The Intelligent Community Forum’s Rural Imperative Program

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?

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Is There A Rural Imperative?

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

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Who & What Is Tech For In The Inner City?

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:

  1. What can city governments do to create technology-based economies in inner cities?
  2. How can cities ensure that inner city residents have access to technology so that they are prepared, skilled, and able to participate in a tech-based economy?
  3. What is a local governments’ role in building the capacity of innovative businesses so that they create jobs for inner city residents? What policies have worked?

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:

  • connects residents to the global economic opportunities
  • connects residents to open innovation
  • provides a platform for lifelong learning for residents
  • has a culture of innovation
  • creates places that inspire residents to innovate

© 2014 Norman Jacknis

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Large County Innovation Summit

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

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Changing GDP To Reflect The Digital Economy?

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

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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

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What Should Local Gov Do About Corporate Incentives?

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

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What Is An Appropriate Strategy For Mid-Sized Cities?

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:

  • Carlo Ratti, Director of MIT Senseable City, expanded the vision to include Public Participation 2.0 and reminded people again that when technology becomes ubiquitous it becomes invisible and most useful.
  • Martin Fleming, Chief Economist of IBM, recommended that cities decide what brand their city should be and then go about implementing that brand.  (Of course, I liked this statement since I’ve told mayors that they have to start thinking about themselves as brand managers, who need to understand market segmentation.  Everyone does not agree on what is the ideal quality of urban life, so find what your city can offer best and that becomes part of your brand.)
  • Anthony Townsend, Research Director of the Institute of the Future, talked about clusters forming the foundation for economic growth – but innovation clusters.  This is not about the traditional one-industry physical clusters, but instead about networks of creative people.

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

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