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May 2006 Archive

Wireless Security: Point-CounterPoint

Dark Reading - Metromesh Security: Strix Strikes Back - Security News Analysis

Starting with a hypothetical article in Dark Reading, a security consultant waxed on about what could happen if metropolitan broadband networks were hacked. It took a day or two for a response to come forth, but it was a good one. Check it out.

There was a time, admittedly not long ago, when most enterprise and residential WiFi networks were woefully insecure. Because of this, there remains a tremendous concern over the security of this technology. But the truth is that today professional network designers are well aware of the risks, and they use the most advanced authentication and encryption features offered by Strix and other network equipment providers to protect their networks. Conclusions of Nan Chen, VP of marketing at wireless LAN mesh company Strix Systems.

The bottom line - there is currently a host of articles written about security, much of it by security consultants raising the FUD factor - Fear, Uncertainty, and Doubt - for their own purposes. Don't get me wrong, I'm a fan of FUD when I have something to sell. It works as a motivator to create a sense of urgency. FUD is a favorite ploy of sales people - think insurance sales in particular. Of course, this is not to make light of the serious business issues regarding security, an ever present issue in data communications. But, we should always consider the source and seek balanced thinking, like Nan Chen presents.


Posted on May 25, 2006 at 06:05 PM | Comments (0)

It's Fixin' To Get Interestin'

The New Wireless Wars

Hard to find a better, more comprehensive review of the impact of upcoming FCC spectrum auctions. A good primer on what to expect. I'm excited...aren't you?

Posted on May 22, 2006 at 09:47 PM | Comments (0)

World Comes, World Goes

I posted up a storm this week, and will probably post some more on the World Congress on IT - WCIT 2006 was quite an event in Austin. It was exhausting, but time well spent. I'll be more than a few days getting back into the swing of things, but it is a very exciting position we find ourselves in.

Follow up will be key in the next several days. Besides about 10 deployments around Texas, based on the conversations I had this week, I perceive opportunities for wireless networks in Guatemala, Uganda, Malaysia, and right next door, in Nuevo Leon, Mexico. Clearly, with 10% IT penetration among the middle tier of 4 Billion individuals, there's room all around the world for the benefits and accessibility that MetroNets and NANOnets bring.

The exciting aspect of the WCIT 2006 for me, is the focus that the crowd put on Digital Access. A few reflections as the week comes to a close:

1. We are all much more alike than we are different. When we gather a group like that and discuss IT, despite our different perspectives, we have so much in common and I'm impressed with the openness and willingness to connect and to do business that I saw last week.

2. Of the three main topics of focus - Health Care, Privacy & Security, and Digital Access - it was the third that tied the conference together and became the main focus of the conference.

3. Widely acknowledged was the need for better connectivity, starting with hardware. Whether AMD's PIC, Intel's Discover the PC Initiative, or Nicholas Negroponte's $100 laptop (One Laptop Per Child), much of the focus last week was on the hardware at the end of the network.

4. But much of the conversation among the attendees was on communiciation, which was acknowledged as a missing element at this IT conference. Despite the fact that much of the presenters talked about ICT, the conference is missing the C - the communication companies have not been included in the past, but I think that will change going forward. Communication will be an ever bigger deal, and while everyone looks to mobile phone growth among the poorer segments of the world's population, many were also talking about the new broadband technologies that we talk about here - Wi Fi Mesh and WiMAX.

5. The NANOnet solution offered on my new website, www.metronano.com , is made to order for meeting the needs of the Developing World. It's Small, it's Simple, it's loaded with Local content, and it's Cheap. Small, Simple, Local, and Cheap - that's the secret that the Gates Foundation talked about last week for the Developing world. And that's what we've put together. Stay Tuned!

Posted on May 07, 2006 at 09:35 PM | Comments (0)

Prime Minister of Malaysia Anticipates WCIT 2008

Prime Minister Dato Seri Abdullah Ahmad Badawi of Malaysia promises to keep up the standard set here in two years, when his country hosts the next WCIT. We must focus on the barriers to access that remain - until everyone has access, we won't be successful.

The Digital Divide is the New Poverty of our era. As the leader of a developing country on the way to becoming developed, as the chairman of ASEAN and other organizations of developing countries, the PM sees technology such as ICT and its usage as essential for economic development.

In many of these areas, access is pivotal. The statistics highlight a large gap between developing and developed countries. Over 90% of the content on the Internet is English, but a small percent understand this language. The Divide will widen without intervention. Ever expanding innovation risk widening the gap further.

But innovation focused on access can close the gap. Automatic translation is one such innovation. Telemedicine is another.

He encourages us all to play a role to ensure that technology is utilized in the developing world. Leaders in ICT must play a role in this endeavor. While we celebrate new innovation, we must guard against harmful uses of ICT. Governments must be prepared to deal with threats in cyberspace. A nationwide blackout, collapse of check clearing systems, collapse of trading systems - we can't ignore these threats.

Leaders must work together against such dangers. Malaysia will establish and host an institution against cyber terrorism. As a public/private endeavor, IMPACT will create a platform to allow governments to work together and devleop best practices against threats. World class companies are already participating. Activities of IMPACT will include training, certification, and R&D.

Hosting the conference in two years is a great opportunity to influence and stimulate the development of the ITC industry. Please join us, the Prime Minister urged the attendees in his closing address. Malaysia is transforming itself, and hosting the WCIT 2008 is one more step in the process.

The latest five year development plan (2006-2010) places a key emphasis on ICT, with a goal to create a knowledgable base for ICT and technology business development, giving Malyasia the fastest growing ICT climate in Asia. Malaysia's diversity makes it a great launch pad for ICT in the region. Come to Malaysia and see for yourself!!

And with that, the conference ended with the passing over of the Crystal to the WCIT 2008 team by the president of WITSA. Phewww! I'm looking forward to a nap.

Posted on May 05, 2006 at 12:46 PM | Comments (0)

Former Sec. of State Colin Powell Wraps it All Up

Featuring a keynote address by former US Secretary of State Colin Powell is a great way to wrap up this conference, which has brought a focus to the issues facing the world.

He opened by applauding the conference and looking forward to the next one in Malaysia. He highlighted the changes in his personal life as a RETIRED Sec of State. He reflected on other changes in his life, such as when he left the military and retired. Then he transitioned to work in civiilian government. But he worked on managing his own personal change - aging gracefully at the age of 69. Change and transition are a theme that I see developing here in his speech?

Now that he's out of government, he's speaking a lot around the world. He's also a limited partner in Kleiner Perkins VC firm in Silicon Valley, which gives him a seat at the table to look at coming innovations in IT. And, he's part of the Revolution Health Group, which will use the power of IT and innovations to do a better job of taking care of our citizens. They are working on a portal to allow individuals to manage their health care costs, funds, information, and issues. He's active raising money in the non-profit world, he has a Center named for him at his alma mater, City College of New York. A no-cost education, from kindergarten to college, made a big difference in his life.

New opportunities that come along are fulfilling. Does he miss being in charge in the military and government? Not so much - he's focusing on business, a new area for him. He does miss his airplane however. No kidding.

He introduced 9-11 and our national responses with a funny anecdote about flying commercial and getting searched at the security gate. He's a good speaker, moving us from laughter to seriousness, and back again. Powerful. For security, he highlighted the problems of integrating databases in federal government that left us exposed to unnecessary risk.

In the new, globalized "flattening" world, the US is competing for talent and young Muslim students are likely to be discouraged from coming to the US to study, fearing harrassment and discrimination. Other countries pounced to go after those disenchanted young talent pools - another example of new global competition.

New ways of thinking bring on new patterns of behavior. Our future is in our youth, worldwide. Young people who come to the US leave with a better understanding of life here, based on reality, not what they hear when abroad. He related a story about young folks in Brazil who came to America and went home - later, when he asked them about their experience, one student told him that he was shocked that people laughed at him for putting ketchup on his pizza. No big surprise, that's wierd.

