New Westminster Keynote - Norman Jacknis

Norman Jacknis
ICF Senior Fellow
March 31, 2015
The New New Westminster
— Ready For The Future
Building The Community Of
The 21st Century

What Is The
Intelligent Community Forum?
March 31, 2015 © 2015 NormanJacknis,Senior Fellow, ICF. All rights reserved 2

ICF Is A Global Network
 ICF is the global organization that brings together the
visionary leaders who make high speed Internet and
technology an integral part of their community building
 Together, they pursue joint development
 Organized more than 15 years ago, now with more than 125
communities around the world

ICF Is Also A Think Tank
Community
Accelerator
We study how
communities use ICT to
build economic prosperity,
solve social challenges and
enrich their cultures.

Success Factors For
The Intelligent Community
 Why are some communities more intelligent and
successful than others?
 the power of effective leadership
 flexible and creative collaboration
 a focus on long-term sustainability.
 Community development faces obstacles –
economic, social, political and cultural – and every
successful community has found ways to overcome
the ones that stand between them and a better
future

Key Indicators For
The Intelligent Community
 The key facets of community development based on
information and communications technology:
 high speed Internet
 knowledge workforce development
 innovation
 digital inclusion and
 marketing & advocacy
 And how these interact to create a virtuous cycle
powering economic growth, citizen engagement and
social health of the community

Some Big Questions To Think About
 How can a city of fewer than 70,000 stand out in a
world of 7,000,000,000 people?
 How can we build a high quality of life by intelligently
responding to the trends that will affect all of us in the
future?
 How can we expand our thinking about our options?

Why Think About The Future Today?
 “A good hockey player plays where the puck is ... a great
player plays where the puck will be.”
― Wayne Gretzky
 “If the rate of change on the outside exceeds the rate of
change on the inside, the end is near.”
― Jack Welch, former CEO, General Electric
 "We tend to overestimate the effect of a technology in the
short run and underestimate the effect in the long run.”
― Roy Amara, past president of The Institute for the Future
 “The future is already here. It's just not very evenly
distributed.”
― William Gibson, sci-fi novelist and coiner of “cyberspace”
Laying a foundation for a flourishing future takes time.
There are important things to do today to start.

Economic Trends
How Did We Get
Where We Are Today?

What Leads To Economic Growth?
 Specialization of the skills of people so everyone is
producing the most for society
 Creation of new knowledge and innovations
 Which results in new products/services or enhances
productivity in producing existing products/services
 These, in turn, depend upon communications and
collaboration among many, diverse people
 In the 20th century age of industry, cities put many
people in close proximity which enabled better
communications and collaboration
 Which made cities the engines of economic growth

Urban Areas Became Engines Of Wealth
March 31, 2015 © 2015 NormanJacknis,Senior Fellow, ICF. All rights reserved
Urban areas
increased
physical
proximity
between people
Urban areas
had the large
number of
workers who
were required
in factories
With many
people close to
each other, it was
easier to
exchange
goods/services
and innovations
Which increased
specialized skills
and innovations
that created
more wealth
Which brought
more people to
the area
12

Business Clusters Developed
The major
movie
studios
locate near
each other
in
Hollywood,
1922

Economic Trends
But Things Are Changing

The Study Of Economic Geography
Led To Cluster Policies, But …
 Princeton University Economics Professor Paul
Krugman won the 2008 Nobel Prize for identifying
the “new economic geography” (aka cluster theory)
some 20-30 years earlier
 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.”

“Cluster Requiem And The Rise Of
Cumulative Growth Theory”
 2009 research at the University of North Carolina that
tracked the growth and survival of a cohort of more
than 300,000 establishments operating in Pennsylvania
from 1997-2007
 “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

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.

“If I can make it in New York,
I'll make it anywhere”
“Today, 36 percent of daily trades in stocks that are listed on the New York Stock
Exchange are actually executed on the exchange, down from about 75 percent
nearly four years ago. The rest of are conducted elsewhere, on new electronic
exchanges … half of the jobs there have disappeared over the last five years …
“Unlike the Big Board, the new electronic exchanges are virtually unknown outside
financial circles. Direct Edge, the largest, is in Jersey City. Another, the BATS
Exchange, is based in Lenexa, Kan [picture above]. Both are only about five years
old. But each now accounts for about a 10th of daily United States stock trading. “ −
October 15, 2009 New York Times Front News Page

