Global Innovation Outlook

The Responsibility Revolution

In 2004 the Global Innovation Outlook first began convening groups of thought leaders around the world to collaboratively address some of the most enduring problems society faces. Together with IBMers, these forward thinkers tackled subjects as varied as the provision of affordable and effective healthcare, economic development in Africa, and protecting the availability of global water supplies. And through it all, more than a few innovative ideas were born and acted upon.

But the GIO was never a philanthropic endeavor. If fact, it was not even part of IBM’s community engagement strategy. The GIO was a business program, expected to identify real business opportunities that led to real profit. It just so happens that IBM has always believed that addressing the most pressing needs of society are where opportunity has always been found. As our former CEO, Thomas Watson, Jr. said, “Corporations prosper only to the extent that they satisfy human needs… Profit is only the scoring system… The end is better living for us all.”

While we conducted our deep dive discussions on water in 2008, we were joined by a journalist by the name of Bill Breen. Bill used to be a senior editor at a magazine called Fast Company, and he was working on a book about corporate responsibility with Jeffrey Hollender, the cofounder and executive chairman of Seventh Generation, a maker of green cleaning products. He was curious about IBM’s Global Innovation Outlook program, and wanted to get a first hand look.

I’m happy to announce that the book, The Responsibility Revolution, is now available. It’s a book for forward thinking companies that are looking to shift corporate responsibility's focus from reputation to innovation and leadership. The Responsibility Revolution also unpacks much of the back-story around how the GIO came to be and how IBM thinks about collaboration.

The book challenges business to move beyond the limiting assumptions of corporate responsibility and provide real leadership and innovation, taking on fundamental societal challenges. Using companies like Nike, Novo Nordisk, and Timberland as examples, it makes the case that following a sound blueprint and foundational principles for moving responsibility to the core of a business can simultaneously be good for the balance sheet, company reputation, employee motivation and retention, and the planet.

That’s how IBM approaches its business. And we hope it’s a model that more companies will start to follow.

When Cities Grow Too Fast

All around the world, experts have been studying urbanization for decades. It is an undeniable global trend, one with major consequences for all of us. But it’s not until you come to Asia, where people are pouring into cities from Seoul to Singapore, that you begin to understand the full effects of rampant urbanization.

 “The question is how we can prevent urbanization,” said one participant in IBM’s Global Innovation Outlook deep dive in Singapore yesterday. “I don’t think megacities are sustainable.”

“The blind rush to cities is creating environmental problems and deteriorating the quality of life in our cities,” said another.

“If large companies would start supporting tele-commuting, we might be able to slow the growth of these cities,” said yet another.

It’s not surprising that residents of this area are gravely concerned about this unchecked urban growth. Our meeting was attended by urban experts from Singapore, Japan, China, Vietnam, Hong Kong, The Philippines, Australia, and New Zealand. And the concern about the negative impacts of overpopulation in their cities was palpable.

But despite this universal concern, it was widely acknowledged that there is nothing to be done about it. People come to cities for many reasons: jobs; entertainment; family; friends; and sometimes because they have no where else to go. Urbanization is a force of nature, a sign of our times, and it cannot be controlled, even if someone were so inclined.

Of course, this immutable fact only reinforces the need for better planning, more efficient systems, and sustainable solutions; a reality that was not lost on this group. “Cities are like multi-dimensional jigsaw puzzles,” reasoned one participant. “To have a good puzzle, you have to design it properly. But most cities are not designed like this. They just keep adding things on, like a rubbish heap. So there is a great need for good master planning.”

Planning like that requires deep insight, both from the elected leaders that govern these places and the citizens that live in them. From that insight they must develop well-defined goals and constantly measure their progress against those goals. In this way, running a city is not unlike running a business.

“In the business world we use dashboards to measure our progress,” said one participant from Hong Kong. “But what if we used the same tools for leaders and individuals in a city? Only we make the dashboards relevant for each of them, so that they feel that with their actions, they can move the dial?”

In other ways, cities are nothing like businesses, of course. And some of our participants were quick to remind us of that fact. “Businesses can be incredibly creative and they can act very quickly,” said one participant from New Zealand. “But they are also profit driven, and have a huge capacity for greed. I don’t think cities can afford the luxury of failure that comes from greed.”

Cities certainly can learn a lot from the private sector when it comes to strategic planning and managing growth. But they’ll have to learn from their own citizens and other cities as well. And in this part of the world, that learning can’t happen fast enough. 

Turkish Delights

In pursuing a global perspective on the future of the world’s cities, IBM’s Global Innovation Outlook could have hosted deep dive discussions in nearly a thousand locations around the world. But you would have a hard time picking a more compelling location than Istanbul.