Another said that they went out to dine while in Chicago and discovered they couldn't pay the bill because they had made a mistake. The proprietor offered to pay as a gift because they honored him with their visit. This message of hospitality that had a wide-ranging impact on them - the act of generosity of one man, who showed the face of compassion and giving in America.

The key message: As we fight the War on Terror, we have to keep our minds and attitudes open, like that restaurant owner in Chicago. We win when we maintain our attitude of openness and welcoming.

The State Department had Wang computers in 2001 - good grief. In two years, they put new computers throughout the State Department, connected computers. They had to also change people's attitudes. Sec. Powell was always on line, and the rest never knew when he would send him an email, so they got on line. He learned a lot from his grandsons - Digital Natives. This is a recurring theme of the conference, lessons from youth.

His grandson started with a PC before a book. Its how the world is transitioning and changing. We all need to shift our thinking. On the State Department website, there are "Country Background Notes," but they were not keeping them up to date. Updates every three months were not sufficient - "we are not in a lunar world anymore," Sec. Powell admonished. The world runs at the speed of light, and we have to keep up with our business practices. It will only get faster and faster. No brakes on this sociological phenomenom.

A key message: Using information faster than others confers a competitive advantage, so those with access to information have an advantage, and those who don't are at a disadvantage.

The world continues to have challenges, but also tremendous opportunities. Sec. Powell's experience with the Cold War was real, and it dominated all of our thinking - Contaiment was the watchword and physical closing in was vital to that strategy. But Gorbachev promoted Glasnost - Openness, which unravelled the world as it was, and ultimately, the Berlin Wall fell, and the rest is quite literally, history.

Now, more democracy than ever. Problems persist. But, the old world is gone, forever. Now, shifting to Asia, Deng Xiao Ping became an agent for change in China, and he said "Black cat, white cat - who cares, as long as it catches mice."

The key message: its about wealth creation, the bottom line, and not so much the political system.

In India, Finance Minister Singh drove change to focus on wealth creation. Asia enjoys increased stability now, because of changes in India, China, Thailand, Japan, Malaysia, Singapore, and elsewhere.

In Japan, Prime Minister Koyazumi (?) drove change with friendly attitude towards US policies. The PM quoted an Elvis Presley song that reflects the relationship: "I want you, I need you, I love you" !!

Today, economics is the name of the game, and every nation should be entering the modern global economy. It makes a difference.

Africa is in dire need of reform, and IT revolution is likely to be the tool to educate these people to take part in the world. We have opportunities, and we have problems that affect smaller populations.

Iraq got some attention - we need to build up the local institutions and support the will of the people - its a terrible challenge, but the people of Iraq deserve a shot at democracy. Every time we think we are progressing, we seem to slip back (e.g., Hamas in Palestine).

We have a world now with more peace and more democracy than every before, new challenges like infectious diseases, but one thing is essential - the US must play a leadership role in addressing the problems of the world. We have to keep listening to friends and allies, remember that we are part of a larger world. To the degree that people are unhappy with the US, remember that the nation remains composed of people, like the restaurant owner in Chicago, who care and will act to show that.

Posted on May 05, 2006 at 11:54 AM | Comments (0)

IBM, Innovation, and the 21st Century

Innovation in the 21st Century is important, and it is different. That is the key point of Nicholas Donofrio, Executive at IBM in charge of International Innovation. This is a fascinating, paradigm shifting outlook on innovation and change.

ts always all about moving ahead, and innovation is the driver. In the 20th Century, it was driven a lot by technology - sometimes, the invention was the innovation. In the 21st Century, that is no longer the necessary and sufficient condition - why? Because its a different world now. Consider this:

* Network Ubiquity - more than a billion Internet users worldwide

* A State of Openness - Open Standards are the best evidence - widely-adopted technical and transaction specs

* New Business Designs - horizontally integrated operations - connections are the driver

According to a survey by IBM, leaders in big business acknowledge that fundamental change is necessary in the next two years. Innovation is the key. And, they think that Collaboration sparks Innovation. Ownership is less important than progress and problem solving, and applying the solutions.

People understand that the concept of value is migrating. Technology still matters, in fact, more and more. It will always matter. But technology is no longer the necessary and sufficient condition for success. It takes more. Collaboration and Innovation are now needed.

More transistors now than grains of rice. What a concept! And everyone is getting connected. Everything is getting connected.

By 2010, the amount of coded digital information in the world will double, TWICE A DAY. Profound. By 2010, one quadrillion of calculations per second... Windows XP has 40 million lines of code today, but the automobile in 2010 will have 100 million lines of code, the Airbus will have one billion lines of code. YIKES.

Opportunity for Innovation abounds.Under IBM's Global Innovation Outlook (GIO), IBM's forecasting processes for businesses and technology have been opened. In 2004, three primary focus areas for GIO 1.0 (healthcare, government, and work/life balance). Expanded in 2005 and 2006 with increased focus on developing new markets and capitalizing on business opportunities. Topics of GIO 2.0 are Future of the Enterprise, Environment and Energy, and Transportation and Mobility.

What do the data and insights of this GIO 2.0 process show?

Horizontal Themes of GIO 2.0
* The power of networks of people
* Better lines of sight
* Flipping the equation

Enterprise of the Future
* definition is changing from entity to a network
* innovation is a culture - from intellectual property to intellectual captial

Environment and Energy
* reverse supply networks
* mining existing landfills
* clearer line of sight into the consequences of our actions

Transportation and Mobility
* Transportation paradox - easier, but harder, with megacities blossoming in the developing world
* Need to work on shipping - moving to virtual borders to alleviate congestion and bottlenecks - paperwork delays loading and unloading, passage through borders

Innovation Requirements
* Think broadly, act personally
* Integrate business and technology
* Defy collaboration limits
* Force an outside look, every time
* Listen for early weak signs to determine what is happening

Closing Quotation from Donofrio's father:

"If nothing changes...nothing changes."


Posted on May 05, 2006 at 11:20 AM | Comments (0)

Digital Access Panel Focuses on Connectivity & Empowerment

This panel, as others the past two days on Digital Access, was moderated by David Kirkpatrick, Senior Editor, Internet and Technology, FORTUNE Magazine. The panel consisted of the following unique perspectives.
* Ibrahim Kaliisa, Special Advisor on Information and Communication Technology to the President (Uganda)
* C.K. Prahalad, Professor of Business Administration, Stephen M. Ross School
of Business, University of Michigan (United States)
* Henry Rivera, Partner, Vinson & Elkins (United States)
* Theogene Rudasingwa, Visiting Scholar, California at Berkeley (Rwanda)
* ? Gates Foundation
* ? Uganda

Given the state of the world, why don't more of us work together? asked Theogene from Rwanda. Why do we rely so much on competition and neglect bringing the market along to make it bigger? We need more collaboration. While skeptics deride Negroponte's vision of a $100 laptop - one for every child on the planet - one can't challenge the vision that he has and the passion he uses to communicate. But what about tying together the Intel initiative, the Microsoft initiative, and others to connect and enable the developing world?

This conference has been PC oriented, without much discussion about cell phone based technologies. PCs have a role, but also mobile telephony, voice and data devices and applications offer hope and potential.

CK Prahalad talked about connectivity, not a PC - but connectivity to what? Local connectivity is as important as global connectivity. Should we have a PC oriented view or a telecom view? So many initiatives have been done with a lot of initiative but they accomplish little. Why? Let's look at local and global responsiveness and orientation - together. Until we understand how to bridge the global and the local, we will not be able to scale these experiments. Third, the goal should be to remove asymetry of information between the rich and the poor. Poverty is caused by asymetry, so we should give them the tools and they can adapt locally. Poor people know what they want, if you listen to them.

Do poor people want devices? No they want cell phones and the communications that they bring. There is a different level, the lady from the Gates Foundation said. Global health crises are immediate and compelling. The need to get technologies into the hands of communities - the organizations that work with communities. They need international and global perspectives, but they need to deliver their local data to the world. Avian flu drives home the point. Connectivity and PCs needed by communities and organizations, but individuals need phones.

