|Monday, July 8, 2013|
|The Skills Gap in Manufacturing: An Unwelcome Blast From the Past|
There is a place in the Netherlands, that land of relaxed efficiency, where high-tech rules. Actually there is more than one. But the one I know best is the Eindhoven Region, which was our 2011 Intelligent Community of the Year. Here, they pull off the parlor trick of being a high-cost country and yet leading in manufacturing through leading-edge technology in the hands of a highly skilled workforce.
So it was with great surprise that I learned over dinner with my friend Joep Brouwers, vice director of Brainport Development, that Eindhoven is facing a skills shortage. More specifically, they already have skilled manufacturing jobs going begging, and they expect the situation to worsen. The problem is that talented young people don’t want to work in something as physically demanding, dirty, and economically uncertain as manufacturing.
The Netherlands is not alone. In a 2009 survey by Area Development magazine, 70 percent of American respondents viewed manufacturing as a top priority for the nation’s economy, but only 17 percent considered it a top career choice – despite average manufacturing wages that are $10,000 higher than those of non-manufacturing jobs. Even in China, the world’s factory floor, the lure of manufacturing isn’t what it used to be. The Global Times reported on a Chongqing job fair in early January. An aluminum processing plant offering good starting salaries, free food and accommodations received only 20 applications from high-school graduates, while a real estate company offering a lower salary was deluged with hundreds of job-seekers.
But wait a minute. Arduous and physically demanding? Not on today’s automated assembly lines. Dirty? Most modern factories, even the ones without clean rooms, are probably tidier than my living room. Uncertain and prone to boom and bust? Sure – just like real estate, finance, media and entertainment and a hundred other industries.
How did manufacturing get such a bad reputation? In a word: culture. In this case, culture means the store of shared experience with de-industrialization in the rich world that began in the 1970s.
For more than a generation, the decline of manufacturing was the rich world’s tale of woe. Developing nations moved up the ladder from manufacturing cheap goods cheaply to making extremely sophisticated and high-quality goods cheaply. The explosive growth of world trade brought that competition right to the shores of industrialized nations, and they found to their frustration and shame that they could not compete. Manufacturing declined as jobs moved offshore in a long terrible wave that seemed to have no end and that brought many formerly prosperous places to their knees.
As I wrote recently, those years may finally be coming to a close. Places like Eindhoven point the way to a future in which high-cost countries can compete in manufacturing as long as they make things that exploit their competitive advantage. But the trauma has left its mark. Trauma always does.
The people who raised today’s youth lived through what looked like the death-spiral of manufacturing. They want something better for their children than they experienced themselves. As communities work to match local employment demand with local talents, they need to overcome the anti-manufacturing bias of the new generation. Left unchallenged, legacy has a bad habit of turning into destiny.
|Monday, July 1, 2013|
“Innovation does not automatically create jobs- the innovations must be adopted and used.” Vinton Cerf
“The key issue in a global innovation economy is jobs – good meaningful jobs and generating the talent to be able to meet the requirements of the global skills gap.” Warren Buffet
ICF’s most recent Summit in New York (June 5-7, 2013) focused on innovation and its impact on creating (or destroying) jobs.
Years ago when I was a post graduate student at the University of Manchester, I visited the birthplace of the industrial revolution at Iron Bridge in Shropshire. At that time, the Information Technology and Internet Revolution had not yet begun. But the jobs that were going on around me in Britain at that time - many representing solid manufacturing jobs that no longer exist today - became the casualties of the new industrial revolution: a dynamic brew of the broadband economy mixing connectivity and globalization policies and practices. With high speed broadband, skilled workers and innovation, the inevitable occurred, the destruction of jobs as we know it. Today in addition to the loss of blue collar jobs, there is even the threat of vanishing white collar jobs; not just because the standard tech job uniform is blue jeans and t-Shirts, but the world is changing faster than some care to imagine and even those that have.
