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Monday, March 25, 2013
It takes a Smart City to become an Intelligent Community

https://www.intelligentcommunity.org/clientuploads/Images/Jung-Blog-DesigningComm.gifAs I travel to meet cities and companies such as Siemens in Germany; Cisco and IBM in the USA and Canada; WIPRO, Tata and Tech Mahindra in India; Chunghwa in Taiwan and countless others in China, Australia and Brazil, I am absolutely amazed at how quickly “smart cities” has jumped onto everyone’s radar screens and part of the popular lexicon around the world. Back in the late 1980’s and early to mid-1990’s I was on a similar track with my “smart people, smart buildings and smart cities” initiatives which came together around SMART95 in Toronto and again in conferences in Silicon Valley and Calgary, among other places. We even started a Canadian Smart Cities Initiative in the mid-1990’s. But when we looked at the word SMART following the depth of discussion held at the SMART95 conference, we were challenged to go beyond just smart infrastructure. Over the years in the late 1990`s my fellow co-founders of ICF and I looked at the entire city and community development spectrum – from infrastructure and data to more holistic levels to engage discussion around the importance of higher education and skills development, involvement of research-based universities and the creation and expansion of knowledge-based industries; we focused on application of innovation and creativity in creating more vibrant and productive communities; and encouraged the importance of social and digital inclusion in clientuploads/Images/Takes-a-Smart-city.jpgcreating a bridge to bring all the citizens of a community, state and country into the digital century and broadband economy. We embraced discussion around public advocacy and governance, collaboration, leadership, marketing and sustainability. We also discussed the concepts of liveability and the importance to look at scale when we consider the rural imperative. Over the years we at ICF and hundreds of communities and many more of its citizens around the world have come to refer to this higher order convergence as “Intelligent Communities”. 

Yet, in this day of the ubiquitous “smart city” promotion by companies like IBM and others, we are constantly asked what the difference is between smart cities and Intelligent Communities.

Back last summer, I referred in my August 28 2012 blog that there was a big difference between Smart Cities and Intelligent Communities. My colleague Robert Bell did an even better job in his exceptional three-part series on the difference between Smart Cities and Intelligent Communities (refer to ICF Blogs dated December 27, 2012; January 6 and January 15, 2013). From these you will quickly discern that the essential difference between Smart Cities and Intelligent Communities is the former`s focus on urban performance as it relates to urban competitiveness versus the latter`s role in creating a more holistic approach at city and community-building and collaboration.  By building and managing urban infrastructure with advanced monitoring and other intelligent systems, a new urban competitiveness is able to be developed based on urban performance and productivity. Urban, environmental and social capital emerge when they are properly valued and taken advantage of.  For instance, a city watermain is kept in excellent condition to be able to provide 100% distribution since no leaks are detected along its system and repaired immediately when identified; traffic patterns ease congestion and reduce carbon emissions through effective traffic management systems; smart meters in municipal buildings limit electrical waste; and so on. These raise the bar for everyone in the community; cities are flocking to their nearest technology partners to become "smarter-connected and/or sustainable cities” as promoted by IBM, CISCO and Siemens, among others.  A formula for creating smart cities based on urban performance may be seen as:

UP(urc[h+spi]) + ec  + sc = UC² 

In other words, Urban Performance (urban capital [hard and soft physical infrastructure] + environmental capital + skills capital = Urban Competitiveness (aka “Smart Cities”).

But to take it to the next level in creating Intelligent Communities, I could offer the following formula:

UC²+IC(t/SC)+InCr+DI+Av/M+S= IC

In other words, Smart Cities (Urban Competiveness) + Intellectual Capital [technology/social capital] + Innovation/Creativity + Digital Inclusion + Public Policy Advocacy/ Marketing + Sustainability Inputs = Intelligent Communities. A little tongue in cheek and fun with math, maybe, but it serves to explain that it takes more than urban performance systems to become an intelligent community. 

However, to keep it simple - when I look at the image developed by our friends in Stratford Canada that reads: “It takes a Smart City to become an Intelligent Community”, I cannot explain it better to people than this when they ask me the difference between the two. 