The impact on government is a question, because access to information is liberating and promotes democratic behavior. The role of technology in the process of government is revealing: local poverty leads people to exist on OLD technology - muscle power, simple tools. But new technologies enhance productivity and then it liberates. If people cannot access technologies, they are less productive, and that is the connection story between technology and economic development.

The gentleman from Rwanda suggested that IT is a powerful tool to empower people, despite the efforts of government to limit that. It impacts politics by distributing information. It is transformative to liberate women and the young people. They are the leaders of tomorrow, and IT is a weapon in their hands that equalizes the debate.

Rwanda telecom has one of the most robust broadband networks in the capital - how will that impact politics?

Theresa from Gates Foundation has a story about cell phones and rules for successful IT in developing world. Small, simple, local, and cheap. There is a drive to scale but it is counter-intuitive for the problems in the developing world. TB treatment at a village in South Africa is an example, where their health is compounded by AIDS as well. If they miss medical dosages and drop out - they have to start over. There is a dilemma of proper following of protocol to ensure they eradicate the disease. The doctor pushed SMS text messages out to cellphones and moved treatment compliance to 100%.

Henry, the V&E attorney and former FCC Commissioner, commented that emerging markets require training. UN Telecommunications Training Institute is a tool to provide that training. Motorola provides free training. They tend to use the equipment they are trained on.

A challenge for WITSA and WCIT in the Q&A session was to converge the IT Industry with the Communications Industry to converge on the world radio. Comments were that prices drop with scale production, so we should look at that more. Do we need to focus on this or is the market working? Yes, hybrid partnerships need to examine sustainable projects. The GSM Foundation has been looking at a $30 cellphone and they are being produced. Estimates are for half of humanity being connected by 2010. Prahalad stressed that Connectivity and Microfinance enable development and productivity. Health and Energy complete the equation, but they do not receive the same focus from the private sector.

Henry sees activity at CTIA to address world problems. Theresa said that the private sector will not solve all these problems though. The last mile places have difficulty, and the donors and the aid community have a role to play. Sustainability can happen when organizations are effective at delivering social goods, so that the community demands subsidization and practices group behavior. The private sector will not solve all problems.

WCIT should evolve to WCICT, said the gentleman from Uganda, and he received applause. Makes sense that all week the speakers have talked about ICT, but the conference is focused on IT. IT and Comm are also converging to form ICT, and it appears the organization should reflect that fact. The Brain Drain is becoming the Brain Bank, as talent comes back home when infrastructure and opportunity come to the developing world.

Posted on May 05, 2006 at 10:11 AM | Comments (0)

BT sees a connected world

Ben Verwaayen, Chief Executive of the BT Group (United Kingdom) talked to us about the disruption of the need to be physically located somewhere to accomplish something. We have killed the distances that separate us as a people on this planet.

Convergence is blurring the lines between the definitions we used to have of industries, roles, and responsibilities. The change is underway, and the definition of success will be more and more defined on end results. We simply say the business concept and the expected end result, and we let the business figure that out and deliver. That puts the supplier and the customer together around the strategic goal - a convergence of strategy.

Until now, to be global meant lots of buildings - that is still what a multi-national looks like. No, that's not so - you can be a multinational with a web business, linking together employees, suppliers, customers, all to make a market. The POWER OF ONE is the next revolution.

The distinctions in strategies and success are complemented by the convergence between size and effectiveness. You can combine world class with world class and you have recreated the power for people to participate on a global basis, shifting the power from a massive amount to a massive amount on the number One. That will impact how we organize ourselves and our systems. We enable people to make a difference.

All of this is based on knowledge - you possess it, you transfer it, but something is lacking. Everyone with a college degree understands, but what about those who are left out? They're out of touch. Policies need to address a third leg of convergence. We have a role as leaders - technology convergence - check, strategy convergence - check, but the most important convergence is the gap between policy and capability. That gap is based on 1) language and goals; and 2) time - many of the things we have talked about cannot be delivered in the timeframes set by policymakers.

We need to talk to the influencers and leaders, to make sure they understand what the capabilities are, but also to create a sense of urgency. Local environments provide our understanding. Let's get busy!!!

Posted on May 05, 2006 at 09:56 AM | Comments (0)

Sun Research Director On Health and Wealth

John Gage, research director at Sun, envisioned a world in 1984 that is now coming to pass. He kicked off the presentation with a tour of relevant sites using Google Earth - what a trip that software is - its like you're a bird flying around the world. If you haven't used this yet, you should check it out.

Next John Gage used a software developed at the Karolinska Institute in Sweden - at the URL www.gapminder.org, a free open software that helps people to tell stories using data and demographics - some incredible graphics show statistics in more meaningful ways, which explain what has gone on in world economics and world society, and what is likely to happen in the next 10 years. This is a fascinating and sobering look at the world - what a difference pictures make in telling a compelling story.

Gage urged the audience to use this tool to better understand the problems of the world - why do some regions do so much better with child survival, for instance, than do others of equal circumstance. It boils down to government policy and where we put our emphasis when it comes to weatlh and health. This analysis makes you wonder why we don't spend more to save children's lives...

Search engines are identifying current data via blogs and websites and you can use Google Earth to pinpoint WHERE the event occurs. Gage urged us to go home and think about what we can do with regard to Avian Bird Flu, for instance, and we need to be prepared to deal with such a public heatlh crisis. We need to link the poor parts of the country, because that's where bird flu will happen, and we need to know about it sooner than later - the message I get is that we are all connected more than ever in this world - so we have to make the network connect everywhere, and start in the poor parts of the world.

Economic development is tied to connectivity and that's where MetroNetIQ and NANOnet come in. I'm encouraged at the possibility of working to close the Digital Divide and include more of the world's population by harnessing the latent energy and knowledge that sits in the local sites, untapped because they are unplugged from the global communication network.

Posted on May 05, 2006 at 09:31 AM | Comments (0)

Gov. of Nuevo Leon, Mexico and the City of Knowledge

It's Friday morning at WCIT 2006 and I'm dragging. While this conference has been an exciting and informative and productive week, the 15-hour days are taking their toll on my 48-year old body.

But, we have one half day to go and the agenda is rich. After a Cinco de Mayo breakfast with mariachi bands - what a wake up that is - we went upstairs for the last series of keynotes. Starting the last day of keynotes is Jose Natividad Gonzales Paras, the Governor of the State of Nuevo Leon (Mexico).

Monterrey, the key city for business in Mexico, located about a four-hour drive south of the Texas border, is transforming from an industrial city to a knowledge city. In fact, they have a project called the City of Knowledge Project - it puts new emphasis on knowledge, promotes innovation, ensures Monterrey offers the infrastructure and amenities to promote knowledge and innovation and help spread these concepts throughout society. The Institute for Information Technology and Transfer is assisting in providing access to technology with grants and commercialization, promoting regional collaboration and links between education, government, and business.

The RTIP (I lost the thread, so I'll have to look it up) is a technology park in Monterrey to focus research and innovation efforts. It has 74 acres of buildings and 98 acres reserved for locating businesses - an environmentally responsive and alternative energy approach to architectural design. They are seeing so much cooperation among the three participating universities, where they will offer shared credit for students taking courses there. This is the Triple Helix Model for Innovation - linkages between industry, academia, and government interwoven to create new opportunities and synergies.

Another project in Nuevo Leon is the Software Industry Development Initiative - an important initiative to position Nuevo Leon as the leading provider of IT among Latin American countries for the USA. It reflects on the program, Prosoft, that the Economic Minister of Mexico talked about yesterday. Since that federal initiative was launched, Nuevo Leon has worked to implement and advance the iniitiative, contributing more than $30M over the last two years.

Market development, export assistance, business development, entrepreneurial development, all focused on creating opportunities for public participation and job creation. Nuevo Leon, clearly, has what a region needs for economic development - they're calling offshoring "nearshoring," which emphasizes low risk environment and a preferential offshoring opportunity.

Posted on May 05, 2006 at 09:13 AM | Comments (0)

Spectrum, Telecom, and Digital Access

Back at WCIT 2006, we had a nice good lunch - (note to self - good eating, diet next week) and now I'm sitting in on an "Executive Briefing Panel" on Digital Access and telecom alternatives.

