I would like to amplify on my colleague’s last blog, as I too participated in The Economist Web debate on Smart Cities. I too voted “no” – Smart Cities are not empty hype, but I wasn’t surprized by the split vote. As Robert Bell stated in the last blog, “Smart Cities are about using a new generation of cheap, powerful sensors, data storage and software to automate cities …. using information and communications technology (ICT) to do more with less.” Cities that have become involved in these tech enhanced programs like are quite happy with their asset management initiatives. But having worked with some of these cities, I cannot say that they would qualify as Intelligent Communities. They could if they go the next steps and build on the platform that has been built for them by the Smart City technology firm. So my position was a little different. I felt that these tech companies are doing these cities a big favor by helping them to get a terrific grounding on the first level of intelligent communities – namely by focusing on what we call getting the infrastructure right. Here is what I said:
“I think it’s essential to have smart cities. They are not just empty hype. Whether they evolve as a result of public policy first or come originally in a box from vendors promoting it to the city technocrats perhaps without a clear picture of where the community is going with it, the end result is the same - like early adopters, these communities will have the benefit of the experience of greater efficiencies in transportation, utilities, etc; improved budgets; and overall longer term sustainability than without them. Citizens, technocrats and decision makers alike will greatly benefit from this experience and want to constantly improve upon their smart community with increased connectivity, perhaps even seek to develop ultra-high-speed broadband throughout their community like Toronto's Waterfront or Chattanooga; perhaps more wireless monitoring capabilities will be installed to capture even more data, but which might also double up as free Wi-Fi for their citizens; and maybe even some visioning among thought leaders in the community might result to help to develop a plan to improve their community further or take advantage of underutilized land or buildings which might benefit from these smart services. Their city asset managers will greatly benefit from these and likely promote further improvements and maybe even seek more ways for their community to benefit from these smart technologies and methodologies.
Sooner or later the benefits will also attract investors (perhaps even FDI) and businesses who want to be associated with these efficient and well planned communities. Talent will be attracted to join these new job opportunities; more talent will be needed and perhaps local educational institutions will be brought into this activity - not only for training to meet the needs of analyzing the big data generated by the smart city but also to investigate and undertake research on what these and future smart cities need; how to create them better and other related research in support of smart region planning and execution. With these institutions involved, more talent is created and attracted to be involved in the local smart community activities. Some of these will be highly innovative and creative people benefitting from the smart technologies available in the smart community. They might even incubate homegrown businesses as start-ups, creating innovative products and services that can be commercialized and exported abroad, bringing further wealth and prosperity to the area. These benefits and increased prosperity can now be shared among the disadvantaged, disenfranchised, the elderly and single mothers and young children. Those disadvantaged in a smart city should be able to benefit from available digital training and become digitally included, offering some new opportunities for them and their children. I have seen this in the Knowledge Squares in Rio and even in smaller locations such as Riverside, California.
With a smart city as a platform you can begin to get onto the pathway to a higher level of community-wide engagement; bringing education, thought leadership and public policy into the game. Ultimately we will want to see these ideas entrenched into public policies so that plans, budgets and community wide acceptance and continuous improvement become part of this exercise. With all of these elements in place, I dare say the marketers of the community better step up and promote the city to attract even further investment, talent and jobs to this smart community.
But at this point, I would suggest it goes beyond the concept of "smart". It has been said by the Mayor of Stratford, Canada that you have to be a Smart City to become an Intelligent Community. Where the city transforms from smart to Intelligent is another topic for debate, but it clearly goes beyond the infrastructure, analysis of big data and begins to get into the attitude, culture and philosophy of true city-building along with its citizens that makes it become intelligent. But it has to start somewhere - and I would say that it all starts with the smart city. Empty Hype? Not at all: a great platform upon which to build upon.”
Monday, December 16, 2013
Are Smart Cities Empty Hype?
This bracing question is posed on the Web site of The Economist, and visitors are invited to vote “yes” or “no” as well as to post their own comments. The voting closed with a hair-thin 54/46 victory for "no," which must be demoralizing for the brilliant technology companies promoting Smart City solutions.
I was one of the "no" votes. Smart Cities are not empty hype. But I suspect the current split decision reflects an uncomfortable truth: that the hype-to-reality ratio is pretty high.
