In 2004, I visited Taiwan as the guest of Ma Ying-jeou, then Mayor of Taipei and now President. At a trade fair there, I was shown a new kind of laptop – one with a touch-sensitive screen and stylus, but no keyboard. The size of a briefcase, it weighed about 6 pounds. After trying it out, I told them that “If you can get this down to the size and weight of a magazine, you will have the killer product of all time.”
Well, Steve Jobs at Apple got there first with the iPad. Or did he? In 2013, Apple revealed that, of the 17 factories where its products are assembled and packaged, all but one is owned by a Taiwanese company. That’s no accident. In 1973, the national government created the Industrial Technology Research Institute (ITRI) to nurture the high-tech industry, using patents licensed from US companies. The Economist called it “a rare example of successful industrial policy.”
Forty years later, one of the beneficiaries is Taichung, the 2013 Intelligent Community of the Year. But Taichung is not just on the receiving end of smart policy; it has been an energetic participant that built high-quality schools and industrial parks making just about every kind of technology we have a use for – then getting them to work together for the benefit of Taichung.
Its universities and technical schools have launched hundreds of research institutes and more than a dozen incubation centers. A Taichung Incubators Business Alliance nurtures the growth of more than 400 companies that are successful graduates.
In the past 10 years, just one of its industrial zones, the Central Taiwan Science Park, has attracted companies with combined revenues exceeding US$8.1 billion from solar energy technology, touch-panel displays, optoelectronics, precision chemicals, semiconductors, aerospace and ICT.
One of them is Taiwan Semiconductor Manufacturing Company, a chip foundry that was spun out of ITRI in 1987. With global revenues of US$17.3 billion in 2012, it one of the world’s leading silicon chip makers. The company has made massive investments in foundries in Taichung, including a US$10 billion factory in the Central Taiwan Science Park, which employs 8,000 workers.
But the story is not all about tech giants. A city-led initiative created a shared-use ERP platform called the Engineering Data Bank. More than 400 of the city’s small precision manufacturers use it to enhance their engineering and operations. The reduction in rework, errors and delays is now saving these smaller companies a combined total of US$29 million per year.
Serving all these industries, Taichung Harbor has massive container truck traffic in and out of the port, which requires secure handling and verification. Until 2011, that meant unloading and physically checking cargo, creating a bottleneck that hurt the port’s competitiveness. In 2011, Taichung Harbor launched an automatic gate checkpoint system that electronically reads and matches the truck drivers’ identification, license plate numbers and container numbers using RFID technology. The entire process takes 2-3 minutes and has proven almost 99% accurate. The savings in time and money for users are enormous.
What do all of these different activities have in common? They are what people do when they believe in a better future. They combine the resources of business, government and institutions to place big bets that tomorrow will be better than today.
In the 21st Century, the infrastructure of most rich nations is slowly eroding for lack of appetite to place those bets. In 2009, the American Society of Civil Engineers (ASCE) estimated that the nation needed to spend at least $2.2 trillion over the next five years to repair its infrastructure. So, five years later, how was the nation doing? The 2013 ASCE report card foresaw the need to spend $3.6 trillion by 2020 – $1.6 trillion more than was currently budgeted.
Even Germany, that exemplar of efficiency, has skimped on maintenance. A government-appointed commission concluded in 2013 that the country needs to spend $9.2 billion every year for the next 15 years to get existing infrastructure back into shape.
When we believe that the future holds more potential for gain than loss, we invest in our future and that of our children. When we believe the opposite, we invest only in today’s rewards. There is a question that those of us in the rich world should be asking ourselves – a question I do not, unfortunately, hear in public debates but one with profound implications for ourselves, our communities and our nations. The question is: what kind of future do we truly believe in?