"What's the role of govenrment - all levels - in infrastructure development?" Antony from the UK asked. Taipei responded that regulation is to ensure a level playing field and no obstacles for interdisciplinary operations. Local government, on the other hand, seeks to create new and better opportunities and alternatives.

State Department respnded that muicipalities come in when major carriers ignore certain markets. That's up to the market forces and now, carriers are realizign that they have been avoiding certain markets, where now they risk letting others in if they don't get active.

One of the issues is the distribution of broadband access (availability) and the price (affordability). The issue of broadband in the US is also skewed by the definition of broadband, so the US would be even lower if the definitional standard were raised. The people that cannot access video because their fake broadband will raise a hue and cry among consumers, who cannot access high-speed applications because their "broadband" is not high-speed enough. That will be the day, but it may come sooner than we think.

Posted on May 04, 2006 at 02:25 PM | Comments (0)

Texas CTO and Panel on National IT Strategy

At the WCIT 2006 in Austin, here on Thursday morning, immediately following the presentation by the Mexican Minister of the Economy, is an interesting panel on national IT strategy. The panel is compelling:

Moderator Larry Olson, CTO for the State of Texas and Executive Director of the
Department of Information Resources (United States)

Panel:
* Jamaludin Jarjis, Minister of Science, Technology and Innovation (Malaysia)
* Ibrahim Kaliisa, Special Advisor on Information and Communication Technology
to the President (Uganda)
* Montasser Ouaili, Minister of Information, Communications and Technology
(Tunisia)
* Antony Walker, Chief Executive Officer, Broadband Stakeholder Group (United
Kingdom)
* Oleg ?, Minister (Russia)

First question by Larry Olson was posed to JJ, the Minister from Malaysia - how do you work with government officials that don't know IT. The country has an economic imperative to move in the direction of IT.

Next, Olson asked Antony from the UK about a focus on technology to the exclusion of government, education, and other policy areas that are goals of their society. A shift to people, economy and society gets people's attention. Health Care problems stand out, so tying technology to health care, for example, can pay a dividiend because its a highly relevant outcome. Focus on outcomes is very important.

Oleg from Russia added that technology demands of the global community impact the national strategy - meeting global demand for IT is more important than digital access, for example, where the focus is on individual consumption rather than production. Human Capital is the greatest resource of all - its important to focus on the environment that will enable that Human Capital, and generate awareness and visibility of IT to the domestic and international markets. In Russia, they documented readiness across over 80 states, and that created a competition and best-practices benchmarking discussion among regional IT leaders.

For Montasser of Tunisia, Olson asked about international collaboration, ICT and education. Education is vital because Oil is not a natural resource for the country, so they have focused with education on their Human Capital - they are only 10M in population, so they focus on human resources more than infrastructure, as do many other countries.

Over 60% of GDP is based on services, and now they are moving to higher value added services and a knowledge-based society. Tunisia has a high rate of literacy, and is considered socially progressive in its treatment of women, which makes it stand out among many Muslim nations. ICT strategy is the only way to build a knowledge-based society. Availabilty, accessibility, and affordability are important for this to succeed. I'm very impressed with Tunisia and their inclusive and comprehensive approach.

Ibrahim (Uganda) was asked about resources and strategy - he said his situation was very similar to that in Tunisia, with a focus on education and youth IT knowledge development. The leaders born before digital economy have naive perspectives, because the lack of infrastructure deployment and awareness. It has taken an awareness campaign on the benefits of digitization and ICT to move the culture in the direction of eGovernment and eBusiness. The biggest challenge for Uganda is resources, where you will have 1000 students and only 10 computers in a lab.

In Malaysia, IT infrastructure is important to draw investment and economic activity. Too much focus on highways and physical infrastructure. Risk is another issue for technology development. Government can invest to lower risk and create jobs. IT has to have a different way of looking at this, if "the world is flat" as the Friedman book says (the most quoted phrase here at this conference, nd probably at conferences the world over - good work Tom on branding and marketing - he has given the world a catch-phrase for something that everyone sees - thank God for such shorthand, even though it does get tiresome to hear, its true). This kind of talk is just what I want to hear. It sounds like Malyasia is open for business.

Antony from UK says that you have to learn that this is a competition and its about how competitive your nation will be. The challenges of mature economies, while still equally challenging, are different than those for the developing world. Legacy infrastructures slow down the pace of change, putting mature economies at a disadvantage. Korea and Japan have focused on detailed, wholistic strategies for ICT development and making them work. How can we take that lessons learned and adapt them for the UK? The same could be said for the US. The speed and complexity confound planning. On the supply side, vendors are routinely disrupted. On the demand side, governments have to adapt to the pace of change. In general, we are too "short-term" oriented.

In Tunisia, they view competition a little differently. What are your objectives for domestic national strategy - if you define a domestic goal differently, there can be many winners - its not all about competiing with different countries. A focus on niches that are vital to Tunisia, for instance, may be different than in another country.

In Uganda, with 26M people, we work to define a bigger East Africa regional cluster, where we work together on ICT strategy, and leave implementation to the individual countries and states. We make large investments in education, and use politcal champions to set policies that stimulate the development of ITC. Uganda is well-positioned in between the US and China, making Uganda a good partner for outsourcing. Infrastructure and WiMAX is deploying rapidly in Uganda. Student labs in the day turn into call centers at night. We need to increase individual incomes (30% of the country still lives in poverty, for example).

In a short Q&A, the question of class and cultural norms was raised. Internet is disruptive to older styles of control and hierarchy. In Malaysia, government works with ISPs to manage the downsides. In Tunisia, it takes some adjustment, but innovation involves young people so we are all learning, with the old wise ones learning from the young - its very invigorating! We leverage IT to break old bureaucratic thinking. In Russia, the government is responsible for maintaining a cultural norm - censorship is a slippery slope, but some censorship makes sense.
In UK and Europe, cultural control is seen in the way that broadcasting is regulated. Broadband and IPTV is leading to fundamental discussion on regulation of converged services. There will be pressure to extend cultural control to new media - is this wise?


Posted on May 04, 2006 at 11:07 AM | Comments (0)

Minister of Economy in Mexico: "Se Habla IT"

Next up on the keynote front at WCIT 2006 is Sr. Sergio Alejandro Garcia de Alba Zepeda, the Minister of Economy (Mexico), who highlighted Mexico's economic status, but first opened with an announcement that the government of Mexico will make digital blackboards available in all K-12 schools in Mexico, starting with the Indian villages in Mexico.

The boom in oil prices is giving Mexico an opportunity to spend revenues to build up their IT industry and infrastructure. Inflation is always an issue in Mexico, as elsewhere, but it hs come down steaily over the years, and it was at 3.3% last year, for the first time, less than what the rate is in the US.

IT sector growth in Mexico is three times the average growth in the Mexican economy overall, which makes it a very important focal area for local, state, and national government. Nearly 2100 IT firms and 500,000 IT professionals work in Mexico, and that number grows yearly, adding 60,000 new professionals per year. Young people get IT and want to participate in this area. Government programs stimulate this natural career trend and move it along. And IT sector growth is projected to steadily gain over the next decade.

Prosoft is the organization in Mexico that promotes IT sector growth, and they anticipate by 2013: IT services annual production level of $15B, OECD average IT GDP expenditure, and Mexico as a leading IT powerhouse for Latin America. (I believe they will get there - I've seen a lot of energy and entrepreneurial spirit among the delegates from Latin America over the past two days).

Prosoft Strategies include:
* Exports and Investments
* Human Capital capabilities
* Digital Economy legal framework
* IT domestic market
* Local IT industry
* World class process capabilities
* IT cluster development

Prosoft is active in 26 states in Mexico, with 110 universities. Prosoft makes cash grants that fund total costs on a 50% basis, as well as a tax credit for up to 30% of total R&D expenses.

