Gigabit Broadband-Fueled Knowledge Exchange Can Drive U.S. Economic Recovery
Columbia, Missouri, November 17, 2011 – In a speech today at the sold-out Missouri Broadband Summit, Gig.U Executive Director and the architect of the National Broadband Plan, Blair Levin, outlined how high performance collaboration will be, and must be, the killer app of the next generation of broadband, one that will fuel American innovation, productivity and economic growth. By removing bandwidth as a barrier in innovation-rich university communities, America can create a distributed model of innovation hubs that will ensure our economy grows everywhere, and global leadership in research and innovation will “still be us”.
“We need to approach our national challenges in a different way,” said Levin, “one focuses on the interaction of individuals.” He continued, “With broadband as the new commons of collaboration for our time, and by enabling the communities that surround our research institutions with world-leading bandwidth we can unleash the bottom-up, high-performance collaboration that will be the killer app of the next generation of the Internet.”
Gig.U, the University Community Next Generation Innovation Project, is broad-based group of 37 research university communities from across the United States. Drawing on American’s rich history of community-led innovation in research and entrepreneurship, Gig.U seeks to accelerate the deployment of ultra high-speed networks to leading U.S. universities and their surrounding communities, driving economic growth and stimulating a new generation of innovations that address critical national needs such as health care, energy and education.
“The digital revolution has transformed knowledge exchange, affecting every sector of the economy; from construction to agriculture; from manufacturing to retail.” Levin continued, “Our world leading research institutions can create new industries and economic growth, if we can create an understanding of how education, health care, public safety, job training and other essential services can be improved by moving more of them to the digital platform, with a climate of collaboration that rewards initiative and innovation.”
Through an RFI process, Gig.U is working with current and potential network service providers as well as others, to create a critical mass of these next generation test beds. While economic hurdles impeded upgrading networks in all communities, those hurdles are smaller in university communities as they enjoy characteristics that both lower the cost of deployment and increase demand, making them the most attractive targets for initial next generation network deployments. Responses are due December 2, 2011.
Full text of speech below:
Speech to Missouri Broadband Summit
Gig.U and the Innovation Imperative:
High Performance Collaboration as the Killer App
This is a summit about broadband but the underlying question here, as it is in so many other fora, is how do we rekindle the kind of economic growth and improvements in our standard of living that we in the United States used to see as natural, and common, as the sunrise?
In his 1987 acceptance speech for the Nobel Prize in economics, Robert Solow laid out the case that technological innovation is the ultimate source of productivity and growth.
As we seek to rekindle our economy in the wake of the 2008 meltdown, many echo his thoughts.
For example, a few years ago a Business Week cover story asking “Can America Invent Its Way Back?” answered its own question by outlining an emerging consensus that “innovation is the best – and perhaps only – way the U.S. can get out of its economic hole.”
A year later, then Google CEO Eric Schmidt said something similar, with an added important insight: “we are going to have to innovate our way out of this thing and our great universities will have to lead the way.”
Turning that realization into reality is no easy task.
There are plenty of policy proposals—STEM education, Immigration Reform, Tax Reform—that would no doubt contribute, but in today’s D.C. climate, they do not seem to be moving forward.
These are good ideas about giving individuals the right background and incentives to innovate. I hope they will be enacted.
I think, however, we also need to approach the problem in a different way; one that focuses on the interaction of individuals and one that does not need Congressional action.
Indeed, while what I am about to discuss ought to be a national priority, but as an organizing and managerial manner, it ought to be done at a state and local level.
It starts with a simple question: how can states and local governments enable improved collaboration within and among various economic ecosystems in their communities?
This question, simple on the surface, has its roots in lessons about innovation that underlay the National Broadband Plan.
What I would like to talk about today is how those lessons apply to the idea that high performance collaboration is the killer app of the next generation of broadband, and some concrete steps communities can take to make sure they ride, rather than are crushed by, the waves of innovation to come.
Let me start with 4 lessons about innovation.
- Let Chaos Control.
The idea here is not chaos, but rather enabling chaos to challenge the existing order.
This idea was succinctly expressed in the current bestseller “That Used to Be Us” as Carlson’s Law: “innovation from above tends to be orderly and dumb; innovation from below tends to be chaotic and smart.”
There is significant academic work that supports this view, such as in the work of noted economists William Baumol, Robert Litan and Carl Schamm, who argue that the seeds of growth and prosperity lie in “the estuary region where rigid order and random chaos meet and generate high levels of adaption, complexity and creativity.”
There are also historical examples of these principles in action.
