This is a recent podcast in which Lou Zacharilla, co-founder of the Intelligent Community Forum, interviewed me about how communities prosper in this century.
© 2018 Norman Jacknis, All Rights Reserved
This is a recent podcast in which Lou Zacharilla, co-founder of the Intelligent Community Forum, interviewed me about how communities prosper in this century.
© 2018 Norman Jacknis, All Rights Reserved
Lots of talk about the economy focuses on how individual businesses compete. Generalizing from the situation of individual businesses, public officials who are responsible for the overall growth of their local economy also often talk about competition. Making their cities “competitive in the world economy” or enabling their “residents to compete" are frequent phrases you hear.
And they worry about where they stand in the competition with other cities.
Even in today’s global economy, the biggest cities still envision themselves as standing alone, in competition with all other jurisdictions.
And, of course, with cash, tax and other incentives, local economic development officials will try to steal – i.e., compete – with distant or even nearby jurisdictions.
Granted that sometimes the word “competitive” is used merely to mean prosperous or good or something else positive. But the use of the metaphor of competition can be misleading, even in those cases.
The fact that individual businesses often find themselves competing with
each other doesn’t mean that regions as a whole thrive by focusing on
competition with other regions.
Getting back to basics, an economy grows as people develop and exchange
specialized services/products and, in various ways, create new ideas and
services/products. The better connected and more collaborative the residents of a region are with everyone else, the more likely they are to be creating more wealth and income for themselves. This means that
overall economic growth of a region is much more about collaboration than
The value of collaboration has begun to be heard
in some parts of the economic development profession. For example, John Jung, Chairman of the Intelligent Community Forum (ICF), wrote “Collaborative Innovation – the New Competitive Edge for Economic Development”. From a conference on Global Competition and Collaboration in 2011, there was “New Building Blocks for Jobs and Economic Growth”. The Wharton School at the University of Pennsylvania affirmed this idea: “We Need More Collaboration And Less Competition For Economic Growth”.
Unfortunately, most of the huge global cities have not yet seriously adopted this approach. In contrast, an increasing number of smaller cities, towns and rural areas have come to the realization that they have a better future if they cooperate, collaborate and network.
An interesting example is Mitchell, South Dakota, which has 15,000 people, but was among ICF’s Top 7 Most Intelligent Communities this year — among cities like Rio, New Taipei and Columbus Ohio. They were in trouble a decade ago. They had lost 30% of their population, especially young people, like many other small communities in the countryside.
Mitchell turned that situation around. They have three Internet service providers that deliver gigabit bandwidth. They’ve seen the growth of tech companies and precision agriculture. Their unemployment rate is 3%, with hundreds of open jobs. Unusual for a small city, it has its own workforce development director.
At the recent ICF Summit in Toronto, Bryan Hisel, Executive Director, Mitchell Area Development Corporation, put it simply: “entrepreneurship is our way of thinking here.” So the leaders of Mitchell view their small size as an advantage, not a disadvantage. That entrepreneurial culture of its people came before they had broadband.
With that entrepreneurial spirit, you’d think that Mitchel is all about the competition. But Hisel pointed out that all the things people elsewhere have started to talk about — especially collaboration — comes naturally to small communities. So Mitchell has extended its service to nearby communities and even provides advice to small cities that others might see as competitors.
Perhaps the tradition of collaboration in parts of the countryside is also why there was increased interest at the summit in my proposal for a global virtual metropolis that connects small cities like Mitchell – a connection for economic success that arises from collaboration rather than competition with one another.
© 2015 Norman Jacknis
Some of us live in places that are lucky enough to have some highly unusual feature that stands out – whether it’s the mountains in Colorado towns or the surf of Key West, Florida or even the sheer scale of New York City. But unlike those examples, there are many fine places to live which have a high quality of life, but don’t otherwise have an obvious promotable distinction.
The big question for these places is how to maintain and build on that quality of life in a century that raises new challenges to every place, as more people are able to earn a living no matter where they are – if there’s high-speed Internet connectivity available.
Consider the small city of Clinton, Mississippi. It has a population of about 25,000 people and is near Jackson, the State Capitol. Although it is a relatively old city in the state, having been created in the early 1820s, it was known as Jackson’s first suburb. More recently, other more affluent suburbs have grown up around Jackson with high-end national stores in upscale shopping malls.
While many small cities dream of having a Fortune 500 company, Clinton had already “done that, been there”. WorldCom (later MCI Worldcom), for several years the second largest long-distance phone company in the US, made Clinton its headquarters location. In the early 2000s, a major fraud and financial scandal was discovered at the company. It went bankrupt in 2002 and after a while its nice headquarters was empty and the company’s assets were eventually acquired by a company far away, Verizon. So Clinton was no longer a big company town.
Clinton has, however, retained much of its original small town urban charm, with a number of brick-covered streets and an urban center that’s mostly missing from other suburbs. It has a well-developed sense of community, which is, in part, reflected in the quality of its schools that are ranked number 1 in the state.
Nevertheless, the people of Clinton know there are challenges ahead, so they have been an early adopter of gigabit connections to the home, through a program offered by the regional telecommunications company, C-Spire. The company announced at the end of last month that Clinton had five neighborhoods where pre-registration for the service exceeded the minimum necessary and Clinton becomes the second city in the state to become a gig-city.
