It’s remarkable how much computing, communications, supply chains, knowledge, and economic development have in common. They’re all increasingly taking the shape of networks, operating with the same principles. And, as such, they are some of the most powerful forces at work in the world today.
This thought came through loud and clear in a SmarterCities Shanghai session led by Victor Fung, group chairman of Li & Fung, the Hong Kong-based trading, distribution and manufacturing giant. In network parlance, Li & Fung is a hub, a maker of connections–which makes it tremendously important globally. In fact, over the past 30 years, Li & Fung wrote the book on the modern global supply chain. It operates in 40 countries and runs a network of 30,000 suppliers, but Fung made the point that Li & Fung’s network is really made up of a constellation of cities. The company orchestrates its network, getting things done in the places and by the organizations that can do them most efficiently and effectively. “Our global supply chain is the story of the connectedness of 100 cities,’ Fung told the audience.
Years ago, all around the world, places vied to be the next Silicon Valley, a concentration of talent and enterprise and intellectual property and intellectual foment. But that model is now outdated, it’s clear. Today, the Silicon Valleys are increasingly virtual, networks of relationships between people and places with different and complementary capabilities. Li & Fung and its suppliers are the new Silicon Valley.
There are powerful networks within the global network, too. The Pearl River Delta is a cluster of cities in Southeastern China with a total population of 60 million people and a GDP of $600 billion–12% of China’s overall GDP. “Every city in the region has a specialized place in the network,” says Fung. “You ask what can we do as a group, rather than as a single city.”
I’ll make this prediction without trepidation: The businesses, governments, and individuals who understand their connectedness and learn how to orchestrate it will be the great successes of the 21st Century.