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December 14, 2008

Top 10 IT Trends for Higher Education in 2009

What happens when tough economic times combine with fatigue across the campus community hyping the latest 'killer app', and the growing intolerance of disruptions to services occasioned by security-related activities. I think the intersection of these three realities represent the most important challenges for IT Leadership on the campus in 2009.

The truth is that we've not seen 3 years of negative economic growth since the birth of the Internet. We are one year into the global recession and the crystal-ball gazing efforts underway on most campuses are not producing rosy scenarios. CIO leaders at most universities are closing in on 'core' operations as they look for options for cost cutting requirements after more than 5 years of marginal growth. CIOs are portfolio managers. Like their counterparts, CIO portfolio management is really about combining requirements for operational excellence, customer service, and selective innovation (r&d) activity. In a three-year secular downturn, there are going to be tough decisions ahead to keep strong performance in all three core activities outlined above.

For many university technology leaders the emergence over the past couple of years of web 2.0 technologies represented a confluence of maturing underlying technologies combined with the rise of what we asserted was the first really promising set of mass collaboration tools. Here we were sitting on the precipice of the long promised 'transformational' potential of technology to the education enterprise and then the economy tanks. In reality, the economic downturn is only one reason that the campus community is less enamored with web 2.0 tools than most of us technologists. For many across the university the rate of change in introducing ever more exciting technologies has left them, to put it diplomatically, breathless. In reality, the hype over web 2.0 is only the most recent instantiation of the long held view that we technologists are amusing ourselves and the rest of the campus to death, forever one gadget or applet away from the ultimate breakthrough.

Finally, whether it is the latest facebook virus, botnets instigated from far flung corners of the world, or the now predictable 'urgent' security fixes from our favorite vendors, there is a real sense across the campus that the 'bad guys' are winning the war. What was simply a nuisance that could be solved with a bit of end-user education and throwing some hardware at the problem has emerged into our own full fledged war on the forces of evil on the Internet. Like recent international conflicts, most on the university campus are ready to conclude that we have neither a strategy for winning this war nor an exit strategy.

Combined, economic blues, end-user fatigue, and a growing sense of collective vulnerability to the forces who would seek to harm us has the campus technology community facing its biggest set of challenges in 25 years.

Against that sobering backdrop, here are my top 10 IT trends for higher education for the year ahead, 2009.

1. To The Cloud and Beyond. Watch for significant moves in the university space going well beyond cloud email services. I expect we'll see the emergence of shared storage utilities and a range of 'web services' in 2009 following industry trends, campus economic pressure, and ecological considerations. While the same resistance points will find their way into campus deliberations, resistance is too expensive, distracts us from where we can bring real value, and ultimately futile. But for the most regulated storage requirements, there really is no alternative.

2. The Consumer Reigns Supreme. There has been an academic debate in most large organizations for 5 years about how we were going to manage the growing presence of consumer technologies within our enterprises. No more. The tsunami is here. Those of us still debating the merits of attending to Facebook, iTouch/iPhone, streaming media, massive player online gaming, mashups, and virtual reality platforms are staring at the wall of this tidal wave of consumer technologies. New trends in 2009 will likely include the first college-centered breakthroughs for mobile computing after mass notification. Watch for location-based technologies and presence technologies embedded in mobile smart phones and other devices (like wi-fi enabled iTouch) to lead to the first set of scalable campus applets.

3. Streaming Media for Education Goes Mainstream. Students expect it. Teachers accept it. Network engineers will have to live with it. Academic technologists need to figure out how to scale it. In the next 12 months, I think YouTube, iTunes U, and the plethora of campus-based services for academic streaming media are going to hit main street. Economics plus assessment data now provide compelling evidence that student success is positively associated with the integration of streaming media into the capture and review of traditional learning models of instructor-centered delivery. In the next year I expect that we will see significant acceleration of efforts associated with video/speech to text technologies to provide real time transcripts for purposes of enhanced search capabilities. I also expect that large repositories of meta-tagged and transcoded academic assets (classes, recitations, seminars etc ...) will begin to emerge allowing for federated searches and mashing up of learning content by students and faculty alike.

4. SecondLife Goes Back to School. Initial exuberance and hype led to hundreds of universities experimenting with 3D Virtual Worlds three years ago. The user-generated universe requires new pedagogy and curriculum considerations. Academic technologists and the education community has learned a lot over the past several years. Look for new functionality and education-centered technology capabilities over the next year. The net result should be an exciting and provocative set of new collaborative capabilities to help enable more campus control and flexible tools for learning. Dust off your avatar and get ready for one of the most important collaborative learning platforms to make inroads in the year ahead.

5. e-Book Readers Disrupt the College Text Book Marketplace. Early predictions of the demise of the college text book market in 2008 were highly exaggerated. Sony and Amazon (among others) are in e-Book Reader space for the long haul. Early in 2009, expect to see new hardware form factors reflecting a more mature and robust technology. More important, I think we'll see pilot activity among the Book publishers and the e-book publishing industry to work with the campus to create relevant tools for learning embedded in their core technologies.

6. The IT Help Desk Becomes An Enterprise Service Desk . Long underfunded and staffed with underpaid students I think we are going to hit an inflection point in the IT Help Desk world. Customer service matters. Truth is that with a few important notable exceptions most campus Help Desks are not our strongest service lines. An emergent group of higher-education focused companies have entered this space and are offering a compelling value proposition for many campuses. On some campuses, the Berlin wall between IT Help Desks and Facilities and other customer service organizations are also coming down. The trend line is about to hit a take-off point. I think 2009 may well be the year.