Wall Street, New York, New York, USA

Lenexa, Kansas, USA
Downtown Lenexa
20

Even Manufacturing Is Being
Decentralized By 3D Printing

Economic Trends
Making A Living By Providing
Services & Intangible Products

One Hundred Year Shift In The USA
Thousands of employees and percent of total
Employment
1900
Employment
2000
Percent 1900 Percent 2000
Agriculture 11,680 3,281 43.5 2.4
Goods 7,252 25,710 27.0 18.8
Services 6,832 85,370 25.4 62.5
Government 1,094 22,131 4.1 16.2
Total 26,858 136,492 100.0 100.0
71%
79%
24

In Europe
25

And Canada
 “Since the 1970s the Canadian economy has been
transformed from one based on industry and mining
to one dominated by the service sector. …
 “Services account for 66 percent of the nation's
economy and employ 74 percent of the country's
workforce. Of Canada's skilled workers, 80 percent
are employed by the service sector.”
— Encyclopedia of the Nations/Canada

At The Apex Of The Industrial Era,
The Factory Concentrated Jobs

In The Service Economy, Office Towers
Are Supposed To Do The Same

But Where Did All The Office Workers
Go?
“Jones Lang LaSalle
changes the current rule
of thumb concerning
office space per
employee, shrinking it
from 200 sq. ft. per
employee to just 50 sq.
ft. by 2015.”
“40% of IBM employees
work from a location
other than an office at
IBM.”

Why Is This Happening?
High Speed Internet Makes A
Difference

A Communications Network
Revolution In The Home
Even more than
business, people at
home are driving
technology innovations

Business Support Services Become
Accessible Around The Globe
Business support services have become within reach of
people in more locations than in the past … Between
any other part of the globe and people here

High Speed Internet Has Had A
Big Economic Impact
 For every one percentage point increase in
broadband penetration in a state, employment is
projected to increase by 0.2 to 0.3 percent per year.
— Brookings Institution
 “The increase in local GDP is more than ten-fold the
value of the investments in broadband
infrastructure. “
— SNG

Numbers That Tell The Story
of economic growth in developed economies
came from the Internet over past 15 years
21%
For every job the Internet makes
obsolete, it has created 2.6 more
the productivity gain – doing more with the same
resources –the Internet provides the average small-
to-midsize business
10%
Small-to-midsize businesses that are
heavy users of the Internet grow
2x faster

The Impact Is Not All Being Measured
 “[GDP] almost inevitably misses some economic
gains from new technologies.”
 “these statistics do not tell the whole story. Because
they miss much of what technology does for people’s
well-being.”
 “G.D.P. is not a measure of how much value is
produced for consumers”

“Well-connected cities, regardless of their
size, are more likely to develop robust
regional economies”
“A city that can draw on the resources of the
whole world through extensive network
connections to other cities, whether it is a
metropolis or a hamlet, is likely to thrive.”

Economic Trends
The Game Is Changing

The Game Starts Anew
In This Century
 There is now an unprecedented opportunity for
small cities
 Often they have the agility to take advantage of the
new opportunities before the bigger cities can

 Cities put people in close
proximity that led to
collaboration, innovation and
growth – cities as center of
production
 Physical proximity is no longer
the only way for people to
collaborate & innovate – cities
are now more centers of living
than centers of production
20th Century
Industrial Economy
21st Century
Digital Economy

 The “bigger the city, the
better” and quality of life was
traded off for sake of growth
 Quality of life is now an
integral part of the city’s
economic strategy
20th Century
Industrial Economy
21st Century
Digital Economy

 Work was tied to an office,
factory, store and employees
were not mobile
 Work goes to people and they
are more able to move where
they wish
20th Century
Industrial Economy
21st Century
Digital Economy

 Big companies concentrated
employment
 Big companies are more
disaggregated:
 Global supply chains &
outsourcing
 Contractors instead of
employees
 Global presence instead of
one main location
20th Century
Industrial Economy
21st Century
Digital Economy

 Economic Hunting strategy,
including the use of incentives
to big companies to move jobs
 Economic Gardening strategy
to develop local companies
instead of ever weakening
incentives to attract outsiders
20th Century
Industrial Economy
21st Century
Digital Economy

 Big organizations provided the
connections people needed to
collaborate on a massive scale
 The Internet makes it possible
for people to collaborate on a
global scale
 From Coase’s Theory of the
Firm (1937) to Shirky’s
“Here Comes Everybody:
The Power of Organizing
Without Organizations”
(2008)
 The individual (and fluid
teams) become the key
economic actors
20th Century
Industrial Economy
21st Century
Digital Economy

 To make a decent living, you
had a 9-5 job in a big company
for life
 People will need a portfolio of
ways to earn a living
 And they won’t be on a fixed
time clock
20th Century
Industrial Economy
21st Century
Digital Economy

High Speed Internet Internet Trends
Visual Communications
Intensifies The Effects

Non-Verbal Communications
 93% of communication is nonverbal
 Especially critical in establishing trust
between people
 “Seeing Is Believing”
 We process visual information 60,000
times faster than text
 Mehrabian's communications research
 7% of message pertaining to feelings and
attitudes is in the words that are spoken.
attitudes is paralinguistic (the way that the
words are said).
attitudes is in facial expression.