Outsourcing is of growing importance in Mexico - they see the global market for outsourcing growing from $300B in 2005 to $1.1T in 2010, and offshore business growing from 8% to 15% in that time period. Mexico's proximity to the US makes it an attractive business climate for US businesses (they call it "nearshoring"). NAFTA provides investment protection.

Mexico is promoting WiMAX strongly, and believe that infrastructure is a key component for economic growth.

In a short Q&A, my friend Fermin Navarro with Bridge 360 asked about how Mexico will differentiate itself from India, China, and other IT markets. Mexico is promoting its nearshore capacity and has a focus on niche markets, the minister responded.

Posted on May 04, 2006 at 10:39 AM | Comments (0)

Michael Dell Shares His Vision for Global IT Growth

Dell CEO kicked off the program at WCIT2006 this morning with a Keynote speech giving us his unique perspective on the state of the IT world. We see global IT growth of outstanding pace, he said. What's more, we see an increasing pace of Innovation, fueled by Standardization and corresponding Collaboration. These factors are spreading IT ever faster around the globe.

And more IT is a catalyst for economic growth - especially for smaller companies.
As US and other G7 countries have benefited, so have developing countries - and that's where much future growth will come from. Dell highlighted such companies as FON in Spain, which is making broadband available, PacketFront as a pioneer on Triple Play services, and Asterix, an open source PBX software providing VOIP.

It's hard to envision where we'll be in two decades, Dell said...the computation speed and capability will dwarf today's capabilities. Productivity and efficiency benefits of IT are shown in two examples. Dell Connect allows Dell Tech help to remotely connect to customers' Dell computers, making for more efficient Help and Customer Service. And in India, in Bangalore, children are teaching their parents about the Internet and computers.

The economic impact of global phones in developing countries is fascinating. Mobile phones reduce transaction costs, spur information flow, and substitute for physical transport. There is a direct, documented correlation between number of phones and economic growth.

eBay, Google, and Yahoo have created tremendous new economic opportunity, And, such innovations as blogs and Peer-to-Peer networks and Massively Multiplayer Online Gaming are leading the disruptive disintermediation that challenges existing solutions and providers. But in the developing world, Digital Access remains a challenge. One of the biggest challenges we face is leaving parts of the world behind.

We need to bring everyone along and at this point, Michael Dell shifted his focus to the role of Government in dealing with this issue. First, education is vital to provide the necesary skills to succeed in the 21st Century economy. Schools must play their part, and they often are the only place to gain the critical IT skills kids will need.

Second, infrastructure is important, not only cable, wired, fiber, telecom, but also the more modern wireless networks. We will need much more than we have now, that is for sure.

Third, governments should set goals for Digital Access, so that anyone in the country that wants broadband access can get it, affordably. Some nations have yet to do this and that will hold them back. Governments should open their markets to other technology, which will spur their economies.

Here are some success stories for smaller countries. South Korea has broadband adoption of over 70%, thanks in large part to efforts of the government. IT now counts for 30% of exports. IT839 program looks to create 8 new technologies, 3 new infrastructures, and 9 new IT engines.

Ireland has had a very focused program, funding research targeted at new technologies. Favorable tax policy and welcoming foreign investment policy has stimulated the economy in Ireland.

Malaysia ranks in the top quartile in countries for network readiness, they have reasonable regulation, and they make IT a priority. And, they favor external investment in their country.

Finally, Ethiopia is investing in infrastructure that will enable access throughout the country. IT is the fastest way to end their isolation, according to the president of Ethiopia.

Michael Dell urged sustainable and responsible IT development, balancing their plans with the immediate needs of their citizens, such as clean water, affordable medicines, etc. As development proceeds, they will need to support responsible access that stewards the environment - for instance, we need to consume less power with our IT infrastructure and devices, and Dell is moving in that direction.

Digital Access challenges must be met together. First, we need to improve lives by making IT solutions more accessible to more people. Second, we need to view Digial Access as an opportunity for growth. We can encourage and nurture the skills that IT needs to thrive.

In a brief Q&A following his presentation, Dell was asked about the slow pace of broadband deployments in the US. Dell responded that one of the most exciting areas is fiber to the home and fiber to the curb. But we have a long way to go, he said and in the US, competition will work, if in time. Second, Dell was asked about the health of the IT industry in general and the future of both Dell and the IT industry, and its impact on our economic future, here in Austin and elsewhere. Dell responded that his company's business has grown considerably faster outside the US, and that growth should continue at Dell. They remain a growth company, expanding all over the world. In North Carolina, a new factory, and elsewhere, growth will continue. Third, a comment on the stock price of Dell, which has fallen considerably over the past several quarters. (on this, I sympathize with Michael - give the guy a break) Michael Dell reminded the audience that his company saw growth of 10X over 10 years, with share appreciation of around 1000% during that time. Sustaining that pace of growth is not possible, and there is no linear path to success. Dell Corporation is a significant leader, it will remain so, and it is focused on long-term growth. Fourth re Green Grid membership, what about energy efficient processors by AMD, another delegate asked? What's taking so long to get there? We are working on it. And with that, he was off.

This is an exhilerating, if exhausting conference, with a lot of focus on Digital Access, which is a topic near and dear to my heart. More later.

Posted on May 04, 2006 at 08:27 AM | Comments (0)

Innovation Exchange II

Mr. Chuang Beng Wei, Group CEO, REDTone Berhad, from Malaysia is speaking in the session I'm in now. Supply Chain and payment is under the microscope, and he's making a good argument for mobile commerce as a rapidly developing segment of e-commerce.

I made a good contact with a consultant in Australia - he recommended I look at Bendigo Community Telco. They're a partner of a broader group, Community Telco Australia. Their approach is a validation of the site I just launched this weekend for my new venture, NANOnet, where we talk about a new apporach to deployment and management of community networks. NANOnet, like Bendigo Community Telco, enables communities, be they neighborhoods or Chambers of Commerce, to take control of their telecom destiny.

I'm back focusing on the next presentation - Rackspace is a service company approach to making webhosting work, where they promote "Fanatical Support." They seek to compare themselves to Nordstroms, Lexus, and Ritz-Carlton, none of them tech companies, but all of them radically focused on service that screams "We care about you!" I think there's a future in this.

CEO Graham Weston says that IT services are becoming like utiliy services, where you will buy more and more services. So, he's trying to differentiate his company's offer based on service. IT could use more of this attitude, and I agree that its the future of IT. What a gulf we have now between technical competence and ecstatic customer experience. We all more or less put up with poor service levels and unmet expectatoins, as if its a natural in the IT space. Maybe this attitude wil catch on with other aspects of IT. We can only hope.

I've got to change batteries now or find a plug. More later. This is really something to have the whole world here in Austin. And we've only just begun.

Posted on May 02, 2006 at 12:16 PM | Comments (0)

Innovation Exchange: Australia Communication Minister Gets It

Back at it on Day 2, its Tuesday and I'm attending the Innovation Exchange program that is adjunct to the World Congress on IT 2006, which kicks off tomorrow morning. We attended a great Texas Welcome party last night out at the Oasis Restaurant on Lake Travis, which sits up on a cliff overlooking the lake and provides some of the best sunset viewing you'll see anywhere. I met an interesting gentleman who is setting up a telecommunications infrastructure in Afghanistan - what a trip that conversation was.

This morning, I had a nice conversation with a gentleman from Malaysia who is running a telecom network south of Kuala Lumpur, using Motorola Canopy.

Right now, I'm sitting listening to The Honorable Helen Coonan, Minister, Ministry of Communications, Information Technology and the Arts, in Australia. She is saying the right things from my perspective, indicating that focus on extending broadband infrastructure - Australia is the 5th most connected country in the OECD.

Australia is a low-cost, skilled-labor, multi-cultural country that is attracting foreign investment, especially among companies looking to enter the Asian market. Top multinationals are choosing Australia as the hub of their Asian operations because of these reasons. Minister Coonan stressed the importance of infrastructure to businesses - they want to see security measures and a commitment to improvement and extension of the infrastructure.