(See my earlier blog post about Quitman, MS, for a report on the first city to do this last fall.)
Thanks to the work of the Intelligent Community Institute of Mississippi State University Extension Service, there I was last week to talk to a room full of Clinton’s community leaders. They met to envision how this gigabit network investment can be used to provide new economic opportunity for its residents and to ensure that the city can flourish in the future.
Of course, I pointed out that broadband, while necessary, isn’t sufficient. It’s only the start in building an attractive 21st century community that will retain and, better yet, attract people to live there.
I presented a picture of where the economy and technology have come from and where they seem to be going – and what Clinton can do to get ahead of the curve. I offered numerous examples of things that can be accomplished by a small city, pointing out that small cities can make a bigger impact this way than big cities. After my presentation, Clinton’s community leaders worked together to identify concrete actions they would get done in the next six months.
I was struck especially by the city’s new slogan and campaign. It was not the all-too-frequent argument that “we’re cheaper than the next city down the road and we’ll give your company big incentives to come here.” Even before I arrived with my message that, instead, these days the key question for economic development is how you go about keeping people and attracting newcomers to your city, they had already figured it out.
I wish I had come up with their slogan, since it is spot on – “You Belong Here”. I’ll be following up to see how Clinton goes about making good on that slogan and its promise for the future.
© 2015 Norman Jacknis
In many of my presentations, I point out that an increasing number of people will no longer have traditional 9-5 jobs in office buildings. Of course, I’m not the only one to observe that the labor market is potentially global and that entrepreneurs who live anywhere can connect with others who have the skills they need to make their businesses successful.
When I say these things, people generally agree – in the abstract – but they seem not to know how they can actually do this. They just don’t know how to start and sustain a global virtual business.
This is a particularly important problem for entrepreneurs who do not live in one of the half dozen biggest metropolitan areas in this country or their equivalent metropolitan areas elsewhere.
With that in mind, it’s worth noting that last year a book was published that can set virtual entrepreneurs on their way. It’s “Virtual Freedom: How to Work with Virtual Staff to Buy More Time, Become More Productive, and Build Your Dream Business” by Chris Ducker, a serial entrepreneur based in the Philippines. (He’s also responsible for the slide above.)
Ducker starts by describing the feeling that entrepreneurs have that they must do everything themselves because they can’t find others to help them. And, of course, those who are outside of big cities feel even lonelier. But reminding readers of that feeling is really just the motivation for reading on.
“Virtual Freedom” is essentially a practical handbook for managing a virtual global workforce. It goes into some detail about hiring people, compensating them, managing them, etc. It provides case studies and references to tools that the entrepreneur can use.
It’s interesting that the advice in much of the book applies to management in general, not just management of virtual workforces.
Perhaps managing a virtual workforce forces you to think about management more clearly than when you manage in traditional offices. In those offices, people seem to think they know the rules and patterns of behavior – even when they don’t really know.
Some of the advice is common sense, except we all know that common sense is not so common.
For example, he gives examples of entrepreneurs who were frustrated by the poor quality of those they depended on, until the entrepreneurs realized the problem was, in large part, on their side – a failure to communicate clearly and specifically what they were asking for and a failure to verify this was understood by workers who often came from other cultures. But in the diverse workforce in many countries today, this is an issue even in traditional offices.
Along with communicating clearly, he emphasizes that the entrepreneur needs to think clearly about the tasks that need to be accomplished. After all, when you can’t really look over the shoulders of the people who work for you, the only measure of effectiveness you have is what results they deliver.
Of course, such an approach in a traditional office environment is also a good idea – rather than trying to see if “people are working hard”. It’s easy to look busy. Not so easy to get tasks done and deliver results.
Bottom line: if you want to get a quick course in management of virtual staff, read this book.
© 2015 Norman Jacknis
You often hear how the countryside is collapsing in various ways. And clearly the remaining sixty million Americans who live in small towns and rural areas have faced a variety of challenges.
As I described in my presentation at the Walsh University Leadership Academy a few weeks back, I’ve heard eight major complaints to explain why rural areas are in trouble. While each of these has been true over the last few decades, increasingly the changes in our world mean that these complaints themselves are no longer relevant – the complaints are collapsing, while the countryside has new opportunities for renewal.
Let me address each of these, briefly, one at a time. (If you’re interested in a fuller explanation, I can send you a copy of the whole 80-slide presentation.)
1. “We’re not big enough to have sustainable business clusters.”
So many economic development officials have had the cluster strategy drummed into their minds that they don’t realize how out of date it is. As economist, Paul Krugman, said when he was given the Nobel Prize for his early work on economic geography, “[Clustering] may describe forces that are waning rather than gathering strength.” My favorite example is the growth of the BATS Exchange at the expense of the New York Stock Exchange on Wall Street. BATS is headquartered in Lenexa, Kansas.
2. “We’ve lost most good-paying manufacturing jobs.”
So has everyone else. Just as economic changes over the last hundred fifty years meant that we need very few people on the farm to produce the food the rest of us need, so too productivity in manufacturing means fewer people are needed in plants. That is part of the growth of the economy. But there has been a parallel increase in the service sector of the economy and the Internet has made possible a new range of intangible, digital products and services – from which people can make a living. That, of course, doesn’t even account for the many unmet needs of our economy and society – for example, curing major diseases – that will generate employment.