Corporate Video-Conferencing
Is Rapidly Increasing
Within the next
couple of years,
about two thirds
of businesses will
have adopted
some kind of
telepresence
solution
– Forrester

But We Are Only In The Early Stages
Of The Internet’s Development
Not yet today, but by 2030 — A world of high quality
visual communication and easy collaboration
everywhere, enabling anyone anywhere to virtually
meet anyone else anywhere else
… for a flavor of what the future might bring

The Black Eyed Peas in France

It’s Getting More Like Being There

And More

Economic Trends
Re-Thinking Your Economic
Strategy

This Is The Key Question For
Economic Strategy In Future Decades
When most people can work anywhere,
where will they choose to live & work?
59

How Would You Measure A City’s
Economic Success In 2030?
 The total revenues of
companies that might
happen to have an address
in the city?
 The number of 9-5 jobs in
those companies?
 Office buildings in
“downtown”, but a per
capita income of $40,000
per year?
 The amount of income and
wealth of the city’s
residents?
Whether or not that income
comes from 9-5 jobs in a big
company or from royalties
on inventions or from a
dozen freelance contracts
with companies of varying
size
 No office buildings, but a
per capita income of
$100,000 per year?

High Speed Internet Is Necessary,
But Not Sufficient
 ICF communities have learned that deploying high
speed Internet itself will not be transformational
 It may not even be adopted by many of the people who
could obtain high speed Internet
 High speed Internet can enable and must be tied in
with all the other aspects of community
development
 What can high speed Internet make possible? …

What Does High Speed Internet Make Possible?
A Platform For Lifelong
Learning That Will Increase
People’s Income Potential

Students Mentoring Students

Long Distance Music Lessons

edX
• EdX is available
to anyone in
the world with
an internet
connection
• Online learners who demonstrate mastery earn a
certificate of completion, issued by the "X University"
from where the course originated, i.e., HarvardX, MITx
or BerkeleyX
65

Coursera

Udacity

University Of The Third Age

Digital Public Library of America

Public Libraries Are A Cost-Effective
Guide To Global Innovation
 The libraries should be tasked to organize the vast
amount of free training and courses online in a range
of subjects from business knowledge to technical skills
 The public library should be the corporate librarian for
entrepreneurs and other innovators
 Helping to conduct market research, identify opportunities…
Chattanooga
Public Library
4th Floor
71

Connecting Residents To Global
Economic Opportunities &
Business Services

Help Local Enterprises Reach
Beyond The Local Area
 Consider health care, as an example

Health Maintenance
For Chronic Diseases

Health Maintenance For Seniors
Who Are Generally Healthy
Vermont Telecare for
Rural Health Project
• Two-way interactive
exercise class for seniors.
• "We know that exercise is
helpful for senior patients,
but we can't get to them. And
we know that Tai Chi helps
keep seniors healthy,
increases their well-being and
balance.“

Remote Diagnosis

Remote Consultation
Health Presence allows
patients to remotely
connect with doctors
and clinicians for an
encounter that rivals a
face-to-face meeting
Use in psychological
counseling

Robotic Surgery
Becomes remote surgery

Connect Entrepreneurs To The World’s
Best Sources Of Business Services
 The hidden secret of
Silicon Valley
 In a networked world,
business services to
support entrepreneurs &
innovators become much
more widely available
 So entrepreneurs access
to high quality
videoconferencing and
collaboration platforms

Connect Entrepreneurs To The
Flow Of Capital
 Capital is flowing
more freely around
the globe
 Make sure your
entrepreneurs are
connected to these
sources of funds
 Beware of old
fashioned
investors
 Consider new
forms of
investment

An Entrepreneurial Extension Service
 Many small businesses need help in learning about
innovations and techniques which will help them
succeed in the global, networked economy
 Now help can be in person and on the Internet, in
part, by recent college graduates

Even Connect Low-Tech Business To
The Global Economy

Connecting People To Open
Innovation

Innovation Is The Competitive Edge In
The 21St Century Economy
 But how does innovation happen in a networked
world?
 Does open innovation provide new opportunities?
 What kind of innovation makes the biggest
difference?