Just as the ludites were unable to stop the industrial revolution and stop the shift of jobs, we won’t be able to build a wall around the new innovation revolution, especially as the world of quantum computing and nanotech commercialization unfolds. My answer to this is the same as Tallinn’s impressive start-up group called GARAGE 48 says it best: “Get on with it” or as their poster says: “screw it, let’s do it”…
Adopted and fully implemented innovation destroys jobs and creates new ones. Even if some manufacturing jobs are returning to North America, they won’t be there for those employees that lost their jobs a few years back. Let’s face it – it’s not a human resources issue. It’s a skills and talent issue. 90% of city officials noted in a recent survey by the National League of Cities (NLC) that workforce alignment has not improved over the past year and prospects for improvement looks grim. These city officials report that workforce skills are not keeping pace with employer demand and 53 % say that current local workforce skills are posing a problem for the economic health of their communities. The world’s present labor market systems can’t seem to handle the accelerating rate of innovation.
The key word here is accelerating.
Jobs are evolving faster than educational and employment systems can adapt, resulting in rising unemployment even as employers experience of appropriately skilled workers. This is a waste of human potential.
The old ways of matching people with jobs is broken. What are our communities around the world doing to deal with this global issue? I believe that intelligent communities
have a much better handle on how to resolve this dilemma and have built an environment – an entire ecosystem- that thrives on innovation and empowers everyone to create new value. They put a high value on education and work closely with educational institutions to target and deliver relevant education to meet the demands of jobs for the future, today. These intelligent communities are able to bridge the chasm among innovation, employment and education policies. They accept change, accept failure and are capable and willing to learn new tricks.
These are communities that have already figured out how to commercialize innovation and are now tackling the question of innovation for jobs.
During the annual ICF Summit
, we met the Top 7 Intelligent Communities of 2013: Columbus, Oulu, Stratford, Tallinn, Taoyuan, Toronto and Taichung. These Intelligent Communities represent an elite breed of community; ones that are willing to share, have an ecosystem of innovation and are poised to succeed:
In Columbus, Ohio
, collaboration among city government, academic institutions, businesses and nonprofits, resulted in adding 15,000 new jobs in the last decade, reversing the “brain drain” typical of many similar communities along the Great Lakes.
has created 18,000 new high-tech jobs since 2007, thanks to a decades-old culture of public-private collaboration and its many high-quality educational institutions, including the University of Oulu. They offer a “youth guarantee” and other strategies to help give direction to its under-employed youth, attempting to match new skill sets to new jobs. They are even training 8 year olds to become entrepreneurs and encouraging former Nokia executives to help match skillsets to new job opportunities in the community they love and want to stay in to raise their families.
leveraged ICT to transform its economy. The city-owned utility has built out an extensive open access fiber network with a WiFi overlay and signed agreements with commercial carriers to deliver triple-play and mobile services, enabling, for example, its Stratford Festival to significantly expand its online marketing, to play a key role in the city’s tourism strategy, to help turn Stratford into a test bed for technology pilots and to attract the University of Waterloo to open its Stratford Campus focused on digital media.
’s 23 universities and technical schools generate a knowledge workforce focused on expanding ICT and digital content skills. Tallinn and its educational and business partners have launched multiple incubators targeting creative services, medical and biotech, mechatronics and ICT, including Europe’s first gaming accelerator while its Ülemiste City industrial estate has expanded to house 250 companies, making it the Baltic’s biggest knowledge-based development.
