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December 30, 2004

Measuring the Impact of OneCleveland: A Call for an Active Research Agenda

Call To Action

We need some help.

This is a public call through our blog to create an active research project to help measure and evaluate the impact of OneCleveland on the priorities of our community. As we move into 2005, OneCleveland hopes to ignite interest in this active research project to help transform OneCleveland from a conversation among technologists into a dialogue with community leaders and activists. Economic development, poverty alleviation, job creation, healthy cities, crime prevention, civic engagement and building of democratic institutions, compelling education for our K-12 schools, greater access to our museums and other cultural institutions are all candidates for this active research agenda. In today’s entry, I take time to focus on one dimension warranting more detailed study, namely, economic development.

OneCleveland in the Global Context

Earlier this month (Dec 8-12, 2004), OneCleveland and Case Western Reserve University had the honor of being invited to an international gathering on Public Sector Innovation and Technology co-hosted by the City of Stockholm held in conjunction with Nobel Week. Two hundred invitees from around the world including Presidents, Ministers, CEOs, community activists and technology leaders from six continents gathered to learn and share our experiences in leveraging technology to enable social transformation. The gathering was inspiring and included presentations from Nobel Laureates and other luminaries who explored topics as broad as leveraging technology to address education challenges in Ethiopia or in the Israeli - Palestinian conflict to the future of the public sector in a technology-enriched networked economy. One of the main recurring themes was measuring the impact of emerging, innovative, technology-informed initiatives on the national, regional, and local economy. That the Internet has had a substantial impact on the way business is conducted is incontrovertible. However, the extent to which information technologies have contributed to substantial cost savings, productivity, and efficiency increases for government, non-profits like hospitals, education and cultural institutions has not been measured beyond the macro-data level.

The Impact of Existing Regional Institutions

It has become fashionable to engage consultants to make the case for the impact of key institutions to regional economic vitality. Professional sports teams started the trend in the '90s. More recently universities, museums, and health care institutions have all engaged consultants to analyze and deliver a big dollar number to their impact to the region. In Cleveland, readers will recall the great debates over the Gateway development regarding downtown redevelopment and professional sports. Playhouse Square recently announced that it generates $43m a year in economic activity. A couple years ago the Cleveland Museum of Art declared that its annual impact to the region was $22.3m. The Cleveland Clinic and University Hospital systems are conservatively worth many billions a year in terms of regional economic impact. A month ago, Cleveland State University issued a study declaring its impact to be $254m on the regional economy. Armed with consultants' reports, press releases, and the appropriate civic booster club members our most important institutions do their utmost to help the weary and fatigued public understand their value to the quality of life of our region.

The Impact of Emerging Capacity Building Projects

What then about the impact of emerging efforts, the new institutions-in-the-making? OneCleveland, our region's technology platform for innovation and social transformation is one such important emerging initiative. It has become rather predictable that when meeting with regional foundations, civic leaders, and other important influencers in the community, there is a healthy dose of skepticism when asked how we intend to measure OneCleveland’s overall impact to our region. I usually respond that ultimately the most important, measure of OneCleveland’s overall impact is the extent to which it enhances the standard of living of all those who use it. Being an academic at heart and a student of the history of cities and technology, I have tried, with only limited success, to make the case that enhancing the standard of living is the way that the impact of other important innovations—such as the automobile and electricity—is judged, and that OneCleveland and the Internet is and should be no different.

