March 2015 – Looking Forward

March 31, 2015

Does A Cluster Strategy Work?

The conventional wisdom in economic development calls for growth strategies that are based on clusters of businesses in the same sector. Here are just a few examples of the many cluster-based economic plans that I’ve come across from one end of the country to the other:

The problem with this conventional wisdom is that it is increasingly unwise.

Princeton University Economics Professor Paul Krugman won the 2008 Nobel Prize for his work 20-30 years earlier in identifying the “new economic geography” (the theoretical foundation of the cluster approach). But in his acceptance speech, he noted changes:

“[Clustering] may describe forces that are waning rather than gathering strength.”

“The data accord with common perception: many of the traditional localizations of industry have declined (think of the Akron rubber industry), and those that have arisen, such as Silicon Valley, don’t seem comparable in scale.”

A European report from 2011 found:

“Business clusters could be less relevant as drivers of innovation than has been commonly assumed. The Stavanger Centre for Innovation Research analysed 1,600 companies with more than 10 employees located in the five largest Norwegian city-regions. Rather than national clusters, international cooperation or global pipelines were identified as the main drivers of innovation.”

For his University of North Carolina Ph.D. thesis research titled, “Cluster Requiem And The Rise Of Cumulative Growth Theory”, Dr. Gary Kunkle tracked the growth and survival of a cohort of more than 300,000 establishments operating in Pennsylvania from 1997-2007. His findings:

“Industry cluster theory has … an inability to explain economic dispersion and the presence of high-growing firms that thrive in non-clustered industries and locations.”

“Firm characteristics are 10-times more powerful than industry and cluster characteristics, and 50-times more powerful than location characteristics, in explaining and predicting establishment-level growth and survival”

“A sub-set of businesses systematically accumulate a disproportionate share of employment growth. Roughly 1% of establishments created 169% of all net new jobs added in the state over a ten-year period.”

This latter point is one of the reasons that the Economic Gardening movement, led by Chris Gibbons, has arisen as an insurgent force within the economic development world. It concentrates on the small proportion of enterprises that create the most new jobs.

There is nothing wrong with encouraging any existing local business to grow – again an economic gardening strategy. But it is foolish to try to build a region’s economic development strategy around a cluster where none exists.

While many regions try to be more sophisticated in their approach, too often, I’ve heard people say that they have a few web design firms and from that they’re going to invest in building a “high tech cluster”. Every town has someone who claims to design websites. Really, that’s not a cluster even in the old industrial era. And it’s not an effective strategy for economic growth in this era.

The famous economist John Maynard Keynes once said “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” While some of the economists who developed cluster approaches are not quite defunct yet, the message is the still relevant.

We are in an economy where everyone in the world is connected by information and communications technologies. For residents of any city or state to flourish economically, they should not be limited to a cluster of business activity which is based on purely local, physical proximity.

[http://njacknis.tumblr.com/post/115120132463/does-a-cluster-strategy-work]

March 25, 2015

What Is A Book?

A few days ago, I was in a meeting of library leaders watching a presentation about the current status of the Digital Public Library of America and the Empire State Digital Network.

With all the work going on in libraries to digitize materials and also to manage materials that are born digital, someone asked what this means for the traditional role of librarians as collectors on behalf of their patrons.

Someone else pointed out that librarians are beyond being collectors of materials to being curators. OK, but what does curation mean now and going forward into the future?

In many ways, the deeper question is “what is a book” in the digital age?

To provide some context, imagine all the books that have been written are each envisioned as a highway. Reading the traditional printed book of the pre-digital era was like getting on a highway and not getting off until it ends – unless, of course, you just stopped reading it at all.

But when you’re reading a digital book, you might see something interesting from this highway – at any point – and get off for a look. You might return quickly or keep going further and further away from the highway (i.e., the original book you started reading). You might also want to follow a meandering path that someone else charted or “discovered” before you.

So we are practically past the age when the book as a body of written material was siloed between hard covers and stood in isolation from other books. The book is no longer a discrete and fixed product.

Some developments have already begun to recognize this change. For example, there are the “adaptive textbooks” from McGraw Hill Education and Harvard’s H20 Adaptable Digital Textbooks.

Indeed, over the last few years, the Harvard University Library Innovation Lab has been doing some of the most interesting work along these lines anywhere in the world. Its relevant projects and experiments include:

Highbrow: A Textual Annotation Browser
Consilience: which “provides an interactive user interface to help users discover different ways of grouping sets of documents, to zoom into each cluster within a selected group, and to zoom in further into individual documents”
Atlas Viewer: a way to explore geographic materials spatially, rather than one page at a time
StackLife: which “lets you browse all of the items in Harvard’s 73 libraries and Book Depository as if they were on a single shelf.”

In the new world of digital reading paths, how can the reader not get totally lost and confused? – Or perhaps get lost enough to discover new things for himself/herself. Better yet how can people be helped to discover new things and new connections that no one had discovered before, that we would all benefit from?

How many of the people who have traditionally been trying to help readers – librarians, reviewers, editors, writers and others – are prepared to deal with the fact this is even a question they have to answer?