During the remarkable period in the 17th and 18th Centuries when humanity first escaped the Malthusian trap in which GDP growth was simply a function of population growth, England and France approached innovation in two distinct ways. Frances went with the orderly and dumb version, providing top-down royal grants to inventors.
England went with a patent system in which no one needed permission to innovate and the innovators took the risk and would reap the reward.
The chaos that ensued caused English GDP to grow about 250% more than France in that period.
So a bottoms up framework is the right place to start. But it is far from the end.
- Get everything on the table.
In April of 1970, NASA faced the biggest crisis of its existence when one of the primary oxygen tanks exploded and no on knew how to get the spacecraft safely home.
The engineers at NASA in Houston responded by putting everything the astronauts had access to on a table; many of which were not usually thought of as parts that were supposed to work together.
But the presences of the parts inspired the innovations that saved the day.
The author Steve Johnson, in his book “Where Good Ideas Come From,” uses that episode to suggest the “trick to having good ideas is not to sit around in glorious isolation and try to think big thoughts. The trick is to get more parts on the table.”
- Enable the adjacent possible.
Innovation also involves combining things that have not been in the room before, but rather, from the room next door. We see these in primordial times where evolution advanced not by great leaps, by combinations of adjacent molecules.
We see this today in the way that the technologies of the future are really about the fusion of disparate disciplines, such as life sciences using advanced engineering, or medicine being delivered through the tools of nano technology, photonics, electrical engineering and single molecule biophysics.
Johnson suggests the “history of life and human culture, then, can be told as the story of a gradual but relentless probing of the adjacent possible, each new innovation opening up new paths to explore.”
- Recognize when today’s logic no longer applies.
New technologies, as noted by Stanford Professor Paul David, often suffer from a “diffusion lag.” It takes time for a new technical system to replace an existing technical system. For example, in the early 1900s “the transformation of industrial processes by the new electric power technology was a long-delayed and far from automatic business.” Factories didn’t reach 50% electrification until four decades after the first central power station opened.
This lag was due in part to the unprofitability of replacing “production technologies adapted to the old regime of mechanical power derived from water and steam.” In other words, the problem was not getting electricity—it was reengineering factories designed and optimized for the steam era to embrace the potential benefits of electric power.
Part of the cause is economic; if one just invested in a steam driven factory, one is not anxious to lose the benefit and have to reinvest.
But just as one can be anchored by sunk costs, one can also be anchored by sunk thinking. It took a long time for factory architects, well-versed in how to build a vertical, steam-driven factory, to recognize that electricity could not only improve that factory, but could create the kind of horizontal factory never before conceived of, and one that proved crucial to the age of the automobile.
While understandable, such sunk thinking is costly. As Peter Drucker noted, “the danger in times of turbulence is not the turbulence; it is to react with yesterday’s logic.”
History is replete with examples, from the French Maginot Line to Wang Computers, of yesterday’s logic jeopardizing their self-confident creators.
But history is also replete with examples of those who used today’s logic to innovate and create new opportunities to address previously intractable problems.
So while there are many lessons one can learn about innovation, as we think about stimulating economic growth by facilitating innovation, the challenge can be seen as figuring out how to escape embedded thinking, empower the adjacent possible, get more parts on the table, and let chaos control.
The common link to meeting those challenges involves creating environments in which there is a better exchange of information.
That was the heart of the National Broadband Plan.
As we built that plan, we saw that the core task for our economy and civic society is not the building of a network but in improving how we use its potential.
And that the primary use is knowledge exchange. We gather information, analyze it, act on it, and then through a feedback loop, continually revise courses of action.
We also took note of the “new growth” economists, such as Stanford’ Paul Romer, who have provided insight into how “America’s precedent for creating institutions which lead to better innovation” gave America a competitive edge in the 20th century over its global competitors.
In that analysis he notes that the biggest leaps in growth are produced by “meta-ideas” that increase the generation and spread of ideas.
That is what we have seen in many sectors in the last two decades, driven by three revolutions that have transformed knowledge exchange:
- the data revolution – collecting and providing trillions of data points previously unavailable;
- the computing revolution – analyzing that data, making tasks that would have seemed like finding a needle in a galaxy of haystacks as common as locating the moon in the night sky; and
- the communications revolution – allowing us to transfer the data and analysis anywhere, anytime, to anyone with speeds and at costs unimaginable less than two decades ago.
This knowledge exchange revolution affects every sector of the economy; from construction to agriculture; from manufacturing to retail. It is our next frontier.
Knowledge is the ultimate renewable resource. It creates growth through a magical math, explained by George Bernard Shaw this way: “If you have an apple and I have an apple and we exchange apples, then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then of us will have two ideas.”