The Evidence at 50,000 Feet

Since the Internet itself is such a recent phenomenon, and OneCleveland is in its very infancy it is not surprising that relatively few studies so far have examined its likely economic impact not to mention its impact on civic engagement. Parenthetically we should add that a OneNEO effort is in its final stages of gestation and I look forward to sharing more insights on this exciting development in the new year (end of parenthesis). Viewed from the vantage point of some of the best macro research (See Doms (2004) and Varian et al (2002)) the consensus seems to be that the Internet, at a minimum, could generate added productivity growth of at least .5 percent annually. It will come as little or no surprise to most readers of this blog that the Federal Reserve Bank of San Francisco concludes that "results from recent research indicate that the successful adoption of IT appears to have played a role in productivity growth… (Doms 2004)" More ambitious estimates suggest that the Net adds as much as 1.15 percent annually to our productivity rate. And productivity rates matter. A regional economy growing at 2.5% per year will double in 30 years. If our region’s productivity rate grows at 5% per year our region’s growth will double in 14 years. There is a .99 correlation between productivity (measured as non-farming output per hour) and gross domestic product. So, this begs the question if we are to arrest the underdevelopment of our region and turn it around, and actually accelerate our regional growth, more than half (52%) of all of our region’s potential productivity growth comes from technological change. Capital investment represents just under 40 percent of the region’s potential productivity growth and the quality of labor another 10 percent (U.S. Bureau of Labor Statistics for average from 1948-2001).

Enter the Skeptics

But, say our skeptical friends, 'technology spending is much more than spending on telecommunications and network equipment and, after all, that is the OneCleveland value proposition.' Well, first, OneCleveland is not an infrastructure play. OneCleveland is attempting to position itself as a platform for innovation and transformation enabled by unprecedented leveraging of advanced network infrastructure. Moreover, even it were "just" a network play, Varian et al note that of the 2699 company executives from the Dun & Bradstreet database of global businesses, the number one factor contributing to the benefits associated with the Internet economy were those who "spent a greater portion of their IT budget on communication and networking hardware than on other IT line items."

How much of an economic transformation is OneCleveland likely to produce in the regional economy? This is an important question because of the impact that OneCleveland will have on non-profit organizations, individuals, businesses, and the entire regional economy. Another important question which is posed to us on a frequent basis is what impact will OneCleveland have on the average citizen in Cleveland or the region? The truth is that OneCleveland will only be perceived of value after it touches each person in a way that sets off that “ah ha� epiphany.

However, the benefits of OneCleveland will accrue to the entire regional economy and will enable greater civic engagement. As more organizations, institutions, governments, and economic development firms use OneCleveland to cut costs, the growth rate of productivity for the whole regional economy will improve. Faster productivity growth improves living standards for average citizens in several ways:

* Through more rapid growth in real wages (which ultimately reflect productivity),
* Slower inflation (which also enhances real wages), and
* Through larger government surpluses, which leave room for tax cuts and/or added spending on social programs that improve quality of life

As regional economists have been telling us, the last point underscores the importance of productivity growth for economic policy making. For those who set city and regional governmental budget policy, projections of productivity growth are the most critical-albeit the most uncertain-element in long-range budget forecasting.

More at Stake than Just Greater Productivity Through Cutting Costs

Nonetheless, in principle, there are several reasons for believing that OneCleveland will in fact lead to productivity enhancements. As anyone who has experienced ultra broadband can attest, OneCleveland represents a new and highly powerful way to communicate information more rapidly, cheaply, and with greater flexibility. OneCleveland is taking us to the edge of the possible in terms of persistent high band width availability which in turn will create new, never before seen applications and services in the areas of health care, research, cultural experiences, education, and organizational efficiency. This should allow organizations employing OneCleveland infrastructure:

* To enhance the efficiency of producing and delivering goods and services (through enhanced cooperation among designers of new products and services in different locations, whether inside or outside the region);
* To enable new, next generation goods and services to be developed in the OneCleveland bubble providing both immediate value and productivity to our community and positioning new opportunities for entrepreneurship and new business development supporting markets near and far;
* To reduce the cost and improve the effectiveness of dealing with customers through augmented communications, enhanced self service offerings;
* To reduce their transaction costs of locating and purchasing required supplies (including labor)

A Call to Action: Re-dux -- Towards An Active Study of Emerging Digital Cities

The factors driving the financial impact of networked-based business solutions for government and the public sector institutions are really only one dimension of an active research agenda. There exist many other community priorities that are candidates for extensive, sustained, community engagement. The most common questions I receive from the dozens of emails, phone calls and reactions to presentations about OneCleveland is two fold; "what is the secret sauce?" and "how have you measured the impact?" These two questions constitute the foundation of the emerging study of the digital city of the 21st century.

