Which is a darned shame, because we naturally base our vision of the future on past experience.   

The past, of course, has much to teach us.  History is not bunk, no matter what Henry Ford said.  But as the present unfolds into the future, it always charts a fresh course.  That course may be a lot like the course it has charted in similar circumstances for hundreds or thousands of years.  But the differences are always there and they do add up.

When I was my youngest daughter's age, "connectivity" meant postal mail and the telephone.  Contrast that with her summer semester in Rome this year.  Within 24 hours of her arrival, I was video-chatting with her on her boyfriend's Mac. 

It made me think of a report published by Cisco a year ago.  It was called Approaching the Zettabyte Era.  What's a zettabyte?  A byte is a unit of computer code.  It is equal to one number or letter of the alphabet.  When you look at file sizes on your computer, you usually see units of 1,000 bytes or kilobytes.   When I first started using a computer, back when they were still making them out of stone and wood, a computer file of 200 or 300 kilobytes was a big file.  Today, a big file is measured in megabytes or millions of bytes.   

A zettabyte is a million billion megabytes.  It's a really big number.  But according to Cisco, global Internet traffic will exceed half a zettabyte in the year 2012.  They should know, since they sell the technology that runs it all.  The Internet will be 75 times larger in 2012 than it was in 2002, because global IP traffic is doubling every two years.   

This will happen because the way we use the Internet is changing.  In 2008, about one quarter of consumer Internet traffic was video.  Cisco expects that to grow.  By 2012, the volume of Internet video will be 400 times what the total US Internet backbone carried in 2000.  The company expects that growth to happen in three waves.  The current YouTube-style explosion will see online video traffic grow by 600% from 2007 to 2012.  The next wave will be the delivery of Internet video to TV screens.  If you have a Tivo digital recorder, it will already let you watch YouTube video on your TV.  The third wave, beyond 2015, will be video communications: the "vidphone" that has been a staple of science fiction for decades.  Cisco is already doing it in a big way with their Telepresence system.  But I'll tell you one thing: it's going to have to be of a lot better quality than my herky-jerky video-chats with my daughter this summer. 

There are two things you can take away from this blizzard of forecasts.  First, of course, is to keep in mind that they are forecasts.  Nobody really knows how the Internet's culture of use will evolve.  For years, I've been wondering something.  When the teenagers of the first great online boom grow up and have to work for a living, will they still have the same appetite for online video, games, iTunes, social networks and all the other stuff they have pioneered?  I don't know.  I just know that, by the time you finish a day's work, make dinner and put the kids to bed, there's not that much fuel left in the engine.

The other thing to take away is that the future may actually turn out the way Cisco describes it - or at least something like it. In which case, whatever broadband assets your community has are going to become old-fashioned really fast.  Whatever training you are offering to students and adults needs to adapt and grow.  We will be living increasingly digital lives - which increases the odds that vital parts of your community will be left out, damaging your culture and limiting opportunities for growth.  And the innovators in your community, who have to deal with all this change?  They are going to have to run all the harder to keep up.

Anyway, that's how it seems to me, based on past experience.  But then, we know one thing about the past.  The future is never quite like it. 

At ICF, we really have just one mission.   We want to help communities to become or to remain places where the next generation finds enough economic opportunity to stay and make a life there, if that's what they want.  If your community's biggest export is its youngest and most talented citizens, you are in a world of hurt.  And everything else that makes the life of your community meaningful - its history, culture and ways of life - will ultimately fade and fail.

For some Intelligent Communities, particularly ones with a troubled past, the question is not just how to keep the kids at home but how to bring back the ones who left.  There can be a positive side to losing your kids to the big bright world outside.  If they return, they may bring valuable skills and experience with them.  The well-known OneCommunity broadband network in Cleveland, Ohio exists because some talented people who grew up there decided to return to their roots and do something good for the community. 

On July 3, I wrote about the Return to Roots campaign (www.returntoroots.org) in Southwest Virginia, USA.  It reaches out to people who left the region and tries to lure them back.  Using money from the Virginia Tobacco Commission, RTR is basically a career center that connects people to local job openings in a place they would still like to call home. 

I recently wrote to RTR director Carl Mitchell to ask what kind of results the program had produced.  He was kind enough to send me their latest report.  To boil it down to its most basic, the program placed 9 people from outside the region into jobs in the region in the first six months of 2009.  Their salaries were worth an estimated US$446,000 per year.