Smart Cities are about using a new generation of cheap, powerful sensors, data storage and software to automate cities, in the same way we have automated factories over the past decades. They are about using information and communications technology (ICT) to do more with less. Processes that once operated in the shadows become visible and measurable, which lets cities make better choices. Everything happens faster and more reliably, which makes constituents happy. Costs fall permanently because more efficient processes need fewer people to run them.
It’s all valuable. It’s just not the revolution that some claim it to be.
The revolution lies in taking the next step – in setting out on the path to become an Intelligent Community. Here, the goal is to do more with more. Intelligent Communities use ICT to generate more economic energy in the form of new employment from new employers and new industries. They work to break down social and cultural barriers that hold back part of their populations, allowing the benefits of a knowledge-based economy to spread far and wide. They even use ICT to strength, preserve and extend the culture of communities – that invisible glue that binds together individuals into a whole and makes a place into a home.
I would go so far as to say that Smart Cities are about adapting to limits – to shrunken municipal budgets, lower ambitions, and a vision of the future less prosperous than today. Intelligent Communities are about envisioning a future limited only by our imaginations and our ambitions for the place we live, work and raise the next generation. Municipal leaders need to respect the limits of the present. But those limits should never be permitted to define the future.
Monday, December 9, 2013
2013 Goes Home
“Going home.” The phrase resonates at so many levels every time I hear it. Most recently the American president, Obama, used it, referring to the final place to which Nelson Mandela had been called upon his passing in Johannesburg, South Africa. After a remarkable nine and one-half decades, nearly three of them in jail, a lonely struggle and, in the end, a miraculous transformation from an old tribalism to enlightened national community, Mandela set us on a course which remains one part aspirational and one part achieved. With his work on Earth now finished, said the young American president, he had been called home. “As we all shall be,” he added. In 2013, no doubt as it was in 1320, Home is the word we all embrace for its emotional composition. It is both refuge and, yet for many, still an elusive aspiration.
At the moment Mandela exited, you can be sure that a long, long way away, the polite, ebullient students of Taoyuan County’s Chung Ping elementary school, a celebrated rural school full of great teachers and digital tools, were also headed home as the day’s final bell rang. As I witnessed when visiting in the Spring, a final bow to the teacher ends the day and children file out in an orderly (well, kind of orderly) fashion. These children too go home – in this case to their parents - knowing that they will rise again the next morning in one of the world’s Top7 Intelligent Communities and in a country, Taiwan, that in 2013 claimed for the second time in seven years the world’s best example of our collective future. In June Taichung was named Intelligent Community of the Year. It was the type of place Mandela had in mind for his own nation’s communities, including Nelson Mandela Bay, a 2009 ICF selection.
As 2013 posts its final grade, I can report that in terms of its cities and towns; communities and cultures, it was a year of progress. The Mandela vision of one world moved one inch closer to reality. It was a year when the notion of “enlightened tribalism” was further embraced. Thanks to the work of Intelligent Community leaders like Mayors van Gijzel, Halloran and Hau Lung-bin, Taipei is to Eindoven what Waterloo is to Suwon. Irrespective of culture or language, the identification of a like-minded city, with similar aspirations and policies shaped by five basic indicators, has produced a new form of global governance and cooperation. One of the Intelligent Community Forum Foundation’s major achievements of the year, its “Connections” program, allows communities with much in common to build upon their intelligence and capacities.
If you set aside the policy papers, city council debates, legal battles over municipal fiber ownership and the circular confusion over how to best teach people in an era when “knowledge” has burst through the retaining walls, and what we need to know is challenged, these communities, working together, offer cohesion and promise. Cohesion and promise formed around a new set of guidelines and realities. In each you will hear “quality of life” spoken of as if a right; “access” debated not as something that might be useful, but rather in terms of how fast it can be installed, and “culture” being examined not merely as tourism or a Sunday visit to the local museum, but as a natural resource with economic development and gross domestic local product output as its goal. While these ideas have been in the air since 1995, the Intelligent Community movement has brought them squarely into the discussion - and into the imagination of a new corps of leaders and thinkers. 2013 was a watershed year.
