Tag Archives: disruptive technology

Infrastructure – why it matters, how it is changing and disruption

I’m travelling all day today by trains and ferry so I’ll wind back the clock to Sunday where I spent the day with Johan and his family with some incredible hospitality in rural Sweden which gave me a wonderful insight into Swedish life.  I meet Johan in the US – one of those chance travel encounters.  Here’s a lake we visited, it’s hard to believe that it ices over in winter so people can skate to work across the lake or drive a tractor on it.

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Sweden and NZ have a lot in common as smaller counties who value quality of life  There’s some differences in how that is achieved – like much of EU there are subsidies to farmers (tech geeks check out open data), restrictions on alcohol (can only by 3.5% alcohol in supermarkets and use a state owned monopoly for other alcohol) and higher taxes.  On the flipside there is free tertiary education, efficient public transport and cycling/walking and a diversified export economy.

Kommuninvest

Johan works at Kommunivest, which finances infrastructure development and investments of the Swedish local authorities and regions (very similar to NZ Local Government Funding Authority, which was based off Scandinavian models).

Kommuninvest was started by nine authorities in the mid-1980’s and now has a Aaa credit rating and the ability to source lower funding from all over the world.  Interesting times here with it costing you to keep money in the bank.  As I’ve mentioned previously, NZ simply doesn’t have the history in certain activities that other countries do – which is a limitation and opportunity.

So how is all this relevant to economic development and locations of any size?

Infrastructure

Infrastructure is often perceived as a boring subject but in many ways it is the most important because it sets the platform for everything else in society.  As Joe from the World Bank would say “Infrastructure is now the price of entry” for economies, and underinvestment either exits you from the game or makes you irrelevant.  What will the Asian Infrastructure Investment Bank (AIIB) do to further unleash economics in Asia?  The worst thing will be to sit still, which will be hard for some people as NZ continues to bridge the infrastructure deficit and keep up with the new pace of first world infrastructure.

What is infrastructure anyway? 

The nature of infrastructure is changing – Wifi has come from nowhere and is now an absolute necessity with people consuming and transacting online…how often do we see locations through the eyes of tourists?   Digital and data infrastructure is probably one of the least recognised but critical going forward.

What would disruption look like?

Taking this a step further, how long until we see disruption in more traditional sectors?  Will infrastructure be funded differently – crowdsourcing?  How long until the banking sector undergoes a disruption Uber or Skype style?  What will self driving cars to do insurance companies revenues from premiums and will peer to peer insurance become mainstream?

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Smart cars, civic innovation and makers

Todays destination was Columbus, Ohio for a mix of disruptive technology, urban regeneration and a maker organisation.

Tesla

If you don’t know what these are – you should because Telsa is changing cars and driving as we know it.  In summary, this was seriously amazing.   Their second quarter sales released today increased 52%…bear in mind the average sales price is USD $100k and their nearest top selling rivals average price is around a third of that.  I had a 20 minute test drive of model 85D.

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The standout features are:

  • Design…very simple but smart looking both inside and out.  You can custom build your car and the retail experience was more like browsing a clothes store than a car yard.
  • Smart technology is the second thing that confronts you…the door handles pop out, a huge 17 inch screen replaces all the clunky knobs and dials, while software updates constantly add improvements.
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  • Speed is what you notice when you put your foot down…the model I test drove does 0-100km in 4.4 sec, the next model up does it in 3.1 sec (i.e. it is quick!).  Car geeks check out all the specs!
  • Distance wise they do up to 270 miles on a charge and they have a great network of charging locations.

As I mentioned in Nevada, this is changing the way travel occurs and locations need to be thinking creatively, planning ahead and building partnerships with the new wave of transport.

Forge Columbus

Reese operates Forge Columbus, which is a civic innovation program collaborating with a number of partners.  We toured one of the projects they have been involved with in the East District of Franklinton which won a American Planning Association award last year.  The redevelopment is in the early stages and you can already see the rejuvenation occurring, much of it centred around a converted factory housing an award winning restaurant, recording studios, event space, cowork space, office space, a yoga / trapeze studio, and over 100 artists studios.  It will a place to watch in a years time, let alone five years…there’s that reinvention theme again…  Read more on Reese and Forge Columbus.  Here’s an outside snap of the building.

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Columbus Idea Foundry

Lastly, Alex gave me a tour of their setup which in Alex’s words has been built on hard work and luck.  The Columbus Ideas Foundry is the biggest ‘maker’ space in the US.  Read Time magazines take on makers or a view from The Atlantic about how makerspaces help local economies.  As one person put it to me “we are learning as a culture how to manufacture again”.  Check out this 3D printer which was made by a 3D printer…

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Alex shared his thoughts around the emergence of the maker movement due to the intersection of:

  1. free information and education – Massive Online Open Courses (MOOCs)
  2. open source software
  3. prototyping tools such as 3D printers
  4. crowdfunding

So what do all these have in common?  They are all led by creative and passionate people changing the world we live in even if we can’t see it yet where we live.  Will we resist or adapt, and what are the opportunities we can create?

Reinvention – the new normal

The weekend was full of lots more driving and some sightseeing, but most importantly time to recharge the batteries after an incredibly demanding week.  There was probably no better place to do it than in Oregon (photo of Smith Rock).