7. Course Management Systems are Dead! Long Live Course Management Systems! Proprietary course management systems are heading for a brick wall. The combination of economic pressures combined with saturated markets and the maturing stage of the life cycle of these once innovative platforms means that 2009 may well be the year of change or a year of serious planning for change. Relatively inexpensive and feature-comparable open source alternatives combined with some now learned experience in the process of transition from closed to open systems for the inventory of repeating courses makes real change in this once bedrock of education technology a growing possibility. As product managers and management view these trend lines, I think we might see incumbent players make a valiant effort to re-invent themselves before the market drops out from underneath them. Look for the number of major campuses moving (or making serious threats to move) from closed systems to climb in the year ahead.

8. ERP? What's That? No, I don't think the large enterprise resource planning systems that undergird our major administrative systems are going to fall off the face of the earth like antiquated dinosaurs in the next 12 months. I do think that ERP upgrades which many campuses are now facing, planning, and staging are going to need to be re-positioned. At a minimum, I think we will see decisions made to delay major upgrades for 18-24 months. It is also possible that pressure will grow in this next year on the duopoly of these integrated systems providers to re-open their maintenance and other fee schedules in exchange for continuing multi-year commitments from the campus community. We will also see new models mature in the hosting of ERP services both as shared services among the campus community and as a commercial service offering. For these glacially-moving systems, change is happening. It's just hard some times to see the rate of change until you're looking in the rear view mirror 10 years from now.

9. In God We Trust -- Everyone Else Bring Data. Decision support software and data warehousing tools have been available on campus for well over a decade. While cultures of evidence are not well rooted in the decision making on many University campuses, the growing pressures for better decision making in the context of budget pressures is compelling the campus to make better decisions. The small priesthood of campus analysts with skills to support decision making have more job security than most. At the same time, look for new reporting tools and growing expectations that metrics, scorecards, and data analytics will be used to drive tough decision making on campus.

10. Smile, Interactive High Definition Video Conferencing moves from the Board Room to the Research Lab and the Lecture Hall. Facing budget pressures and public pressure to go green, corporations around the world are investing in next generation video conferencing. Moving operating dollars into infrastructure investments in this collaboration platform technology has led to significant reductions in travel costs, better space utilization, and a growing conscientiousness about carbon footprints. As businesses continues to look for capabilities to support global operations video conferencing has become a daily part of many companies. The logic facing corporations now confront the University community. Over the past 18 months some public universities have been mandated to reduce their carbon footprints. Most everyone else is facing growing operating pressures pinching travel and other budget lines. New students care about pro-active green initiatives as part of their University experience. Over the next 12 months look for double digit growth in campus adoption of next generation video conferencing tools, including integrated collaboration technologies.

One more trend for good measure. Substitute this one if you disagree vehemently with any of the other items above.

11. The campus data center goes under the scope . Most every campus technology leader has been zinged for disaster recovery and business continuity planning. Add to this that there is exponential demand among the research community for computational research space to support high performance computing. The facilities community is under growing pressure to distribute the costs of power consumption on campus. Data centers consume disproportionate amounts of space, cooling, and power. Finally, growing green is a campus imperative leading to potential operating savings through virtualization, data center optimization, and new greener strategies. Board audit committees and senior management are going to hold technology management accountable for robust data center operations in a highly constrained budget environment.

I don't know about you but my holiday gift wish list includes an extra bottle of Tylenol three, a Teflon flak jacket, and a hope that structured innovation remains part of the campus IT portfolio. Against multiple pressures, focus on structured innovation remains our best hope of remaining central to the University's strategic mission and activity.

Lev Gonick
Case Western Reserve University
Cleveland, OH
December 15, 2008

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Lawrence Lessig Read/Write Government

Larry Lessig is about to embark on yet another big, audacious project. Delegates to the Public Sector Innovation Summit in Stockholm during Nobel Week got a preview.

For those who have followed Lessig's public sharing of his scholarship and activism, his new arc of work on (re)framing the relationship between corruption, trust, and the financing of government is as exciting as it is a daunting undertaking. The goal of a transparent (read/write) government finds a recent instantiation in the call to the Obama transition team for an Open Government Transition

Lessig's keynote to the Summit was itself a mashup of previous presentations. The theme of read/write culture can be viewed in these three re-mixed talks.

First, the theme of (dis)trust and different types of economies and their deep cultural origins can be gleaned from this talk in New Zealand.

Second, the theme of (re)mix culture and the difference between the 'read only' culture of the 20th century and the emergence of 'read/write' culture in the 21st century and the rise of hybrid models can be viewed in this presentation on keeping culture free.

Finally, the link to the themes of trust and the future of governance issues in the United States are available here in his proposal for principles for a new Congress.

In his presentation Lessig observed that most geeks view all problems as having a technical solution. In the case of re-invention of democracy, machines are not the answer. With masterful, rational reasoning, Lessig made clear that the 'first' issue that must be attended to in a fully read/write government is changing the rules for financing our democratic project. The corrosive impact of private financing of democracy has eroded the very trust principles which are required in creating legitimacy, the underlying first rule of democracy.

The new administration in Washington faces the unenviable twin challenges of triage and transformation. The same can be said of most governments today. It remains to be seen whether the 'all hands' approach to attending to the current economic crisis, stimulus, and triage will leave any cycles for the re-imaging, re-invention, and re-invigoration of a new read/write government and a forward leaning economy for the 21st century.

