Text of Talk at Brazil’s National Innovation Congress – Comments Welcome

Let me begin by thanking BNDES for inviting me to speak at this conference on behalf of the Institute for the Future, and for the many leaders of your country’s government and industry for being in attendance – [Listing of names] It’s an honor to be here in Brazil at this exciting point in your history. I can speak for my futurist colleagues around the world when I say that Brazil’s recent economic and cultural achievements are an inspiration for the world.
If you’ll permit me, I’d like to share a few insights about how technology can drive economic growth and social development forward in Brazil in the coming decades.
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Put simply, the next great opportunity is at the intersection of two trends that will dominate the 21st century – urbanization and ubiquity.
We are rapidly becoming a planet of city-dwellers. In 1900 just 14 percent of the world’s people lived in cities. In 2008, for the first time, more than 50 percent did. At the end of the century, more than 90 percent will. This means that by the end of this century, we will be done building all of the cities we’ll ever need. Doing this properly is the greatest challenge humanity has ever faced. Billions of lives, and the fate of the earth’s habitats are at stake.
But just as we face this enormous challenge, there are new tools being created that will help us cope. This is the information technology that’s spreading into every corner of our lives. This is ubiquity.
The most basic form of ubiquity is the humble mobile phone. There are now more than five billion mobile phones in service worldwide – nearly one for every person. They are already essential tools for work, education and health. Every year these devices become more powerful. Within the next decade even the world’s poorest people will be walking around with a device in their pocket that is by any measure, a supercomputer.
Mobiles aren’t the only technology that’s becoming ubiquitous. A growing number of sensors continuously measure everything that happens  in our cities. RFID tags that track the movement of goods in supply chain.  Environmental sensors track pollutants. Video cameras with image recognition software track the movement of people and vehicles. This real-time data about the city is growing daily, and it can be analyzed by both governments and businesses. New patterns and new understanding are emerging. Cities are quickly becoming the next great platform for technology innovation and the creation of new and better services.
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Big business has leaped at the opportunity to build and rebuild our cities. Companies like Siemens, Cisco, IBM, and Microsoft are racing to capture a piece of market for urban infrastructure. This is a business opportunity that is estimated at estimated $40 trillion over the next 25 years. If they can capture even a tiny portion of this, it will guarantee growth for decades to come.
Industry brings tremendous resources to this challenge. IBM worked with the city of Rio de Janeiro to create an “urban command center”. This command center allows urban managers to see what’s happening in the city and respond to emergencies more effectively. Working with IBM allows the city to focus on running the city, not building new technologies. IBM’s world-class technology and engineering talent are crucial to making this project possible.
But beyond emergency management, security, and energy efficiency, big companies actually have very few new ideas about the future of smart cities. I see this lack of vision in New Songdo City, a project that Cisco Systems is building in Korea, and which it claims is the world’s first fully networked city. Cisco is putting videoconferencing in every room in the entire city – every home, office, and classroom. But have only the foggiest notions about what people might do with it. It’s a vision of the city driven by a product. We’ve made that mistake before. In the 20th century, when we let General Motors convince us to design our cities around cars. We can’t make that mistake again.
The truly innovative ideas about how we’ll live in smart cities of the future are being invented not by big companies, but by entrepreneurs and citizen hackers. Ten million people around the world use a mobile app called Foursquare, created just two years ago by one of my former students at New York University. Foursquare is a kind of Facebook for the city.  People use it to “check in” at  bars, restaurants, schools, wherever – and broadcast their location to their friends. Foursquare turns the city into a game, and you score points by doing new and fun things. Like gathering together in a “super-swarm” with hundreds of friends.
Foursquare, and thousands of apps like it being invented by young people, shows us a very different vision of the smart city. Instead of control, its about having fun. Instead of efficiency, its about sociability. Big companies like IBM and Cisco don’t get this, and they probably never will. It’s not in their DNA. So we need these grassroots innovators badly to realize the full potential of the smart city.
Governments are starting to get this. In the last three years, dozens of cities around the world have sponsored apps contests that challenge citizens to create a more bottom-up vision for the smart city. They are opening up government data to the public to fuel this innovation, and become more democratic and transparent. And government is slowly finding ways to bring together the resources of big companies, startups and citizens to create truly visionary new ways of living in cities. The city of Houston, Texas is bringing together tech giant Oracle and tiny startup of a popular app called SeeClickFix, to create a citizen-friendly system for reporting problems to government.