Perhaps librarians and editors should start thinking of themselves as the equivalent of digital DJs who organize and often mash-up music from a variety of artists. These DJs become star entertainers themselves – way more than mere musical curators. (Librarians should also note that the most successful of these DJs earn millions of dollars. See Forbes’ review “The World’s Highest-Paid DJs”.)

With a new mindset about the role of a librarian and more of the kind of experimentation and technology Harvard has created and the rest of us will be better able to navigate the digital reading highways and byways.

[http://njacknis.tumblr.com/post/114580547778/what-is-a-book]

March 18, 2015

Creativity Rules

I’ve written, as recently as a couple of weeks ago, about innovation in government. There are many examples, although many more are needed. Despite – or maybe because of – financial constraints and opposing interests who are ritually stuck in old debates, creativity rules in government as elsewhere.

But I was reminded by readers that public officials – or executives of corporations, for that matter – don’t always know how to create a culture of innovation. In response, I remembered a book published a bit less than a year ago, titled “Creativity, Inc.” by Ed Catmull, the founder and CEO of the very successful animation film studio, Pixar, and now also the head of Disney Animation.

The book is partly a biography and partly about film making. But it is mostly one of the best books on management in a long time. Many reviewers rightfully cite his wisdom, balance and humility and note that this book goes beyond the usual superficialities of most management books.

Catmull talks about how to run a company in a creative business, but it applies to many other situations. It certainly applies to the software and technology business, in general. It also applies to government.

One of the major themes of the book is that things will always go wrong and perfection is an elusive goal, even in companies that produce outstanding work. Leaders need to set the proper frame for all stakeholders.

To put this in the context of politics, a successful elected official I know has concluded that it’s not a good idea to go around (figuratively) wearing a white robe, touting your perfection. As soon as one small spot appears on that white robe, it will be noticed and condemned by everyone. Instead, it’s best to let the public know that you too are human and will make a few mistakes, but those mistakes are in the interest of making their lives better.

Catmull puts it this way:

“Change and uncertainty are part of life. Our job is not to resist them but to build the capability to recover when unexpected events occur. If you don’t always try to uncover what is unseen and understand its nature, you will be ill prepared to lead.”
“Do not fall for the illusion that by preventing errors, you won’t have errors to fix. The truth is, the cost of preventing errors is often far greater than the cost of fixing them.”

The last point has a larger message: that success is less about the right way [the process] to fix a problem than actually fixing the problem.

“Don’t confuse the process with the goal. Working on our processes to make them better, easier, and more efficient is an indispensable activity and something we should continually work on— but it is not the goal. Making the product great is the goal.”

Government, in general, would do well to convert as many activities as it can from being processes to being projects, whose aim is to achieve clear and discrete results.

Along with many of us who have supported open innovation and citizen engagement, he points out that good ideas can come from anywhere inside or outside the organization:

“Do not discount ideas from unexpected sources. Inspiration can, and does, come from anywhere.”

And he adds that good managers don’t just look to employees for new solutions, but for help in an earlier stage – defining what the real problem is.

In government, you often hear the line that “information is power” and thus many leaders horde that information. Catmull, on the contrary, argues for the need for open communication:

“If there is more truth in the hallways than in meetings, you have a problem. Many managers feel that if they are not notified about problems before others are or if they are surprised in a meeting, then that is a sign of disrespect. Get over it.”

Of course, actually having good communications isn’t any easier in government than it is anywhere else. Catmull suggests that it is the top leaders who have to make the major effort for good communications to occur and it is in their own interest. How many times have you been blindsided by something that others knew was a problem, but didn’t reach you until it was a full-fledged crisis?

“There are many valid reasons why people aren’t candid with one another in a work environment. Your job is to search for those reasons and then address them. … As a manager, you must coax ideas out of your staff and constantly push them to contribute.”

This brief review doesn’t do justice to the depth of the book. And I’m sure that many public officials could draw more parallels than I have.

Clearly the government would run better, the public would be better served and public officials would be more successful if creativity ruled in the public sector as well as it has at Pixar.

[http://njacknis.tumblr.com/post/113958132330/creativity-rules]

March 11, 2015

Art And The Imitation Game

The
recent movie, the Imitation Game, brought attention to the Turing Test to a general audience. First proposed by the British mathematician
Alan Turing, the test basically proposes that computers will have achieved
artificial intelligence when a person interacting with that computer cannot
distinguish between it and another human being.

Last
year, it was reported that a machine successfully passed the Turing Test – sort
of. (See this article
in the Washington Post, for example.)
While that particular test didn’t set a very high standard, there is no
doubt that machines are getting better at doing things that humans only used to
do.

This
past Sunday, there was an article in the New York Times Weekly Review titled “If
an Algorithm Wrote This, How Would You Even Know?” Its (presumably human) author warned us that
“a shocking amount of what we’re reading is created not by humans, but by
computer algorithms.”

For
example, the Associated Press uses Wordsmith
from Automated Insights. With its Quill product, Narrative
Science originally started out with sports reporting, but is now moving into
other fields.

The
newspaper even offered its own version of the Turing Test – a test
of your ability to determine when a paragraph was written by a person or a
machine. Try it. (Disclosure: I didn’t get it right 100% of
the time, either.)