Here's a surprising statistic - 47% of trade takes place in Asia Pac. According to Minister Coonan, Australia is positioning itself as the gateway to Asia Pac, stressing its location, its openness, and its innovative approach.

Finally, here's the takeaway - "technology is delivering huge benefits and Australia is an innovative nation ripe for investment." To put a Texas spin on it, we'd say "Doors Open, Come on Down Under!" In Australian, Minister Coonan says "Where the Bloody Hell Are You?"

Posted on May 02, 2006 at 10:31 AM | Comments (0)

New Experiments in Austin's Digital Media Sector

Digital Regions: Public/Private Strategies for IT-Cluster Development in the Global Knowledge Economy

Session Four: New Experiments in Austin's Digital Media Sector

Overview of Austin's Digital Media Initiatives - Chair Jim Butler, City of Austin introduced the panel.

Computer Games: A Global Perspective. Richard Garriott, founder of pioneering video game company Origin Systems and currently CEO, NCSoft, claims the title of the "oldest" game developer in the business, as he was an early pioneer programming games - as far back as the Apple II. Pheww! The business is growing incredibly rapidly, and is now one of the fastest growing industry in the US. Growth is expected to double over the next five years, and by 2011, be about a $66B industry. In comparison to TV, movies, and music, games are bigger. Than all of them. And the gap is widening.

And within the gaming space, online gaming is the fastest growing sector. And Austin has a leadership role in online gaming. In fact, a “plurality” of games is developed here in Austin, with NCSoft as one of the few on-line game publishers. Richard explained why online gaming business model works so well – lots of fresh content, for one, and online revenues tend to be sustaining, given the subscriber base of online business. As opposed to traditional retail where revenue spikes and then fades, leaving developers constantly short of cash, online developers get cash to invest in new product, new promotion, etc. Lots of retail startups go out of business in the gaming world before they get going, because of this cash flow issue.

Worldwide in the gaming industry, Korea leads the PC world, China follows, and the US and EU trail. Korea beats the US ten-fold, in fact. And the rest of Asia is developing much more quickly. Why is that? Korea still has import restrictions for no game consoles (from Japan), so gamers just play on PCs – that’s the way it developed. And, the government, given the density of the country, invested in broadband, so video online flies compared to elsewhere. And there are PC Bangs (Internet Cafes) so that games are accessible to everyone, not just the ones who have computers and are online. China is the fastest growing, where per capita revenue is very low, but the number of people using online gaming is huge. Thus, US is trailing.

And, the costs and game development cycle for console and online games are increasing, which makes it even harder to be successful. But for an economic development industry, its one of the best, because its clean, high revenue, and growing. To be successful with online gaming, a city needs a tough mix of resources and traits: 1) strong high-tech resources; 2) strong arts community; and 3) a strong education system. Austin scores high on all three of these scoring criteria. Lucky us.

There are some developer issues that plague the industry though: 1) a development staff shortage has materialized (the pace of program sophistication is so quick); 2) lack of sufficient training; and 3) the challenge is exacerbated by competition for good resources, with raids on talent. Hard to keep good help. This raises costs, as positions sit open and recruiting costs go up. This even leads to outsourcing, to access distant talent – not the best way to do it, but necessary because of the rarity of the skill set and lack of local talent. That said, this is a profitable and fun industry, and opportunities still remain.

Rethinking Regions, Digital Technologies, and Competitive Advantage. Alex Cavalli (director, Digital Convergence Initiative – “DCI”) and Eliza Evans (IC2 Institute) described a new way to look at regions and technologies and economic development. Alex spoke first about DCI, explaining how current convergence is now as a topic – its become a reality around the world. The paradox is that as the computer becomes more and more simple to the end user, the back end becomes more and more complex. Thus, more collaboration is needed to produce products, more time is needed, etc. etc.

Convergence is causing industry leaders to depart from their core businesses and reach out into new industries to remain competitive. Why did Dell move into home electronics? Because that’s where the market is going. PCs are merging with home electronics, converging into “media centers.” Why is ATT moving into provisioning content? Because they have to – they must be more than just a pipe provider. We call this a “horizontilization” – is that a real word? Whatever, horizontal movement comes about with convergence. Digitization makes this possible. Verticalization in industry segments, the history of the IT industry, is being followed by “digital intersections” that blur the lines and the IT industry is disappearing into a new, converged reality.

Collaboration – there’s that word again – is necessary and that’s where regions can flourish, by working together to provide all the pieces of the puzzle, all the assets needed to compete globally.

It’s a shame, but I had to leave to go pick up my car at this point. This was a stellar panel and I’m sorry I missed these guys: AMD and the Future of Digital Media and Digital Entertainment. With Charlie Boswell (AMD); and Reengineering UT-Austin’s Film School: Private Enterprise at a Public University. With Tom Schatz, UT’s leading authority on Radio, Television, and Film and now running the Burnt Orange project.

Posted on May 02, 2006 at 08:19 AM | Comments (0)

Austin and Texas in Transition

Digital Regions: Public/Private Strategies for IT-Cluster Development in the Global Knowledge Economy

Session Three: Public Private Partnerships for Cluster Development

Austin and Texas in Transition

Chair David Smith (Technology Futures Inc) introduced Dr. James Truchard, CEO and co-founder of National Instruments; Dr. Gustavo de Veciana, Director of the Wireless Networking Communications Group (WNCG) at UT; and Erin Defosse, Director of Technology Sectors at the Austin Technology Incubators, Director of ATI Wireless, and Chairman of the Austin Wireless Association.

David Smith offered an interesting look at Austin's future via some laws.
o Sarnoff's Law: the value of a network is proportional to n (one-way broadcast), Austin into the 1980s;
o Metcalfe's Law: the value of a network is proportional to n2 (value shop), Austin from 1990-2000 - this value graph has a more steep slope, and we see this in Internet business valuation, for instance; and
o Reed's Law: the value of a network is proportional to 2n (the law of self-forming groups). This is a value network, putting together the right core competencies creates a compelling proposition. This graph turns steeply north as n grows in size. Instant messaging and P2P computing are examples of Reed's Law. Dr. George Kozmetzky's Technopolis wheel has evolved to a combination of local and global networks.

Building a Globally Competitive IT Company in Central Texas. Dr. Truchard opened with one of our favorite pictures here in Austin: the UT tower lit up with a large number one on its side – we do that when we win a national championship, which we did last year for the first time in 35 years! This is a metaphor for goal setting, said Dr. Truchard. The team never gave up, even though they failed to achieve their goal of a national championship 34 times in a row .

National Instruments, a local productivity software company and one of our best local success stories, has been around for 30 years, with near steady growth except for the downturn in 2001 and 2002. With $600M in revenue and operations in 40 countries, this company is a good example of what a region wants. A leader in the Virtual Instrumentation space, National Instruments evolves software programs to solve lab problems more effectively. Their product LabVIEW allows virtual programming of a variety of instruments, including the new LEGO robot application!

Design and Test are converging, which presents a challenge for NI – but they are turning this into an opportunity to produce a combined hardware/software solution.

WNCG-UT: Building a Center of Excellence for Research and Entrepreneurial Excellence. Dr. de Veciana spoke about operating a Center inside the UT environment. Formed in 2002, the group has 14 faculty, 70 graduate and 10 undergrad students. Joint Organizers of the Austin’s Wireless Networking Summit. Their mission is to be a “breeding ground for technical innovation, imagination, and entrepreneurship in the wireless networking and communications area.” But to be successful, WNCG has to work with industry. Technologies start with universities, but it is industry that will create a standard and drive an industry.

What did they learn in the last four years? WNCG faced these challenges in relationship building: 1) Attract faculty talent; 2) Attract and develop student talent; 3) Build industrial affiliates support - think strategically about industrial affiliates and consider what’s in it for companies? 4) Connect to the right people (at multiple levels); 5) Intellectual Property Rights … can be a brick wall; 6) Entrepreneurship and Faculty Attrition – have to let go to accommodate entrepreneurship cycle (like college and pro football); 7) Build a team of highly independent individuals (need a strong shared vision, create valuable shared resources, and real opportunities and a sense of achievement); and 8) Space, Infrastructure, and the Right Staff Support.