Wednesday, November 20, 2013
Via Dandolo #10
At night and for years homeless men have taken sanctuary and shelter along the perimeter of the Church of St. Vincent Ferrer and its Priory on the Upper East Side of Manhattan. The young Dominican friars who run the parish were able to manage the situation so long as the numbers remained reasonable and morning debris was minimal. No doubt to the puzzlement of tourists who daily visit the historic site, and neighbors who live in its shadow, the pastor had always pointed out that sheltering this group was part of the “ancient practice of sanctuary and should be honored.” However as 2013 rolled forward and the recession continued its ceaseless persecution of the long-term unemployed, numbers swelled and troubles began. The outside electrical and water outlets of the church were persistently tapped by a new group of men (the women have a shelter nearby); the rambling garden inside the courtyard, tended to by the community and students of the high school, was trampled and, because this is New York, the potential for liability screamed like a siren. With profound reluctance, the parish put up “No Trespassing” signs and gave its brethren on the street gentle notice. To date these guys – several of whom I know, since this is my parish - have heeded the signs. This is a truce that will last. Several of them attend regular church services and, yes, put money in the collection basket every Sunday. They feel part of the community and understand.
As a member of the church’s Parish Council, I was conflicted by the decision and became intrigued by possible community-based solutions. While none are perfect, including a technology solution tied to “digital inclusion,” a best practice half-way around the world recently caught my attention. It reinforces the notion of how innovations, even tiny ones, are transformative and can even lead to bigger and more profound outcomes.
Today in Rome, the community of Sant’Egidio, formed in 1968 after a universal call to serve the poor in the community, consists of over 60,000 volunteers in 73 nations committed to developing communities of inclusion based on one simple concept: that no one is a “foreigner.” Similar to ICF’s mission, it also insists that “home” is where the action is and where solutions to global problems arise.
Sant’Egidio is expansive. It offers programs from “schools of peace” to integrative AIDS programs to petitions for the freedom of political prisoners. Its facility in the Trastevere area of Rome, which provides pasta meals to the homeless that are worthy of a four-star restaurant anywhere else, proved ICF’s beliefs about “the restoration of place,” and is a persistent example by the global media of what true peace, and the trust it generates, can achieve.
The facility in Rome is not only a place to get a meal and shelter, but literally a home for the homeless. Not a shelter, mind you. I said “a home.” The staff at Via Dandolo #10 have somehow created a sense of belonging and offer what one resident from Somalia called a “unique friendliness.” It is genuine and it is believed. The innovation, if it can be called that, is simple. Working with the approval of the government, it allows every homeless person to list #10 Via Dandolo as their official residence. Their civic identification cards tell the world and authorities that they indeed have a place they can call “home.” And it is a fine place.
As a result of its commitment to community as a path to peace something much greater emerged. That happened in 1992 in Mozambique, where the Sant’Egidio movement had already established a presence that was respected by all parties. As a result, the nation’s brutal 15-year war was brought to a truce, and then to a peace with Sant’Egidio representatives at the table moderating the General Agreement. The group is credited with being the glue that has held that peace for 20 years. Despite rising tensions today, the glue still grips. It is jarring to think that a small group from a neighborhood in Rome could ultimately grow to have that kind of influence by employing a few simple, intelligent principles. However, to ultimately become an Intelligent Community, a sense of trust, peace and commitment to home come before all else. It is food for thought.
As the Intelligent Community Forum comes up on the first anniversary of its participation last year at the Nobel Peace Prize in Oslo, where I was invited to speak at a forum that included former British Prime Minister Gordon Brown (who is also committed to developing a more peaceful Africa, in his case through petitioning for an increase in Internet access, education for women and economic justice), it is good to remember that the reason ICF was invited to Norway was to help answer the question of whether healthy, integrated, digitally inclusive communities could be a catalyst for more free and open societies. That the discussion that we have been having since 1995 had risen to this level signifies that the volunteers from the inspired community of Sant’Egidio in 1968, the homeless men of St. Vincent’s in New York in 2013 and the 21 communities in our 2014 awards program all share a common belief: that home is where the ever-elusive path to lasting peace begins. In this place, none of us are “foreigners.”
China’s Evolution to Create Intelligent Communities
I have yet to bring out my abacus, but if I was a betting man, I would say that there are probably at least 1000 or more smart cities and Intelligent Communities either in existence, under construction or being planned around the world today.
I can tell you that in China alone there are 193 smart cities that have already been listed, but perhaps as many as 800 smart city projects may be on the drawing boards in China, expected to cost $300 billion to execute. In India there are at least 2 smart cities per state being designed or in development (that is 56 to you and me) and probably more. ICF currently lists 126 Intelligent Communities to-date and we have hundreds of communities who annually attempt to get onto the Smart21 list. I read about one newly named community per week in real estate journals and global newspapers that I have never heard about before that promotes itself as a unique smart park or smart city. Many of these start off simply as a real estate play; morph into a community-wide application and sooner or later emerge as a smart city infrastructure program. As it matures, the chance that it begins to follow ICF’s criteria becomes more realistic every-day until we perhaps see it emerge as a Smart21 community and then evolve to become recognized as an Intelligent Community.