, Taiwan is home to 15 colleges and universities, graduating 25,000 students every year, making it the county with the youngest population in Taiwan along with the challenge to ensure its residents have the skills employers need. To offset this challenge, the County manages a massive effort connecting job seekers with job opportunities, from employment offices to recruitment events, to fill thousands of job opportunities opening yearly in the international airport area serving Taipei and its industrial region with more than 24 industrial parks, 44,000 companies and 10,000 factories.
is Canada’s largest city and often is referred to as one of the world’s more successful places, but it is also challenged to maintain that edge. With over 52% of its current population having been born outside of Canada, Toronto is experiencing an immigration-driven population surge that is straining its hard and soft infrastructure systems. Governments are addressing these challenges with a development strategy stressing ICT, environmental sustainability and innovation. One of the key strategies being implemented is along Toronto’s waterfront where North America’s largest urban renewal project is transforming a vast area along Lake Ontario into a new knowledge-based economic center with 40,000 residential units, one million sq. meters of commercial space, hundreds of hectares of parks as well as a new center for universities and knowledge-based industries, served by a 1 Gbps fiber-to-the-premise network.
and its 17 universities and colleges created a truly lifelong learning system ranging from basic digital education and vocational training to advanced study and continuous skills improvement. It is also aggressively pursuing industrial clustering through development of the Central Taiwan Technology Corridor, which combines science parks, precision manufacturing parks and software parks to give physical shape to its global ambitions. Taichung is also benefitting from an emerging animation and film industry due to the commercial success of Ang Lee’s film Life of Pi, which was primarily filmed in its city. Taichung was selected as the 2013 Intelligent Community of the Year on June 7, 2013 at Steiner Studios in Brooklyn, New York.
|Monday, June 24, 2013|
On June 7, Taichung’s Secretary-General, Ching-Chih Liao, stood on the stage of Steiner Film Studios in New York, surrounded by previous Intelligent Communities of the year, from Glasgow to Riverside, and accepted the 2013 award for Taichung City, Taiwan and its 2.7 million residents. It was the second time that tiny Taiwan has produced an Intelligent Community of the Year (Taipei was the other in 2006.) Flush with excitement, she nearly sprinted to the stage; surprised but gracious, she went out of her way to congratulate the other six finalists, referring to them as “the real winners.” Such emotion; so nice to see. It reminded me of Mayor Rob van Gijzel of Eindhoven, whose acceptance remarks in 2011 remain embedded in everyone’s memory – including his. That afternoon he spontaneously redefined the purpose of the Intelligent Community movement. He now heads the ICF Foundation. Madame Liao was much less circumspect. “We did not think we would be here for at least another three or four years,” she admitted.
For Madame Liao the audience also applauded loudly, and she applauded them right back, an Asian custom that I find revealing of generosity of spirit. She said twice that she did not envy the jury, which had to evaluate the Top7 and then decide who would be named Number One. Nor, she said, did she envy ICF for having to make the announcement! (Nor do I, since we have always believed that there are no real winners.) She then let go of a “Freudian slip,” which I have been thinking about.
While cheerfully and gently noting how proud she was for her city, her emotions became obvious. She said that she was proud of Taichung, proud that it had survived the nearly year-long “battlefield of competition” with the others to become the global representative of our movement. Standing behind her and listening, the words “battlefield” made me at first wince. I was surprised. You rarely hear people, especially as gracious as the Intelligent Community representatives, reveal themselves so honestly. Leave it to this smart, tough and joyful Taiwanese woman to show you the heart of a champion. Handpicked by Mayor Jason Hu for her post, she again demonstrated the poise and character of Taichung, which simply has willed itself into international relevance.
But a “battlefield of competition?” Our friendly award? Is it really perceived that way, despite everything we do to communicate the absolute fact, noted above, which is that the Top7 are the real winners? A family of leaders. And they are, at least in our minds. In discussions privately or with the media, I never refer to the Intelligent Community of the Year as the “winner,” but rather as the “recipient.”
But let’s be real, Lou, I know that this may appear disingenuous. After Taichung was announced, I went to the tables of each of the other six communities to congratulate them on their extraordinary success. After all, they are collectively leading the entire world toward a new day for cities and communities. I could tell it was a tough moment because, as it is every year, I received the same basic reaction. A cool shoulder and an icy, forced, smile. It is followed by a less than firm handshake but a genuine thank you for organizing another Summit in New York where they could come together to network and to observe. Those that had been there before seem to feel it most.