Lev Gonick
(Back In) Cleveland, OH
December 13, 2008

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December 10, 2008

A Personal Journey From Untouchable to University Vice Chancellor: Narendra Jadhav, University of Pune

There are 180m untouchables in India. Another 90 million aboriginal Indians live at the margins of that society. What happens when a person's personal journey takes them from the bottom of the caste system to the top executive of the largest university of India? One of the most distinguished economists and central bank authorities in India, Narendra Jadhav's parents had no formal education. His presentation at this year's Nobel Week Public Sector Innovation Summit narrates his own story and the challenge of re-energizing a 650,000 student University of Pune with some 800 colleges, schools, and educational institutional affiliates.

The challenges of education in India are of a scale nearly incomprehensible. There are 225 million Indians between the ages of 10-19. Less than 10% of them manage to navigate their way to post-secondary experiences. Jadhav's new mission in life is to turn a massive university into an agent of inclusivity and a social movement for making education relevant to people (what he calls social connectivity), wherever they live and whatever their background.

Here are some examples that Jadhav shared. A two year massive curriculum reform has been enabled through electronic workflow underwritten with incentives. Professional development and technology support for faculty. Everyone in the University can get a computer and pay it out over various periods of time. The University picks up the interest. Stimulus investment in research activity in non-traditional parts of the University system have also led to growing trust between historically oppositional forces and significant returns through additional sponsored and funded research activity. In addition, Jadhav is rolling out a soft skills curriculum for students on an extra curricular basis with a special focus on youth from marginalized communities to bolster their self esteem and provide them with key skills for their personal and professional development. Uptake has been tremendous with some now 600 centers for soft skills acquisition across the University.

If that weren't impressive enough, Jadhav has catalyzed a multi-tiered community engagement strategy by challenging each of the 800 institutions to adopt a rural community near by. The adoption strategy spans a wide range of possible activities including education, sanitation, water engineering, environmental activities, alternative energy, technology training, engagement on woman's health and education, gis mapping, and writing local history. Over a million tree saplings have been planted. Hundreds of oral and community histories have been documented. Thousands of mini-courses are being offered by students in villages as 'barefoot professors' teaching those who have very little opportunity for education the very subjects they are studying. Over half a million youths and their faculty and staff colleagues are now directly engaged. Jadhav has unleashed social dynamics that have the makings of a transformational and authentic social movement.

A product of an American PhD program in Indiana, Jadhav also sees the value of community colleges and vocational schools. This tier of education is largely missing in the Indian post-secondary education system. In a workshop yesterday we spent time talking about each of the University of Pune's colleges having a community college and/or vocational program to provide relevant life skills. The University is also innovating by creating perhaps the world's first PhD program exclusively tailored to senior citizens over 60. The only qualifications to get in are being age eligible and having a first degree. In the first week he had over 5000 applications.

Jadhav and colleagues are embracing information technology to disrupt the market to enable scale and support growth of the market. Enrollment has grown more than 20%. Pune has more than 15,000 international students and has become 'the' destination for international students and study abroad experiences in India.

Did I mention that he's been at the job less than 3 years

Lev Gonick
December 10, 2008
Stockholm, Sweden

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Broadband and the Future of Democracy: The View of an Elder Statesman

Sixty years ago today Eleanor Roosevelt introduced the Universal Declaration of Human Rights at the the United Nations. The defense of human rights, freedom of religion, and communication has been the bedrock of defenders of democracy since 1948. The former Mayor of Lisbon and former President of Portugal celebrated that legacy at today's Public Sector Innovation Summit and opined that the future of universal human rights may well be connected to the emergent broadband revolution underway this past 20 years.

Jorge Sampaio has spent a lifetime defending as one of the most articulate spokesperson on human rights as both a lawyer, politician, and now elder statesman.

Democracy, according Sampaio, is about how to live together in our globalizing world is which a problem anywhere is a problem everywhere. This is both the challenge and opportunity of the Internet and the broadband revolution. The broadband forces that enable democratic tendencies can be used (and have been used) by those who would exploit and deny human rights.

The challenge of democracy is to bind its citizenship to a sense of belonging and engagement. The lack of trust and confidence in many of our forms of political life has bred cynicism and alienation from a generation of citizens who are significantly disconnected from and lack empathy for the institutions of governance and the public sector as a whole. This is a theme that Lawrence Lessig addressed in his keynote later in the day.

According to Sampaio, however, broadband internet connectivity, especially as demonstrated by the American Presidential campaign and election provides a last great hope in the 21st century to re-integrate the public, re-invent the nature and meaning of public service, and revitalize democracy itself.

There has long been a view among technologists and many civic leaders that digital networks can provide a positive contribution to economic and social development. For the first time in the relatively young life of the connected republic's history, it is possible to argue that democratization and connectivity are linked together. Not only has the American election made it clear that future campaigns all over the world will be waged over the Internet. More importantly, the web 2.0 world of mixing, and read-write, has enabled the once consuming, television electorate to now actively participate (rather than simply consume) in the political process and through that engagement help to strengthen democracy on both a national and local scene.

In his more optimistic view of the future, Sampaio, opined that the new phase of the connected republic makes possible an enabling platform to encourage the population to create its own authentic and meaningful sense of belonging and engagement rather than just being consumers.