Besides being one of the largest cities in the world, with more than 12 million residents, Istanbul is the cultural and financial center of modern day Turkey. It straddles two different continents (Asia and Europe.) It has been the capital city of no fewer than four different empires (Roman, Byzantine, Latin, and Ottoman). And its history dates back more than 8,000 years, during which time it has been known by countless different names (Constantinople and Byzantium, to name a few).

Not surprisingly, this long and rich past plays a central role in shaping Istanbul’s future. Our meeting featured a robust collection of local expertise, from Turkish universities to government leaders to some of the most successful private companies in the country. And many in the room agreed that transformation in Istanbul cannot be pursued without first considering the past. But whether history is Istanbul’s opportunity or challenge depends on who you ask. Two comments from the dive illustrate these contrasting views:

“Istanbul has so much history and each culture tries to put a straightjacket on the direction of development.”

And

“History and heritage can make a city a center of excellence.”

These starkly contrasting statements demonstrate how historical legacy can either be seen as a burden or an asset. Making ancient cities smarter is indeed a formidable challenge. Aside from the logistical difficulties of retrofitting systems that were designed hundreds of years ago, it can be nearly impossible to get citizens that are still culturally tied to the past to embrace change.

But if Istanbul’s history has taught us anything, it’s that great cities can be made and remade dozens of times over the years, and nothing is forever. In that spirit, participants in the Istanbul dive advocated for a new era of urban planning. Not the kind of planning that gets constantly interrupted by election cycles or quarterly earnings. But the kind of planning that is informed by a deep understanding of the citizens of a city, and an enduring vision of what the city can and should become.

“Istanbul has been a center for civilization for a long time,” said one participant. “People still come here and leave their culture. And Istanbul still embraces these cultures, and incorporates them into the dynamic nature of the city. So the city of the future should be the city that listens to people and their agenda.”

Many in the room recognized that a new ability to listen to citizens now exists with the millions of people already communicating through social networking sites and the like. And it is this generation of Turks that most participants identified as the key to Istanbul’s future. The trick is converting their input into insight, and crafting a plan that both moves the city forward while preserving its precious history.

The Business of Cities

Businesses interact with cities in thousands of different ways. They are important contributors to city tax revenue; they provide jobs to city residents; and they are heavy users of urban transportation, utilities, and communications services. They often become important members of the community, deeply involved in local philanthropy and charitable work. And some private enterprises or industries come to define the very city in which they locate.

In light of this symbiosis between the private sector and cities, IBM’s Global Innovation Outlook went looking for insights about how these important relationships are evolving in the age of urbanization. So we spent yesterday in New York engaging strategy executives with half a dozen global companies at a members meeting of The Conference Board, a non-profit organization that serves as a collaborative platform for private-sector companies.

We kicked off the conversation by stating a few facts about urbanization. Facts like by 2050 a full 70 percent of the human population will be living in cities. Or that we are adding urban population at the rate of two New York Cities every year. And then we asked the extent to which these companies were factoring these trends into their long-term strategic planning. We wanted to know two things: 1.) How do the geographies, demographics, and services that cities offer affect decisions on where companies locate facilities, and 2.) How does the trend of ever-bigger urban populations affect how companies make, market, distribute and sell their products and services.

Participants were a bit stumped on the first question, especially as it pertained to locating headquarters facilities. In fact, most agreed that the circumstances that led to headquartering in a particular city or region were not strategic, no longer relevant, or both. For example, one executive at an East Coast-based food distributor said the company was founded more than 100-years ago in New Jersey because that’s where they grew the food. But today, most of that food comes from California. However, the company’s ties to the community are so deep, there’s not a chance in the world the company headquarters would ever move.

There was a great deal of discussion about how some cities can grow extremely dependent on both individual corporate citizens or the industrial clusters that sometimes result. Detroit’s struggles at the hands of a declining American auto industry were frequently referenced. And on a smaller scale, the economic impact of the Carrier Corporation leaving Syracuse, N.Y. cannot be overlooked.

On the flip side, Seattle, Washington was held up as an example of a city that lost a major corporate citizen in Boeing, but remade itself with the rise of Microsoft and Starbucks. These success stories are no accident, and are often the result of long-term strategic planning on the part of the municipality, which lays the groundwork to facilitate the growth of particular industries. And one participant pointed out that cities should be very thoughtful about the type of industry they are trying to attract, because it can make a big difference. For example, a technology company may bring with it not only jobs, but a groundswell of localized innovation and entrepreneurial activity. Commodity companies, however, do not typically provide as much of an ancillary benefit.