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Now, multiply these three streams of innovation – big business, startups, and government – by ten thousand, and you see the revolution that is happening as cities and computing come together. New technologies are being combined to create innovative public and private services. But because every city is different, we’re seeing ubiquitous technology used in thousands of different ways around the world.
At the Institute for the Future, we call these places  “civic laboratories”.
Hold onto the word “laboratories” for a moment, because its very important. We are very early into this process of inventing the smart city. These are experiments, not finished products. Wonderful things are happening. But there are many failures, many dead ends. We still need to spend the time and make the investment to make them work.
Like good scientists in the lab, we also need to openly share what we learn. “Computational leadership networks” are forming around the world. These are networks of city leaders for sharing lessons between smart cities about what works and what doesn’t. For instance, in the United States the Chief Information Officers of the biggest cities hold a conference call every week to share news and insights. It also much easier now for ideas about urban innovations to spread thanks to the rich multimedia of the web. Think about the many years it took innovations like Bus Rapid Transit and participatory budgeting to spread from Curitiba and Porto Allegre to the rest of the world. In the future these ideas will spread from city to city in days and weeks.
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However, as any good scientist knows, experiments also have risks.
Perhaps the greatest risk is that a single company controls a vital piece of smart infrastructure. Rio’s command center is remarkable, but if the relationship with IBM becomes difficult, it will be very difficult to switch to another vendor or for the city to take control of the system. That’s because IBM virtualized much of the system into the cloud. That means the servers, the software and data that power it could theoretically be located anywhere on earth. And who owns the data that companies collect in smart cities? I’m sure Rio has taken many precautions, but other cities may not be as careful in the future.
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There are many other risks. But the three things I fear are that smart cities will be buggy, brittle and bugged.
First, as we all know, all computers and all software have bugs. What happens when the smart city crashes? How long is it going to take us to trust these systems? In the United States, we have begun a public debate over how to safely integrated automated vehicles into our public roads. These systems will need to have a flawless safety record. I think that is going to be very difficult.
Second, the intelligent city depends on the most fragile infrastructure in the city, our electrical grid. We saw that vulnerability in Japan, where after nuclear plants were destroyed the country now has to cope with a chronic shortage of electricity. Smart systems in entire cities, are now simply switched because of the need for scheduled blackouts.
Finally, smart cities are also a spymaster’s dream. For instance, in China, we’ve seen the government of Chongqing seek to build out a network of 500,000 video cameras. The stated reason is for policing and crime prevention, but we KNOW that it will be used to spy on citizens and political dissidents. Every city, every society will need to confront how much its wants its government to spy on it.
Don’t misunderstand me. These risks, and there are still others, are all manageable. The potential benefits outweigh the potential risks. But what will decide the winners from the losers will be those that look into the future, and anticipate the risks along with the opportunities and unintended consequences of building cities with smart technologies.
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So how do we drive innovation forward? Three key technology infrastructures are needed to lay the foundations for success. These are steps that will shape the opportunity for cities, but must be pursued at a national level to be truly effective drivers of innovation.
Ubiquitous, affordable broadband is the first foundation. Compared to other kinds of public investment, broadband is surprisingly inexpensive. In the average European city, for example, it costs the same to lay fiber to every single home as it does to build just 20 miles of roadway. Wireless makes it even cheaper. So cheap that in the former Soviet republic of Estonia an NGO built a comprehensive network of 1100 free Wi-Fi hotspots with no public funding.
Open data is another foundation for smart cities. Governments all around the world are opening up archival and operational data to businesses and NGOs to create new applications with it. Just in the last few years the governments of Finland, the US, the UK have opened up data stores. The great world cities of New York, London and Paris all have as well. Even the World Bank, so secretive in the past, has launched a major open data initiative. Companies like MasterCard and ThompsonReuters have jumped into the open data game too.