The rise of collective intelligence through active engagement of a well informed and curious population that develops empathy for others, and a sense of common purpose, is at heart of the democratic vision of the 21st century. It's a big and exciting vision. The challenge of execution and propagation across the signatures of the Universal Declaration of Human Rights seems to be a significantly worthy 21st century aspiration. The challenge, as always, is to build consensus in driving thought leadership and execute confidence building measures that are meaningful to the man or women on the streets of Cleveland or any other city (or rural community) in the world.

Lev Gonick
Stockholm, Sweden
December 10, 2008


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December 09, 2008

Government 2.0 vs. Democracy 2.0: Blogging from the Nobel Week Public Sector Innovation Summit

For more than a decade, governments around the world have been engaged in making city halls, state/provincial legislatures, and other public services more accessible to its citizens. E-citizenship and e-government has come to be understood as a commitment to transparency by inviting citizens to discover the workings and services of their elected officials online. Welcome to the world of e-Gov 1.0.

While some governments are still struggling to frame their e-gov strategy as outlined above, a new wave of global leaders is emerging and taking the dialog on e-citizenship to a whole different level. In addition to being more savvy consumers of public information, leading governments are now engaged in new efforts to enable citizens to be co-producers of their own public policies. The technology tools engaged in projects like "Show Us A Better Way" not only provides access to public information. These new initiatives are provocatively re-inventing the nature of democracy and the relationship of citizens to their 19th century government forms by asking citizens how they would use the public information to provide services to themselves and their neighbors. Welcome to the dialog on government 2.0 and/vs democracy 2.0. Here are just two examples of such provocative developments.

UK Government 2.0 lead William Perrin outlines the logic of the British government's approach to disrupting legacy 19th century democratic institutions. At its core, web 2.0 tools democratize the ability to communicate which challenges a lot of received wisdom and institutional interests. At the same time Web 2.0 tools can and do circumvent the authority and power of the state. Having mothers and fathers use web 2.0 tools to talk about health care for kids (see http://www.netmoms.com) is a terrific and rich resource. Sometimes this kind of wisdom of the crowds can and does run up against the wisdom of experts engaged in important areas like public health. One of the most provocative opportunities enabled by web 2.0 tools is the ability of neighborhoods and individuals to take some measure of control over their own relationship to government by educating government on conditions like new potholes, broken street lights, and other neighborhood priorities through web 2.0 tools. This form of hyper-localism not only helps to refine the role of government it can also empower citizens and helping to facilitate the democratic process.

Peter Shergold, Former Permanent Secretary of the Australian Dept of the PM and Cabinet also framed his experience as the emergence of new public management moving from a fully hierarchical and centralized management system that is now tending towards decentralization and a devolution of traditional roles. The old public service model was clearly prescriptive. There is now an opportunity for those in government to use these new web 2.0 tools to enable a more active listening and responsive approach to their vocation and calling. Specifically:

(1) The whole of the governments approach allows for real-time internal civil service sharing across otherwise deeply embedded organizational silos. This is in effect the creation of platform technologies for re-inventing the nature of work within government and the layered decision making that traditionally throttles innovation and agility within government.
(2) The opportunity the third sector (non-profits, community organizations) to actively become involved in the making the public policy. This is not only a case of the third sector being able to access the halls of decision making. Forward thinking and action-oriented Government is now proactively contracting with the third sector to deliver public policy.
(3) Like the British view, there is an emergent condition in which citizens are now poised to directly influence and get involved in the making of public policy (networked governance).

There is a line of reasoning that challenges the inherent value of government and the civil service as intermediaries between the citizenship and the distribution of resources. When Democracy 2.0 take off with the pervasive availability of web 2.0 technologies and a growing awareness and capabilities of well educated populations, the new debate will be on the relevance and sustainability of those 19th century institutional artifacts of democratic forms of governance. There is a real possibility that within the next 25 years civil service reform and the re-invention of the State will once again be on the radar screen. Unlike the Reagan/Thatcher era the challenge will not come from some ideological view of how best to organize the dynamic of state, industry, and society relations but rather because increasing forms of disintermediationoccasioned by technology and a more autonomous population render the traditional 19th century forms of democratic governance less relevant.

Lev Gonick
December 9, 2008
Stockholm, Sweden

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Technological Revolution and the Coming Golden Age - An Update From Nobel Week Public Sector Innovation Summit

The opening plenary at this year’s Public Sector Innovation Summit was highlighted by a keynote by Professor Carlota Perez author of the 2002 book, TECHNOLOGICAL REVOLUTIONS AND FINANCIAL CAPITAL: The Dynamics of Bubbles and Golden Ages.

In his Noble lecture yesterday, economist Paul Krugman painted a picture of the emergence of a new phase in the global economy characterized in many ways as a classical system of comparative advantage defining new winners and losers. As I noted yesterday, Krugman’s life work helped us better understand the post-war international economic regime. Classical theory of international trade, according to Krugman, missed at least 50 percent of the real economic dynamics unfolding in the dynamic globalizing economy. His work in new trade theory helped us better understand geography, the role of the firm, an intra-regional trade patterns. His prognosis for the future, however, appears to be framed in terms of an emerging neo-classical system of comparative advantage resulting from the current disruptions and the financial credit markets.

Professor Perez’s presentation leaves one with a very different sense of possible outcomes. Her sweeping analysis of 240 years of paradigms links technological revolutions, financial capital in the introduction (in her words “installation”) of new configurations of state, capital, and society. In each and every of the 5 technological revolutions the ‘introductory’ phase is followed by a financial market collapse (creative destruction) and then by a maturing phase (in her words “deployment”) ushering in a golden age. This phase involves production capital and state regulation to help drive adoption.