The answer to the first question can only be answered by an active research agenda exploring, probing and ultimately articulating the emerging governance model for the digital city. We have unique opportunities in Cleveland to leverage world class research in this area. David Cooperrider's work in Appreciative Inquiry is world renown. We could work with the entire AI team at the Weatherhead School of Management to insert an ethnographic study of the building of the OneCleveland model as a potential reference architecture for governance of the digital city of the 21st century. The Maxine Goodman Levin College of Urban Affairs at Cleveland State University and the Center for Regional Economic Issues at Case could be engaged in this effort in both documenting and disseminating the findings of the DNA of the constitutional makeup of digital city of the future using OneCleveland and other nascent city-based activities in northeast Ohio.

The answer to the question of the impact of OneCleveland on our region could involve multi-disciplinary teams from all sectors of our community. The impact analysis should be informed by the community's priorities and could be funded, at least in part, by some of our Foundations. The impact study could be part of the curriculum in Law, Urban Studies, Non-Profit Studies, Engineering, Business, Management, Poverty Studies, and a host of Humanities and Social Science disciplines at our community colleges and universities. The impact study could also directly engage community members, schools, artists, community centers, churches and other religious institutions, city and regional council members and their staff. Imagine if we asked an organization like IDEO based in Palo Alto to take on the question of the "Impact of OneCleveland" as a design challenge. IDEO has designed, inspired and produced more award winning products than just about any other design firm in the world. Whether it was IDEO or any number of other creative consultants who might be involved, the question of the impact of our technology-enabled emerging platform of innovation and community transformation should itself be a project of community transformation and engagement.

Are you ready?

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December 19, 2004

Digital Cities - An International Ranking

John G. Jung is the Chairman of the Intelligent Community Forum. At a recent presentation to regional leaders in York Region, , organizers of the OneCleveland initiatve were encouraged to submit a dossier to the judges of an international review panel on "Intelligent Communities". On Friday, of this past week, OneCleveland was announced as one of the 18 finalists for the Top Seven Intelligent Communities of 2005. Here is the press release.

List of Candidates for the Top Seven Intelligent Communities of 2005

1. Taipei, Tawain
2. Spokane, Washington, USA
3. Toronto, Canada
4. Dubai, United Arab Emirates
5. Mitaka, Japan
6. Pirai, Brazil
7. Philadelphia, Pennsylvania, USA
8. Tianjin, China
9. Singapore (1999 Intelligent Community of the Year)
10. Sunderland, U.K.
11. Long Island (Nassau & Suffolk Counties), NY, USA
12. Province of Ontario, Canada
13. Greater Cleveland and NE Ohio, USA
14. Calgary, Alberta, Canada (2002 Co-Recipient of the Intelligent Community of the Year)
15. Dublin, Ireland
16. Spanish Fork, Utah, USA
17. London, England, U.K.
18. Issy-les-Molineaux, France

The IFC will make its annual announcement of the world’s Top Seven Communities on January 19, 2005 at the Pacific Telecommunications Council conference in Honolulu, Hawaii (www.ptc.org) at 1:30 p.m. One of the Top Seven will be named the Intelligent Community of the Year in June 2004 at ICF’s annual conference in New York City Intelligent Communities Conference and Awards.

Background

Each year, the Intelligent Community Forum selects communities from around the world to appear on a list of the Top Seven Intelligent Communities of the Year. While most communities and the media treat it as a competitive ranking, that is not its intent. ICF has developed a list of five Intelligent Community Indicators that provide the first global framework for understanding how communities can gain a competitive edge and strengthen their social fabric today. The Indicators demonstrate that being an Intelligent Community takes more than "being wired." It takes a combination of -

* Significant deployment of broadband communications to businesses, government facilities and residences, with government providing a catalyst through regulation, e-government initiatives and
even network construction when necessary.

* Effective education, training and workforce development that builds a labor force able to perform “knowledge work.�

* Government and private-sector programs to overcome the Digital Divide and ensure that all sectors of society benefit from the broadband and information revolution.

