Intelligent Communities

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.

I have an abiding interest in a question that is on the mind of every parent able to afford today's marvels of networking, the mobile phone and personal computer.  What impact is all of the Facebooking, Twittering, texting and now Formspringing having on the development of the next generation?  (More on Formspring in a moment.)  In the last chapter of our book, Broadband Economies, I wrote about the tide of research in the Nineties on the psychological impact of Internet use.  "If we take this research at face value," I wrote, "the conclusion is clear.  The Web is a destroyer of social capital.  Power it up with broadband, and you have the makings of a virtual plague laying waste your community."  Really?  I get impatient with claims that the moral universe is shredding because the kids do things differently than we did.  Human has been making this claim for about 10,000 years, and the moral universe appears to be holding its own.  All change brings negatives and positives.  Our current situation has negatives and positives - something we tend to forget in the face of change. When change does come, we usually focus on the negatives because we recognize them.  Our kids are head down with the smartphone, texting away and ignoring the world.  Obviously, a bad thing.  They are permanently plugged into video games or Facebook pages.  Clearly a waste of time and bringer of bad influences.  We don't see the positives because, in most cases, we don't have a mental framework for understanding them. Three recent articles in The New York Times point to new research and our ongoing lack of real knowledge about the human-machine interface as it affects young people.  On May 5th, Tamar Lewin wrote about a new social networking site, Formspring.me.  ("Teenage Insults, Scrawled on Web, Not on Walls.")  Think of it as an anonymous Facebook.  Or as Lewin puts it, "It is the online version of the bathroom wall in school, the place to scrawl raw, anonymous gossip."  Kids register, then link it to their Facebook or Twitter account.  Anyone visiting their page can post anonymous comments and questions.  "Comments and questions go into a private mailbox, where the user can ignore, delete or answer them. Only the answered ones are posted publicly -- leading parents and guidance counselors to wonder why so many young people make public so many nasty comments about their looks, friends and sexual habits."  Lewin interviewed Christine Ruth, a middle school counselor in Lindwood, New Jersey.  "I'd never heard of Formspring until yesterday, but when I started asking kids, every seventh and eighth grader I asked said they used it.  In seventh grade, especially, it's a lot of 'Everyone knows you're a slut,' or 'You're ugly.' It seems like even when it's inappropriate and vicious, the kids want the attention, so they post it. And who knows what they're getting that's so devastating that they don't post it?"  Okay, raise your hand if you think that's bad.  Me, too.  A May 2nd article by Hilary Stout cited research from the Pew Research Center, which ICF is presenting with a Founders Award on May 21.  ("Antisocial Networking?"  It found that half of American teenagers send 50 or more text messages a day, while one-third send more than 100 a day.  Fifty-four percent said they text their friends once a day but only 33% said they talk to their friends face-to-face on a daily basis.  According to the Kaiser Family Foundation, Americans between the ages of 8 and 18 spend an average of 7.5 hours daily using some sort of electronic device.  What does it all mean?  Is the ease of electronic communication making young people less interested in face-to-face communication with their friends?  Psychologists are worried, because close childhood relationships help lay the groundwork for healthy adult relationships.  (Heck, I have wanted to throw away my wife's BlackBerry more than once in the past couple of months, and we've been married for three decades.)  One neuroscientist, Gary Small, came up with a term for these kids who have grown up using computers and mobile phones: "digital natives."  He argues that the new natives of the 21st Century are great with technology but weak on face-to-face human contact.   One parent quoted in the article, Beth Cafferty, who is also a teacher, disagreed.  She said that the hundreds of texts her 15-year-old daughter sends each day are good.  "I actually think they're closer because they're more in contact with each other - anything that comes to my mind, I'm going to text you right away."  We just don't know.  The other thing we always forget about change: it is a learning process.  Writing in today's Times, Laura Holson reported on the coming-of-age of 21-year-old Min Liu, who has suddenly realized that stuff posted on her Facebook page could be seen by people from whom she hopes to get a job.  ("Tell-All Generation Learns to Keep Things Offline.")  She is busy removing photos and posts and asking her friends to do the same.  More than half of young adults surveyed by the University of Berkley in April said that they were more concerned about online privacy than they were five years ago.  As they come to grips with the positives and negatives of their digital identities, young people are adapting.  They are carefully controlling who sees what, and feeling every more mistrustful of the Facebooks of the world, whose carelessness with their private information keeps making headlines.  Even Formspring may find its moment in the spotlight to be short-lived.  A 14-year-old interviewed by the Times' Lewin reported ""We all got Formspring about two months ago, when it began showing in people's Facebook status.  It's actually gone down a little bit in the past few weeks, at least in my grade, because a lot of people realized it wasn't a good thing, that people were getting hurt, or posting awful comments."  The young, massive online audience can make you a star in minutes but they can also relegate you to the rubbish heap just as fast. I have an abiding interest in this topic because the answers really matter.  I instinctively believe that the culture of use being forged by today's digital natives will be a net positive once we integrate it properly into our lives.  But gut feel is not the same as knowledge.  I am an immigrant in the digital nation, not a native.  You probably are, too.  We both have to keep in mind just how little we really know.  Photo credit: John Shumaker, 17, on Facebook at his home in Lafayette, Calif. Peter DaSilva for The New York Times