Monday, March 11, 2013
For Once, Automation May Be Good News for the Less-Skilled

I came across a great phrase last week: “practicing at the top of your license.”  The words come from healthcare – they refer to practicing medicine as a licensed professional.  But they also open up a new way of thinking about the future of innovation and employment

clientuploads/Images/Bell-Blog-Reboot-Comm-2.jpgHealthcare is one of the strangest corners of the working world, because it is just about the only one in which technology innovation has done nothing to make things cheaper.  Quite the reverse: each new innovation in diagnosis and treatment seems to trigger an arms race in which providers compete to plunk down more millions on shiny toys, with insurers, governments and ultimately patients picking up the tab.   

In an intriguing article (“The Robot Will See You Now” in The Atlantic), Jonathan Cohn writes about a new wave of technology innovation in medicine that aims to supplement the judgment of physicians with artificial intelligence.  IBM is leading the pack with its Watson computer, which made headlines in 2011 by winning the American game show Jeopardy.  The Cleveland Clinic is helping to develop Watson as a training tool for young physicians and ultimately as a tool for diagnosis at the bedside. 

clientuploads/Images/Watson-Jeopardy-300.gifMuch is expected of Dr. Watson.  Human physicians tend to diagnose based on a small set of things they observe, guided by judgment honed with experience.  Watson may not have a physician’s judgment or experience, but it has access to vastly more knowledge.  So Watson can suggest a range of possible diagnoses that might not even occur to television’s Dr. Gregory House.   

“In Brazil and India,” writes Cohn, “machines are already starting to do primary care, because there’s no labor to do it.  They may be better than doctors.  Mathematically, they will follow evidence – and they’re much more likely to be right.”

So how is this good news for lower-skilled jobs?  Unlike medical technology innovation of the past few decades, these changes may well empower lesser-skilled healthcare workers to provide services that only physicians now perform. 

One doctor told Cohn, “I think we are transitioning into what I see as super-quality-control officers, overseeing physicians’ assistants and nurse-practitioners, who are really going to be the ones who see the patients.”  (For the record, he doesn’t like the future he is forecasting.)   Smart information and communications technology will let lower-paid employees deliver a more consistent and evidence-based quality of care.  “If technological aids allow us to push more care down to people with less training and fewer skills,” predicted one expert, “more middle-class jobs will be created along the way.”  That is, middle-class jobs where people are practicing at the top of their licenses. 

Human beings are terrible forecasters of the impact of technology.  We always see the dark side first, because it is so easy to recognize.  Much harder to imagine are the positive ways we will put new technologies to work to build a future we want.  When we talk about the impacts of innovation on employment, we see the machines taking away jobs.  But the jobs of tomorrow are taking shape all around us.  Community leaders need to keep their minds open to possibility, and steer their constituents toward it. 

Thursday, February 28, 2013
The Call Back Home

When I next see her, I am going to tell my high school language teacher that I learned 11 Aboriginal Australian languages in 90 minutes last Friday night in New York.  I did not use Rosetta Stone or one of the commercial courses designed to “immerse” a person in a language, so that they can travel to a country and manage to at least mangle greetings.

clientuploads/Images/Zach-NameCaption-2013-140.gifInstead I felt my way into the culture, through the music, sounds and images of an ensemble of 16 artists who are part of a “creative meeting place” for Aboriginal and non-Aboriginal performers to develop and perform contemporary Australian Aboriginal music and, as I was told, to “interrogate Australian culture.”   The group is called Black Arm Band.  These beautiful souls offered me in 90 minutes more emotional range than a joint conference of psychotherapists and opera divas.  While the inspiration of the group is to “awaken sleeping languages” and the spirit of a community that has been fragmented, it has given the culture –Australia’s – the “courage to face many dilemmas.” 

clientuploads/Images/Black Arm Band3.jpgThe music and images were an attempt to unite, or at least to call forward, language as a cultural center and source of personal power.  Given the fact that I was a guest at the performance and performance after-party of my friend Phil Scanlan, the nation’s Consul General to New York, the connection among culture, community and broadband ran like a current through the entire evening.  It is not lost on Australia, as we heard from last year’s Visionary of the Year, Stephen Conroy, that there is a seeping away of vitality from the communities of that hearty culture.