Since Madame Liao was so emotionally honest, let me also be that way. When I get this response each year, I say to myself, “Good. The world is working as it should.” The delegations of Intelligent Communities are not reacting as “sore losers,” as some claim, but rather as champions. True champions.
“Show me a good loser and I will show you a loser,” I heard often as a young athlete. This year’s Top7, who will be the subject of our new book to be published in the Fall, were a most competitive group, numerically. According to the final report by our evaluation research company, the point differential between Taichung and the next closest community in the rankings was a mere .253 of a point. Between Taichung and the final two communities in ranked order (there was a tie between #6 and #7), the difference was .811 of a point. That’s close. A nano-small margin, as Mike Lazaridis might say. (Well, he might say it much better.)
I know this about the final six. Each will go home, let off steam, answer questions from their media about “losing” the “competition” in New York and then, come July 9, do what Toronto and others have already done: inquire about the 2014 awards program, theme and nomination form and get back to work to head back up the mountain. I do not guarantee much in our often surprising Awards program, but I guarantee you this: they will be back. I know this because of this year’s Top7, six of them have before been on the list at least once. Enough said. Some, like Tallinn, have made it five times. They will be back, perhaps not next year, as communities sometimes go away to retool, make progress (as was the case with Issy-les-Moulineaux) and take a whack once again as their new projects are up and running.
Most important they will come back for reasons that have nothing to do with the Intelligent Community of the Year Award. They know who they are: the stars in the Intelligent Community firmament. They know what being a Smart21 or Top7 is worth in terms of publicity and inward business retention. They know that when the three of us travel to different parts of the world to speak, as I did over the past two weeks in Australia and eastern Canada, that we tell their stories.
So for those squeamish about an unhappy face, remember: this is how champions look. They do not participate in what appear to be competitions to finish second anymore than they will stop building the best places to live. Taichung wants to be the next Seattle or Singapore. It will. It is closer than it thinks. It is the nature of a champion to hate to even think that they have lost, and it is as hard for them to admit that they are done. Even at the top of the mountain there is yet the sky. Taichung, like Waterloo and like Taipei, are just getting started. I learned perhaps later than I might have about the importance of process, and it has made me more determined to be better. It is the work that counts, not the end itself. It is a hard, but necessary passage. Yet it is one which in this case is the pathway to continuous process improvement. It is precisely this characteristic that makes these places terrific communities in which to live, work and to follow. They do the hard work every day
So it would worry me greatly if they did not respond the way they do. Why? Because the greatest virtue of a champion is that they do not know – really – when to quit. So if mayors Michael Coleman, Dan Mathieson, Matti Pennannen and others never looked at me or spoke to me again, I would perfectly understand. But here’s the deal: they already have. They want to know what they need to do in 2014 to stand where Madame Liao stood.
|Monday, June 17, 2013|
|In Stratford Ontario, a Digital Economic Engine Revs Up|
We all recognize the sound of an engine revving up. But when that engine is digital, what sound does it make?
The question was prompted by a March visit to Stratford, Ontario, Canada. I went there because this city of 32,000 was named as Top7 Intelligent Community for the third year in a row, and it was my turn to conduct the site inspection. I went looking to see what was different: what program they had made on very ambitious goals announced three years before.
Back in 2011, Stratford was talking about decisions by its municipal electric utility, Festival Hydro, to build an open-access fiber network and spin it out as a separate business called Rhyzome Networks. The network aimed to ensure that business had the advanced communications infrastructure it needed, while providing the backbone for the utility’s smart-grid project. But there was a much greater ambition in the background. The open access network had the potential to make the Stratford area much more attractive to competitive service providers by offering them a ready-made backbone for hire. In a small city surrounded by farmland, they could offer big improvements in speed and price.