3. “We don’t have skyscrapers filled with office workers.”
But work is no longer tied to these “places of work”. Many people can work from home, without the need for a cubicle in a skyscraper.
4. “We’re isolated in the middle of nowhere.”
You may be physically far from large metropolitan areas, but digital communications connects everyone everywhere, even face-to-face through video-conferencing. (Of course, this assumes you have broadband connectivity sufficient for video – but that’s part of the point of this argument. If you get the connectivity, there are all kinds of options open for you, even in the countryside.)
5. “We don’t have a major research university.”
There is an incredible amount of learning available on the Internet, including courses from traditional universities (like edX) and non-traditional sources. And most of the research at the major universities is now available online, especially the kind of later stage research that is most easily commercialized. So what you need is not the research university, but people with sufficient entrepreneurial imagination – and those folks can be found all over.
6. “Whenever we get sick we need to go to a big city for care.”
With telemedicine (and even remote surgery, in the longer run), not all health care requires a visit to a big city.
7. “We can’t participate in developing new ideas and our innovators have no one to talk to (so they leave).”
Again, anyone with an innovative disposition can now reach out to others on the Internet. Moreover, with the growth of the open innovation movement in corporations and governments, there are a variety of opportunities for people who live in the countryside to offer their new ideas – and be rewarded for them.
8. “There are not enough customers nearby and many of the business skills we need are also not nearby.”
Yet, economic opportunities and services are global. All you need to be is connected to the global economy. By the way, this isn’t limited to people who want to write computer software. There are all kinds of interesting examples of people who live in the countryside making a living outside of the tech industry – for example, by teaching English to foreign students, or selling their works of art and craftsmanship, or providing help desk/customer support or even selling lobster bait bags. Now the market is not limited to the small number of people who are nearby.
So before people in the countryside give up on their futures, they should consider how these old obstacles of the past will collapse in the future.
© 2014 Norman Jacknis
Last month, the Economist had an article titled “Arrested development: The model of development through industrialisation is on its way out” – well worth reading.
It started by describing how China successfully followed the previous model of industrialization by Japan and South Korea, among others. In turn, many other emerging economies are now planning to follow the same road as China did – initiate a wealth-creating manufacturing sector that can export to the world.
However, the Economist offered a cautionary note about this strategy:
Governments across the emerging world dream of repeating China’s success, but the technological transformation now under way appears to be permanently changing the economics of development. China may be among the last economies to be able to ride industrialisation to middle-income status. Much of the emerging world is facing a problem that Dani Rodrik, of the Institute for Advanced Study in Princeton, New Jersey, calls “premature deindustrialisation”…
For most of recent economic history, “industrialised” meant rich. And indeed most countries that were highly industrialised were rich, and were rich because they were industrialised. Yet this relationship has broken down.
The article went on to point out that:
Another mechanism through which new technology is changing the process of development is the dematerialisation of economic activity. Consumption the world over is shifting from “stuff to fluff”
The Economist article, however, was not complete. While it noted the impact of robots who can work cheaper than humans anywhere, it didn’t address the role 3D printing will have on manufacturing.
In my presentations to mayors of North American cities, I’ve emphasized that they cannot base their future on an old industrial era model of the economy. The same is true for countries which haven’t industrialized yet. In a global economy, even with vastly unequal positions of different nations, the same rules of the game apply.
I won’t repeat here the themes of my other blog posts, but, to get into that game, communications and information technologies (ICT) are a requirement.
Of course, it is frequently argued that ICT has to take a back seat when a nation doesn’t have clean water, etc. I understand this argument and sympathize to a degree, but I’d also note that in fact in many poor countries there are more people with mobile phones and access to the Internet than access to a bathroom. Maybe they understand that you need, to use an old analogy, to spend some money to drain the swamp or you’ll forever be stuck fighting the alligators.
For them, ICT is a path out of poverty. And, of course, from a public sector viewpoint, ICT can also help to manage and implement cleaner living conditions, sewer systems, etc.
The ultimately pessimistic view of the Economist article may not be justified, since these new rules and approaches to economic growth are beginning to be understood by a number of leaders in developing nations. By ICT investments, experimentation and innovation, they are also beginning to create the new post-industrial template for growth.
© 2014 Norman Jacknis
People who live in big metropolises, like New York, London or Hong Kong, often say that they can always find someone within a few miles who has a special skill they need to complete some project or build a business. I’ve pointed out that the close proximity of millions of people with so many different skills is part of what has made cities successful economic engines during the industrial era.
When the population of your town is just a few thousand, there is a much smaller likelihood you’ll find the special skill you need nearby – and thus you’ll be less likely to achieve what you have in mind.
In the US alone, the Census Bureau has noted in its report “Patterns of Metropolitan and Micropolitan Population Change” that 10% of Americans live in one of the 576 small urban areas (where there is at least one urban cluster of less than 50,000, but at least 10,000 people). That’s about 32 million people.
Another 6% lived in neither major metropolitan areas nor even these small urban areas. That’s just under 20 million people.
In this century, with broadband Internet, physical proximity is no longer necessary for people to collaborate and share their skills in a common project. Yet the small towns of these more than 50 million people are mostly not connected to each other.