In her view, the emergence of the new IT-enabled technological revolution is now entering the deployment phase (of another approximate 25 years) following the current financial (casino) credit crisis. The emergent new paradigm could shift us from the mass consumption model of the antecedent era. What might emerge is a world based on privileging diversity and respecting differences within the context and at the intersection of IT and Green. Rather than a world of traditional winners and losers, Perez sees the capacity to shift to IT-green consumption not by guilt and fear but by desire and aspiration. The definition of the good life and our notion of luxury is clearly shifting from the post-war mass consumption society towards a green and boutique solutions scalable through deploying advanced technologies.

The language in the United States and the forthcoming stimulus package appears to privilege and tilt the playing field in favor of the technology-enabled green economy. Perez sees the need for supra national regulation of financial markets in order to move us beyond the jolts of casino financial markets. While ironic, this choreography of diversity enabled by a highly distributed technology system combined with an apparent high degree of centralized authority is at the heart of the challenge ahead, Indeed, in Krugman’s world I expect that he dismisses the likelihood (if not the desirability) of this kind of choreography and thus sees the emerging new state-supported role in the economy as leading to a more classical comparative advantage international trade regime. Perez for her part is not sanguine nor naïve but believes that the choice is at the heart of the new public agenda.

Lev Gonick
December 8, 2008
Stockholm, Sweden

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December 08, 2008

Blogging the 2008 Nobel Week Public Sector Summit

It's 4:50 pm and night has fallen in Stockholm. I spent most of the day at the University of Stockholm. Each year, Nobel Laureates are invited to offer a 50 minute lecture about their story and their contribution. More times than not, most of these brilliant people stay focused on the story of their craft rather than their personal story. Osamu Shimomura was the exception. He was 1/3rd of this year's Nobel Laureate's in Chemistry. His story opens on the day of the atomic bomb hit. He was a 16 year old high school student. His lecture wove the science of the discovery of isolating the green fluorescent protein, GFP, with stories about his mentors, colleagues, families, and the politics of scientific discovery.

Paul Krugman has spent an academic lifetime enlarging our understanding of classical trade theory into what has become known as new trade theory. He offered a bit of insight on the road he's traveled these past 25 years. As I noted in my Tweets and FB updates live from the lecture, the irony of Krugman's talk was that for 25 years he has been at the forefront of a revisionism in economics to account for trade patterns and economic activity that helped to turn classical Ricardo on its head. After explicating some of the empirical and theoretical basis of that activity he concluded (in the last 3 minutes of his presentation) that while he has contributed to a better understanding of foreign trade over the past 50 years of global transactions, the next 50 years appear to be leading towards a 'return of the classical foreign trade economics' based on comparative advantage.

At tonight's opening of the 2008 City of Stockholm and Cisco Systems Public Sector Innovation Summit, some 300 delegates from around the world gathered to compare notes on the unfolding of the broadband economy and innovations in the health, education, and public services arena. Interesting enough, a wide cross section of delegates from the OECD as well as Asia, Africa, and the Middle East were talking about their government's economic stimulus plans. Each of the persons I spoke with was convinced that their governments would be offering a significant infrastructure stimulus to catalyze an effort at economic turn around. However, unlike the conversation in the United States, or certainly in Ohio to date, I heard time and time again about stimulus investments in public broadband efforts, extending broadband enabled services in health care, education, and core government services. It was striking how forward looking the European and Asian stories were (in particular). Beyond the headlines, there may never be a more important time then mobilizing our thought leaders and civic leaders in our State capitals, cities, and universities to press the case for economic stimulus for a 21st century broadband future. For one view on what this might look like in NEOhio take a look at this earlier analysis.

Tomorrow, Government Ministers, University Presidents, and other public sector leaders conduct a full day of indepth case studies and architecting of broadband futures in about 50 countries represented at the Summit.

Lev Gonick
December 7, 2008
Stockholm, Sweden

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December 07, 2008

Cleveland: Too Big To Fail?

As Cleveland Goes, So Goes America

Cleveland is the story of America in the 21st Century.

After the Obama Stimulation Plan of 2009 works, we will have 2.5 million new jobs. If they are to be jobs that will position America to compete in the 21st century, we will need to transition from an analog economy and largely fragmented and disconnected education system. The 21st century belongs to those who fully embrace the knowledge economy and one that is informed by a more fully connected and integrated education system. It is all about focus on the transitions. If the stimulus is to work it must have enough dry powder to enable the necessary investments to transition us forward into the 21st century. We have seen the first wave of legacy interests lining up to extract public largesse to support the 20th century.