* Fostering innovation through government programs, by creating an environment that attracts creative people, and by promoting the formation of, and access to, the risk capital that fuels new business growth.

* Effective economic development marketing that leverages the community’s broadband, labor and other assets to attract new employers.

The Top Seven are chosen, not necessarily because they excel in all of these areas, but because each demonstrates excellence in at least one. ICF salutes them as pioneers and role models for the development of vibrant Digital Age communities in the 21st Century.

Some of each year’s Top Seven appeared on the following year’s list. Others from the previous year are replaced by new communities. Just as appearing one year does not mean that a community surpasses all others, so being replaced on the list does not signify failure. ICF purposely introduces new examples each year in order to continually expand the scope of the Top Seven list, and the selection process must inevitably exclude some worthy and exciting examples.

The Top Seven Selection Process

The selection of the Top Seven Intelligent Communities of the Year is based on nominations received by the Intelligent Community Forum from communities, organizations and individuals around the world. Selections are made through review of the nominations by an expert Advisory Committee and the Intelligent Community Forum. The list of 18 communities (above) are the first step in a process that culminates with a selection of the top seven. In June one of these is selected as ICF’s Intelligent Community of the Year. Criteria for the awards can be found at

http://www.intelligentcommunity.org/html/award_criteria.html.

About the Intelligent Community Forum

The Intelligent Community Forum (ICF) is a nonprofit think-tank that researches the uses of broadband technology for economic development by communities large and small in both the developed and developing world. Its 2001 landmark study, Benchmarking the Intelligent Community, identified five criteria that define “intelligence� for communities seeking economic development in today’s challenging global economy. Founded by the World Teleport Association (www.worldteleport.org), ICF conducts research, creates conference content, publishes newsletters and presents annual Awards for Intelligent Com¬munity developers. More information is available at www.intelligentcommunity.org.

- END -

Intelligent Community Forum
55 Broad Street, 14th Floor, New York, NY 10004 USA
For more information: Louis Zacharilla, Director of Development, +1 212-825-0218 x12, lzacharilla@intelligentcommunity.org


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December 01, 2004

OneCleveland and the War on Poverty

The headlines scream a frank and brutal reality. The OpEd pages are predictable with "I told you so" insights.

The number of children living in poverty has increased by 11 percent over the past three years. The number of children receiving welfare has declined by 10 percent over the same period. Adding to the gloom, median family income - $44,853 in 2000 - fell by $1,535 over the past three years while the number of Americans without health insurance, according to the Census Bureau, grew by 5.2 million, to 45 million in 2003. And beyond the statistics, we know that the City of Cleveland and its nearly half million residents struggle to maintain their dignity, hope, and aspirations for a better, healthier, more prosperous tomorrow. We certainly are hurt and have a growing sense of powerlessness as our city finds itself at the very bottom of the barrel, a civic platform increasingly disparate in our pursuit of strategies for reinvention and a sprit of renewal.

Our biggest enemy is the culture of poverty. As our leaders meet this week, we will reaffirm the central role of our education and religious institutions in the new war on poverty. We will hear the coalition of the opportunists calling for a war on poverty by creating construction jobs to create new edifices to the last century. Our generous Foundation community will be identified as a key source of investment to address the war, with or without a plan. Some will, no doubt, remind us that the consensus regarding the social contract developed over a 40 year period beginning with Roosevelt and ending with Johnson is all but dead. Federal transfers to the States have sharply declined since the early 80s. State transfers to cities and regions have also declined precipitously since the 90s. And now, as we know in Cleveland, the City can not continue with business as usual. Some will, by their implicit silence, write off the City and call for the emergence of a new phoenix from the ashes of the rusted out industrial ghost town that represented the spirit of greatness in a bygone era.