Our year began in January, when seven communities were designated as exemplars for all to look toward for guidance. The Top7 of 2013 continue to construct admirable home towns. One of them, Toronto, even demonstrated in ’13 that a futuristic community can go forward with a backward-looking leader. In Canada’s other Intelligent Community, Stratford, the future was in sight and the mayor led the way. In the two Taiwanese cities among the year’s elite seven (Taoyuan and Taichung) the persuasive strength of their mayors showed the rest of the population the way home. Columbus (USA), Oulu (Finland) and Tallinn (Estonia) were examples of places where, without a public fuss or dust-ups, foundations were laid for the future, even as headwinds challenged the journey. An Intelligent Community is one that is “future proof.” Columbus created nearly 30,000 jobs even as America struggled to regain its economic footing; Oulu continued to build an entrepreneurial engine, despite having a limited history of doing so; and Tallinn (as it had done in 1991) pushed its chips to the center of the table again, this time betting that education would be the dog that would hunt, and hunt well for its citizens, in the long-term.
Not all of our alumni communities thrive, but all continue to imagine they will and keep at it. In 2009, Nelson Mandela Bay became the last Intelligent Community named from South Africa. In its annual report, the city reported 100% compliance with both fresh water standards and the provisioning of electricity. It also created nearly 1,600 new jobs. But it has not been easy. It reported too that its persistent challenges include a need to “develop a shared, long-term vision and a mission to provide a strategic focus for long-term planning.” It has a 28% unemployment rate. But it is free at last, and that is not a small thing. It is also an Intelligent Community, because in 2009 it set itself a task of getting home, no matter what the price, and showed us the plan and its tenacity. We can say it holds its own because it knows that now is not the time to let go of its future. After all, this is a place named after a giant.
The most inspired words of the year came spontaneously from the Keynote speaker at our Institute’s annual Symposium at Walsh University. As he patiently explained to a rapt audience why his Aakash II computer is creating the next one billion mobile users, Datawind CEO Suneet Singh Tuli told his story of how the device was created, and how it has begun turning India and the developed world inside/out and upside/down. His vision is Apple’s with a social conscience. Aakash may do for the three billion underserved what the iPad has done for those of us grateful to be among the over-privileged. It will make a profit - and much more. “I am not by nature an optimist,” he began, “but listening to the people in this room and in this movement, I can say that there is no longer any room for pessimism.”
For these words alone, 2013 was a year to cherish. Pessimists need not apply in 2014.
Monday, December 2, 2013
Charging for Internet at Hotels is so Yesterday!
Over my career I have spent a considerable amount of time in hotel rooms. I am currently writing this from the Hotel Principe di Savoia in Milan looking at their hotel website and wondering why I am facing a 27 Euro per day charge for Internet services in my hotel room. Like you, I have been surprised how inconsistent the hotel world is about providing access to the Internet for their customers. Generally around the world it could be free in the hotel lounge or for around $15-$20 per day, it could be made available in the comfort of your hotel room. But when hotels charge hundreds of dollars per night as it is, couldn’t they at least throw in the basics of connectivity? They provide basic television but charge to see newly released movies. That is fair. But isn’t it ironic that the most expensive hotels like the Intercontinental will charge you $20 per day but the least expensive hotels such as the Hilton Garden Inns will offer it for free? It’s a minefield of variances out there; some offer it for free in the main lounge, while others offer it free everywhere, either as WiFi or as a dedicated line in the room. Some, as in Tallinn, Estonia, even provide free hi-grade Skype in the room, complete with a Skype device. But others charge for a service that might cost the hotelier less than $1 per day and could otherwise help them to market their brands better, offer a relatively inexpensive part of the hotel infrastructure as part of the basic hotel charge, or simply motivate them to get into the new world and stop gouging for it.
When cities have found a way to provide free WiFi to its visitors and citizens, why do hotels still charge their customers for Internet? It’s simple actually; in a world of declining occupancy, hotels believe they need to charge for everything they could beyond their base room rental as an added source of revenue. Sound familiar? Airlines now charge for baggage in a lucrative move that added millions to their bottom line (but are hated for this by their customers and will rue the day when it comes back to bite them), so why not charge for Internet access in hotels? Telephone revenues for hotels have virtually disappeared with the advent of cell phones. Perhaps hotels might try charging for bags next or you could offer to swap the expensive toiletries for free Internet access (only kidding Mr. Hotelier!).
For Road Warriors who might average 50 hotel nights a year, the Internet charges could wind up ending up to be between $500 and $1000 per year. This extra charge can be offset with personal Internet devices, such as Rocket sticks or by other ways to work around it. Sprint, for instance, offers a small credit card sized MiFi mobile Internet device that allows multiple users to access the Internet. It is also possible to ask for rooms on lower floors closer to the lounge where free access is assured. Or join the hotel chain’s loyalty card which in most cases provides regular users with free access as a loyalty card feature. Another option is to purchase a relatively inexpensive data plan before leaving your home country. And many hotels offer Internet for free in exchange for embedding ads and cookies, which provide income to the hotels.