So here’s my wild idea for the day: why not create a virtual metropolis of millions from the people in the small towns and communities of the countryside?
Imagine if even half of those 20 million (or 52 million) people who live outside the big metropolises could work together and be combined to act as if they were physically next door – while not actually living in such crowded conditions.
Such a network or virtual aggregation of small towns would offer their residents a much higher chance of succeeding with their business ideas and making a better living. If someone, for example, had the engineering talents to design a new product, that person might more likely find the necessary marketing talent somewhere in that network of millions of people.
Clearly, anyone connected to the Internet can try to reach out to anyone else whether that person lives in a small town or a big city. But a network of small towns alone might encourage greater collaboration because of the shared background of country life and the perceived greater friendliness (and less wariness) of non-urban residents. In most small towns, people are used to working with each other. This would just be a virtual extension of the same idea.
Initially, of course, people would feel most comfortable with those in the same region, such as within North America. Over time, as people interact more with each other on a global basis, that comfort level will expand.
Whether on a regional or global basis, this virtual metropolis could compete on a more even playing field and even establish a unique brand for the people and companies located there. It would make it possible for rural residents to keep their quality of life and also make a decent living.
What do you think?
© 2014 Norman Jacknis
Can a town of 2,300 people in the countryside of Mississippi create a future for itself with broadband? The answer is yes if you speak to the visionary leader of Quitman – its Mayor, Eddie Fulton – and about two dozen community leaders from business, education, churches, health care and other fields.
Quitman is not what you might think of as the likely star of a broadband story. It has suffered de-population, economic difficulties, community tensions and all the other problems people in many small towns across America have witnessed.
Then along comes the Mississippi-based telecommunications company, C-Spire, who announced it would deploy gigabit Internet connection through fiber to the home in a small number of communities. The key requirement was that a fairly sizable percentage of the community’s residents had to sign up for the service in advance.
Quitman was the smallest town to take on this challenge. It would not normally be considered because of its size, but they had such a strong commitment to building on broadband that the company decided to make the investment. Now, Quitman is ahead of the others in deployment and plans for developing their community.
Anyone who has ever been involved in a big technology project knows that the biggest obstacles to success are not technical issues, but human issues. That’s why the chances that Quitman will succeed are good. They have the necessary leadership, motivation and willingness to innovate.
They’ve also been helped by one of the long forgotten secrets of America’s agricultural and economic success – the extension service. In particular, Professor Roberto Gallardo at Mississippi State University Center For Technology Outreach has helped to educate the community and been their adviser.
And so it was that last week I was in Quitman leading what the Intelligent Community Forum calls a Master Class, as part of its community accelerator program.
I pointed out that, rather than being an anomaly, a small city like Quitman could be the quintessential broadband success story. I told the community leaders that a number of recent studies have shown that broadband has a much greater impact on small towns and rural areas than in cities. As I’ve written before, this is not surprising. Big cities provide many traditional ways that many people can interact with each other. It is only when residents of small communities get connected to everyone else through the Internet that they can start to level the playing field.
I reviewed the historical context that is opening up new opportunities for rural communities. I provided various examples, from elsewhere in North America and beyond, of the ways broadband can make a difference to the countryside. The point of the examples was to give the community leaders ideas and also to see small towns, like theirs, doing great things with broadband.
Then to bring the strategy and examples home, I asked them what they would do with broadband when it was deployed. The community leaders separated into three groups, one each focused on education, health and economic growth. They had a good discussion and came up with good ideas that will enable them to move fast when the connectivity is available later this year.
The signature line of the old song “New York, New York”, written at the height of that city’s industrial prominence, proclaimed: “If I can make it in New York, I’ll make it anywhere”. This century, in the post-industrial era, the line should be: if broadband helps make Quitman a success story, then it can happen anywhere.
I’ll keep you apprised of their progress.
© 2014 Norman Jacknis
There have been recent news stories about those coming and going and possibly returning to life in the countryside.
A couple months ago, the New York Times had a major story about older folks returning to rural life after business careers elsewhere – “A Second Career, Happily in the Weeds”. (Among others, it featured Debra Sloane, a former Cisco colleague.
Then this past weekend, in a kind of counterpoint, the Times’ Sunday Review section had an op-ed article about a woman who tried and gave up on living in the countryside – “Giving Up My Small-Town Fantasy”. While she returned to the city, she also wrote that she moved to a small town because:
We were betting on the fact that we wouldn’t be alone in fleeing the big city for a small town. Urban living has become unthinkably expensive for many middle-class creative types. A 2010 study from the Journal of Economic Geography found a trifecta of reasons some rural areas have grown instead of shrunk: the creative class, entrepreneurial activity and outdoor amenities. In 2012, a University of Minnesota research fellow called the influx of 30-to-40-somethings into rural Minnesota towns a “brain gain” — flipping the conventional wisdom on the exodus from the boonies to the big city.
To further the idea that the traditional brain drain from rural areas is changing, the well-respected Daily Yonder had a feature article last month summarizing research on “The Rural Student Brain Gain”. As they note:
The common wisdom is that rural America’s “best and brightest” want to leave home. New research shows these students are no more likely to want to leave than their counterparts. And when they do go, they have a stronger desire to return.
