Smart Cities – Part 1

"Brainbelts, places where close collaboration among universities, start-ups, and legacy businesses had put them at the forefront of innovation, revived economic activity, and brought boarded up downtowns back to live. Contrary to popular perception, Democrats didn’t “lose” the entire rustbelt, just those areas that made little effort or were unable to reform and revitalize their economic foundation. Those that did – the brainbelts – the “smartest places” that are the subject of this book – were actually won by Democrats." The Smartest Places on Earth: Why Rustbelts Are the Emerging Hotspots of Global Innovation, Antoine van Agtmael and Fred Bakker, 2016, p.8.

"Promising to put “America first” and bring back manufacturing jobs through economic protectionism is fighting the last war. Protectionism would relegate the United States to permanent second-class status. Smart innovation is already well on its way to replacing cheap labor as the key competitive edge." The Smartest Places on Earth: Why Rustbelts Are the Emerging Hotspots of Global Innovation, Antoine van Agtmael and Fred Bakker, 2016, p. 10.

Characteristics of smart cities:

• Take on complex, multidisciplinary, and expensive challenges that could not be handled by any single player (an individual or organization) alone. The lone, iconic innovator is an outdated concept.
• Are driven by a connector, an individual or group with vision, relationships, and energy that is largely responsible for establishing and building the ecosystem.
• Operate in a collaborative ecosystem of contributors, with research universities at their center and typically composed of start-ups, established companies with a thriving research function, local government authorities, and community colleges or similar vocational institutions. Health-care institutions, such as teaching hospitals, are often a part of the ecosystem, as well.
• Focus on one, or just a few, particular discipline or activities.
• Are open to sharing knowledge and expertise. To facilitate openness, the organizations are de-siloed. The walls between academia and industry and public governance have been taken down. The sharp separations between academic disciplines, such as chemistry, physics, mathematics, and biology, have been removed.
• Contain physical centers, such as incubators and start-up spaces, often within modernized factory or warehouse complexes, that house and encourage collaborative efforts.
• Foster an environment that acts as a magnet for talent. The area offers not only an existing talent pool in universities, research institutes, and start-ups but also non-work attractions and benefits, such as affordable housing, a variety of cafes and restaurants, good schools, and recreational activities.
• Have capital available. There is sufficient money available for investment in start-ups and spin-offs, as well as for facilities and incubators.
• Have an understanding and acknowledgment of threat. Unlike the days when corporate researchers did not worry much about outside competitive forces, people in brainbelts recognize that the region has been hit before and could be threatened again. This leads to a strong sense of identity, regional pride, and activities of continuous improvement.

The Smartest Places on Earth: Why Rustbelts Are the Emerging Hotspots of Global Innovation, Antoine van Agtmael and Fred Bakker, 2016, pp. 39-40.

I haven’t gotten very far because I’m reading three books and shifting among them (and thus not getting anything else done). My initial impression is that there are some similarities between what Thomas Friedman describes as complex adaptive coalitions and this book’s brainbelts or smart cities. First and foremost, there has to be trust and collaboration amongst all of the people in a community. Second, there is always a university or a research institution involved. And finally, there has to be some type of culture involved (cafes and restaurants, for example) in order to attract young talent.

The book did offer a surprise that is not much known: brainbelts seem to go for Democrats, at least that is how I read between the lines. That’s really interesting.

But, there are some troubling elements. It seems to me that the brainbelts are centered on engineers and scientists and leaves very little for average manufacturing workers to join in. So I wonder about all of those who just don’t have the talent for the science and engineering. The secondary jobs that grow up around these high tech areas have to provide at least a living wage, if not better, or we are in deep trouble. Thomas Friedman’s optimistic story said that the revival did not have to involve high tech, so his version includes a greater spectrum of skills and talents.

The other troubling element is that large companies are very much involved in this revival. The authors make it sound like the large companies are committed to making the ventures work locally and that’s why "cheap was giving way to smarts". No! The shareholder value philosophy is still around and still drives large companies to seek the lowest cost, so eventually they will offshore the thinking and research to cheaper areas when they can. There is nothing to prevent large companies from offshoring. The only way I can see it is if the local residents work hard on the continuing education and making education available to all, so that the city can maintain a high level of expertise that can’t be easily replicated overseas. Or we change the philosophy of capitalism that businesses need to consider ALL stakeholders, including employees, not just shareholders, if we want to continue to have an increasingly better quality of life.

"The low-cost labor advantage that companies in the MIST countries had leveraged for the past couple of decades to gain economic growth was losing power…Making things cheap to gain an edge over high-cost Western companies just wasn’t cutting it anymore. The days of the low-cost advantage were essentially over." The Smartest Places on Earth: Why Rustbelts Are the Emerging Hotspots of Global Innovation, Antoine van Agtmael and Fred Bakker, 2016, p.21.

That’s all I got for now. I’m barely past chapter 1 so I may report more later on.