December 2009 Archives

Ask many westerners about southwest China and they will look puzzled. They can quickly name cities along the eastern coast of China, like Shanghai, Beijing and Tianjin, but haven't a clue about cities like Chongquin, Chengdu, and Kunming. Yet these cities boast populations in the order of 32 million, 13 million and 6 million people, respectively and have most western commodities available to their impressively well dressed and market astute consumers. Salvatore Ferragamo, Rolex, Rolls Royce, BMW, Boss, Canon, IBM, HP, Microsoft, Apple are common names on the street and on the tops of buildings.

Chongquin is a city-region that boasts 56 universities, massive science and technology parks with research centers such as Haifu, investigating non-invasive technologies to deal with cancer via ultrasound; massive multimedia digital projects and broadband-based outsourcing and data centers. The urban intensity of Chongquin is every bit like Manhattan and its skyline at times can be mistaken for Hong Kong.

No one that I know back home in North America has ever heard of it. Yet, here I was on business to this incredible city and its neighbors in the southwest of China, talking about intelligent cities to civic leaders and finding great interest by everyone I spoke to about becoming one. Their voracious appetite to become part of the world stage gave me the opportunity to raise the idea of becoming an Intelligent Community with the mayors, the head of the region's foreign affairs and the heads of some of the area universities. People were clearly interested but as one of the mayors said, "we do not have the confidence to be an intelligent community."

Confidence, now there is an attribute that I had not thought about. We have criteria ranging from broadband infrastructure, knowledge work, creativity and innovation, digital inclusion and marketing and advocacy, but we never discussed confidence. Here is a city that has all the markings of an intelligent city, and they would dearly love to be considered one, but they lack confidence.

Clearly by size alone these cities should have all the attributes to become intelligent cities. Massive consumer and business acumen; major transit facilities; research and data centers with significant double-digit gigabyte broadband services; and a culture of use of advanced technologies. Cell phones abound in these parts, even among some of the poor but entrepreneurial market vendors and street hawkers. Smart notebooks sit on the tables at Starbucks and other local hotspots. No wonder, a major partnership of HP and Taiwan's Foxconn are pumping out large quantities of laptops and notebooks from the nearby industrial park.

And yet they lack confidence. Judging from the wave of enthusiasm on the streets and in the lecture halls, I am sure that that will soon change.

It is usually a bad idea to generalize about big regions of the world, and never more so than in Asia.  A much-traveled business person once told me that there is no such thing.  The region is made up of many different countries with their own unique histories, and businesses typically fail when they try to attack it as one big market.  What works in India is meaningless in Australia, and what South Koreans want could not be more different from what Indonesians desire. 

But the temptation is just too strong.  As we prepare for the announcement of the Top Seven Intelligent Communities of the Year on January 20, I am going back over the first wave of nomination forms submitted by the Smart21 Communities in October.  From a review of the five Asian communities among the Smart21, I want to risk some generalizations about the Asian Way of being an Intelligent Community.  I offer them with all due humility.  The communities are more different than alike.  What they have in common is not uniquely Asian but can be found to some degree in communities everywhere.  In the Asian Smart21 Communities, however, we find distilled a set of particular strengths, from which we all can learn.

1.  Mighty visions and massive plans.  It is common among Asian Intelligent Communities to develop ambitious visions and to back them up with meticulous planning.  Taoyuan County, Taiwan is home to the nation's biggest airport, which serves the capital, Taipei.  The county's vision is to transform that asset into an Aerotropolis, an information-driven ecosystem for trade, industry, exhibitions, tourism and entertainment.  Driving the transformation is an ICT revolution in four stages: E-Taoyuan (for e-government), M-Taoyuan (for mobile broadband services), U-Taoyuan (for ubiquitous ICT in business and life) and I-Taoyuan (which ties to President Ma's vision of making Taiwan an Intelligent Island.)
     Taoyuan is a county of 2 million people that is Taiwan's industrial heartland.  But the same emphasis on vision and planning is visible in Gold Coast City, Australia, a county-size municipality that is home to a half million residents and attracts more than 10 million tourists yearly.    Fifteen years ago, the City put into place a formal economic development strategy overseen by a Regional Economic Advisory Committee.  The plan is updated annually to align it with other community development plans, such as the Gold Coast Planning Scheme, Local Growth Management Strategy, Activity Centre Strategy and Pacific Innovation Corridor program - not to mention the Bold Future blueprint for the next three decades.  That is a lot of plans and schemes and blueprints.  By the standards of other parts of the world, it may seem like overkill.  But consistency, discipline and focus are powerful virtues, and these communities seem to have them in abundance.

2.  Large-scale public and private investment.  Asian communities tend to make big bets on physical infrastructure, from building complexes to fiber networks.  Suwon City in South Korea has its own big vision (U-Happy) and multi-step meticulous plan.  But construction has a big role: the Gwanggyo Housing Development District, which houses 150 high-tech companies; the Suwon Industrial Complexes, with 1.2 million square meters of factory lands; the Suwon Venture Center for high-tech start-ups, the Gyeonggy Regional Research Center, Content Convergence Software Research Center and Auto Part & Material Research Center.  The government leads as planner and investor, and businesses and universities pick up the rest.  Nobody appears interested in a quick profit: they are laying the foundation for decades of growth.
     In Ballarat, Victoria, Australia, the focus is on the University of Ballarat Technology Park, which is key to a plan to make the city of 90,000 an internationally recognized ICT center.  Public, private and university money have gone into infrastructure, business attraction, incubation and training.  Meanwhile, the government of Australia is rolling out an A$43 billion National Broadband Network offering up to 100 Mbps nationwide.  Vendors have lined up to profit from the wave of investment, but it is the people of communities like Ballarat that will see the greatest return in coming decades.  Putting up buildings alone does not create sustainable growth - just ask the US construction industry right now.  But properly integrated into a long-term strategy, it can have a transformative impact. 