 This is not unique.  There is something swelling in the ground and in our public air that is seeking a new way; certainly a new economy but also a new cultural experience that can feed the new economy.  It first needs to reunite and then to reignite.  It needs the  courage to face dilemmas.  That is where ICF and its communities come in.   

clientuploads/Images/Black Arm Band1.jpg

I am not dreaming this, however dreamy the performers at NYU’s Skirball Center made me.  This is real world stuff, and you can hear it rumbling through the conferences, cafes and countryside just as well as I could hear it in the unique sound of the world’s oldest wind instrument, the didgeridoo.

What is it?  It is both anger over the pace of change and a rush toward the hope and possibility bound up in a newly-discovered, old truth: community is the source of culture, and culture is a canvas that can be repainted and reconstituted for the good.  But you need to have wealth.  You need to be able to sell the painting and to own it in every generation.  This is called economic viability.  

You can see this rush of possibility on our stages in New York each June, when the world’s Top7 Communities arrive to tell their stories.  We learn from it and it guides others.  You feel it when you speak with people from our Institute at Walsh University which is attempting to explore education’s role in the new community, while bringing Ohio’s Stark County into the new century.  It too is a call back home.

You will also hear it in a new, exciting way when Chief Uzo Udemba, CEO of the Udemba Group of companies addresses the ICF’s Intelligent Communities of the world alumni on June 5th.  Udemba is attempting a cultural coup of epic proportion.  One worth studying.  His vision is as clean and as simple as the voice of a great singer.  His countrymen have scattered.  Nigeria, which has one of the world’s largest film and media industries (after the USA and India), is attempting to put these creative arts back into its economy and to build an economic and social engine from them.  To do this Mr. Udema has a vision for a new city, an Intelligent Community which will arrest the Diaspora of Lagos.  As with most communities under siege, there is flight out.  Nigeria’s talent is scattered across the globe.  The work, over the long-term, is to allow them to hear the right music, the song that lures them back home.  It is an attempt at a global gathering, which is not unlike what we hear from rural populations trapped inside cities.  “We want to go home.”

If I heard anything on Friday night in New York, during one of the most significant two hours of my life, it is the sound of a call to gather the tribe and to make it work and work and work until the gold returns to the kingdom of community.

Monday, February 25, 2013
Offshoring? That's So 20th Century! Or Is It?

Last summer, according to The Economist, MIT surveyed 108 American manufacturers with multinational operations.  It found that 14% of them had firm plans to bring some manufacturing back to America.  Another 33% were actively considering it.  Almost half of really big US firms, with sales above US$10 billion, plan to “reshore” some of their operations, according to a different study by Boston Consulting Group.

clientuploads/Images/Bell-Blog-Reboot-Comm-2.jpgSo, is the era of offshoring jobs over?  Can American workers – and the communities where they live – relax?  Can their counterparts in other high-cost countries from Canada to Europe look forward to a reshoring surge?

And if you live in China, India, Malaysia, Mexico or another offshoring destination – do you need to start watching your back?   

I don’t pretend to have the answer.  But I can tell you about something I saw with my own eyes.  Last year, I had the privilege of visiting Oulu, Finland, one of our Top7 Intelligent Communities of 2012 which is also among the Top7 of 2013.  I was taken to visit a Nokia manufacturing plant.  Now, Nokia has been through some rough years, as its failure to keep up with mobile innovation cost it dearly.  Oulu, home to one of the company’s major R&D facilities, has suffered right along with it.  I was eager to see what the company was doing with the people and facilities they had chosen to keep in Oulu.

clientuploads/Images/Oulu-Nokia-Plant-400.gifWhat I saw was a manufacturing plant, but of a very specialized kind.  This facility exists to take prototypes of new equipment and turn them into production models.  Its production capacity is deliberately limited to the thousands of units.  Once they have worked out all the bugs and found the most efficient way to produce the product, manufacturing moves to Asia, where contract manufacturers make millions of them at per-unit costs that the Nokia plant could never equal.  But the Oulu plant is not out of the loop.  It also functions as the repair facility for the equipment it helps create.  (They are making mostly wireless base stations and other heavy gear, not handsets.)  Everything that fails in the field comes back to Oulu, where it is tested, torn down and diagnosed.  The lessons learned go into product upgrades, which are put through the plant’s processes until they are ready to go to Asia and be implemented in mass manufacturing. 