Knowledge exchange takes many different forms, but inevitably shares a common platform: the broadband ecosystem; the interaction of networks, devices, applications, and, above all, people who know how to use it.
We’ve talked for years about broadband causing a convergence of voice, video and data markets; how once sole purpose telephones, televisions and computers are morphing into devices capable of carrying any kind of traffic.
Far more important, however, is how that convergence has created a commons of collaboration.
As broadband is the common collaborative platform for both the economy and our civic society, we need to have a broadband ecosystem that facilitates knowledge exchange in ways that are constantly more robust, more effective and faster.
Thus, the core idea of the National Broadband Plan: assuring that America has a broadband ecosystem that enables high performance knowledge exchange.
Having such an ecosystem does not assure success. Not having it, however, guarantees failure.
Without it, there is no possibility of leading in clean energy, education, health care or of responding effectively to international competition.
During the planning effort, the elements of this kind of ecosystem became clear.
The most important, for the purposes of innovation and growth, is that the ecosystem must constantly evolve and improve. Improvements in each element should drive improvements in the others in a constant, virtuous feedback loop: better applications driving more usage driving upgraded networks driving more powerful devices capable of better applications and ever onward; above all, continually improving actual use.
As I have discussed in other speeches, this vision is actually in stark contrast with the historic vision for telecommunications policy in the United States, as that policy, both in word and expenditure, focused not on use for all but on subsidizing networks for the most rural of citizens.
The legacy of that historic vision today serves as an anchor, not an engine of economic growth.
That historic vision focuses on baseline wire line networks while high performance knowledge exchange vision sees the challenge having an ecosystem that is constantly improving.
That requires an ecosystem that keeps pushing the envelope in a way that improves the odds of having technological leadership.
In the old world of unquestioned American supremacy in all sectors of the global economy, the AT&T monopoly, and Bell Labs, this proved a relatively easy challenge.
In today’s world, it is much more difficult.
While there are many advantages of the two-wire market structure we in the United States—almost unique in the world—enjoy, it makes upgrades much more difficult for a service provider to finance. They have to spread the cost over fewer customers and they face a risk of a competitive response that makes Wall St. more nervous than, as in most parts of Europe and Asia, there is not material risk of another wire line competitor for most of the population.
Indeed, one reads about massive wire line upgrades in Korea, Japan, as well as other places in Asia and Europe. Just this week came another report of a company in England seeking to invest $800 million to connect 50,000 businesses and 4% of British homes to open-access fiber. One does not read such reports of investments in wire line infrastructure in the United States. In fact one reads of Verizon and AT&T deciding not to proceed with such upgrades, which, again, as a former Wall Street analyst, I both understand and applaud.
But that leaves open a big-time question for the United States, with huge consequences: how do we make sure the United States does not fall behind in creating a new generation of networks, and services based on those networks?
How do we make sure we have the people that know how to design, build, operate, and most of all, innovate on top of the next generation of networks?
The National Broadband Plan suggested a critical mass of test-beds but did not have a practical way to stimulate them.
Google, to its credit, took on the challenge of building one itself.
It also caused 1,100 communities to self organize to improve the business case for new or upgraded networks.
The communities acted with many different motives but the common link was all recognized world-leading networks would give their communities a competitive edge. Thus, Google had opened the door to that critical mass, as the effort had demonstrated the willingness of communities to reorganize themselves to encourage providing next generation networks.
But which communities could most quickly provide that critical mass?
Which had the two elements most critical to success: the best economics and the most innovative cultures?
The answer quickly become clear – university towns.
As the great, and dearly missed, Senator Daniel Patrick Moynihan once said, if one wanted to create a successful city, one should build two-world class research universities and wait 50 years. The insight—that great research institutions are engines of growth—is absolutely right, as anyone looking at the history of Internet, for example, would immediately recognize. And we have the greatest collection of research institutions anywhere in the world.
We don’t think we have to wait 50 years – nor can we afford to – if we can throw world-leading bandwidth into the mix.
Just as manufacturing grew in the 19th and 20th century by combining new sources of power with new modes of transportation, we believe the fastest growing parts of the economy of our time—the sectors in which better understanding of data is the principal source of wealth creation—require us to combine the best of human capital with the best of bandwidth.
As I noted above, broadband is the commons of collaboration for our time; combining the communities that surround our research institutions with world-leading bandwidth will demonstrate that high-performance collaboration—not one way video, not restaurant reviews, not discount shopping—is the killer app of the next generation of the Internet.