Recently I visited China and was surprised to learn of the depth and extent of the activities around what my hosts refer to as their “smart city developments”. According to Quan, Zang, General Manager of the Application Development Consulting Business Unit from Pactera Technology International Ltd., a global consulting and technology services firm headquartered in Beijing, “2013 has seen a boom of smart city pilots in China with support from the State and the Ministry of Housing and Urban-Rural Development.” Their smart city programs in China are strategically attached to their new urbanization agenda. Says Mr. Quan, “We define smart cities as utilizing an integrated urban development and management model based on information technology and orchestrated application systems. Our smart cities programs cover aspects such as living, green architecture, community, health, education, security, transportation and environment. By sharing data and information resources, the movement will help create a new management eco-system”.
Mr. Quan and his team are keen to move forward with these smart city pilots, indicating that they are currently working hard on one such project in Chongqing. He said that developing smart cities is a necessary road to follow, aligning it to China’s new urbanization efforts. According to Mr. Quan, among the smart city development aspects, smart industry is the most critical factor to improve the local economic development (GDP) and improve the quality of life and people’s satisfaction.
Says Mr. Quan, “Pactera is looking forward to co-operate with domestic and international Smart City hardware vendors and software solution providers to realize China’s smart city plans. We will work together to build up China’s homegrown smart city solutions and share them with the Smart City market with our partners all over the world.”
Chinese municipalities, developers and the Ministry of Housing and Urban-Rural Development are also keen to better understand the evolution of these smart city projects into Intelligent Communities, recognizing that they must go beyond the basic fundamentals of infrastructure to include knowledge workforce strategies and the creation, attraction and retention of talent in these communities; the application of strategies to build an innovation ecosystem; initiatives to ensure that all members of society are given equal access to affordable digital opportunities; among other strategies that promote sustainability, marketing, advocacy and collaboration. China is leading with massive initiatives to move the smart city and Intelligent Community movement forward, however its clear that the world over is now on the move to create Intelligent Communities, especially as towns, cities and regions are being revitalized and reinvented.
Monday, November 4, 2013
The Time for a Revolution is When Things Are Going Great
How do you get a community to change its ways when those ways are working so well?
The community in question is Walla Walla in the US state of Washington, which is located in the northwest corner of the 48 contiguous states. On October 21, ICF named Walla Walla to its Smart21 and, last week, I was there conducting an ICF Master Class for a group of government, education, business and institutional leaders to help them advance the broadband revolution in W2, as the city is affectionately known. My host was David Woolson, president of the Walla Walla Valley Chamber of Commerce, pictured below.
Walla Walla means “many waters” in the language of the Native Americans who first settled in this meeting place of rivers. Natural abundance created agricultural prosperity and a strategic location made Walla Walla a 19th Century shipping hub – until it was bypassed by the trans-continental railroad and its prominence was gradually eclipsed by the coastal city of Seattle. Today, however, Walla Walla still grows wheat that is sought after in Asia, produces fruit sold across the US, and has seen explosive growth in wine-making, from a handful of vineyards to 160 registered locations today. Tourists and retirees seeking fine wines and natural beauty have given birth to a thriving culinary and arts scene, providing residents and businesses with an outstanding quality of life.
Sounds pretty nice – so why change? The city is home to a university and community college, but it provides too few jobs worthy of the talents of their graduates. Agriculture does not employ many people and tourism does not create a stable year-round economy. As a result, the population has not grown for decades. And if you are not growing in the economy of the 21st Century, you are gradually losing ground. W2 needs to change for the sake of citizens being born today and citizens yet to come.
The Chamber of Commerce is leading an effort to leverage Walla Walla’s existing strengths to create broadband-powered growth. In 2012, thanks to a broadband stimulus grant, the nonprofit Northwest Open Access Network (NoaNet) completed expansion of its fiber backbone into the Walla Walla Valley. The city is now working with carriers, institutions and businesses on ways to roll out local connectivity to fill gaps and deliver significant bandwidth where needed.