The Austin Technology Incubator: New Strategies and Experiments. Erin Defosse challenged the audience with a provocative statement – “The era of the regional incubator is dead, long live the incubator.” By that, Erin explained that the role and value proposition for incubators has shifted, as the entrepreneur has grown more sophisticated and self-sufficient. There’s a new role for incubators though. In 1989, when the ATI was formed, the value proposition was: 1) low cost infrastructure; 2) access to mentor, angel, and VC network; 3) access to key service providers; and 4) access to UT students and faculty. Of 150 companies incubated to date, 4 have reached IPO, 30 are still in operation, and 17 have been acquired. In sum, 10,000 regional jobs created because of the ATI.

When ATI was formed, the founders didn’t know where the hits would be, so they had to recruit from any number of industries. In the next 15 years, that scenario is changing. Now, sectors and clusters like semiconductors and digital media gaming have emerged. ATI has succeeded and created a supportive ecosystem, wherein the entire city incubates businesses, and that makes the original goals of ATI moot.

Current challenges for ATI to address: 1) global competition (open markets, etc.); 2) faster competitive environment (distributed development, open source models, and global communications have made it cheaper and faster to launch companies; and 3) global customer base (the “next one-billion middle class” people will be outside the US and developing global channels is costly).

Meeting those challenges will involve the following strategies: 1) a Hub and Spoke model (sector-focused accelerators led by industry experts with high-touch strategic assistance); 2) Go Global on Day One (establish partnerships with global reach and factor global customer strategy into the business plan); and 3) Accelerate innovation (Interlink accelerators to drive convergence).

Posted on May 02, 2006 at 08:15 AM | Comments (0)

The Role of Government in Regional Economic Development

Digital Regions: Public/Private Strategies for IT-Cluster Development in the Global Knowledge Economy

Session Two: Accelerated Knowledge-Based Growth

Role of Government

Jon Roberts, our provocative moderator introduced the topic of how public policy works on a local and state level. He introduced the panel as Austin City Councilmember Brewster McCracken and Ron Lehman at the state level. “How do you grow a cluster when you don’t have the preconditions for such?” is a question we have to ask. OK, so now, hold on to your hats, WAKE UP! In the spirit of disruption, Roberts offered these thoughts: 1) The world is not flat, it is “spiky.” Talent and capital do not flow freely. Rather, they flow to a few select areas of the world and being in one of those areas is a good place to be. Lucky You. But we can anticipate that the climate will grow increasingly difficult for those regions to capture talent and capital if you’re in the wrong place. 2) Regions don’t matter. What defines a region is a dominant metropolitan area – Austin, in this case - the rest of the area is more or less, along for the ride. There are tremendous differences between areas and regions – yes – but whether a region can really collaborate to its own advantage remains to be seen.

The first issue for economic development – talent – is defined by this factor. Talent is being concentrated in urban centers, with flight of human capital from the rural areas. Concentration of talent is increasingly defined in less than a dozen communities. What about the rest? We must ask how to keep rural areas sustainable in light of the flight of human capital. The second major issue is integration of a large, growing, uneducated domestic talent pool. Witness the boycott today on May 1 in the US over immigration issues. Growth in opportunity for immigrants is in the service industry – not in the technology industry.

Interstate 35, our major transportation artery, neatly divides Austin on color lines, for instance, with almost exclusive white population to the west and non-white to the east. Also, we must consider environment concerns as barriers to economic development. More and more, populations will value environment and may slow down economic development out of respect for preservation of the environment.

On the role of government, two ways to look at it: 1) Status Quo: regulation and tax policy are predominate concerns; and 2) technology policy side: targeted and cluster recruitment – how to integrate university and business activity, and how to influence the location of businesses in a targeted fashion.

Role of State Government. Doug Ridge manages the development and implementation of the Texas Cluster Initiative. Regions do not stop at a political subdivision. Some are larger than 17 other states. You have to look at economic activity to define the region. Doug’s particular background is in the energy industry, and in that field, he’s been in charge of mapping possibilities for a state plan regarding energy economic development.

What does it take to make it easy to do business? Texas wins the business friendly award once more, but there is room to grow and improve the business climate in Texas. The cluster strategy in Texas goes all the way down to the local level, where planners gather data at the local level. State Economic Development has many facets – under the area of Strategic Investment Tools, for instance, is the Enterprise Fund, which is a “deal closing fund.” The mantra among economic development professionals is to be “market driven, collaborative, and cooperative.”

Diffusion of technology in particular, development of new and disruptive technologies, is a key area of focus for Texas. The Emerging Technology Fund ($100m/year for two years) is governed by a committee of 17 members – locally recognized leaders. The local/regional Centers for Innovation and Commercialization promotes ideas and then manages them when they are approved and implemented.

Role of Local Government. First, Brewster McCracken highlighted convergence as a primary area of focus for local economic development. Technology and clean energy are no longer separate concepts, for instance. AMD in particular is gaining market information by engaging with local companies to gain new information for marketing chips for film making and video games. The City of Austin is redeveloping the old airport site for convergent digital industries.

Second, Austin is investing in entrepreneurial organizations, in particular Clean Energy and Wireless Incubators, exclusively on technology companies. Next, a key facet in Austin’s ability to emerge as a global region is the Quality of Life in Austin. We have to keep it vibrant. Tolerance and social liberalism are alive and well in Austin, and that cultural attitude makes it very different from the rest of Texas. Fourth, a key strategy is using targeted recruitment packages for specific companies that matter to you (global technology companies – read Samsung). And, fifth, Austin Energy has the largest clean energy program in the nation – we use it to beta test emerging technologies in the energy field. Wireless, digital media and video games, on-line applications are key industries, and our focus on Independent creative types make us a differentiated area v. the more conventional areas (e.g., Hollywood). Clean energy will get attention with a venture contest and hopefully, they will stay in Austin.

A region’s strategy should have no silver bullet – it’s more complex than that. It’s a combination of factors that COMBINED make the region attractive and appealing to businesses. Government has to be a partner with business for a region to succeed, most effectively as a catalyst. If the goal is private investment leveraged through public infrastructure, then the perspectives are oriented around economic development.

This debate is shaping the way I feel about municipal wireless and in fact, is confirming my opinion that government's role should be more moderated than it is currently.

Posted on May 02, 2006 at 08:13 AM | Comments (0)

The Austin Model for Regional Economic Development

So back at the Digital Regions: Public/Private Strategies for IT-Cluster Development in the Global Knowledge Economy Seminar today, Session Two was about to start:

Session Two: Accelerated Knowledge-Based Growth

The Austin Model

After a good opening round, setting the stage with city and UT leadership, now we get into the meat of the program. What is being billed as the Austin Model is this panel discussion that includes Pike Powers, founding partner at law firm Fulbright and Jaworski (and Austinite of the Year 2005); Kirk Watson, former Austin mayor and president of the Greater Austin Chamber of Commerce (and now candidate for the Texas Senate from our region); Arjun Sange, UT System Associate Vice Chancellor for Technology Transfer; and Juan Sanchez, VP Research at UT.


Relational Capital: Public-Private Networking for Accelerated Regional Development. Pike Powers talked about the role of government in building a technology cluster for our region, but his talk really emphasized the role of relationships. Pike started off with a sports metaphor as an analogy (apt in our region given the current dominance of UT in national sports). Gil Brandt, 73 years old and long-time recruiter and scout for the NFL's Dallas Cowboys, still focuses on "fertilizing relationships." He's set himself apart for several reasons. He's a "people person" who knows everyone and lives for building relationships. He shares his information with others. He communicates widely and deeply. He's a "concierge" who shepards people through the process.

That reflects the situation in Austin - we fertilize relationships, share information, and seek to ensure that the best practice wins in the end. Read these two books: “Grassroots Leaders for a New Economy,” about Austin and its success, and “The Southwest Airlines Way,” because they both focus on the strategic value of “high performance relationships.” Thousands of people work on regional Economic Development projects, but nobody ever said, “I can’t do that,” or “That’s not important.” This kind of commitment and prioritization in a relationship setting creates a level of trust that begets success.

