Globalization: A New Urgency for Building Digital Communities
"The prize of the future will be the ability to attract, nurture and retain the type of bright and creative people who generate new inventions, world-class products and the finance and marketing plans to support them."
Cities across the world have been struggling to reinvent themselves for the new, post-industrial economy and society foreshadowed in the 1960s by economists Fritz Malcop and Marc Porat (1) and by sociologist Daniel Bell (2). In their efforts to prepare themselves for the 21st century, many communities focused on updating their data infrastructure to accommodate the needs of an age in which information is the most valuable commodity. Now the stakes have gotten higher.
As author and New York Times foreign affairs columnist Thomas Friedman has said, "The world is flat" (3). All of our communities and us are suddenly competing with every other community around the world for basic manufacturing requirements and provision of high tech and biotech services. With this flattening taking place everywhere, we must accelerate the change-taking place within our communities and reinvent our centers of learning -- our schools -- at every level and at a pace unparalleled in the history of the country. This is not about technology for its own sake. San Diego, for instance, even commissioned a "City of the Future" (4) committee in 1993 to make plans to build the first fiber-optic-wired city in the country in the belief that as cities of the past were built along waterways, railroads and interstate highways, cities of the future would be built along "information highways" ?wired and wireless information pathways connecting every home, office, school and hospital and, through the World Wide Web, millions of other individuals and institutions around the world.
These new information-technologically sophisticated-infrastructures are important. Yet, it must be remembered, the effort to create a 21st century city is not so much about technology as it is about jobs, dollars and quality of life. In short, it is about organizing one's community to reinvent itself for the new, knowledge economy and society; preparing its citizens to take ownership of their community; and educating the next generation of leaders and workers to meet these global challenges.
Today, the demand for creativity and innovation has out-paced our nation's ability to produce enough workers simply to meet the needs of Silicon Valley or the Hollywood entertainment community. Seven years ago, for example, the Alliance of Motion Picture and Television Producers asked the governor of California to declare a state of emergency to help Hollywood find digital artists. There were enough people who were computer literate, they claimed, but they could not draw. In the new economy, they argued, such talents are vital to all industries dependent on the marriage of entertainment to computers and telecommunications (5).
Worrying about the lack of qualified workers in this day and age may sound unusual. With the globalization of media and markets in full bloom, America is beginning to see the outlines of yet another out-migration of American jobs, unleashing new concerns about rising unemployment. Many economists are alarmed that the latest round of losses, unlike the earlier shift of manufacturing jobs to Taiwan and less developed East Asian countries, will have a dramatic impact on the West's economic wealth and well-being.
Twenty years ago it was fashionable to blame foreign competition and cheap labor markets abroad for the loss of U.S. manufacturing jobs, but the pain of the loss was softened by the emergence of a new services industry. Now that the service sector also is beginning to automate, banking, insurance, and telecommunications firms are eliminating layers of management and infrastructure as the traditional corporate pyramid disappears and is replaced by highly skilled professional work teams. State-of-the art software and telecommunications technologies now enable any kind of enterprise to maximize efficiency and productivity by employing foreign workers wherever they are located, making the retention of service sector jobs in the U.S. even more precarious (6).
In 2003, IBM, the world's largest computer maker, acknowledged that "a significant number" (the unions claim several thousand) of software, chip development and engineering jobs were being moved to India and China. In 2004, industry stalwarts like Microsoft, Hewlett-Packard, and Dell Computer announced that they, too, were either "outsourcing" their software development or beefing up their foreign subsidiaries in China, India, the Eastern Bloc, and Russia to do the same. Marketing research firm Forrester Research, Inc. estimates some 3.3 million service jobs will move out of the United States over the next 10-15 years. Others put that number at 15 million and say the results will be devastating for America's economy (7).
While CEOs, economists, and politicians are telling us that these are short-term adjustments, it is clear that the pervasive spread of the Internet, digitization, and the availability of white-collar skills abroad mean potentially huge cost savings for global corporations. Consequently, this shift of high-tech service jobs will be a permanent feature of economic life in the 21st century, but this does not necessarily mean the news is all-bad. On the positive side, some economists believe that globalization and digitization will improve the profits and efficiency of American corporations and set the stage for the next big growth-generating breakthrough. But what will that be?