The central public policy opportunity is not to report the facts, bemoan them, debate them, parse their meaning, point fingers, or invoke sentimentality and choruses of "if only…". Rather, if ever there was a clarion call for a third-way (non-partisan), a new coalition (not just the rehash of business versus government with or against organized labor), a new generation of leaders who are attuned to the 21st century rather than being preoccupied with the view from the rear view mirror – this would be the opportunity. The central organizing point for this new coalition could be the connecting, enabling, and transformative power of information technology. Those who are afflicted by comfort will reject the idea of embracing a new currency for our future. Others who preach that we need to retool our manufacturing workforce are quick to de-personalize the analysis rather than ask how prepared they themselves are to invest their remarkable talents with new 21st century tools to address the burning issues of today. There is, in this hour of structural crisis, a very human response to reject the new, untried, and risky option of strategic deployment and use of information technology to reinvent our city as a prototype of the connected digital city. While we embrace and affirm the key role of schools, religious and other 19th century institutions, we need to look forward to establishing, nurturing, and grow new institutions relevant to the challenges of the information age.

OneCleveland, is our region’s platform for innovation and creativity. OneCleveland is committed to not only connecting our key institutions with next generation Internet networking technology, OneCleveland is committed to working with public policy makers in Cleveland and other cities in NorthEast Ohio to bring broadband internet connectivity and technology to affordable housing. All our residents should be empowered with internet access and computing power in order to benefit from the goods and services available to them. Leveraging the power of networking relationships with Cisco, Intel, and Sun Microsystems OneCleveland hopes to roll out model services to residents later this year. Our hope is that our pilot efforts will inspire public policy makers to work with builders and developers to integrate technology into their building plans. More promotion and support needs to be directed to Ohio’s low income housing tax credits for providing high-speed Internet access in the living area of every unit via a data network.

Our city’s future is intimately tied to inviting and absorbing tens of thousands of new Americans to Cleveland over the next twenty five years. OneCleveland advocates adding a new computer and network connection to every family that moves to the City. The value is not only to create an incentive at less than $500 per family, but also to facilitate English as a second language training, linkages to job searching sources, communication with family and friends in their home countries, and linkages to critical information regarding their new home in Cleveland. The computer and network services could be enabled by OneCleveland and implemented through cooperative agreements with ESL providers who could provide families with the technology until they land their first job along with an option to buy.

Cleveland should work to create a Connect in Cleveland program to target a home connection for every resident of the City. This offering can be facilitated by OneCleveland and its "last mile" partners including dsl, cable modem, and wireless service providers. Following successful experiences elsewhere, the Connect in Cleveland program for residential broadband dialup should be priced at $10/month. We should target no less than 70% of Cleveland being connected by 2010 and 90% by 2015.

Financial security and planning is now a critical on-line experience. OneCleveland, calls upon local banks, financial planning firms and insurance companies to come together to develop and provide intensive training and education opportunities to make sure that our residence understanding of how to use on-line tools to become better consumers. Filing claims online, completing banking transactions online, setting up small businesses on-line, interacting with government offices online are all part of today’s reality and our residences need to become comfortable with that reality.

OneCleveland is about the power of opportunity – today. Single mothers, heads of households are now nearly 30% of all households in Cleveland. Helping kids with homework, accessing timely health care information, sharing parenting issues, on developing and maintaining a family budget and having time for exchanges with others in similar circumstances can make all the difference. Getting connected to broadband services is no longer a luxury, it is an imperative as we redefine the core value of the social safety net.

The health profile of our City will vary directly with its ability to develop a meaningful strategy for addressing the culture of poverty. OneCleveland calls on Cleveland’s world class health care facilities to use the power of ultra broadband connectivity to support mobile healthcare clinics connected to hospitals via a community health grid. Bringing diagnostic tools to the community and allowing health care practioners to exercise their skills with expert support at the hospitals for advanced service support is just the beginning of our ability to model for the nation, next generation public health care policies.

We are not so idealistic or presumptuous to assume that OneCleveland is the solution to Cleveland’s war on poverty. However, there can be no sustainable and meaningful future for Cleveland without an engaged and integrated strategy for leveraging technology to beat the culture of poverty and form the foundation of a culture of innovation, creativity, and hope.


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