Catching transitions is the secret to success. Just ask folks in Cleveland. We haven’t had much luck in the past fifty years. Want to get a preview of the next twenty-five years in our country, take a journey down Greater Cleveland’s lived experience this past twenty-five years. Getting a helping hand to support a graceful fall or serving as a catalyst for new opportunity is the art of politics. We have already seen the captains of finance and the automotive industry attempt to frame the need for a multi-trillion dollar stimulus and bailout as a bridge to tomorrow. Cleveland’s recent loss of National City Bank and further job losses in the anemic automotive economy reflect forces of the global economy and a march of historic dynamics that will not stop at the shores of Lake Erie. Two other major industries are now poised to line up in Washington to argue that that they too are too important to fail. Next up will be the airline industry. Not too far behind will be our telecommunications industry. The biggest problem for each of these industries, and one could add steel as well, is catching market transitions. In almost every case, catching a market transition requires vision and risk. More often than not both are in short supply. The dead weight of unsustainable and recurring short-term demands for investor profits, myopic leadership, and deeply structured organizational culture makes it very difficult to plan and execute these transitions. In each of these industries the rhetoric of the past 25 years has almost always been tinged with the language of the remarkable and sustainable opportunities occasioned by unregulated markets. Government and regulation were the enemies of the invisible hand of the market. If only the government, regulators, and citizen interest groups would stand down, our banks, automotive, steel, and airlines, and telecommunications industries could be expected to function and deliver wealth and opportunity with the confidence of a Madison Avenue pitchman. We are long overdue for a correction in the language and discourse in the United States and the attended policies that must follow.

Catching transitions is the most important quality of leadership. Knowing that a structural transition in an economy is underway is the easy part. There remains a deep-seeded human need to believe that resurrection is a matter of will, grit, and determination. This is as true of the leadership and the broad masses in our country as it is Greater Cleveland, and for that matter in any of a number of marquee institutions in our region. Given the growing sense of powerlessness, leadership in our communities needs to find the unchartered path between a peoples’ collective resilience (whose flip side is collective fear) and the visioning and development of a complex blueprint to serve as a map to the future (the flip side of which is being trapped in the mythical picture of the unending American Century as a rainbow without an end presented through the rear view mirror). The march of history continues and the future belongs to those who embrace the transition. The role of leadership is to enable people to look in the mirror and see in it a person with the personal attributes, skills, and beliefs to meaningfully and directly contribute to the re-making of our future. Knowing that a structural transition in the economy is underway is much easier to internalize than helping to architect and build the scaffolding required to get us from the here and now to the next arc of generative economic, social, education, and creative opportunities.

The too big to fail argument is the story of Cleveland. Today, most people in Cleveland are not so sure anymore. We have been in transition for nearly 50 years. The bedrock of our sense of invisibility through much of the late 19th and 20th century is based on our contribution to inventing, sustaining, and leading five core industries that define Cleveland the American Century. Today, one by one, the leadership of each of these industries will be sitting in front of benches of elected officials looking for bailouts, bridge loans, and the largesse of economic stimulus packages. The most difficult decision a leader can make is to find the courage and strategy for shifting scarce human, financial, technical and political capital towards transition. This is the stuff of the making and re-making of historical epochs that later historians will render fully intelligible.

Banking and consumer lending and mortgages has much to thank Cleveland. National City Bank may have been among the very first financial institutions in the country to offer a consumer home mortgage service line shortly after it was founded by Misters Sheldon and Severance in 1845. Once, Cleveland was a top banking center in the country and too big to fail. Today, the creative destruction of the home lending industry has contributed to the crippling of the global economy and brought National City Bank to its knees. Through the transition that has been underway for at least 40 years, the center of gravity of global finance continues to shift from cities like Cleveland and even America’s banking capital in New York to oil cities and sovereign national funds in the Middle East and Asia. America will continue to be an important linchpin in global finance as the transition continues to unfold. Former financial capitals like Cleveland are less relevant than ever before.
When the steel economy in this country defined our national status as a true global economic superpower, Cleveland was the Silicon Valley of the golden period from 1930 to 1960. Legendary captains of industry like Eaton and Mather looked down over the bellowing smoke stacks in the Cleveland Flats supporting hundreds of thousands of jobs at the mills and serving as a catalyst for the feverish maritime traffic through the Great Lakes and around the world.
Cleveland’s steel mills inspired industrialists from around the world who visited the banks of Lake Erie and who imagined a gleaming future for countries like India, Russia, Poland, and Japan. Today, Cleveland has fewer than 1500 steel mill jobs and of the global production of over 1.4 billion tons of steel, the United State will produce less than 100 million tons. Too big to fail? The transition is almost complete. It has been anything but painless. In Cleveland, the echoes of the steel economy remain with us as a haunted voice from the past representing both strength and weakness at once.

The automotive corridor in the United States goes from Detroit through Cleveland/Akron and to Pittsburgh. Cleveland had it all. It was home to the origins of the automotive industry. When Alexander Winton, who first introduced the steering wheel to the fledgling automotive industry, drove his 1899 Winton car from Cleveland to New York, it made headlines news all across the nation and perhaps a million persons in New York came out to see this novelty vehicle. Cleveland had the key inputs required including steel, rubber, and glass. Cleveland had skilled and unskilled labor. When the industry grew from its start up phase around 1913 and transitioned to a mass industry, it was Detroit and not Cleveland’s business leaders who took the risks to invest in massive production facilities and made the big bets. Given the nexus of geography and raw inputs, Cleveland remains a city whose future is closely linked with the destiny of MotorCity and the automotive industry. At its zenith, around 1963, census data suggest that there were 59 motor vehicle assembly and equipment parts manufacturing facilities in Greater Cleveland supporting more than 37,000 jobs in the manufacturing workforce. Cleveland’s automotive sector has been in a secular decline and transition since the mid-60s. Within a decade, America found itself in what is now recognized as the beginning of the end of its once uncontested dominance in the auto-industry. Too big to fail? Japan, China, and Germany all produce more cars than the United States. In the next year or two, South Korea, Brazil, and perhaps India (all with double digit production increases) will eclipse US car production. After loosing first to market advantage to Toyota on the decade of the hybrid, the future is being bet on the plug-in electric car. Nissan and Renault are ahead of the United States on that front, after we surrendered first position on the recall and demolition of the EV1 more than a decade ago. Today, fewer than 20,000 persons are employed in the automotive-related industry in Greater Cleveland. Given the nature and anatomy of the supply chain, Cleveland’s short term prospects are precarious and tied to the mess facing the big three automakers.

