My colleague Adam Christensen wants to make Smarter Planet something that matters to each of us: something that more people can understand, appreciate and maybe even feel some degree of personal, emotional connection to.
*** Update: Some further remarks about the visit on Whitehouse.gov with this quote from President Obama:
And it will invest in broadband and emerging technologies, like the
ones imagined and introduced to the world by people like Sam and so
many of the CEOs here today, because that's how America will retain and
regain its competitive edge in the 21st century.
Earlier today, IBM CEO, Sam Palmisano, participated in a roundtable discussion of business leaders with President Obama to discuss the economy. Sam was also asked to give a brief speech. For readers of this blog, note the connection between building a smarter infrastructure and smarter planet with the opportunity to climb our way out of the current economic crisis. (I've added italics for emphasis).
You can watch the video here on CNBC.
Or, you can read the full transcript below:
Mr. President – Thank you for the opportunity to be here today. I think we’ll agree that across America… and around the world – from board rooms, to cabinet rooms, to kitchen tables – people are fixated on what’s necessary to address the present economic emergency. There’s a gathering global consensus that bold and aggressive steps are needed, on both business and government working together to address what’s required to help the worldwide economies.
In the past several days, I have been in contact with many leaders in the corporate world. But I think there is a unanimous commitment to support the President.
• We all agree we need to re-ignite economic growth in the country,
• we know we must create not just jobs for 21st century jobs,
• and therefore we need to invest and to build a more modern and more competitive infrastructure for the future.
There is clearly no reason we believe to undertake projects just for the sake of activity. We need to undertake projects that actually create jobs that will make infrastructure, make our country much more competitive for the long term. It is a balancing act between the short term crisis and what we need to do for the long term.
We really believe all this possible is possible today for many reasons because a convergence of factors. One because of the technology itself as well as the economic need we find our selves in and the current situation.
As a country we have to compete in the world. Yes is flatter, yes it is smaller. But we would argue it is also smarter. And today you’ll see technology embedded in processes and systemic systems from everything from environmental – between water to energy conservation – to basic supply chains for global business.
So, the world does have a much smarter infrastructure, and therefore the base to build for the future. It’s there. We are excited. I can’t tell you how excited we are about the president’s commitment to lead us to the future. And the support for Health IT, and support in the area of smart grids, support in the area of education and broadband. All those things are essential. They are essential in the short term. And because of the research we’ve done in working with the transition team, we know that $30 billion could create a million jobs in the next 12 months. But it’s also every bit as important that we touch so factors of the ecosystem that it will create jobs for decades to come.
We are honored to be here. I’m honored to be speaking on behalf of the business community. It’s imperative that business and government come together to help the President get the package through and we get to work. We have a lot of work ahead of us.
Thank you for your time.
It can’t be a good sign that complex financial topics have begun to dominate dinner-table conversations. But the dire situation in which we find our economies extend far beyond the inner circles of the finance elite.
In this episode of the Building a Smarter Planet podcast series, we focus on the financial services industry and interview Stephen Hsu, professor of physics at the University of Oregon, Jeanne Capachin, an analyst at Financial Insights, Carl Abrams, financial services business manager within IBM Research, and Keith Saxton, global director in IBM’s financial markets industry.
In the podcast, we try and probe our experts to understand more clearly some of the causes of the current financial crisis and get some ideas on how we can build a system smarter than the one we have today.
During the course of the interviews, it became clear to me that there’s consensus on a number of areas:
First, it’s clear that the current regulatory environment isn’t well equipped to appropriately manage risk in an incredibly complex interconnected financial system. This leads to big questions around how to coordinate regulations that extend beyond country borders, as well as what powers, authorities and policies should be in place to avert future calamities.
Second, transparency – everybody’s favorite word – is easier said than done. We need more transparency across many parts of the system – particularly the shadow banking system – but we also need better tools to actually understand the data that is being reported. In fact, the intelligent analysis of data is perhaps the biggest gap in the system today.
Third, while it’s certainly true technology has played a role in increasing the complexity of the system, there’s no getting around the fact that technology will play a huge role in getting us out of it. Technology that helps to make sense of complexity, that detects growing concentrations of unknown risk, and that interprets and analyzes massive piles of unstructured data in real time, holds the key to a smarter system in the future.