On our second line of questioning, around how business models would need to change to accommodate the trend of urbanization, there was some early strategic thinking going on. While most corporate strategy groups are looking 3-5 years out at the most, everyone in the room knew that trends as globally important as urbanization could not be ignored.

“It’s going to change the way we manufacture and distribute products, there’s no question,” said one participant. “What kind of stores do we want, the size of our packaging, how the products are delivered. When you start to see the kinds of numbers that are building up in Asia, you have to start asking questions like, ‘Is China my market, or is Shanghai the market?’ The entry strategies suddenly become city driven.”

The Intelligence Within

During the course of IBM’s Global Innovation Outlook on cities, we have held deep dives with as many as 30 people in a room, roundtables of smaller, more focused groups, and dozens of one-on-one interviews with urban experts. Throughout all of these conversations, two themes have been consistent: 1.) We need to find better ways to engage the citizens in the planning and development process, and 2.) We need to collect and combine the most valuable data to help support those processes.

Fortunately, there are all kinds of ways to tackle both problems simultaneously. In an earlier post on this blog, we discussed the many ways in which citizens are both consumers and producers of the data that city systems give off. How people are moving around the city, what kind of health services are they using, test scores in schools, and so on. These data are invaluable, but very raw. They require someone to make it useful or instructive.

Well it turns out citizens can handle that as well. Earlier this week we met with a group of transportation experts in Helsinki, Finland. In Helsinki, there is a Web site for commuters (or travelers of any kind, really) to show them their transportation option for various routes around the city. It’s a very convenient service that is catching on around the world.

But Helsinki officials have taken it a step further. They made the raw transportation data available to the general public. This open-source approach allows anyone to create an application based on the data. For example, they can develop optimized apps for different mobile devices, add in GPS capabilities, or integrate the information with other city systems. And those applications can be bought and sold or given away to anyone who finds them useful.

The point is that cities, with their limited budgets and onerous bureaucracies, don’t need to do everything themselves. There are throngs of city dwellers with the skill and motivation to pitch in, an invaluable resource that has gone largely untapped. And a lot of the data needed for these kinds of innovative applications are already being collected. As long as it doesn’t pose any security threats, it need only be handed over. That’s how a little transparency can go a long way.

Making Great Cities

What makes a great city? Is it healthy citizens? Plenty of jobs? A well-educated population? Or is it beautiful parks, a low-crime rate, and affordable transportation?

A great city is some, any, or all of those things and more. Cities are every one unique. So what constitutes a great city depends entirely on the city in question and the values of its residents. And that’s why many of the participants of IBM’s Global Innovation Outlook deep dive in Los Angeles advocated starting from the bottom and working up when going about building smarter cities.

“The questions that each city has to answer are these: How does leadership and management tap into the values of their communities? Do they have the systems and structures needed to translate those values into metrics that represent what people want? And are they able to then measure their progress towards those goals?” said Scott Taylor, a Senior Managing Director at Teach for America, a non-profit organization that provides young teachers in disadvantaged school districts. 

Taylor was not alone in this approach. The discussion featured experts in everything from urban planning and management to health care. It included futurists, urbanists, and journalists; academics, educators, and technologists. And many of them agreed on the need for some kind of system for urban change that is adaptable, specific to each particular city, and informed by the residents of that city.

Here are a few salient quotes from the day around this idea:

“You have to go back down to the bottom,” said one participant. “You have to be able to tailor your solutions, because what’s good for one city might be catastrophic to another. And the system must govern toward that vision, but be designed for rapid, incremental change and response to things we cannot possibly predict.”

And:

“We are trying to plan a quality of life and an urban experience for people that we don’t even know yet, our future generations,” said Mary Jo Frederich, Director of Industry Solutions Lab and First-of-a-Kind Solutions at IBM. “Already my kids interact with each other and their schools in ways that I don’t understand.”

And finally:

“We know that more planning does not necessarily help you succeed,” said another participant. “In fact, the more you plan, the greater the cost of failure. So let’s have a thousand little failures that make up a collective, long-term success.”

Throughout the day, much of this thinking was directed towards the subject of education. There was little disagreement among those in the room that urban schools are part of the foundation of a smarter city. And the philosophies above have direct relevance in how to approach improvement of city schools.

“You can define and measure an educated city in a number of ways,” said Taylor. “Maybe it is narrowing the gaps between the best and worst education level. Or maybe it’s the percentage of people that go to an Ivy League school. But you have to be careful which metrics you choose, because those two things are very, very different. So where you start from shapes what information you’re going to gather and what you will do with it.”