A number of think tanks, including Japan's Nomura Research Institute (8), argue that elements are in place for the advance of the "Creative Age," a period in which America and the West should once again thrive and prosper because of its relative tolerance for dissent, respect for individual enterprise, freedom of expression, and recognition that innovation, not mass production of low-value goods and services, is the driving force for the economy. Developing the human mind to its fullest potential and educating people so they are capable of success in the information age requires that we rethink the role of community broadly defined; retool our knowledge factories -- starting with our universities -- concentrating all our energies on educating the public for the coming knowledge age; and restructure education to incorporate what we now know about enhancing creativity. Unless we do so, we will not develop the skill base we so desperately need in the work force for the new millennium. Richard Florida, author of The Rise of the Creative Class, more optimistically argues that the U.S. is already churning out large numbers of "creative workers" (9).
We can meet the challenges of globalization and the needs of a creative and innovative workforce best by helping our communities renew and reinvent themselves for this new global age in which the Internet, knowledge creation and innovation are key and where collaboration and connectivity are the hallmarks of the most successful communities.
THE RISE OF SMART (AND DIGITAL) COMMUNITIES
In less than a decade, the great global network of computer networks called the Internet has blossomed from an arcane tool used by academics and government researchers into a worldwide mass communications medium, now poised to become the leading carrier of all communications and financial transactions affecting life and work in the 21st century. Cities of the past were first created along waterways, then railroads, and eventually interstate highways. Cities of the future will decidedly have 24/7, broadband telecommunications in place, wired and wireless infrastructures connecting, though the Worldwide Web, every home, school and office to every other organization or institution worldwide (10).
Cities the world over are struggling to gain prominence in the wake of a global knowledge economy. In the spring of 2005, tiny Dubai, one of the Arab Emirates, took out full-page ads in The Wall Street Journal and The New York Times proclaiming its success as the number one Middle Eastern "City of the Future," in part boasting the largest Internet protocol in the world. Closer to home, Philadelphia put in place one part of its global telecommunication strategy: a plan to offer inexpensive wireless Internet as a municipal service to the whole city, a bold move that is the most ambitious yet by a major U.S. city.
Not surprisingly, the Philadelphia plan collided with commercial interests including the local phone company. The Telco and cable interests have now joined hands to make sure no other city in Pennsylvania gets as "creative." As dozens of cities and towns have either begun or announced similar ambitions, these competing interests have intensified a national campaign to quash municipal wireless initiatives like Philadelphia's (11).
New York City, too, is looking at ways to provide broadband access to all their citizens. In a briefing paper released before they began public hearings, the city through its experts made it unequivocally clear that "broadband is a necessity for every resident," and second that having it "improves the quality of life of everyone who has access" (12).
Other cites in the US, Europe, indeed everywhere in the world, are developing plans to be so-called "connected communities," or as California called them almost a decade ago, "smart communities" (13). In the wake of globalization and with yet another out-migration of American jobs, there is a new urgency.
Those communities placing a premium on cultural and ethnic diversity, developing their own aggressive broadband strategies, and reinventing their educational systems for the creative age, will likely burst with innovation and entrepreneurial fervor. These are the ingredients so essential to developing and attracting the type of bright and creative people that generate new patents and inventions, innovative world-class products and services and the finance and marketing plans to support them. Nothing less will ensure America's dominant economic, social and political position in the 21st century.
A NEW AGENDA FOR ACTION
The agenda to renew our cities is huge. Working either in partnership with the existing cable or Telco providers or through some alternative strategy, cities must aggressively looking for ways to provide the wireless "hot spots" often found in downtowns, coffee shops and other public gathering places. In the belief that having broadband is as necessary as water, electricity and a telephone and indeed, that such broadband Internet service may be the missing link to reinventing and renewing our cities, they are developing plans for comprehensive, wired, 24/7, broadband infrastructure.
Cisco Systems, a leader in the telecom field has said: "Broadband infrastructure is critical..." to survival in the wake of a basic shift taking pace in the structure of the world's economy. "Its deployment is a key measure of success in the information economy and is crucial to the future growth of productivity" (14).