3.  Focus on education.  The Confucian cultures of Asia are famous for their devotion to learning, and education figures prominently in the economic development strategies of Asia's Intelligent Communities.  None is more focused than the Employment Services Card system of the Tianjin Binhai New Area, home to 2 million people in Tianjin, China.  Starting at university, the card records student participation in career guidance and internships.  It qualifies students for entrepreneurship training and mentoring, business subsidies, loans, social insurance subsidies and other schemes.  The government pays 70% of the minimum wage for between 3 and 12 months after hiring and has set up a technology transfer center to connect universities and businesses.  Inter-disciplinary teams of professors and students have solved many technical problems for businesses in the New Area, from grape cultivation and winemaking to wastewater treatment in papermaking. 

All of the Asian Smart21 put education, from primary through the "last mile" to employment, at the center of their efforts.  That's not unique to Asia, any more than planning and investment.  But the seriousness with which the Asian Smart21 pursue these things is worthy of being celebrated - and imitated - around the world.

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I just finished reading a report on the future of science parks.  The title, "Future Knowledge Ecosystems," is a real snooze but the report actually has a lot to say to communities everywhere.  It presents possible futures for science parks, those custom-built clusters housing scientific and technical research organizations - and hopefully spinning out lots of start-up companies.  The authors are worried that science parks are in decline, whether they are Krista Science City in Stockholm or a three-story building in Waterloo, Ontario, Canada.  In the most dramatic of three scenarios, they paint a picture of a future in which a "research cloud" of small, cheap, nimble groups connected online becomes the favored way of doing research.  This deals a terrible blow to science parks and the universities that host them. 

Here's why the report matters.  It captures a worry that is universal.  Manufacturing hubs from Eindhoven in Holland to Northeast Ohio, USA fret about losing their competitive edge to nimble, low-cost manufacturers in Asia.  Small cities and towns from Bristol, Virginia USA to Ballarat, Australia fear that they will dry up and blow away as youth leave for greater opportunity elsewhere.  Even financial capitals from New York City to Hong Kong worry as more transactions move online, empowering smaller financial centers at their expense.

We are all worrying about the same thing: in the broadband economy, does location matter?  Of course, we know that for some things it always will.  If we are extracting raw materials from the earth, Mother Nature decides where we do it.  We will always need to transport people and things - whether raw materials, fuels, foodstuffs or goods - and communities benefit from being on the transport network or, best of all, a place where networks converge.  But as economies mature, a rising share of employment comes from selling intangible things.  In 2007, the OECD reported that that nearly three-quarters of employees in the richest 30 nations worked in services.  And in many developing nations, the export of services grew a lot faster during the last boom than did the export of goods. 

In advanced economies woven together by a broadband "cloud," location matters a lot less.  Brick-and-mortar retailers compete with e-tailers.  The owners of office buildings, not to mention jetliners and hotels, compete with telepresence.  Employers that historically needed to be in a particular city or district suddenly find that they no longer need to, because their workforce and suppliers are scattered and mobile.  I see it every day in New York's financial district, once wall-to-wall brokerages and banks, and now increasingly a mixed-use residential and business neighborhood. 

That's troubling news for communities.  If investment, jobs and trade can go anywhere, why should they come to you?  If it matter less in economic terms where people are, what will keep them at home?

I write a lot about economic forces, because I believe they color how we think, what we do and what we say in ways we seldom realize.  But we are far more than just economic actors.  Location still matters because, in our deepest core, we need it to matter.  We need to belong somewhere, in relationship with people we know and trust, in order to know who we are.  Communities will always matter because they are where we feed our spirits.  And since we are going to live in communities together, we are going to find ways to generate economic growth together. 

But I do think that "communities in the cloud" will have to rethink what makes them communities.  We like to define who we are by insisting that we are better than somebody else.  We may have our problems, but at least we're not those other guys.  You know the ones I mean: the people in the next town or next country, the ones who look different, who believe different things, who follow customs we don't understand.  We may have our problems, but we stand head and shoulders above those shady, deceitful bags of scum. 

That isn't going to cut it in the broadband economy.  The way for communities to win is use the power of broadband to invite the world in.  We need to learn to define ourselves, not by who we are not, but by who we can connect with.  I have visited many small communities that are located in "the middle of nowhere."  I believe that "the middle of nowhere" is fast becoming just a state of mind.  If your community has robust broadband and people who know how to use it, you are not in the middle of nowhere, you are in the middle of the world. 

"Future Knowledge Ecosystems: The Next Twenty Years of Technology-Led Economic Development, by Anthony Townsend, Alex Soojung-Kim Pang and Rick Weddle.  The Institute for the Future, The Research Triangle Park Foundation and the International Association of Science Parks.  Published June 2009 by the Institute for the Future (www.itif.org)