There is no doubt that many young people who can leave will do so – which more likely means the brightest who can get into major universities. To some extent, all young people want to see the world beyond where they grew up.
Almost a hundred years ago, Joe Young and Sam M. Lewis wrote what became a very popular song as many young men went off to Europe in World War I.
How ya gonna keep ‘em down on the farm
After they’ve seen Paree’
How ya gonna keep ‘em away from Broadway
Jazzin around and paintin’ the town
By the way, this is not just a rural question. A generation ago or so, parents in New York City were asking the same question – would the young return after seeing California? Feeding this concern, for instance, was an article in the New York Times on October 1, 1980 about so many New Yorkers living in Los Angeles that two of the big high schools in Brooklyn held alumni reunions there.
So while we don’t want the young to feel they are being kept captive, the question is will they return to their countryside origins or something like it?
To answer that question, there are others that need to be answered first.
In a post-industrial, global, Internet-connected economy, can young people still feel they are part of the larger world? Can they have as many opportunities for fulfillment and success back home as in the “big city”?
The answer is yes, the potential is there. But the young are still leaving because too few rural communities have done the things they need to do in order to open up those opportunities for their brightest young people. These lagging leaders haven’t built up the broadband necessary to connect both young and old to the world, nor have they helped people understand what they can do with that broadband connection, nor have they focused on the larger issues of developing a community anyone would want to live in if they had a choice in the matter.
And those who have given up hope for their rural communities because they know people there can never earn the megabucks found on Wall Street? They should be informed by other research, including a fascinating, classic study by Professor Gundars Rudzitis of the University of Idaho, in his article in Rural Development Perspectives, “Amenities Increasingly Draw People to the Rural West”:
More people are moving to rural areas for reasons that have nothing to do with employment. … the rural West is one of the fastest growing regions in the United States. … Surveys in the 1970’s began to show that, if given a choice, people prefer to live in small towns and even in rural areas.
Amenities such as environmental quality and pace of life were becoming important in explaining why people move. The apparent sudden preference of people for rural life shocked many academics and planners because rural areas were thought to be at a major disadvantage compared with urban areas.
These findings also were a surprise because they conflicted with the major assumptions of migration theory, or why people move. Simply put, people were thought to move because they wanted to increase or maximize their incomes. … This approach, however, failed to explain why people moved out of cities into places like the rural West.
… People who migrate to high-amenity counties are often assumed to be retirees, as the growth and development of States like Arizona and Florida bears out. In our survey, however, only 10 percent of the new migrants were over 65 years of age. Instead, migrants were more likely to be young, highly educated professionals.
These studies and stories about people moving from city to country and back make clear that these decisions are more complicated than the headlines indicate. And broadband connectivity will upset these patterns even more.
Indeed, this new picture of what is going on may tell us why the best and brightest of the countryside might want to return after they’ve seen Paris (or New York or San Francisco).
© 2014 Norman Jacknis
Jeffrey Dixon, Associate Director of the Monieson Centre which has run the project, was very kind in his feedback:
Norm Jacknis provided an inspiring presentation at our 6th annual rural economic development conference. He helped a group of community leaders, business people, policymakers and researchers consider new opportunities for rural prosperity and to think creatively about how they can use technology to transform their economies.
A video of the presentation, including questions and discussion, is now available at https://www.youtube.com/watch?v=w7PmYBxcqgA&index=3&list=PLc4qJ1UgXeFHWsWwtzQm5TvfeNuDvfRad and also as the Tumblr post just after this. I went into a fairly deep explanation of the trends occurring in the economy and technology – and why and how these trends open up new opportunities for small towns and rural areas. It’s about an hour long video, although the actual presentation starts about two minutes into the video and ends about forty minutes later. (Sit back and relax – I tried to make it as entertaining as possible.)
You can see the printed handout at http://business.queensu.ca/centres/monieson/events/Economic_Revitalization_2014/Presentations/2014%20conference%20presentations/Norm%20Jacknis.pdf Of course, if you only read the handout, you’ll miss the videos and also what I say about each slide since I don’t really read them.
Also, in conjunction with the conference, the university staff issued a series of research papers that you can read in the Journal of Rural and Community Development at http://www.jrcd.ca/viewissue.php?id=20
© 2014 Norman Jacknis
This Tuesday, Queen’s University of Kingston, Ontario held its last annual conference on Rural Prosperity in Canada. As Senior Fellow leading the Rural Imperative for the Intelligent Community Forum, I was asked to give the opening, keynote speech.
My overall theme was that the countryside has a new opportunity to flourish, considering developments in technology and broadband, as well as the major post-industrial trends in North America, Europe, Japan and elsewhere. I also emphasized that broadband, while a necessary condition for community development, is not sufficient and must be integrated with other elements that build quality of life.
I won’t go into more detail here, since my presentation will be posted on their website. Instead I’ll report on some of the items presented by others that caught my attention.
1. Research on the economic impact of broadband
The researchers at the Monieson Centre of the university’s Business School presented the results of their analysis of the impact of broadband on employment and wages. They found that broadband deployment, from 1997-2011, had only a minor positive impact on employment in urban areas, but had a significantly more positive impact in rural areas. However, broadband was associated with wage increases in both rural and urban regions.
Moreover, they found there was no impact on employment at firms producing physical goods, but a major positive impact on employment and wages for services (although not all services).