Inspiring results?  Not at first glance.  But I changed my mind when I went through the wealth of information in Mr. Mitchell's report (click here for a copy in PDF format).  The RTR Web site has registered 2,900 potential job-seekers.  They have submitted more than 1,200 job applications for 420 jobs posted to the site by 632 employers.  In the six months since January, 168 job-seekers applied for 218 jobs.  Employers reviewed the resumes of 96 of them in order to hire the 9 people - but 27 others are still waiting for a hiring decision. 

When did anybody say it was easy to find a job?  In this economy?  More important than these numbers is the fact that, in the past 3 years, the RTR site has been visited by 76,000 people, of whom 10,000 have returned at least once to learn more.  Mr. Mitchell wants us to measure the success of Return to Roots in terms of awareness of the program, usage of the Web site by employers and job-seekers, and interest in Southwest Virginia.  I think those are the right measures.

After all, there's no hard economic value to bringing the kids back home.  In pure dollars-and-cents terms, it doesn't matter to the region if it attracts outsiders or former natives to job opportunities.  But it matters a lot to the history, culture and ways of life of the region.  Those are the things that make life meaningful in Southwest Virginia, and in your community, too. 

As part of my series of blogs over the past few months, I have focused on what I believe are 12 key steps or considerations that we need to be aware of in creating successful intelligent communities around the world. The first four steps are creating a high quality INFRASTRUCTURE; exceptional EDUCATION creating, attracting talent and sustaining skilled knowledge workers; attracting and nurturing INNOVATION and CREATIVITY, nurturing superior and inspiring LEADERSHIP; and today I would like to add the notion of achieving excellence in GOVERANCE in intelligent communities.

I believe that demonstrating excellence in governance is extremely important in order to attract investors, especially foreign investors, and in creating a superb climate in one's community that attracts talent and nurtures innovation and creativity. I am not alone in this as other international authors have recognized the importance of the differences in political and institutional factors among countries (and even cities and regions) as determinants in the flow of "foreign direct investment" and in creating their overall investment environment. Recent empirical evidence suggests that differences in growth and productivity among various countries are related to differences in political, institutional and legal environments or what these authors have referred to as "governance infrastructure." The beneficial conditions for investment and economic growth are a result of a favorable governance infrastructure affecting both domestic and foreign investors, and as a result, foreign direct investment is attracted to those countries, regions and cities that exemplify a more favorable governance infrastructure. The link between foreign direct investment and a country's governance infrastructure has a direct relevance to that country's political stability and the effect that safe and secure governance provides.

Studies have demonstrated that inward foreign direct investment can contribute to improved quality of life, innovation and productivity. As a result competition to attract foreign direct investment has heated up in recent years among countries around the world. Researchers indicate that this is partly due to a large number of developing and emerging market economies, previously closed to competition, opening up their borders to market-friendly opportunities and successfully generating billions of dollars annually. This is significant because these countries represent the majority of the world's population, including BRIC nations (Brazil, Russia/Eastern Europe, India, and China), leveraging their competitive strengths, especially through labour and administrative arbitrage to attract FDI. We are all familiar with India and the impacts of global sourcing to attract FDI, which has completely changed the way in which India sees itself in the world and how we all view India moving forward. Other international regions are readying themselves to compete as effectively as well and are shoring up their governance infrastructure. In fact, the shifts in India that took place are truly remarkable and speak to the importance of both globalization and the important role of excellence in governance infrastructure in making this happen.

At the local level, community governance infrastructure, represented for example in the form of policies, official plans and bylaws of a community, reflect its attitude in providing for its citizens and in its interest in welcoming investments of all kinds, including foreign direct investment. It also reflects the community's ability to leverage and promote its governance infrastructure in creating a positive local environment that "nurtures" investment attraction as well as stimulating investment development and innovation. In turn these strategies, policies and official plans translate into focusing on implementation: building infrastructure, such as roads, transit, and more recently strategically developed broadband and broadband related infrastructure for businesses, research centers, education and homes. Of course, these include many other governance considerations such as strategic policies that involve land-use, environmental, and even marketing and branding considerations, all of which are designed to help create a high quality of life in a community and in economic development terms, establish directions that provide investors a sense of security and confidence in the community.

About two decades ago, OEDC governments around the world shifted their reliance on market deregulation and liberalization, further spurring competition in attracting FDI among countries in North America and Europe. As a direct result, it created the climate for the creation of economic development and international marketing organizations that now regularly compete and promote their regions in order to attract foreign direct investment, capital and talent to their areas. These innovative organizations exist largely due to the stability and confidence that local communities enjoy through stable and effective governance. Hundreds of similar organizations exist around the world today, competing against one another and attempt to differentiate themselves through incentives, promotional literature and provocative images and events. Many compete through branding and unique messaging to promote and differentiate their communities, such as securing the recognition as an Intelligent Community. ICF is proud to be a part of this economic development and marketing chain.