Next in the too big to fail list will be the airline industry. In the 1990s, California’s aerospace industry was devastated and restructured. Cleveland’s long romance with the aerospace industry going back to the pioneering days of the industry petered out with the closing of TRW in the 1990s leaving only NASA Glenn to carry the mantle of that bygone era. As competition arose in Europe and in then niche manufacturing locations like Canada (Bombardier) and Brazil (Embraer), manufacturing in the United States went through predicable consolidation. Today, the flagship carriers are likely to experience an acceleration of the consolidation that has been underway for the past 10 years. CEOs of the remaining carriers are poised to make the case for the need for bridge financing to support the needs of the American flying public. The biggest risk regions like NEOhio face is that the likely further restructuring in the airline industry will leave our region even more vulnerable to the vicissitudes of the unregulated market going through a radical restructuring. Local and regional markets will almost certainly face a major reduction in service and increase in fares. Any future bailout of the airlines should be tied to regulations to assure regional service and competitive pricing. Moreover, it is critical for regions such as NEOhio to invest in skills for next generation aviation and transportation systems. New investments in the emergent advance transportation industries of the 21st century will need skilled labor, science, technology, manufacturing know how, software and logistics, along with new technology-based services platform that the next generation of the flying public will find available to them.

One of the most important risks we face is the debate on stimulus for broadband in the United States. The United States has no national broadband policy. Every country in the OECD (advanced economies), except the United States, has a policy to invest in 21st century broadband infrastructure. Like much else in the past 25 years, our broadband future has been tied to the rhetoric of the free market and resulted in oligopolistic control by the telecom industry. Legacy investments in this quickly changing industry has served as a dead weight to our entire economy and education systems. Telecom and cable companies have no choice but to seek to extract annuity returns from 20 and 30 year old investments. The country as a whole, and regions like NEOhio in particular, are held hostage to actuarial considerations that position short-term returns for private interests against the longer term interests of regions and the country as a whole. Bandwidth is the key transportation investment of the 21st century. Public investment in the inter-state system, our shipping ports, canal systems, and airports are all 19th and 20th century examples of the criticality of investing in transportation systems. Global competitiveness is tightly connected to investments in the broadband economy. There is near certainty that the Obama administration will begin to attend to this deficit in the upcoming stimulus package. To its credit, the Obama shadow administration is keenly attuned to the need to address the major shortcoming of a broadband-free national policy. The biggest risk the country and regions like NEOhio face is the near certainty that the telecos and cable industry will do a 180 degree shift and now line up to receive billions of dollars to build the country’s next generation broadband economy. Long held religious-like conviction regarding government intervention in the broadband economy will turn on a dime as long as the investments are channeled to the telecommunications industry. The arguments are all rather predictable.

The research and education community should quickly mobilize and assert a leadership position in creating and/or joining a national coalition of cities, regions, and community networks to articulate a public alternative to our future broadband policy. Governors should join forces with University Presidents and offer the Obama administration an opportunity to leverage public investments in statewide regional optical networks that can be the platform of our competitive 21st century economy. There are alternatives to connect the regional systems to one another and position the country for a period of unprecedented growth, innovation, and service economy. There is also an opportunity for private interests in the telecommunications and cable industries to compete for using these publically funded transportation system to deliver voice, data, video, and other services to the public. The ‘bottom line’ must be a clarion call and a bright line in the sand that preserves the public interest in investment and opportunity to further invest in the most important transportation system of the 21st century. To do anything less is to render our common future at risk to the market at the very moment that we have ample evidence in finance, automotive, steel, and in the airline industry that market disruptions come at a tremendous costs and dislocation.

Together in NEOhio, we have a regional advantage in the broadband economy of the future. OneCommunity is our regional community network infrastructure project. It has been remarkably successful, mobilizing communities to invest in their own futures. Today, OneCommunity connects more than 1500 locations in what will be 22 counties and nearly 1,000,000 end-users in next generation ultra-broadband. Education, health, government, libraries, museums, and hundreds of other public sector sites are serviced in one of the largest and fastest intranets in the country. More important than the access is the sense that the organizations, institutions, and communities that are involved with OneCommunity are meaningfully engaged in charting their own future in the broadband economy of the 21st century. A wide range of services, including healthcare, government and education are now connecting NEOhio as one large connected community. This advantage is reminiscent of earlier moments in our history. Reading back history, with the advantage of 20:20 vision, we understand how important it is to take calculated risks in big opportunities during moments of transition. We have seen it before in finance, steel, automotive, and aerospace. Our earlier investments (or lack thereof) have shaped our future and the well-being and the destiny of our entire region. The broadband economy is not the only investment opportunity that will help shape our future in NEOhio or the country. The broadband economy is, however, our generation’s challenge. It is at once a challenge that resembles a 21st century version of rural electrification and a moon-shot, at the same time, that will open new vistas of research, scholarship, education, and economic development.