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Many of the people I’ve spoken to in Idaho and Oregon talk about the Oregon Trail, which previously I knew nothing about.  Can you imagine emigrating over 2,000 miles in a horse for 4-6 months?  Then get to the mighty Columbia River and being faced with a decision of whether to the run one of two gauntlets – down the river or over the mountains!  Learning more about the pioneers in the US puts into perspective the country it is today and it helps place life into perspective.

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Staying in Bend, Oregon showed what is possible when towns are faced with changes in industry.  Bend was founded as a logging town and now has a massive tourism industry, a growing technology sector and is a popular place to retire.  My meeting destination for today, The Dalles, Oregon is similar.  It’s been a trading town for 10,000 years but what trades hands is changing, from wool to aluminium and now technology.  Insitu started here and now has 800 employees whilst Google also located their first data centre here (one factor that helped was access to energy).  In the face of adversity communities are playing to their strengths and being creative to enable industry to develop.  The only constant is that change will keep happening.  How do recognize when that change is coming and what do you do?

Mid-Columbia Economic Development District (MCEDD) and Columbia River Gorge Technology Alliance (GTA)

The MCEED has been going since 1969, which shows how young economic development is in NZ.  They serve five Counties in two different states so collaboration is their strong point.  Amanda and the team focus on:

  • business financing, which has great payback and is changing with the likes of crowdfunding.  They explained the concept of Enterprise zones and how it can be used when a community is economically distressed through either high unemployment or low wages.
  • Industry development.  Jessica talked about the GTA as an example of industry collaborating in a cluster.  I suspect we will hear a lot more about STEM youth robotics, it is definitely preparing kids to work in the workforce of the future (or is that today?).
  • Regional coordination including strategy and ensuring enabling infrastructure is provided like transport, broadband, and financing.

From the outside looking in the team were deliberate about where future lies and I can see a lot of potential for this region as different industries continue to intersect.

The Dalles Port

Started in 1933, The Dalles Port has seen a lot of change.  They focus on bringing jobs to region through land sales and it’s fair to say they’ve succeeded.  Google is the high profile one but many of the other businesses are “small business” .  As an aside, it makes you wonder about classification of small business – how useful is it knowing that 97% of businesses are small, perhaps we can make it more commonly known the difference between no employees, micro (1-5 people) and small (6-19 people)?

Andrea and Kathy had some great insights:

  • Places need to find their niche – sounds easy!
  • Time and perseverance
  • Importance of community support, which I get the sense there is a lot of in The Dalles
  • Collaboration with local agencies, putting together a team to work through problems while cutting through bureaucracy

The Dalles is just over an hour outside of Portland, and we discussed how urban people can perceive places outside cities as “rural”…how do you overcome that perception, whether you’ve reinvented yourself or not?

It started in a garage

Huge day as I sit here after midnight.

Today was the first day of scheduled meetings, so the real start of the trip and a test of my logistical skills.  I started the day in San Francisco, before heading out to Silicon Valley and have finished up late in Sacramento.  In between meetings I managed to sneak in a whirlwind tour of the Computer History Museum, a visit to Googleplex, a peek at the campus of Stanford University and a look at the garage where HP started.

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My original plan was to blog daily about the key insights from each meeting.  The problem with that is that the people I’m meeting with are so smart they could have a whole website dedicated to them (if they don’t already) which makes my original plan problematic!  So the revised plan is to give an overview of the organisation and share the most important insight.  Here’s my attempt to do it justice.

Working Solutions

Working Solutions provide microfinancing of between $5-50k.  Microfinancing is something many of us will have heard about, Kiva is a good example.  I see in NZ Lifewise has been at it for a while and Kiwibank has recently started.   Corinne explained how the key difference is that Working Solutions match the business up with a mentor for the life of the loan, which is usually 5 years.  They must be doing something right because the repayment rate is 97%.  The United States is similar to New Zealand in that the majority of their economy is made up of small businesses (note the size of businesses are classified differently in each country for obvious reasons).  Are there any bankers views on whether this has legs in New Zealand?

Kiwi Landing Pad

Pam is based at the Kiwi Landing Pad (KLP) and works for the New Zealand Consulate General West Coast, USA and is supported by Immigration NZ, NZTE and ATEED.  KLP is a great initiative, it is amazing how some workspace and great connected people can go a long way (thanks Sian Simpson for previous insights).  Pam identified an interesting intersection here for regions (especially outside cities) in how international talent can be attracted even just for short term stays, making it easy for people to invest and live, and leveraging existing and new international connections.

Computer History Museum

Marguerite has recently joined the Computer History Museum from Stanford University.  She is co-editor of three books, The Silicon Valley Edge (2000), Making IT: Asia’s Rise in High Tech (2006), and Greater China’s Quest for Innovation (2008)…so getting one insight from our meeting is tricky!

So I’ll try two insights instead.  The first was the distinction of two between innovation and entrepreneurship, where:

  • Innovation is creating disruptive technology and business models
  • Entrepreneurship involves starting, growing and scaling.

Would you describe your culture as one of Innovation and Entrepreneurship?  How would you score companies in your region?

The second insight is around how to enable regions to grow by:

  • Finding the unique competence or value proposition
  • Making this proposition dynamic over time, i.e. it will change
  • Balancing competition with being complimentary

Does your region have each of those attributes clear?

So, there we go.  As we all dream of replicating or having the next Silicon Valley in our region, remember it all started in a garage in 1938…