You have no doubt heard the real estate mantra: Location, Location, Location! I would like to add another mantra for successful communities: Leadership, Leadership, Leadership! In my various experiences with cities that I have become familiar with around the world, effective leadership is a major factor in differentiating one community from another. Sometimes it comes through a local political leader; at other times it can be through business leaders or a university president. In my blogs over the past several months, I have begun to lay out 12 steps to creating successful communities. The first three steps are creating a high quality INFRASTRUCTURE; exceptional EDUCATION creating, attracting and sustaining skilled knowledge workers; and attracting and nurturing INNOVATION and CREATIVITY. The fourth step is nurturing superior and inspiring LEADERSHIP.

But what is leadership? I think leadership is about a person or a group's ability to influence the thoughts and attitudes of others; leadership also helps to shape behaviors of others in a positive and demonstrable fashion. It includes leading by example and demands of that leader the need for clarity to help set a direction for others to follow. Leaders set the tone, help to visualize what can be if we all work together and encourage and inspire us to reach for the next level in all things we do.

A leader helps to clear a path for things to be able to be implemented. As business guru Peter Drucker points out: "leadership is defined by results not attributes."  Sometimes it's as simple (actually not so simple!) as pointing everyone in the same direction to meet a common objective; at other times it is being patient and persistent by nurturing a better understanding of the way it could and should work. Leaders get people to agree to do something significantly different from what they would normally do and by doing so, energize them toward achieving that goal. A community should be thankful if it has even one of these kinds of leadership traits present within it. In the case of intelligent communities, there are an abundance of incredible leaders in business, government and institutions that support it by doing the right things.

At this year's ICF Intelligent Community awards, several leaders were honoured, most notably during ICF's Founders Awards. These awards are presented to leaders and their organizations that are transforming life in the Broadband Economy for the common good and especially to those leaders who are able to influence others to do "the right thing." Among the winners this year was Dave Carter, Head of Manchester's Digital Development Agency in Manchester, UK, recognized for developing linkages between the city government and its university sector, focusing economic development on the city's arts and entertainment sector, and preparing Manchester to prosper from the commercialization of the Internet. Manchester today boasts a diverse and vibrant economy with employment growth in finance and professional services, creative and new media industries, and digital communications.
 
Another leader that knew what needed to get done is Andrew Spano, County Executive of Westchester County, the county north of New York City with a population of nearly one million residents. Mr. Spano made Westchester's broadband and telecommunications strategy the foundation for continued innovation, growth and access.  According to ICF, when carriers refused to introduce broadband beyond the profitable business corridor, the county government, under Mr. Spano worked with 43 independent local governments as well as library systems, schools and hospitals to aggregate demand in order to finance construction of a fiber network. That network today serves 3,500 businesses; saves significant costs for government and public-service agencies, and has been instrumental in the attraction of substantial new investment, improved educational achievement, job creation and an enhanced quality of life. Clearly Mr. Spano did the right thing!

Under Taiwan's youngest governor, Dr. Eric Li Luan Chu, his strategy for becoming a model community for the 21st Century and driving the quality of life and creating a sustainable culture of use included transforming into an electronic, mobile and ubiquitous technology-usage community. For example, Taoyuan's "U-Aerotropolis" project is a broad and comprehensively planned integration of digital infrastructure and support services for an expanding aviation business cluster. But just as dramatic is Taoyuan's aggressive development of 20,000 businesses in the past 6 years where 23 industrial parks generate innovation and prosperity within the context of a local "broadband economy."  ICF particularly commended Taoyuan's public administration and Governor Chu for doing the right thing and deciding to continue to invest significantly in infrastructure and services despite the global economic slowdown. 

The concept of leadership for many is often confused with management and authority. I suggest that true leadership is very different from these and is proactive, inspires and encourages partnership and collaboration. These three leaders exemplify what Drucker so eloquently points out, "management is doing things right; leadership is doing the right things."

America is full of people with quaint ideas.  The current effort to reform the health care market is turning up stories like one from New York Times columnist and economist Paul Krugman, who wrote on August 7 about "a telling incident at a town hall held by Representative Gene Green," a Democratic Congressman from the state of Texas.  An activist at the meeting, according to Krugman, "turned to his fellow attendees and asked if they 'oppose any form of socialized or government-run health care.'  Nearly all did. Then Representative Green asked how many of those present were on Medicare. Almost half raised their hands."  Apparently they were unaware that Medicare - the social service scheme for the elderly - is a program whose rules, management and financing come from that enemy of liberty known as the government of the United States. 