While most Internet access is useful for checking emails, many travelers are bringing their entire home and office platforms with them and require more substantial broadband access for data transfers, social networking and watching videos, such as over Netflix. As business travelers need to access home and business environments, hotels feel that they can charge for this necessity, but are damaging their reputations and bottom lines, aiming for the short term gain instead of the long-term loyalty through goodwill. But some hotel chains are getting it. For instance, Hong Kong-based Shangri-La has decided to eliminate charges for Internet access altogether at all of its hotels, setting the bar for other luxury hotels to do the same. And it appears that customers are being heard. Hotel Chatter offers an interesting new 2013 Infographic that will quickly size up the competition when it comes to free or inexpensive Internet in hotels. According to this report, 64% of hotels now provide free basic services. That is a huge improvement over previous years. Hotels are realizing that it helps their brand; helps in keeping the customer closer to the hotel and more likely to use the bar and restaurant; as well as more likely to promote the hotel or chain to their friends and colleagues as a result.
But why charge for this at all? The cost to set up and maintain Internet access is surely not as expensive as setting up the hot water system or the hotel air conditioning system. These aren’t currently being charged extra for. Mr. Hotelier, if the expense to set up the system and maintain routers is the excuse, then don’t offer it at all, because that is a lame excuse for the expense. In today’s world, whether you are a hotel or a city contemplating the provision of Internet access for your customers or citizens, wireless Internet access is a basic utility like water and sewers, and roads and sidewalks. The Mayor of Fredericton, New Brunswick, Canada is proud to announce that he would not charge his citizens to walk on his sidewalks and so they shouldn’t be charged for access to basic Internet services. Besides, so many municipal services and utilities are now being accessed by WiFi, that it would be relatively easy and inexpensive for cities, just as hotels are now learning, to offer basic Internet free of charge. Yes, if you want to watch your latest Netflix on your laptop and not pay the hotel for the latest movie on their TV set, you should perhaps be charged for the upgraded premium service. But not be charged for the basic level of Internet services. Here at the Hotel Principe di Savoia, one of the most luxurious hotels in Milan, I am offered just that - I did not mind using the basic Internet service at 256 kbps to check on my emails for free. If I needed more at 20 mbps, I could purchase it for 27 Euros for 24 hours. Or I could simply go to the nearest Starbucks, which have mastered the art of the use of the Internet to attract and sustain their business. In fact, Starbucks recently announced free unlimited Wi-Fi service and electricity to customers at all “company-owned stores" in the United States. The loyalty of customers paying $5 for coffee and $4 for a biscuit more than offsets their costs for Internet and electricity for their laptops.
Applications in hotels which offer entertainment have usually contributed to the bottom line of these hotels. However, since many hotel guests are beginning to revel entirely in their own mobile applications, they completely ignore any and all hotel offerings. This may change with new applications and business models on the horizon that may change the way we currently experience our hotel stays. In this case change is inevitable and may be good, unless you are not a road warrior with all of the technical devices and applications.
In anticipation of this, some hotels are now offering new devices and services in their rooms. I recently was in a hotel room with an ultra-high speed broadband based Smart TV which allowed me to use everything from broadcast television to the Web, with video-on-demand while I could do my emails at the same time on the same device ( and more), without the need for me to bring my briefcase. A Dutch chain called CitizenM provides Samsung tablets in each guest room, free video-on-demand TV as well as providing a music library. It also controls the alarm clock, temperature control, blinds and lighting. Even the legendary Peninsula Hotel has installed customizable tablets in the language of your choice directly connected to the concierge and all other services in the hotel as well as to an entertainment system comprising a Blu-ray, LED television flat-screen, with extensive music, VOIP, HD and current 3-D movies, all requiring ultra-high speed broadband, which guests may be more likely to pay to experience.
As cities and industries transform, so will hotels. The trend is towards free basic services with optional high speed broadband charges for all the new devices and applications. Like you, I am looking for the day that hotels don’t charge for these basic services so that at least we can check our email. However in the future, emails will likely no longer be the way we communicate and I bet that next generation communications through social media and other evolving communications apps will require access to ultra-high speed broadband. At that point we may see the debate grow once again but this time for access to ultra-high speed broadband as a way to communicate.
Tuesday, November 26, 2013
What Kind of Future Do You Believe In?
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?