Although we didn’t coordinate, it was nice to see results that tracked with the broad trends I’ve been highlighting for the last few years. In a way, my presentation explained the research results.
2. Rural broadband network in eastern Ontario
The association of the key leaders of rural counties in eastern Ontario (called the Eastern Ontario Wardens Caucus), with others, have spearheaded a project called EORN that is wrapping up its initial deployment this year. The Eastern Ontario Regional Network is building out rural areas with broadband that provides its 500,000 residents with 10 megabit connections – much more than is common even among most urban users of the Internet in North America. EORN officials think it is the most ambitious project of its kind in the Americas or possibly the world. They are certain it is the “most sustainable rural network” in the world.
Later in the day, Bo Beaulieu of Purdue University’s Center for Regional Development spoke about the necessity and value of regional cooperation among rural counties. My observation was that, with broadband and regional cooperation, these areas can present themselves as the virtual equivalent of a city and be able to compete economically in many ways not otherwise possible.
3. Creative uses of the countryside
There were various presentations on how the new countryside is more than just farming. One example was a “multi-functional” farm – yes, it grew food for sale, but also was an environmental education center, alternative energy demonstration site, publishing office, and a bed-and-breakfast set up by a “refugee” from Toronto.
Since, especially in this area of Canada, much of that nation’s history is better preserved in the countryside than in cities, historical and cultural resources have been used as a basis for economic development. See, for example, History Lives Here which has a variety of products, from videos and guided tours to History labelled wines from local wineries.
All in all, a very interesting day that provided strong evidence of the energy and innovation which is creating the future of rural areas in Canada and the rest of the world.
Just a short note that the Intelligent Community Forum has asked me to be responsible for its Rural Imperative to build and create a renaissance of rural life through the power of high speed Internet and technology combined with community development. For more details see http://www.prweb.com/releases/2014/02/prweb11614027.htm
Also, yesterday, Government Technology magazine’s Digital Communities website featured an article by me about the role that technologists need to play to help rural communities achieve their potential. See “The Rural Imperative Needs Tech Creativity and Leadership” at http://www.digitalcommunities.com/articles/The-Rural-Imperative-Needs-Tech-Creativity-and-Leadership.html
The Rural Imperative is one of the very few activities that I’m undertaking – projects that will be fun, challenging and help change the world. What more could anyone ask for?
As readers of this blog know, I’ve spent a lot of time in the last few years helping cities figure out the impact of new technologies and broadband on their future role in people’s lives and also helping mayors figure out ways of using those technologies to create new kinds of urban experiences and reasons for people to live in their cities.
Cities were the winners out of the industrial age and attracted vast numbers of people from the countryside. You can see that pattern repeating itself today in the newly successful industrial countries, like China, or those areas that are just starting to industrialize, like Africa.
In the already developed countries, even though the change from the industrial to the knowledge economy has been wrenching for many cities, urban areas are still ahead of the game by comparison with rural areas and are better positioned to take advantage of these changes.
In theory, though, the global Internet and the increased availability of inexpensive technology should have had an even greater impact on rural areas. For if it were really true that people can work anywhere and quality of life becomes the key factor in where they choose to live, then many people would choose to live in the countryside and not in the more metropolitan regions.
It hasn’t happened that way. As you can read from my post last week which, among other trends, noted that telecommuting has increased dramatically among urban residents, but not for those in exurbia.
There are many reasons why the countryside hasn’t realized its potential. Partly, this is a residue of the industrial age – it is not yet true for everyone that they can take their work with them. For many without college educations, making a living requires a commute to a manufacturing plant or a service location or a farm.
As has been true for declining urban areas, in some rural communities a social pathology sets in that reinforces decline and is evidenced in the increased use of drugs and other forms societal breakdown. Even though it wouldn’t be called a pathology, the out-migration of many of their young adults has also been a concern of the remaining residents of rural areas.
Another part of the story is that many rural communities have not yet become fully connected to the global economy. In his recent rural strategy announcements, President Obama pointed out that there is a 15% gap in broadband between urban and rural households. Many technology providers have ignored rural communities. That should change.
While cities will still be attractive, they are not for everyone all the time. Many people would indeed prefer to live in the countryside if they had economic opportunity, decent health care, a means to learn and in other ways overcome the sense of isolation that has historically been the downside of rural living.
Many countries have come to realize that they cannot just move all of their rural residents into cities. As India has learned, there is not enough economic opportunity in their cities and the urban infrastructure cannot support the migrants who have already moved there. The New York Times recently reported that, even the Chinese, with a relentless urban focus, have started to worry that their nation’s traditional culture and identity is getting lost in the process. Indeed, there has been a reverse migration from the cities to the Chinese countryside.
None of this is a surprise to those who live in rural communities. What may be better news is that there is now an imperative to bring technology and global connectivity to the countryside – and to help them build those communities into attractive and sustainable places for people to stay and to return to.
We’ve seen this in President Obama’s rural broadband program and in the recently announced Canadian rural broadband investment of $305 million.
With this background, the Intelligent Community Forum started its Rural Imperative program last year. It will apply to the world’s rural areas its unique, global perspective on how broadband and technology can be mutually reinforcing with community development and growth. This is an important step in helping the new connected countryside go from potential possibility to a reality.