Most of the personnel in the plant are highly skilled, from engineers to technicians to design specialists.  When they need to do a production run, the plant hires engineering and technology students from the University of Oulu to work part time.  The young people appreciate the money and the chance to see high-tech manufacturing first-hand.  Nokia gets products into the hands of customers faster and can make sure those products work properly committing to high-volume production.  And the benefits run like a river through the economy of Oulu. 

This looks to me like the future of communities in a century where business serves a global market.  Modern economies prosper from being specialized.  Some of the food that farmers grow feeds insurance brokers who sell them crop insurance.  By specializing in different things, both do better than if they tried to do everything themselves.  The way to be a successful community today – whether in industrialized or developing nations – is to figure out what you are good at and then commit to having the people, infrastructure and innovation capacity to deliver it. 

Monday, February 18, 2013
Whatever Happened to the Giant Sucking Sound?

If you lived in America in 1992, you will recognize the following words, unless you happened to be living under a rock:  “The Giant Sucking Sound.” 

That is the colorful phrase used by presidential candidate Ross Perot to predict the impact of the North American Free Trade Agreement, as good-paying American jobs would be sucked away to the low-cost outsourcing destination of Mexico. 

clientuploads/Images/Bell-Blog-Reboot-Comm-2.jpgMr. Perot had a gift for making phrases, if not for politics.  The Giant Sucking Sound came to stand for two decades of concern about the offshoring and outsourcing of employment from high-cost zones like the US, Canada and Europe to low-cost zones from Mexico and Eastern Europe to China and Vietnam.  The Onion, a satirical Web site, mocked these fears with a recent report that American parents are outsourcing child care to India and Sri Lanka, using cardboard boxes to ship their offspring across the seas. 

clientuploads/Images/Ross-Perot.gifOffshoring and outsourcing had devastating impacts on many communities in the Nineties.  But the Giant Sucking Sound has grown a lot quieter in the new century.  For one thing, at least in the US, most of the manufacturing that could be outsourced already has.  And services are not moving offshore as fast as feared.  According to the Hacket Group, big American and European companies are likely to lose a net 2 million business services jobs to outsourcing between 2002 and 2015.  To put that in perspective, the total workforce of the US and the European Union combined exceeds 360 million people.     

Offshoring and outsourcing were driven by two things: the low wages paid to workers in developing nations compared with their rich-world counterparts, and the information and communications (ICT) revolution, which made it possible to knit together global operations and deploy knowledge work anywhere.  So, what changed?  Wages in the world’s offshoring hotspots have grown explosively, as labor markets do what they do best: adjust to demand.  So the cost advantage of hiring Chinese assembly line workers or Indian IT experts is much less than it was. 

But business executives also learned from experience the downside of turning vital parts of their operations over to other companies or running manufacturing facilities on the far side of the world.  Handing off key industrial processes and IT systems to another company risks creating a competitor.  Shipping long distances is slow and costly, and sharply limits a company’s ability to adapt to market changes.   Doing your engineering and design in one location and your manufacturing in another can save money in the short term – but it robs engineers of expertise in manufacturing, which can wind up costing a lot more money long-term.

The result of this learning curve can now be seen in the headlines.  In 2012, General Electric moved manufacturing of home appliances from China to a factory in Kentucky.  Google has decided to make its media-streaming appliance, Nexus Q, in San Jose.   Lenovo, a Chinese technology company, will shortly open a new assembly line for personal computers in Whitsett, North Carolina.  Europe has yet to see a surge in “reshoring,” as it is called, but the recession has loosened some labor markets and reduced labor costs, and it could soon happen there as well.

It turns out that being close to your customers, and ensuring that your key people stay close to what the company does, has enduring value.  Location matters.  Community matters, even in a global market.  As communities in the industrialized nations fight for a better future, the Giant Sucking Sound is one less thing to worry about. 

Note: I am indebted for the facts behind this post to a terrific special report, “Here, There and Everywhere,” in the January 19 issue of The Economist

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