Another quaint idea held by Americans is that the United States Postal Service should pay for itself.  (We think the same thing about passenger railroads, which is why we don't really have any, but that's a topic for another day.)  The pay-your-own-way fantasy about mail dates to the Nixon Administration and has resulted in yearly hand-wringing in Congress as the Postal Service comes hat-in-hand for continued subsidies.  But here in 2009, things are getting really serious.  The Postal Service is asking Congress for permission to end Saturday deliveries.  By shifting to five-day-a-week service, the USPS expects to save billions.  Opposition is strong, however, among members of Congress who know they will hear from angry constituents about this attack on their Constitutional right to receive mail on Saturday. 

The Postal Service is in financial trouble for the most basic of reasons.  We are sending less mail.  A lot less.   The USPS saw a drop of 9 billion pieces of mail in 2008 and expects to deliver 27 billion fewer pieces in 2009.   From its 2006 peak of 213 billion pieces of mail, the USPS projects that it will deliver 170 billion in 2010, a net decline of 43 billion pieces in five years. 

Why the decline?  In a word, "online."  The use of email, instant messaging, social networks, online collaboration tools and tweets has become so widespread that the mails are carrying little but catalogs, direct mail advertising, bills and greeting cards.  And therein lies a silver lining.  A 2009 report from Pitney Bowes, manufacturer of mail processing systems, estimates that delivering one piece of first-class mail - a letter - generates 20 grams of carbon dioxide.  Let's make a generous assumption: that every piece of mail the Postal Service delivers weighs no more than a letter.  On that basis, the 43-billion-piece decline will reduce the national carbon footprint by a yearly amount rising to 860,000 tons in 2010.   

That online communication has a carbon footprint of its own.  I'm working on finding a meaningful estimate for a future white paper.  But it seems likely to be less than moving a letter across town or across a continent.  So keep on sending those emails and tweets, friends.  A 2008 report from the American Council for an Energy-Efficient Economy found that is now takes less than half the energy it took in 1970 to generate a dollar of economic output.  And as the broadband economy takes hold, we're getting better at it.  While the "energy intensity" of the US economy declined 1.8% per year on average from 1970 to 1995, it dropped an average of 2.4% per year from 1996 through 2006.  Apparently, the broadband economy can do more than generate prosperity.  It can help in fight against climate change as well.

What does a plugged-in person do for rest and relaxation?

The question occurs to me as I drive north with my wife on vacation.  She and her family have been "summer people" on the coast of Maine for generations, and this is my fourth decade of going yearly to the same little village near Acadia National Park.  It combines the exotic pleasures of vacationing in a beautiful spot with the familiar pleasures of being at home.

Three years ago at this summer retreat, we had access to the Internet at only dial-up speeds.  To get a signal on your mobile phone, you went outside and found a place with reasonable line-of-sight to a tower six miles across the bay.  Now there's broadband at the village library, the local bed-and-breakfast and in the cabin where we stay.  There's a new cell tower somewhere nearby and signal strength is excellent.  Laptops are everywhere and people use their mobile phones in all the little ways they do at home: to coordinate and rendezvous, check what's for dinner and find out if they need more milk from the store. 

Before leaving, I had a conversation with a woman who marveled that I was taking a whole two weeks off.  (I can hear my friends in continental Europe chuckling.)  She said that she never took more than a week off at a time.  "The river runs so fast," she said in a brief flight of poetic fancy, "you just can't get out of it and sit on the bank.  You have to dabble your feet in the stream."

And I will be dabbling: checking email, writing for this blog, posting to social networks, editing our next book.  I will be living the broadband life.  The usual complaint about the broadband life is that work invades leisure and family time.  We are always plugged in, rarely focused on the here-and-now, never entirely at our ease.  All true - but perhaps not the whole story.  In the last chapter of our book Broadband Economies, I wrote about the fact that we see the negative impacts of the web more clearly than the positive impacts.  Whether it is cyberstalking or compulsive online shopping, it is behavior we recognize.  But we fail to recognize the many positive impacts on our lives, because we do not yet know what to look for.

I suspect the same is true on holiday.  If you are over the age of 30, you did not grow up with these technologies.  You don't have the knack for integrating broadband and IT into a special time set aside for rest, reflection and recharging your sense of wonder.  There are good things about it as well as bad.  The trick is figure out how to maximize the good and minimize the bad.  As a seriously plugged-in person over the age of 30, I will see if I can do it - and I'll let you know how it goes.