© 2014 Norman Jacknis
The Initiative for a Competitive Inner City (ICIC) was created twenty years ago by the famed strategy professor at Harvard Business School Professor, Michael Porter. ICIC focuses on economic development strategies for inner cities. Their stated mission is “to drive economic prosperity in America’s inner cities through private sector investment to create jobs, income and wealth for local residents”.
As part of their What Works For Cities series, last Thursday, ICIC held a webinar for about two hundred attendees on “How inner cities can increase the impact of technology clusters”. On behalf of the Intelligent Community Forum, I was one of the invited speakers.
ICIC wanted to address three questions:
So I took this as an opportunity to discuss technology-based economic growth from a global perspective, based on my own experience and that of the hundreds of cities and regions who have been identified as intelligent communities by the Intelligent Community Forum over the last fifteen years. My focus was especially on innovation and inclusion.
There were two underlying themes in my presentation.
First, technology-based economic development should not mean solely creating software and other tech companies. Partly that is because good social policy doesn’t just replace current poor inner city residents with newcomers who are programmers and web designers.
Helping existing residents learn programming is a key part of the story that the two New York City public officials presented during the webinar. NYC’s focus is to fulfill the demand for programmers, web designers and engineers from among those who have been unemployed – recognizing that in the tech industry, aptitude is more important than degrees, an important consideration for inner city residents.
I’d add that there are a variety of places and ways that people can learn programming from the Internet, including the well-known Code Academy. In his recent post “Can Tech Help Inner City Poverty?” Michael Mandel reviewed the generally positive results of these programs.
But the world needs more than just programmers, as was well discussed in a recent NPR report, “Computers Are The Future, But Does Everyone Need To Code?”.
A successful technology-based economy strategy for inner city residents should also help non-programmers and low-tech businesses benefit from being connected digitally to the greater opportunities of the global economy.
Second, in this century with its digital, knowledge-based global economy, innovation is the key to competitive success. I described several ways that cities can be an example of innovation and facilitate innovation among their residents, including, or perhaps especially, among inner city residents.
While the full presentation will be on the ICIC website later, here is a summary of the various aspects of the strategy that I presented. The 21st century city:
© 2014 Norman Jacknis
The National Association of Counties’ Large Urban County Caucus – LUCC, as it is known – represents the largest counties in the country, where a significant percentage of Americans live. LUCC held its 2013 County Innovation Symposium in New York City last week from Wednesday through Friday.
(I was invited in my new role as the first Senior NACo Fellow.)
Although Thursday’s schedule included sessions on health care, criminal justice and resilience, the meeting on the other two days focused on economic development. Bruce Katz of the Brookings Institution’s Metropolitan Policy Program and co-author of the recent book, “The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy” kicked off Friday morning.
He and other panelists noted the evolving role of counties and NACo itself, as the old suburban vs. urban disputes are overtaken by important socio-economic trends.
First, there is an increased understanding and recognition among public officials now of the metropolitan, really regional, nature of economies. The old game of providing incentives to companies to move within a metropolitan area, resulting in no new jobs in the region, is wearing thin.
Second, the global nature of the economy implies that regions are now competing with each other, not localities. And only a regional scale can generate the funds necessary to compete on a global basis.
Third, the demographic differences that used to separate suburban and urban areas are diminishing. The two are beginning to look a lot alike. Brookings’ research indicates that today there are more poor people in suburbs than in cities.
Along with this discussion of economic strategy, there was a strong interest in encouraging innovation and in learning how to get good innovations to diffuse quickly. This interest is one reason why NACo has appointed Dr. Bert Jarreau as its first Chief Innovation Officer.
With that in mind, the group went to visit Google’s New York labs. (It is interesting to see Google’s entry into the sub-national arena over the last year or so, as more traditional IT companies have withdrawn somewhat from this market.)
A predictable big hit was the demonstration of Google Glass and a discussion of Glass apps, called GlassWare, that might be of value in the public sector.
There were also presentations of two applications that were extensions of Google’s search and other tools. One was for integrated predictive policing, with heavy use of video cams (both public and private) and unstructured, narrative data. Similarly, Macomb County, MI (population 900,000) showed how it uses a search tool, called SuperIndex, for text and images of land records. The latter, by the way, is financially self-supporting.
By the end of the meeting, NACo LUCC decided they will make this innovation symposium an annual event. It is often these kinds of unexpected, under-the-radar, developments that surprise people later. County governments has not had a reputation for innovation, but keep your eyes open for what develops with this group.
©2013 Norman Jacknis
Previously on this blog and in my presentations over the last couple of years, I’ve pointed out that we are not adequately measuring what’s happening in the economy because GDP was developed during the 1930s to measure the industrial economy. In significant ways, it underestimates the value of digital products and services.
I even referred back to a great old quote from Senator Robert Kennedy – http://njacknis.tumblr.com/post/16816367505/robert-kennedy-on-measuring-the-economy-too-much
So it was with interest that I read earlier this week (“Getting Creative With the G.D.P.”) that the Federal government will be adjusting GDP this fall to better account for the new economy. In March, the Government issued a report about this topic, entitled “Preview of the 2013 Comprehensive Revision of the National Income and Product Accounts: Changes in Definitions and Presentations”.