The world we bestow to our children will be much different than the world that most of us inherited from our parents. Our hyper-connected world has rendered the first instantiation of the global village. The transition we are living through is as exciting as it is disconcerting. As the global economy re-invents the global division of labor, there will be continuous change and challenge facing Cleveland. Understanding the anatomy and drivers of this set of new key drivers is vital to the transition that now stands in front of us. This is a leadership challenge that touches every part of our society. Communities need to leverage their relative advantage to frame a bold and exciting future that will connect us to the global economy from a position of evolving and continuous relative advantage. People, strong commitments to education, geography and ecology, ideas and history, and a vision of a vibrant future for the next generation are at the heart of an exciting collaborative future. As Cleveland goes in the 21st century so goes America. We stand ready to focus on the transition. To do anything else would be to place our chapter on the history of the 21st century in the hands of someone other than the school child entering first grade in Cleveland. We owe it to her to help her and us write our own history.

Lev Gonick
December 7, 2008

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December 03, 2008

Memo to the President: Internet for All

This item on NPR sets the stage for the national conversation on broadband under the new FCC. Here's a loose transcript:

The Federal Communications Commission has a range of responsibilities, including overseeing emergency communications systems, guiding the transition from analog to digital television and regulating four-letter words on the radio. President-elect Barack Obama has not said whom he'll appoint to lead the FCC under his administration, or what the powerful federal agency's priorities will be. But if the people advising him are any indication, high-speed Internet access may be near the top of the list.

University of Michigan law professor Susan Crawford is one of two people charged with advising the Obama-Biden transition team on the FCC. Crawford declined to be interviewed for this story. But at a roundtable discussion earlier this year, she made it clear that she believes that Americans don't yet have what they need when it comes to Internet access.

"This really is a utility," she said at the Tech Policy Summit in Los Angeles. "This is like water, electricity, sewage systems — something that all Americans need in order to succeed in the modern era."

Another panelist, Richard Russell, the associate director of the White House Office of Science and Technology Policy under President Bush, made it clear that he disagreed.

"The bottom line is that the U.S. is still, I think, the most dynamic broadband economy in the world," he said.

Crawford called that "magical thinking."

"We're not doing at all well," she said, "for reasons that mostly have to do with the fact that we failed to have a U.S. industrial policy pushing forward high-speed Internet access."

An Official Policy

For years, FCC critics have been demanding just this — an official policy on universal Internet access or, at the very least, government incentives to encourage more competition among Internet service providers.

On Capitol Hill on Tuesday, a coalition of organizations unveiled recommendations for a comprehensive national broadband strategy.

Ben Scott, the policy director for one of those groups, the nonprofit Free Press, says Americans are currently paying more for less. Because of that, the U.S. has fallen out of the top 10 countries in the world when it comes to the percentage of households using broadband, Scott says. Just over half of American homes have it, which puts the U.S. behind Denmark, the Netherlands, Norway, Switzerland, Iceland, Sweden, Korea, Finland, Luxembourg, Canada, the United Kingdom, Belgium, France and Germany.

"If you look overseas," Scott says, "most of the world's leading nations have half a dozen or more different companies offering a similar broadband product. They're competing on price. They're competing on speed. They're competing on the attractiveness of the services they offer on top of their broadband package."

In London, for instance, at least nine Internet providers offer a range of services starting at the equivalent of $10 a month. They can do that, Scott says, because governments abroad have worked with industry to lay wires and equipment that are used by multiple providers. Contrast that with the U.S., where phone and cable companies enjoy a duopoly in most markets.

Joe Waz, a spokesman for Comcast Corp., the nation's largest cable company and second-largest Internet provider, insists there is plenty of competition in the U.S.

"Speeds have kept going up. Prices have stayed flat on a real dollar basis and have continued to decline in terms of the price per megabit delivered," he says.

Waz says his competitors at the phone companies are investing billions of dollars in faster fiber-optic networks. In some places, cable companies are responding by opening up more of their channels to broadband.

High Speed Internet Is Not For Everyone

About 10 percent of Americans still have no access to broadband at all. Many of those people live in rural areas. Wally Bowen, who runs a small Internet company in Asheville, N.C., says the reason is money.

"The cable companies don't find it cost effective. Phone companies have to reconfigure their landlines with additional technology," Bowen says. "There's been some of that, but it's pretty limited."

Bowen and others hope that new wireless technologies recently approved by the FCC will eventually solve the rural broadband problem. But even Comcast's Waz says this is one issue that could benefit from government intervention.

"There are parts of the country where it'll still be uneconomic for a phone company, a cable provider, a wireless provider to offer service. The smart use of government funds — to the extent we care to put them into broadband infrastructure — would be to bring broadband where it isn't."

Waz warns that cable and phone companies won't build new infrastructure where they don't expect to make money. Current FCC commissioner Robert McDowell says that's OK — the FCC has already taken steps to encourage more private investment in broadband infrastructure.

"We need to be wary of any policy that might scare away capital, especially given the state of the capital markets today. I don't think $100 billion taxpayer program is the right way to go right now," McDowell says.

But Free Press's Scott isn't so sure. There is a precedent for this kind of major public-private partnership in American history, he says.

"I look at this as a real Eisenhower moment," Scott says. "You look back at the 1950s, when the government and the private sector got together and triggered investment in our highway systems. We need to have a similar 21st century highway bill where we invest in our broadband infrastructure."

That information highway won't be easy to build. Scott says such a plan would require unprecedented leadership from the White House, Congress and, most of all, the FCC — because it's likely to face vigorous opposition from cable and telecom companies.

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