Pike shared two particular pearls of wisdom: “Economy is cyclical,” and “College Rankings matter,” but the bottom line pearls of wisdom from Pike : Austin has dared to dream and dream big – will you join us? Have a long term strategic plan and stick to it; push the envelope, there’s always something new on the horizon – be disruptive; be bold and ignore the critics, find the way around the obstacle; rely on the bonding of your key collaborators; celebrate the wins and victories – smell the roses, however little, because that brings the community together.

Ingredients of success in regional economic development
o Bright people
o Willingness to adapt to technology
o Commitment to advanced research
o Leave the private agendas at the door
o Strong university
o Passion to get the job done
o Educate, Adapt, Innovate, Collaborate
o Risk is in not acting at all, assuming that a good economy will carry you through

Lessons Learned in Building a City of Creativity and Innovation. Kirk Watson is a “Man with a Vision,” according to a recent Texas Monthly article. And his vision focuses on Austin, Texas, to the benefit of those of us who call this region home. Austin is going through a dramatic transition, as a result of moving from a college town with dominant state government to a truly global town with technology as a primary driver. The community has come together on these two lessons:

1) Lesson: Economic health and wealth is defined by regions in this century, which is not as it was in the past – we no longer need a large mass of land or a population center or be a financial center. Lesson: virtual labor and capital enable new places to be an Economic Center. 2) the primary asset of economic power has shifted from land to industry to ideas and innovation and creativity and intellectual capacity and educated workforces – in a word, people. The marketing term “The Human Capital” is a recognition that we have embraced this lesson.

Kirk detailed the following Lessons Learned that show that the regional model is working here.
1) Lesson: Higher Education and workforce development is our Key Asset. We’re surrounded by great institutions of higher learning, which cultivate and feed fresh talent into our labor pool.
2) Lesson: Talented people get to choose their region, so keep your region attractive and you will draw the top talent. We’re aggressive and effective at protecting our natural environment even as we develop our economy, especially on-line, where they can work globally from Austin. In Austin, you can come home and go out for a bike ride.
3) Lesson: Offer alternative ways of living: urban in a high-rise, urban in a house, suburban, semi-rural, rural, small town – you can choose your life-style here in Central Texas.
4) Lesson: Keep the city open to different, even off-beat, ideas and stay open to “odd” thought – you never know where it will take you. The number one bumper sticker is “Keep Austin Weird.”
5) Lesson: Reach out internationally and recognize that Austin is a small part of a big world.
6) Lesson: We were lucky that we didn’t have to go through the political pain of dealing with a displaced industry. We won’t be so lucky in the future as our industries mature. We have to plan around those transitions.
7) Lesson: Integrate your assets into a bundle – a package that is attractive to outsiders, to emphasize the overall value of your region. That is an inclusive approach.

Research and Technology Transfer in the University of Texas System. Arjun Sange described the UT System (9 universities and 6 health centers) showed how UT works to enhance its capabilities in research and tech transfer. UT seeks to foster large-scale research collaborations. The goal is to strengthen processes and practices and make each of UT’s Institution an “Institution of National Distinction,” thus making the UT System a “System of the First Class.” Arjun leveraged this quotation from the American Assoc for the Advancement of Science: “Institutional research competitiveness requires leadership at every level of the university.” Nowhere to run, nowhere to hide – it’s a team effort. Research expenditures have nearly doubled in six years: from 1999 to 2005, rising from $900 million to $1.7 billion. It’s a linear curve. The goal is exponential growth, however. This pace of growth easily outpaces the national increase for public universities. As for tech transfer, it’s also a linear curve. UT System ranks #11 nationwide in tech transfer, which indicates room for growth. Tech Transfer is a hot topic among universities these days, and it’s a key metric in how they measure their success. Two great examples of tech transfers are LabNow, which provides on-site medical analysis, and the Texas Advanced Computing Center, which runs a Dell Linux Cluster of 6.3 Teraflops up to 35+ Teraflops. Wow!

The Role of the Research University Regionally, Nationally, and Internationally. The drill down after the Tech Transfer discussion is research. Juan Sanchez provided an overview of what UT does in the research area, and it’s an awesome story. The story of science and academic R&D as a business really started mid-way through the 20th Century with the formation of the National Science Foundation in 1950. Total investment in Academic R&D in the US (these data are approximate, as I was typing as the slides flew by) – total investment now exceeds $40 billion, and public government investment covers nearly 75% of that: $24 billion comes from federal government, $2B from state and local government, and $2B from industry. All of the trends are upward, by the way – R&D is a growth industry. Royalties derived from intellectual property are, as you might expect, growing as a result of that spending.

As befitting the premier university in Texas, a region that brags about its size and prowess, UT is at the top of many lists: largest campus (>50,000 students), most doctoral degrees (ranks 1-3 in polls), city’s largest employer, 15th ranked university in the world by Times of London, 400,000 ex-students (100,000 of them live in Austin – that’s a testament to the attractiveness of this region). As for tech commercialization, UT has formed 35 startups (21 exist today), and typically, 3-6 new startups are formed out of UT-originated technologies every year.

The biggest challenge UT faces is in how to relate with corporate partners – the risk is that a competition gets started, and that doesn’t benefit either academia or the private sector. In the end, it’s a matter of trust. We need greater cooperation between universities and industry – more trust - but, the devil is in the details and it takes a while to learn to dance together without stepping on each other’s toes. Juan used a quotation from 1912 to make his point – in other words, we’re still striving for more collaboration nearly 100 years later! Finally, a vision is critical if you seek greatness. UT has a vision and it says: “What starts here, changes the world.”

Collaboration Example. In the follow up Q&A, an interesting question was “How did the Samsung collaboration work?” You’d think the answer would be revealing, because that’s an example of what we’ve all been talking about here. Juan highlighted the large community of South Korean graduate students at UT that must have played a role – they “get” the culture. Kirk talked about our very detailed regional plan to grow jobs, highlighting not only our strengths, but also our gaps and weaknesses, which get funding and attention. Pike talked about how communication, relationship, mutual respect all combined to make things work. Interestingly, little details like siting of traffic lights near the Samsung facility made a difference – Samsung execs wanted to know that they were appreciated and respected, and the risk was that this little thing of a traffic light reflected poorly on the appreciation and respect scales. So, again, the devil is in the details, and sometimes, attention to detail can be the differentiator in a multi-billion dollar deal like the Samsung plant siting decision.

Posted on May 01, 2006 at 11:33 PM | Comments (0)

Gentlemen, Start Your Engines: It's Conference Time in Austin!

The conferences have begun. Today was the first of a week full of meetings. At the University of Texas Thompson Conference Center, about 120 individuals gathered today for the Digital Regions infrastructure policy and regional economic development seminar, in anticipation of the World Conference on IT which will start on Wednesday. Conference Director Dave Gibson with the IC2 ("I-C-squared") Institute at UT, introduced his boss Dr. John Butler and Austin Mayor Will Wynn.

The subitlte of the conference is "Public Private Strategies for IT-Cluster Development in the Global Knowledge Economy. Today, the focus of discussion was activity in Austin and the "Austin Model," and tomorrow the discussion will focus on other regional models.

John Butler, Director of the IC2 Institute spoke first - his message was: "Regions will always be the center of economic devleopment." The reason regions are critical is that social fabric of communities involves trust networks, which drive job creation. In our case in Central Texas, since the early 1980s, technology transfer has driven economic development. We put Wealth and Job Creation at the center of our model.

Austin Mayor Will Wynn followed with a good detailed discussion about Austin and how economic development works now. The big news is that Austin won the largest capital investment project by a foreign company on US soil - in history - when Samsung decided a few weeks ago to build a $4B chip manufacturing plant in Austin. By this time, I'm feeling pretty proud of the region I call home. This win will have a huge economic impact on Austin.

Lots more, so stay tuned!

Posted on May 01, 2006 at 11:12 PM | Comments (0)