And fourth, despite restructuring of regulations, transparency and technology, human behavior also needs to change to make the system smarter. Consumers and shareholders need to understand their financial institutions better before they will begin to have trust in the system. And incentive structures throughout the financial services industry need to be realigned with the long-term benefits of the institutions, and economies in which they operate.
But those are just some of the thoughts of the experts on this podcast. As you look at the system around us, how would you build a smarter financial system?
What if the energy grid worked like the Internet? You'd have a completely flexible network that links producers, suppliers and consumers in a system that enables entrepreneurs to build "apps" on top of the smart grid. Drew Clark, from IBM's Venture Capital Group, outlines the benefits of an "Energy Web" in this post on the VC blog. To quote from the post, written just prior to the inauguration:
One interesting thought that is making the rounds of the Obama
transition team as well as those poised for investment into this
emerging 'Smart Grid' sector is the notion of a national "energy web". This energy web, in concept, would be architected and deployed in a similar way to what we built back in the DARPA days, where a relatively large amount of US treasury was allocated to
build a robust and resilient data exchange infrastructure, based on a
set of open (TCP/IP) standards. Perhaps even more significantly, we all
know the "killer app" that subsequently emerged that was built upon the
Internet in the mid-90s – it's something we now refer to almost as if
it's a basic natural resource – the Web.
But what if we could build a second
killer app to help address, on a large scale, this imperative to
provide an intelligent, collaborative network that links energy
producers/sources, with operators and utilities, and ultimately with
energy consumers both big and small. An energy cloud, if you will, that
will link all of the key energy stakeholders, while providing a secure
means of knowing where and how much energy is needed at all times.
Energy Web would require not only the emergence of standard
interfaces, but also the physical infrastructure to support a way of
distributing not only power, but information, requiring a broad range
of intelligent devices.
Further, what if we could build this
energy web as a robust but accessible (programmable) platform that
would encourage and catalyze innovation around the idea that we need
thousands of entrepreneurs building "apps", applications and services
that address these enormous but critically important challenges of
moving to renewable energy sources as fast as is feasible, but done
smartly and cost-effectively? Think of it as an "iPhone AppStore for
Energy' or something similar…imagine if we could bring even a
fraction of the 10,000+ apps built for this popular mobile device to
bear on key areas like demand response, modeling & simulation,
energy efficiency & conservation, usage monitoring, real-time
What we need to do as a community of entrepreneurs
and venture capitalists, in my opinion, is to band together to drive
interest and investment into such a project, beginning with some
top-down support from the incoming administration, to the definition of
a set of architectures and standards that will help us get started down
This isn't possible, though, without the initial investment in creating a true smart grid. It's something that we've been talking about for a while here. We were invited by then President-Elect Obama to share our recommendations with his transition team. And judging from recent comments by the Obama Administration, it seems that investment in smart grids are looking more promising by the day.
“A butterfly flaps its wings in China, and sometime later a thunderstorm drenches Chicago . . .” These words open video below “The Tale of a Smarter Planet.” This is a story that touches upon aspects of so many of our lives as we enter into this era of change. The bottom line? We now have the tools to literally change the way the world works.
The challenges and opportunities ahead of us are far too large, various and inherently global for any government, industry or nation to tackle alone. It will take all of civil society to transform the way the world works. And the good news is, we can. This goes far beyond repairing the old economy. We can now prepare a new one, for the 21st century. Computational power is being put into things we wouldn’t recognize as computers — phones,cameras, cars, appliances, roadways, power lines, clothes. We are interconnecting all of this through the Internet, which has come of age. There is a tremendous mandate today for positive change, and this moment will not last forever. Let’s seize it — not simply to fix a flawed past, but to build a smarter future.
Of the many client problems IBM works to solve, I don't think "Sea Monsters" has ever made the list. Although to be fair, I haven't checked with the folks at Hursley. Maybe our animation isn't representative.
At the risk of being redundant, I want to share a few recent items that reinforce the points that Chris Caine brought up here on this blog last week.
First, over the weekend CNN aired an interview of IBM's CEO, Sam Palmisano talking about the economy, the recession and the opportunity to build a smarter infrastructure system.