So 37 university communities have come together for the common mission: accelerating the deployment of next generation networks and services in the United States.
By accelerating those next generation services and networks, we can ignite a new generation of innovation, new approaches to solving some of society’s most vexing problems, and in the process, enrich our communities as well as companies.
If we remove bandwidth as a barrier to innovation for the right 1% of the country, we can increase the value of providing massive bandwidth to the other 99% of the country.
And if we remove bandwidth as a barrier to innovation in these 37 geographically diverse communities, we can create a distributed model of innovation hubs that can make sure our economy grows everywhere, and not just in small regions of our country.
So how do state and local governments fit into this effort to create bandwidth-based innovation hubs?
A few thoughts.
- Coordinate the coming big data strategy for all levels of governments with a demand aggregation strategy.
As noted above, big data computing is creating revolutionary breakthroughs in commerce, science and society. Advances in digital sensors, communications, computation, and storage have created huge new collections of data. A recent study on the topic by McKinsey suggested that whole new industries, and restructurings of existing industries, will be built on the ability to share and analyze that data.
One of the sectors discussed in the study is government. In coming to the conclusion that big data has the potential to create between 150 billion to 300 billion euros of value across the OECD-Europe public sector, it pointed to different levers, such as transparency, enabling experimentation to discover needs, expose variability and improve performance, segmenting populations to customize actions, supporting human decisions with automated algorithms and innovating new business models, products and services.
It is beyond the scope of this discussion to go into the details here but what is relevant for today’s discussion is that being able to take advantage of big data effectively requires ultra-high speed networking—not everywhere, but in a variety of places. As the various levels of government contemplate how to best take advantage of big data, there ought to be a concurrent effort to aggregate demand to drive the deployment of world-leading networks so that there is a critical mass somewhere in the state where people have access to the kinds of networks that can take advantage of the big data revolution.
Of course, this has been done in the past with anchor institutions and regional networks. And thank goodness it was done. But now is the time to build on that legacy as the opportunity now is even greater.
- First, existing assets.
There’s a wonderful story Steve Johnson tells of Parisian obstetrician Stéphane Tarnier, who in the 1870s witnessed the death of almost two-thirds of babies born with low birth weight. One day, while visiting a zoo, he noticed an incubator for baby chickens. He built a similar machine for human babies, and halved the mortality rate.
More than 130 years later, an MIT researcher in Indonesia noticed babies dying while broken incubators lay off in the corner, unable to obtain the regular maintenance they require. He also observed that cars, which also need maintenance, were working fine. He then commissioned a team to build incubators using auto parts, such as radiator fans and headlights, which now save babies around the world.
These stories both go to Johnson’s earlier messages about adjacent possible innovation but they have a special message for governments. Innovation can start with better utilization of existing assets.
An example of this is the deal that Google struck with Kansas City. The interesting, and somewhat overlooked framework for that relationship is not, as it is in so many other economic development deals, tax breaks or direct government subsidies. Instead the City is taking a number of steps that have the effect of reducing Google’s capital expenditures, operating expenses, risk and increasing its revenues. The out of pocket benefits for Google are tremendous but the out of pocket expenses for the City are marginal, at most. Most of the benefits come from repurposing existing assets.
That asymmetry of benefits greatly exceeding costs comes from an understanding that yesterday’s logic of exploiting city assets may not drive as many benefits as leveraging those assets to stimulate world-leading networks in areas where such networks can create innovation hubs.
Another example is what Seattle just did by offering access to its fiber network to entrepreneurs who wish to provide new high-speed access to some of Seattle’s neighborhoods.
In the song “If I Were a Rich Man” Tevye sings of the house he would build with “one long staircase just going up, and one even longer going down, and one leading nowhere just for show.”
We can’t afford that attitude. To get the networks we need, we should first look to see how to use the staircase we have to do the job.
- Make sure investments, and your buying power, support the high performance platforms.
Governments are the major buyers of all kinds of goods and services in every community. Their principal goal is to make sure that taxpayers are getting good value for those purchases. And that is the way it should be.
But government can also drive improvements through how and what it buys. In particular, it can drive experimentation by leading with small purchases that drive new investments. This was true in the era of the canals, in the time of the telegraph and it is true in the era of the Internet.
Indeed, one could argue that the $75 million the Federal government invested in NSF/Net, and the $150 million invested in ARPA/Net, which stimulate a $40 billion per year ISP business, a $100 billion hardware per year hardware sector, and a $100 billion per year software services sector dwarfs Peter Minuet’s $24 dollars for Manhattan as the greatest deal of all time.