The Chamber established a film office that has already attracted TV and film shoots and is working to attract a full-time production unit for TV, film or Web content as the anchor of a digital media and gaming cluster. Based on the success of winemaking, it is driving the creation of a Plough2Plate program to help small local food producers with marketing, branding and distribution. And it has begun to integrate the Hispanic business community – in a city where 25% of the population is now Latin American – into the mainstream to boost the growth of both Latino and Anglo businesses.
Still, absent a crisis, it is hard to get a community to change. Judging by the Master Class, though, W2 has one big advantage. I have rarely met people more willing to engage, to seize on new ideas and challenge old ones. Champions like these can be powerful agents for changing things even when things seem to be going so well.
Thursday, October 31, 2013
The Year Australia, Canada and Taiwan Became the Axis of Intelligence
That sweet American folk singer James Taylor once said, “Our planet is impossibly perfect.” I have always remembered this, for it is so right. While perfection may exist, we are imperfect agents attempting to make it visible for any length of time. This is so in the case of our daily mission, which is nothing short of igniting a global attempt to re-energize communities for this new century. We try mightily to find the right solutions to ensure that our special places are engineered to be economically sustainable, future-proof and home to all of the community’s children, if they wish to stay. As with every attempt at perfection, falling short is not be confused with failure.
Last Monday evening the ICF Institute for the Study of the Intelligent Community at Walsh University became home to the announcement of the world’s newest group of 21 cities, towns and counties deemed the most Intelligent for 2014. The list offered-up six communities that had never before had a shot at being named Intelligent Community of the Year. They include Montreal, which you know, and Coffs Harbour in New South Wales, which you do not. Overall the group of semi-finalists for the BIG AWARD are an eclectic fraternity of overachievers. If your travel agent reads this blog, he or she should figure out that the new six, combined in a package, would make a fascinating tour of the world’s future. (Note to the traveler: set aside some time. It’s a long flight to Australia.) All of these places prove again that intelligence and economic development have less to do with size and much to do with planning, persistence and the ability to mobilize knowledge in service of economic output.
If there is a connecting point among these new 21, it is their emphasis on culture as a natural resource. From Walla Walla, Washington (USA) which has a “plow to plate” philosophy and is a go-to place for people seeking a quality of life, to Nairobi County in Africa, with it historic Yingge District, once the center of a $400 million ceramics production industry and is undergoing a revival led by entrepreneurs (with some help from a fellow Smart21 community from Taiwan!), these places understand that culture is the next natural resource to be extracted.
Few understand this better than this year’s “Axis of Intelligence.” The Axis powers are Taiwan, Canada and Australia. No fewer than 13 communities from these relatively thinly-populated nations made the list. This suggests to me that there are places in the world whose work toward a perfect community is very real, and part of a national policy. Each of the communities from these three nations is focused on two things, according to the analysts who elevated them: education and collaboration. Quebec City (Canada), which returns to the list, has harnessed culture to produce a robust games industry. Sunshine Coast in Australia has continued to break out of a cycle of re-circulating wealth among retail and construction industries, and is broadening its initiatives in a range of new vertical clusters. Australia has begun to take advantage of several visits by our organization, as well as the visionary work and strong-armed efforts of Sen. Stephen Conroy to make sure that its communities connect themselves quickly and securely to the nation’s $43 billion National Broadband Network. While I believe Australian communities are still in the planning and aspirational phase of development, you can observe their hunger to participate in the “Broadband Economy.” The drive and passion are there. So is the fear of slipping behind. It is a motivator. Taiwan’s Intelligent Communities are those where knowledge and investment continue to layer traditional industries such as logistics, precision machinery and silicon chip development. Taiwan communities have completely reversed a gear from the industrial past and are (very) aggressively pursuing green policies that lead Asia. Yet they too worry about losing their children to other places, echoing a former football coach of Notre Dame who once said, “Getting to the top was easy, staying there is the hard work.”
If our goal is to create a perfect place to live, we will always be frustrated. It is impossible. But these 21 prove that the idea of the perfect place that we can call home makes this eternal frustration the most motivating and thrilling opportunity of our time. Good luck to you if you live in any of these places on January 23rd, the date which we make our announcement, in Taichung City, of our Top7.
A video of the Smart21 announcement can be seen here.