At least one metric that most people in the room felt was important was the level of integration city schools had with their communities. For example, Oakland’s school system has its students addressing climate change by going out into the community and performing energy audits around the city. This is just one example of how educational curriculum can intersect with other urban systems, in this case energy and utilities, and make the school system a more integral part of a community. This enables the schools to improve the community, and makes the community more inclined to support the schools.

While it may be true that no two cities are alike, there are plenty of lessons to be learned from examples like these. And when the values of the community are taken into account, a vision is created, and progress is measured, smarter cities are possible, one small step at a time.

Cities Of The People, By The People, For The People

Over the years, IBM’s Global Innovation Outlook has not shied away from huge, challenging topics. In fact, that’s exactly what the GIO was designed to do; explore the possibilities for innovation that can solve some of the world’s most pervasive and enduring problems. That’s why we have studied things like water, energy and the environment and health care.

In cities we have yet another massive challenge ahead. And as with any long journey, the hardest part is taking the first steps. So if our first deep dive session in Washington D.C. taught us anything, it’s that there is no clear starting place.

Our GIO participants brought with them a broad range of expertise, from smart electricity grids to transportation systems in the developing world. There were public works officials, technology executives, architects and venture capitalists. There was even a special assistant to President Barack Obama. And at times it seemed every single one of them held a different perspective on the most pressing problems and promising opportunities in our cities.

For example, here is a partial list of what participants felt were the most critical components in running a smarter city: leadership; transportation; health care; jobs creation; education; engineers; sustainability and energy efficiency; communications and connectivity; breaking down data silos; and raising capital.

There was some spirited debate about each of these topics. But in the end there was one thing that everyone agreed on: people. People should be at the beginning and end of every conversation about cities. With so many competing government agencies and businesses and special interests, it’s easy to get lost in the weeds on a topic like this, and forget that the purpose of all the urban components listed above is to raise the quality of life in our cities.

This is an obvious oversimplification, of course. Like the many perspectives of our GIO participants, every resident of a city has different needs and priorities. That’s what makes cities so great. But those varying needs are also very difficult to reconcile. So in the spirit of citizen engagement, participants started to kick around ideas for how to include more city residents in urban management. 

“You have to get the people that will use these systems engaged in the planning process,” said one participant.

And there are two ways of going about that. The first is by making more information available to the people. Today’s technology allows for an astounding amount of transparency into city systems. And not just government. Consider the power of providing real-time data on every possible transportation route from one destination to another within a city. It’s not hard to imagine a system that could analyze buses, trains, cars, and walking routes, based on current conditions, and use that information to calculate travel times, costs, even environmental impact of the different transportation options at any given time. It’s about choices. And having choices improves the quality of life.

But people are not just consumers of information in a city; they are also producers of it. The second way to get citizens engaged in the planning process is by gathering information about them and from them. Everything from how and when electricity is being used to why people are going to hospitals is immensely valuable data when making urban planning decisions.

Already in several cities around the world, mobile phone providers are tracking cell signals and providing aggregate data on how people are moving around cities. With this information, planners can discern whether a person is in a car, train, subway, or on foot, how fast they are moving, and what route they take to their destination. And by mapping the data over time, important lessons can be learned about how a city’s transportation systems are used, and how they can be improved.

Data is an undeniably important part of making informed decisions about our cities. And like anything, data can be misused and abused. But if we approach each city as a unique case, and stay focused on data being generated for and by the people of those cities, chances our good we’ll make the decisions that improve urban life. And that’s something we can all agree would be a good thing.

Virtual Insight

When it comes to gathering insights on what cities of the future will look like, it helps to use collaboration tools that are, well, futuristic. That’s why this week IBM’s Global Innovation Outlook, in partnership with the University of Southern California’s Marshall School of Business, conducted the very first GIO deep dive meeting in Second Life.

For those of you not familiar, Second Life is a free 3D virtual world in which residents create “inworld” identities, or avatars, to interact, explore, create, and connect. It has more than 15 million accounts, and at any given time as many as 38,000 residents are logged in.

We asked students and faculty from USC’s business school to join us in an exploration of smarter cities at a location designed and built by IBM called the IBM System EduCenter Island. We posed a series of questions to them on what they thought a smart city was, how it could be measured, and which urban systems they thought were the most critically in need of innovation.

There were many thoughtful insights on how cities can be improved. For example, what if neighboring cities were connected by high-speed public transportation systems, like magnetic levitation trains? Then each city would not need to be all things to all people. Los Angeles could focus on industry, while San Diego became a healthcare center, and San Francisco an education center.