The BEA report says:
Currently, expenditures for private R&D are not recorded as final expenditures in the calculation of gross domestic product (GDP). Expenditures for purchased R&D are classified as intermediate inputs, and the costs of producing own-account R&D (that is, production of R&D by an enterprise for its own use) are simply included with the other costs of production and are not identified as contributing to the output of a separate commodity.
Investment in R&D will be presented along with investment in software and in entertainment, literary, and artistic originals in a new asset category entitled “intellectual property products,” … The recognition of R&D as investment will improve BEA’s measures of fixed investment, allow users to better measure the effects of innovation and intangible assets on the economy, and make the NIPAs more consistent with recommendations in the SNA [the government’s “system of national accounts”].
The strategic consultants, McKinsey, in commenting on this change this week, noted:
In our knowledge-based economy, this is a sensible move that brings GDP accounting closer to economic reality. And while that may seem like an arcane shift relevant only to a small number of economists, the need for the change reflects a broader mismatch between our digital economy and the way we account for it.
The change doesn’t fully address the under-measurement of the impact of the digital economy, but it does start to fix the problem. Now, as both the public and private sector make investments in expanding the digital sector of the economy, the return on those investments will become clearer.
© 2013 Norman Jacknis
Getting A Grip On The Future Economy
I’ve been asked by several people for the link to the video of my keynote presentation at the first Intelligent Communities Institute symposium last fall, on “Seizing Our Destiny: Getting A Grip On The Future Economy”. This was the latest version of the future-oriented strategy to succeed in the world as technology and how people will make a living both change – http://www.youtube.com/watch?v=WlNxLmIQ4O8.
© 2013 Norman Jacknis
I had the opportunity this week to participate in a summit run by the Chancellor of the State University of New York on Community Colleges and the Future of New York’s Workforce.
The participants came from both the community colleges and industry. As a group, they represented some of the smartest and most dedicated folks trying to improve the workforce.
The special focus was on STEM and especially advanced manufacturing, represented in New York by the photovoltaic, optics, and fab foundry industries, among others.
Some key takeaways:
What I didn’t hear was also important:
Unless community colleges also fully address these two questions, their well-intentioned plans and diligent efforts will be undermined.
© 2013 Norman Jacknis
In my presentations on economic growth, I’ve pointed out that, given the new rules of the 21st century economy, the typical incentives that government uses to get corporations to bring new jobs to their area are rapidly declining in effectiveness. Yet these incentives add up to a huge number – now estimated at $80 billion a year.
Instead, I’ve suggested that at least a fraction of that money be spent in more effective, future-oriented ways. These alternative ways include connecting local entrepreneurs to global partners, resources and markets, as well as efficient lifelong learning opportunities for adults so they can increase their potential incomes as individual players in the economy.
Some of these ideas are parallel to the small, but growing, movement of local officials called “economic gardening” in contrast to the industrial era “economic hunting” strategy that is still the normal approach.
So it was with great interest to see the front page of the New York Times this Sunday, which began a three part series on the “UNITED STATES OF SUBSIDIES – A series examining business incentives and their impact on jobs and local economies”.
Part 1 was entitled “As States Vie to Lure Companies, the Winners Are Often the Losers” and began with this story:
Today, General Motors’ Willow Run plant in Ypsilanti Township, Mich., stands empty and silent. The storied facility made bomber planes during World War II and then automobiles after being bought by G.M. Ypsilanti gave G.M. more than $200 million in incentives for Willow Run and another plant there — which has also been closed.
In the end, the money that towns across America gave General Motors did not matter. When the automaker released a list of factories it was closing during bankruptcy three years ago, communities that had considered themselves G.M.’s business partners were among the targets.
Other highlights included:
A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies.[The combined amount federal and state governments give up for incentives each year is $170 billion.]
The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.
“If you’re looking at the competitiveness of a region, the most important thing a region can do is to focus on education. And this use of incentives is really transferring money from education to businesses.” Donald J. Hall Jr., Hallmark C.E.O.
Workers are a vital ingredient in any business, yet companies and government officials increasingly view the creation of jobs as an expense that should be subsidized by taxpayers, private consultants and local officials said.
For towns, it became a game of survival, even if the competition turned out to be a mirage.
© 2012 Norman Jacknis
Wednesday, this week, there was a conference in Puerto Rico, on “The Role of Cities in a Global Economy”. The New York Fed Bank, in part, played a role in the conference and suggested that I be invited to speak because of my work on economic growth.
The conference materials had a predisposition toward cluster strategy; “agglomeration” was a frequently used term. Along with this predisposition, there was a feeling that metropolitan regions should learn from the past successes of cities like New York.
So I first raised what I thought was the big open question: how should a place like Puerto Rico (and its San Juan metropolitan area) advance the economic well being of its residents?
While New York succeeded in the industrial age because it had the largest agglomeration of resources, this does not mean that Puerto Rico should try to imitate such a large metro area now.
Rather than trying to “win the last war”, there is an opportunity for Puerto Rico to find a leading role in the future economy by not playing according to industrial era rules. At least some of Puerto Rico’s economic strategy should focus on this future.
Other speakers and interesting insights:
The conference brought together many of the thought leaders about the future of cities and it was also inspiring to see an audience that intends to act upon what they learned to leapfrog their economy.
© 2012 Norman Jacknis