Innovation Is A Collaborative Act
“Creativity is not a
solitary endeavor.”
– Ed Catmull, CEO, Pixar
"The secret to
creativity is knowing
how to hide your
sources.”
– Albert Einstein

17th Century Coffee Houses
As Hubs Of Innovation …

In This Century …
 People with new ideas
no longer need to meet
in coffee houses
 They can innovate and
collaborate and share
knowledge on the
Internet
 The old “liquid network”
of coffee house
discussions is now the
global communications
network

Why Would A Company Want
Open Innovation?
 “P&G employs 7,500 people in its R&D division, but
there are 1.5 million scientists throughout the world
with expertise in P&G’s areas of interest.” — Larry
Huston, Procter & Gamble’s former VP of R&D
 “More than 50% of P&G innovation comes from
external companies of all sizes and from individual
entrepreneurs too.”

Opportunities In The
Open Innovation Movement
95

98

Don’t Forget About Senior Citizens
 “Creativity can be divided into
these types -- conceptual and
experimental”
 The share of entrepreneurs in the
55-64 age group jumped from
14.3 percent in 1996 to 23.4
percent in 2012

Research At Great Universities Is
Available In Cities Everywhere
 Many public leaders are trying to recreate
Stanford, MIT, Princeton and the like in their areas
 And they are trying to find some secret way of
“commercializing” the research at their local universities
 You can start with what you have now
 The best university research all of the world is available
through the Internet
 Entrepreneurs already have the skills to commercialize
research, as long as they can find that research
100

Two Kinds Of Innovation
Yield Different Results
 Sustaining innovation
 Disruptive Innovation
 Create a way that gets the
customer’s need served in a way
that is not necessarily perfect,
but is lower priced than the
alternatives …
 or where there isn’t any
alternative at all – compete
against “non-consumption”
 Don’t spend too much money on
any single innovation

What Does This Mean For Your City?
 Sustaining innovations are just normal business
 And usually mean there is less human work to do in order
to sustain the same level of production
 Often happens at higher cost
 Growth instead results from disruptive innovations
 Especially in unmet and, as yet, undiscovered needs
 The new work is in these new disruptive innovations:
health, education, entertaining experiences, etc., but not
in mass produced products that we already know about
 Accelerate disruptive innovation
 Which is what will help your economy grow fast

Your City Should Support
A Culture Of Innovation

It’s Necessary To Accept Failures

Delight Residents & Visitors —
Inspire Them To Be Creative

Maker Spaces In Public Libraries

Co-Working & “Hacker” Spaces

Hotel Lobby:
Unofficial Co-working Space

An Unofficial Work Space Without
Walls, But With Electric Outlets

Inspiration Just Takes
A Little Imagination
111

Piano Stairs

Physical/Virtual Collaboration

Any Public Space Becomes An Urban
Experience – Even Subways

Video Walls You Touch And Control

Combine The Street And The Screen

Floors Can Be Interactive Displays

Put Your History
On The Wall Of A Library

People Can Interact With Animations
 A blend of
live text
message
feeds and
real-time
animation
for a train
station wall
 Seahorse
courtship
dance
animation
triggered by
text message

What Do You Do With
An Old Building In London?

Make It A Portal To Vienna

Take A Wall

And Pump It Up!

Augmented Reality

Urban Design Using Digital Experiences
 The common theme of all these previous possibilities
is that high speed Internet also enables you to blend
the physical existing city with the new and digital
 For new and delightful experiences

Let’s Wrap It Up

Be Visionary About Your City
 High speed Internet opens up new possibilities for
enhanced quality of life in cities
 But high speed Internet and technology will only be
widely adopted if combined with community building
and vision
 High speed Internet enables everyone to participate
in creating a vibrant community

Success Rests On Three Legs
 High speed Internet
and technology
 A Vision for the
community
 The right culture
and leadership so
the community
implements the
vision

The Transition To The Future Won’t Be
Simple, But:
 Plan for the future way that most
people will earn a living
 Shift some investments from the old
approach to this new world
 Build both physical/communications
and human infrastructure
 Offer a video, collaboration platform
for innovation
 Link individuals to a global
ecosystem for dependable economic
growth
 Provide people a quality
"experience” so they will stay

Building The
Community Of
The 21st Century
Dr. Norman Jacknis
+1 (914) 930-4840
njacknis@intelligentcommunity.org
Blog: njacknis.tumblr.com
Twitter: @NormanJacknis
Thank You!
135

New Westminster Keynote - Norman Jacknis

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