There was also a good amount of discussion about the role mobile technology could play in not only speeding transactions, but in engaging citizens more tightly into the urban fabric. But perhaps the most interesting exercise was something we called the “Opinionator.”

This virtual device allowed participants to “vote with their feet,” by walking into rooms labeled with various facets of urban life: Education; Transportation; Public Safety; Energy and Utilities; and Health Care. We asked people to imagine they were the mayor of their city, and walk into the room they felt was in most dire need of innovation. The results? Transportation – 30 percent; Energy – 30 percent; Education – 30 percent; Safety – 10 percent; and Health Care – 0 percent.

I’ll let you draw your own conclusions from the results, but remember that our sample set consisted of relatively young students (hence more concerns about education than health care?) that live in Los Angeles (road rage?).

Overall the virtual dive was an ambitious experiment and a great success. It really felt like we were all sitting in a room together, exchanging ideas and forming relationships. And it got me thinking: if we can accomplish all this after a few short hours in Second Life, what else could we accomplish in virtual worlds that would lead to better, more efficient, and more sustainable cities? Your thoughts welcome.

Cities: The Next Big Thing

The Global Innovation Outlook’s six-month study of water is complete and already beginning to yield some new partnerships and exciting opportunities. But, like a shark, the GIO must continually move forward. So yet again the time has come for IBM’s Global Innovation Outlook to radically shift gears and begin the exploration of a new topic: Cities.

Civilizations have long been measured by the greatness of their cities; Alexandria, Rome, Constantinople, to name a few. For thousands of years our cities have brought together people of all social strata and businesses of every industry. They are the platforms upon which commerce gets done. And they represent the human capacity for culture, community, and progress.

The popularity of cities continues to grow today. By 2010, there will be 59 metropolitan areas with populations greater than five million. The number of inhabitants in urban environments is expected to swell to more than 6 billion by 2050, more than 60 percent of the world population.

Of course, more people means greater demand for energy, water, food, housing, and capital. It means that older cities will need to update critical infrastructure, and new cities will need to build adaptable, flexible systems to accommodate shifting demographics. In both the developed and developing world, cities are being rethought. 

So the GIO is embarking on this exploration with one goal in mind: to make the systems that facilitate life in the world’s cities smarter. There are many complex systems common to all cities, including transportation, utilities and sanitation, public safety, health care, commerce, education, and social services. Each one is in need of innovation and greater efficiency if we are to accommodate the urban masses in the years to come.

Needless to say this is a huge topic, with many moving parts. As a result, the GIO will be using a variety of methods to test theories and gather insight, including our usual deep dive brainstorming sessions, smaller roundtable discussions, phone interviews, and online surveys. In fact, you’re welcome to take the survey right now and add contribute your innovative thoughts on how we can make our cities smarter.

Check back frequently to see how our study is progressing. And never stop thinking about how we can build smarter cities.

GIO Report on Water

At last the time has come. After seven deep dives on four different continents, hundreds of discussions and dozens of opinions, the GIO report on Water is finally available.

Aptly named Water: A Global Innovation Outlook Report, this comprehensive treatment of the challenges and opportunities inherent in modern day management of global water systems can be downloaded here. You can also order hard copies, free of charge, by clicking on this link.

This GIO report takes a hard look at the difficulties society is having managing the most precious resource on earth. A severe lack of data on water use, rapidly changing climate patterns, and a complex global system that is often managed on a local basis all contribute to these challenges.

But there is reason to be hopeful. Already great efforts are being made to measure, monitor, and analyze massive water systems, from the rivers and reservoirs to the pumps and pipes in our homes. The report details dozens of groundbreaking projects, like the SmartBay system in Galway, Ireland, which monitors an entire oceanic ecosystem, collecting data on everything from tides and waves to changes on the ocean floor. The information is then used to inform a host of industries, such as aquaculture, tourism, and alternative energy.

Or the amazing strides Israeli farmers have made in water conservation. Since 1964, Israeli agriculture has fed a population that has nearly tripled, and they have only increased their water consumption by 3 percent. How do they do it? An astounding array of technology that includes automated drip irrigation systems that can determine the exact times when plants are absorbing water into their roots.

Or Singapore's resounding success in water reuse. Using advanced filtration technology, Singapore, with no natural water resources of its own, will meet 30 percent of its total water demand next year with branded, reclaimed water called NEWater.

These are just a few of the many examples of how the world is getting smarter about water. We encourage you to download or order hard copies of the report and consider how you or your organization can contribute.