And earlier today, The Wall Street Journal published an opinion article from Sam, "Let's Spend on Broadband and the Power Grid" that makes the case for investment in three areas: broadband, smart grids and electronic health records. I think the subtitle of the article captures the premise best: "Not all stimulus is created equal." Only the right stimulus investments will drive future economic growth. Consider this anecdote from the article:
We can learn a lot from the network effect of the stimulus
investments in the Interstate highway system of the 1950s. Back then,
our economic system was analog. Building a new highway system sped the
movement of physical assets, creating a new high-speed transportation
system that enabled businesses to expand much more quickly, helping
drive economic growth for decades.
Today, we live in a digital world. Many of our most valuable assets
are online, traded virtually. As a result, communities with broadband
access grow employment at a significantly higher rate. And yet today,
the United States, the country that developed the Internet, ranks 12th
in broadband penetration and 15th in average broadband speed. This is
unacceptable if we want our nation to compete in the 21st century.
Economic growth, then can best be achieved by aligning investments with the realities of our current and future economic structure.
Now, I want to be clear. IBM has a lot to gain from these investment areas. We don't hide that fact. But that doesn't mean these aren't the right areas to invest, nor does it mean IBM is the only beneficiary. From the chart in Chris' post, you can see that the majority of jobs created by this investment will come from the small business sector, which by definition enhances local economic vitality.
But enough from us; what are your ideas? Are we in sync with where you think investments should (or shouldn't) be made? And what are your recommendations for the Obama administration?
Smarter Planet means intelligent infrastructure for our energy grids, transportation systems, food supply chains and healthcare networks. Ok, got that part.
Following is a guest blog from Christopher Caine:
While much has been written and said about President-elect Barack Obama’s statements to invest heavily in the infrastructure of the United States, not enough attention has been given to ensuring we connect our physical and digital infrastructures to create new 21st century systems. We need to make a conscious decision to leap forward, boost productivity, and create comparative advantage for our nation in a global economy.
Though many studies exist about how many jobs can be created by investing in traditional physical infrastructure, none exist for the digital corollary. So, at IBM’s request, the Information Technology and Innovation Foundation (ITIF) conducted a study that showed investing three areas of the nation’s IT infrastructure would yield more than 940,000 new jobs each year.
At the invitation of the incoming U.S. Administration, IBM’s CEO, Sam Palmisano, recently presented the findings and recommendations from this study to Barack Obama’s transition team. I want to share with you a few of the key findings.
Most notably, the study yielded three specific recommendations of where the U.S. Government should invest for maximum, high value job creation: Broadband, Health IT and Smart Energy Grids. Investing $30 billion in these three areas in 2009 would create approximately 949,000 jobs in the United States. Of those, approximately 525,000 jobs will be in small businesses (defined as firms having fewer than 500 employees).
The graph below outlines these potential results:
In each of these areas, the government has an opportunity to make initial seed stimulus investments that offer superior job creation and economic growth benefits because they create what economists call a “network effect.” This network multiplier arises from new consumer and business behaviors, functionalities, and downstream industries enabled by the IT infrastructure. For example, traditional public works investment projects, such as building or improving highways, will not likely spur innovations in the auto industry or purchases of better tires for cars. However, building the smart grid will spur a host of innovative new products and services from hybrid plug-in electric vehicles to smart appliances to more investment in renewable energy.
Given these opportunities, you’ll continue to hear a lot more about these topics – smart grids, healthcare and broadband – from IBM in the near future.
The need is clear. The opportunity is in front of us. The benefits are tremendous. Now, will we have the wisdom to invest in our real future? I believe so.
Christopher G. Caine,
Vice President, IBM Government Programs
Retailers are experiencing a dramatic shift in consumer spending influenced by negative trends in the economy. Consumers have fundamentally changed the way in which they shop in recent years. Advocates have grown in number, empowered by the ability to more deeply understand products and brands through online research and consumer community practices, and shoppers increasingly shift allegiance from vendor to vendor unlike ever before.
A recent study by IBM shows that traditional, competitive price-point, is not the key to consumer decision-making today. Potential customers have a more varied set of desires and expectations when shopping. The manufacturers are no longer able to control and influence trends the way they have for many years, and the consumer is now truly the king.
In this episode of Building a Smarter Planet, three experts in the field of retail take the time to share their thoughts on the current retail climate, developing trends,and some things retailers should be considering to remain competitive in this dynamic space. Doug Fleener, a retail consultant of Dynamic Experiences Group, Jim Blasingame, small business expert and host of the small business radio program, The Small Business Advocate Show, and Rob Garf, a retail strategist with IBM Global Business Services all weigh in on how they see the world of retail today.