But,
of course, it doesn’t stop with writing.
More interesting is the use of computers to be creative.

This is because
among the differences between humans and other animals, that some people claim,
is our ability to produce creative works of art. Perhaps going back to the cave paintings,
this seems to be an unusual human trait.
(Of course, you can always find someone else who will dispute this, as
in this article, “12
artsy animals that paint”.)

While
we may find animals painting to be amusing, perhaps we’d find machines becoming
creative as more threatening.

Professor
Simon Colton is one of the leaders in this field – which, by the way, goes back
at least two decades. He has written:

“Our position is that, if we perceive that the software has been skillful, appreciative and imaginative, then, regardless of the behaviour of the consumer or programmer, the software should be considered creative.”

He and his team have worked with software called Painting Fool. This post has some examples of that artwork, so you can judge for yourself if you could tell a computer generated it.

I have my own little twist on this story from more than ten years ago. I met some artist/businessmen who designed and then had painted high end rock concert t-shirts. These were intended to be sold at the concert in relatively small quantities, as an additional form of revenue.

The artist would prepare the design and then have other people paint them. But this was a slow tedious process so we discussed the use of robots to take over this process. (At the time, the role of robotic painting machines in auto factories was becoming well known.)

One of the businessmen posed an obstacle by noting that people bought the hand-painted product because each was slightly different, given the variation between artists who painted them and even the subtle changes of one artist on any day. I somewhat shocked him by pointing out that, yes, even that kind of randomness could be computer generated and his customers would not likely be able to tell the difference.

But, perhaps, computers could tell the difference. A computer algorithm correctly identified Jackson Pollock paintings, as reported in a recent article in the International Journal of Art and Technology. (A less technical summary of this work can be found in a Science Spot article of a few weeks ago.)

In the end, they didn’t use robots because they were too expensive compared to artists in the Philippines or wherever it was they hired them. Now, the robots are much cheaper, so maybe I should revive the idea 

Anyway, we’re likely to see even more impressive works of creativity by computer software and/or by artists working with computer software. The fun is just beginning.

[http://njacknis.tumblr.com/post/113350817355/art-and-the-imitation-game]

March 4, 2015

A Listening Center In Government?

Thetitle may put you off. You may be
thinking that we’ve all been reading that the NSA has been doing plenty of
listening.

But
are there other uses for listening by the government? – not necessarily for
national security or to listen in to personal phone calls?

As
social media on the Internet have developed over the last several years,
companies have found a gold mine of information that can help them better
understand their customers’ views, needs and moods – and to better assess the
value (or lack of value) of the products and services they offer.

Often
called sentiment analysis,
this has been applied in a variety of ways.
(Note: in a blog post I can only touch upon what is a large, developing
and growing topic, so if this intrigues you, use this piece as just a starting
point.)

Investment
firms use sentiment analysis to determine the future direction of corporate
securities. See, for example, Stock Sonar. Sentiment140
is a company that measures sentiment about product and brands.

CrowdFlower uses five million people in
its sentiment projects. Earlier this
week, the company released its Data For Everyone Library
which makes that information available on topics as different as immigration, Coachella
2015, wearable technology and sports, among others.

Software to analyze sentiment, either with
or without human assistance, is a major focus of research in various
universities and tech businesses. One of
many examples that you can try for free is at http://www.danielsoper.com/sentimentanalysis/default.aspx .

The
Kapsik project is another example. As an illustration, their website shows the
trend in sentiment about London Mayor Boris
Johnson.

I’d
expect that there would be many elected and other public officials who might
want to check their daily sentiment index.
Now they can do it.

But
it’s not just about satisfying the egos or re-election needs of individuals.

Officials
can use sentiment analysis of publicly available tweets, posts, etc. on the Internet
as an important addition to their toolkit of ways to understand what is working
and not working for their constituents.
It can also be a way to discover issues that are bubbling up, but haven’t
yet reached the stage where they explode in the faces of officials.

The
Tufts University Urban Attitudes Lab
has also been using this kind of analysis in urban planning.

And,
as the title of this post suggests, we need to go beyond merely analyzing
social media.

One
of the more advanced listening posts is described in an article titled, “Southwest
Airlines Takes Customer Listening to New Heights”:

“The airline launches a Listening Center to centralize social, industry, and operational data. … [It] is an internal resource that combines social conversations, industry news, and operational data into one central hub… To monitor what customers are saying about the brand, industry, or a specific topic, Southwest uses a keyword-based listening tool that pulls in mentions from social platforms like Twitter. As for staying on top of its operational information, like departures and arrivals, Southwest has a satellite Listening Center inside of its Network Operations Control center (NOC). This real-time insight allows the airline to identify issues and engagement opportunities quickly … and then react accordingly via the channels that customers are using.”

Government could combine into one hub its own operational data, news about other important events going on in the public and private sectors and what citizens are saying in public forums. Now that’s a listening post that would provide clear positive benefits for everyone – without any scary Big Brother controversies.

[http://njacknis.tumblr.com/post/112709282392/a-listening-center-in-government]