But again, having such broadband infrastructures in place is only a first step. As discussed earlier, the effort to create a 21st century city is about economic development and quality of life, not technology per se. In short, it is about organizing one's community to reinvent itself for the new, knowledge economy and society. Cities must prepare their citizens to take ownership of their communities and educate the next generation of leaders and workers to meet the new global challenges of what has now been termed the Creative Economy (15).
The message is becoming clear: rather than economic stimulus tools such as subsidies for footloose corporations and taxpayer-underwritten industrial parks, the successful cities and metro areas of the 21st century will be stimulated by their attractiveness to young, talented people. The traditional economic development push to lure big corporations and build large factories was characteristic of the 20th century economy. The prize of the future will be the ability to attract, nurture and retain the type of bright and creative people who generate new inventions, world-class products and the finance and marketing plans to support them.
For the past 10 years, the California Institute for Smart Communities has looked at hundreds of smart communities in the making worldwide. Each community's approach is different, as each community itself has its own unique characteristics and demographics. But, there are three overarching conclusions or observations that the Institute believes make the critical difference between success and survival in the Information Age.
First, the effort to remake our cities as we shift from an agrarian and industrial economy to a knowledge economy should not be seen simply as an effort to deploy technology. Rather, it is an attempt to understand how people use technology; and then, importantly, how to deploy technology as a catalyst to transform every sector of the community's economy and society.
Second, an outgrowth of this new understanding is the recognition of the importance of collaboration. While competition surely existed between industry and government, and clearly in the telecommunications field between different industries -- cable vs. telephone, wired vs. wireless communications firms, and so forth -- in this new environment, cooperation is essential among and between governments and between governments and industry. Indeed, it is clear that the City of the Future cannot be built without the active participation and cooperation of all of its stakeholders. Many people believe that as the world has become more competitive, a competitive strategy that is not based on a spirit of cooperation will not be competitive very long.
Last, but importantly, is the lesson about empowerment or shared governance. Under this principle all the stakeholders, including individual citizens, have a voice in the dialogue and discussion about their city and region and indeed even in establishing a governance structure that allows them to participate in the decisions that are made.
John M. Eger, a telecommunication lawyer , and Van Deerlin Professor of Communications and Public Policy at SDSU was legal advisor to the Chairman of the FCC from 1970-1973, and Director of the White House Office of Telecommunications Policy until 1976.
- Porat, Marc. "The Information Economy: Definition and Measurement." Special Publication 77 -12(1), U.S. Department of Commerce, 1977.
- Bell, Daniel. The Coming Post-Industrial Society, New York: Basic Books, 1977.
- Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-first Century, New York: Farrar, Straus and Giroux, 2005.
- Eger, John. "San Diego: The City of the Future--The Role of Telecommunications", Report of The Mayor's Advisory Committee on the City of the Future, March 11, 1994. http://www.smartcommunities.org/research_future.htm (page no longer available)
- Eger, John. "Forget Manufacturing Slump, America is Entering Creative Age", Insight, The San Diego Union-Tribune, September 7, 2003.
- Armour, Stephanie and Michelle Kessler. "USA's new money-saving export: White-collar jobs", USA Today, August 5, 2003.
- Perez, Juan Carlos, "IBM Aims for Desktop Outsourcing," Computerworld, November 4, 2005.
- "Japanese Tasks in the 1990s," NIRA Research Output, Vol. 1, Number 1, 1988.
- Richard Florida, The Rise of the Creative Class: and how it's transforming work, leisure, community and everyday life, New York: Basic Books, 2004.
- Eger, John. "Cyberplace and Cyberspace: Building the Smart Communities of Tomorrow", San Diego Union Tribune, October 19, 1997.
- Reuters, "Philly Wi-Fi clash pits city against telcos, " ZDNET, November 3, 2004. (No longer available at http://news.zdnet.com/2100-1035_22-5471853.html)
- Eger, John M. "New York City Holds Hearings on Affordable Broadband," Government Technology Magazine, July 18, 2005.
- Eger, John M. Editor, The Smart Communities Guidebook. Report to the California Department of Transportation, SDSU International Center for Communications, 1997.
- High Tech Policy Guide, Cisco Systems, January 2005. Available: http://www.cisco.com/en/US/about/gov/networks/broadband.html
- Eger, John M., The Creative Community. San Diego: California Institute for Smart Communities, SDSU International Center for Communications, 2003. http://www.thecreativecommunity.org/ (page no longer available)
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