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You can actually feel the difference between an emerging economy and a mature one.  I recall it from trips to Malaysia and India.  When you visit a place where the economy is growing like mad, there is electricity in the air.  It's the energy of hope.  People might not have any more idea where they're going than I do, but they know they're going somewhere and that it's going to be big.  In large, mature economies, on the other hand, the highs and lows are muted.  There's a lot more to lose and less faith in what there is to be gained.  Like big ships at sea, they take a long time to get up to speed and a long time to turn in a new direction. 

I have not had the privilege of visiting Suwon, South Korea - that opportunity went to my colleague John Jung - but I bet I know what it feels like.  I have just finished writing their Top Seven Intelligent Community profile on our Web site, and I recognize the attitude.  It says "let's get it done."  The 1997 Asian economic crisis made Mayor Yong Seo Kim and his leadership team lose faith in a future that depended on South Korea's enormous chaebol companies.  So, they set about building an economy whose growth would be based on small-to-midsize enterprises (SMEs) specializing in IT, biotech and nanotechnology. 

And they got it done.  Fast forward a few years, and Suwon was home to three new industrial complexes and nine multi-tenant technology buildings.  The new Kwangkyo Techno Valley campus is now full of research institutes set up by business, universities and government working hand in hand.   

South Korea already has one of the finest broadband infrastructures in the world, but Mayor Kim and his team wanted ICT to be ubiquitous in Suwon.  They got it done.  A lot of investment later, the U-Happy Master Plan had created a 1 Gbps e-government network.  They integrated systems for taxation, real estate, public health and safety, transportation and city administration, and put them online.  An e-services gateway handled 600,000 transactions last year from 10 million unique visitors. 

In its nomination for the Top Seven, Suwon wrote that "Investment in education is one of the most sound and rational outlays of capital that a government can make."  Between 2002 and 2009, the city backed up that proposition by investing more than US$360m in upgrading school facilities, opening new schools and expanding staff. 

Globalization is much on their minds.  So they opened the Happy Suwon English Village in 2006 to offer intensive learning in the global language of business to 7,000 elementary school students per year.  A new Suwon Village of Foreign Languages, which opens this year, will offer the same environment for Chinese and Japanese.  In 2007, Suwon established the Gyeonggi Suwon Foreign School.  It aims to make the city a premier destination for expatriates with families working for Korean multinationals.  And with all of this focus on languages, they are not exactly ignoring technology.  The city holds an annual Suwon Invention Competition for students and sends contestants to the World Innovation Olympiad every year.  Since 2004, Suwon has organized an annual Information & Science Festival, which attracts 60,000 paid registrants to a National e-Sports Competition, National Intelligent Robot Competition, Professional Gamers Exhibition and much more. 