Again, the principles of laying the platform for high performance knowledge exchange and demand aggregation apply. Every purchase of communications services should be viewed through a lens of how could it be levered to create an innovation hub in your area. Not every purchase will be. But many will.
- Bring new bandwidth to the clusters where it can do the most good.
Famed Harvard Business School Professor Michael Porter has advocated a “cluster” strategy for economic development. Such a strategy is based on the view that geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, and other advantages that are difficult to tap from a distance. Porter believes the more complex, knowledge-based, and dynamic the world economy becomes, the more this is true.
This spring Porter published a paper that found that industries participating in a strong cluster register higher employment growth as well as higher growth of wages, number of establishments, and patenting, as well as promoting related clusters in the region and similar clusters in adjacent regions. The paper also finds that new industries emerge where there is a strong cluster environment.
But there are different kinds of clusters; some are based on proximity to natural resources and some are based on local services that tend to cluster in every local area. Other clusters provide a kind of expertise that has a worldwide scope. Some clusters, more than others depend on the ability to capture and send data, and to collaborate to and from non-local sources. For those kinds of clusters, next-generation bandwidth will become, over time, table stakes. But the sooner such networks arrive, the stronger the cluster will become.
A good target in every state is the community in which the major research university resides. It may not be the only target but it is a good place to start, in part because every such institution already has the expertise in which that region has a competitive advantage.
I should note that as we were forming Gig.U, we were focusing on the large state public universities because, in part, so many had state economic development as part of their mission. All of them were facing significant budget pressures from state legislatures. It struck me as tragic that in some cases, the legislatures seemed not to understand how universities are the seed corn of innovation and economic growth. I hope that one of the outcomes of the Gig.U effort will be to highlight how important research universities are to growth, and that as we think about how to spark growth, we listen to the wisdom of Psalm 84 which describes going from strength to strength. More bandwidth to university communities does that.
- A plan with bold, persistent, experimentation.
In 1932, FDR said “the country needs, and unless I mistake its temper, the country demands bold, persistent experimentation.”
It is beyond the scope of this speech, and my skill set, to describe the temper of the country. I will only say that I sympathize with public officials who want to experiment but feel hemmed in by the instant criticism at the heart of the 24-hour news cycle.
Having said that, we really have no choice.
Progress depends upon experimentation and experiments by their nature are going to fail sometimes.
Every private sector company knows this.
And I think the public knows it too and is willing to take calculated risks, even in this time of public austerity.
The key is to articulate a mission of significant importance that the public will accept some level of failure.
In this regard, we need that experimentation in the context of a plan.
Plan beats no plan.
And if the vision is right, the plan can adjust, as the experimentation proceeds.
The State of Hawaii this summer launched a plan to be the first state to get a gigabit to all their anchor institutions. It will not be easy but, particularly given their geographic position, it is a compelling vision.
But there are other visions that will lead in the right direction.
Some states have already announced plans to replace textbooks with tablets, not only increasing demand for broadband, but massively improving the delivery of educational content.
States, in my view, should announce they will end paper transactions. This will also be hard, and requires help to that population that is off-line. But such an announcement and plan will end up saving money, improving performance, and helping all become a greater part of the society and economy.
There are many paths. But the bottom line is that if we can articulate how we can take our world leading research institutions to create new industries and economic growth, if we can create an understanding of how education, health care, public safety, job training and other essential services can be improved by moving more of them to the digital platform, we can, as FDR did, create a climate of understanding that rewards initiative and innovation in the public realm, as it does in the private realm.
So as we look to the goal of facilitating high performance knowledge exchange, we ought to consider new ways, and new partnerships, that may not make sense in other places, but in test beds, in these communities, are the kindling we need to ignite that new generation of opportunity.
There are no guarantees. Innovation doesn’t work that way. But as innovation authority Steven Johnson noted, “chance favors the connected mind.” So we should do what we can to make sure we connect in the best way possible some of the best minds in our areas.
Let me conclude with a thought from Engineer Henry Rosovsky “Research is an expression of faith in the possibility of progress. The drive that leads scholars to study a topic has to include the belief that new things can be discovered, that newer can be better, and that greater depth of understanding is achievable. Research, especially academic research, is a form of optimism about the human condition.”
Gig.U is about supercharging that form of optimism with unlimited bandwidth and having it meet its adjacent possible in the communities adjacent to our great centers of research.
If we do that, we won’t have to look around the world and say, in the words of the title of the new best seller, “That Used To Be Us.”
Rather, if we succeed in creating a platform for high-performance knowledge exchange, we will be able to say, this is still us.