In March, I met Tom Sullivan, CEO of Wightman Telecom, a well-regarded rural telecom operator with its own fiber network. He had done a deal with the city to deliver broadband to businesses and residents over the Rhyzome network, and to begin building out from Rhyzome POPs to provide fiber to the premises at 1 Gbps throughout Stratford. It has hard to imagine any other scenario that would bring “ultrabroadband” to such a place.
In 2011, Stratford had just completed a memorandum of understanding with the University of Waterloo – located about 90 minutes away – to create a Stratford campus specializing in business and digital arts. It represented a big coup: a small city finding a way to bring a prestigious and effective higher-educational institution right into the center of town. But at that point, it was little more than a handshake and a press release.
In 2013, I visited the new building that houses the University of Waterloo Stratford and saw the early stages of an exciting vision being fulfilled. The curriculum brings together students focused on engineering, arts and business to explore how digital media will transform them all. The nearby Stratford Accelerator Centre offers a place to take that exploration one step farther. So in three years, the city has reproduced at small scale the innovation triangle of education, business and government collaboration that powers economic growth worldwide.
In 2011, Stratford had an economy composed of separate pieces: an agricultural sector, a manufacturing sector specializing in automotive components, the Stratford Shakespeare Festival (the city’s biggest employer), and related tourism industries in food and accommodations. Except for manufacturing, all were seasonal businesses – and in Canada, the season was only 4 months long. When I returned in 2013, I saw what had been separate pieces beginning to mesh like the gears in a good machine. A simple example is the success of online tourism promotion by the city, which has created a unified marketing program for individual small businesses. It provides easy, online, mobile access to all of the city’s food, hotel, entertainment and culture resources. The tourism season is now stretching out at both ends as a result.
Nothing captured the transformation for me so well as attending a breakfast meeting of one of the two Rotary Clubs in Stratford. It was a typical group: small business leaders, independent insurance agents, bankers, retirees. It was a typical breakfast of steam-table eggs and weak coffee. But the speaker was representing the city and he was there to tell these small town business folks about Intelligent Communities and Stratford’s programs. It made me think of that famous line from The Wizard of Oz: “Toto, I’ve a feeling we’re not in Kansas anymore.”
What I saw was a digital engine – designed and built over the past few years, with high hopes and false starts, big dreams and midcourse corrections – turning over and starting up. I can’t describe the sound for you. But thanks to Stratford, from now on, I will know it when I hear it.
|Tuesday, June 4, 2013|
|Five Words for the Top7 Intelligent Communities|
When I visit our Top7 Intelligent Communities, I find myself repeating the same five words. They are words that people need to hear, so I tend to say them over and over again.
I visit these cities and regions because they are in the running to become the Intelligent Community of the Year. After the Top7 site visit, they gather at the ICF Summit in New York City from June 5 through 7 to be honored for their achievements, to share their knowledge, and find out which one will win that prestigious award.
It is entirely natural that they are focused on the afternoon of June 7. That is when we announce the selection, based on rigorous analysis of data and the votes of an international jury. But I’m afraid their enthusiasm is a bit misplaced.
Attending the ICF Summit is the culmination of an analysis lasting twelve months. For the communities, it is a milestone on a much longer journey.
These communities are engaged in a process of major change. Whether acting in response to crisis or out of foresight, they are working to build an economy that embraces information and communications technology as a path to prosperity, as a channel to solving social challenges, and as a means to strengthen their culture and quality of life.
It is this hard work that I address when I repeat those same five words: “It’s not about the award.” They look at me funny when I say it, but I mean every one of those five words.
What is it about? It is about the economic, social and cultural outcomes in those communities. It is about the opportunities they create for individuals and organizations and the brilliant solutions they devise for long-standing problems shared by municipalities everywhere. It is about what they have accomplished so far, and all that our global movement may inspire them to accomplish in the future. These are the reasons we selected them as Top7 Intelligent Communities, and they are rewards much richer than any prize.