Finally, cloud computing is the engine that delivers services to citizens. Markets are leading the way here, but in a handful of countries policymakers are starting to create a so-called “government cloud” or “g-cloud”. The UK is leading the way here to save money, but the World Bank is exploring how this model can help developing countries like Moldova and Ghana leapfrog into the future. Brazil clearly is at a more advanced stage of development, but a g-cloud could be a way help streamline government information systems, and also create infrastructure and economic opportunities for small businesses.
Once these three pieces are widely available, things start to take off. In the US and Europe we have reached this tipping point and it is breathtaking to behold what is happening in our civic laboratories. I’m in the process of writing a book about this and its just impossible to keep up with all of the new innovations.
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But the book gives me time to reflect on the big picture, and I keep coming back to this diagram. It was created in 1855 by Ildefons Cerda, the great Catalonian urban planner who laid out the expansion of Barcelona. It was a time like today, when urbanization and information technology were expanding and reshaping cities. The reason it captivates me is because it shows the value of thinking ahead. His design included conduits for water, sewage and gas pipes – standard practice for the times. But Cerda could see that the telegraph, which was less than a decade old, would transform cities. And so he included a fourth set of conduits for telegraph wires. He saw that digital technology – and the telegraph was indeed a digital network. He prepared the city for growth in an age where culture and commerce would flow at the speed of light, not horseback. In a strange twist of history, today Cisco Systems – I believe ignorant of Cerda’s foresight – uses the phrase “the fourth utility” to describe its vision of the Internet’s role in the future city.
We’re in a similar moment. We can take actions that allow us to build cities as great as Barcelona became in the nineteenth century.
Intelligent cities are a great opportunity for Brazil. This country has already gone through its urbanization – Brazil is 85 percent urbanized, a figure that China and India won’t match for 50 years or more. Brazil has shown so much resolve, and success, in addressing its urban problems. You have some of the best civic laboratories the world has to offer. The question is – how will you use them? How will you create new tools for cities and citizens that not only solve this country’s challenges, but can be exported to the rest of the world’s cities. You have a huge competitive advantage in this area. Please don’t waste it!
I think the most important thing to understand is that everyone has a role. What I mean by that is it is not just big companies, not just entrepreneurs and not just government who will build the smart city. You need to get everyone moving forward together in the same direction. We cannot afford a battle over the future of smart cities, with big companies and citizens in opposition, and government failing to set direction and manage conflicts.
Finally, let’s do this together. I haven’t said much about my organization, the Institute for the Future, because I see this as a first encounter not the last. I encourage you all to reach out to us. We work with organizations of all kinds to help them make better, more informed decisions about the future.
You have a copy of this beautiful forecast poster we were able to prepare with a grant from the Rockefeller foundation. We look forward to helping you understand it, and what it means to you.
The Institute for the Future is located in Silicon Valley, which gives us a unique vantage point where many of these technologies are being invented. But we know that the world is changing fast, and we are eager to build bridges with whats happening in Brazil, and share knowledge and ideas about how to move into the future

One comment on “Text of Talk at Brazil’s National Innovation Congress – Comments Welcome

  1. justin davila 4 August, 2011 6:41 pm

    An excellent presentation, Senhor Townshend. I have enjoyed significant personal interest in Brasil over the years. Regrettably with concerns about unchecked environmental impact on the Amazon as of late, but that is not the topic at hand.

    Your analogy about products driving design instead of design driving products is well documented to urban developers, often well after valuable resources have been spent. There are deals which solve problems and there are deals which move product.

    Regarding security and privacy issues, however, and you hint at this with your mention of Chongqing, government-controlled Internet has the same potential for abuse as government-controlled video surveillance.

    Another historical irony is planning cities, such as Barcelona, for telegraph lines, when today wireless technologies make such ideas quaint, to say the least, even useless, perhaps, and who can evaluate the value of that investment in the short term? What is the short term?

    These are the among the metrics and lessons also necessary to consider redeveloping smarter cities, which I know your group considers very carefully.

    Grateful for your insightful comments, and continued success.


    Justin Davila

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