It's not as though the global recession missed South Korea.  Well, okay, technically speaking, growth never quite turned negative, because the government poured in fiscal stimulus.  But from November 2008 through March 2009, exports slumped every month by double-digit amounts.  When your economy has been growing 7-10% for years, that feels like a recession.   The difference is attitude.  While government and business in Europe and North America have been obsessed with how much and how fast to cut, Suwon has been thinking about how to win the next round of the economic game.  They may not know exactly where they are going, but they know they are going somewhere, and it's going to be big.

Until the US financial industry imploded in 2009, columnists like the New York Times' Tom Friedman wrote despairing editorials about America's best young minds, who were graduating from university and going to work for hedge funds and brokerages.  There, they were put to work developing those exotic financial instruments that, we now know, turned out to be so much toxic junk.  It's a challenge for industrialized nations to interest their young people in science, technology, engineering and math or STEM.  Not so in the racing economies of China, South Korea, India, Brazil and other emerging economic powers.  There, it is clear to everyone where the future lies: in making things and delivering services that require extreme technology skills. 

So, how does a community in an industrialized nation interest its youth in STEM and route them into careers in companies clamoring for their talents?  For a compelling example, see our profile of Ottawa, Ontario, Canada, one of our Top Seven Intelligent Communities of 2010.  (A quick log-in is required.)  Ottawa is Canada's capital.  So naturally, you would expect the most highly valued skills there to be lawyering and navigating bureaucracy.  But Ottawa is determined to be recognized less for governing and more for innovating in the technologies of the 21st Century.   

Recent history makes that challenging.  When the 2001-02 telecom recession hit, it decimated Ottawa's communications sector, which includes Nortel, Newbridge Networks, Cognos and Mitel.  Today, Nortel is in bankruptcy, having been unable to withstand the competition from such Chinese innovators as Huawei and ZTE.  As telecom moved from regional darling to regional dog, enrollment in secondary school science and math programs plummeted.  That soon translated into lower science and engineering enrollment at the university level.  The tech sector recovered but interest in science and engineering education did not.

By 2008, Ottawa's economic development organization, OCRI, its universities and its entrepreneurs were doing something about it.  New programs included a Specialist High Skills Major for grades 11 and 12 that focused on ICT, and a High School Technology Program that sent students into companies to create software projects.  Universities joined in with courses in entrepreneurship and e-business, graduate programs in computer modeling and game animation, new schools of media & design and a bachelor of engineering in sustainable energy. 

The community has also focused on the "last mile" between the end of education and the start of employment. It's the golden moment when the most talented students face a choice of where to start their careers.  TalentBridge is a program that provides entrepreneurially-inclined university students with part-time jobs at local technology companies, paid by local government, where they work under experienced mentors.  The companies get the benefit of fresh thinking and new energy, while students gain business experience and often make the move into full-time positions with the companies.

Ottawa serial entrepreneur Terry Matthews has created the Wesley Clover Affiliate Program, which identifies the brightest and most motivated new graduates, puts them through a "boot camp" training program for 9-12 months, and then pairs them with industry leaders in specific sectors.  The aim is to introduce a new product into the market within 12 months.  That's a smart move for an investor like Matthews, and a great contribution to Ottawa's future. 

I'm glad that serious thinkers publicly worry about young people who would rather get an MBA than a computer science or engineering degree.  In our Facts & Figures Library, there is an interesting opinion piece by columnist Ralph Gomery called "The Innovation Delusion."  He believes that Americans - including Tom Friedman - are fooling themselves if they think they can have a vibrant tech sector in this country but let the manufacturing happen somewhere else.  Whether he's right or wrong, it's an important discussion to have.  But it is not the thinkers who impress me most.  It is the doers - the Intelligent Communities like Ottawa that don't just shake their heads about the future, but roll up their sleeves and get to work creating a better one.