The Cyber City
Analysis of 5 Cyber Cities
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The
Blacksburg
Cyber City Model
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Cybercity Analysis
Strengths & Weaknesses of 5 Cybercities
Strengths
- Well-executed comprehensive executive cybercity plan
- Public funding less subject to economic fluctuations
- Highly educated population is ready for Internet benefits
- Strong political will for IT benefits
- Strong Asian entrepreneurial heritage/culture
- Reasonably solid economy-prosperous middle class
- Wide Area Network (WAN) currently in use
- English proficient business community
- Hardworking workforce
- Substantial neighborhood penetration and acceptance (98.9%)
- Free Internet tuition for citizenry
Weaknesses
- Limited private funding
- Lower Internet usage rate than other Asian cities (Tokyo, Hong Kong, etc.)
- Cyber project still uncompleted
- Large local bureaucracy
- Non-tech savvy population requires substantial training. (Expensive)
- Gridlock
- Strong government intervention
- Small market attracts less venture capital than its larger urban rivals
Strengths
- Highly educated population
- Strong English language proficiency communitywide
- Traditional banking capital of Asia
- Political will by local and national government for IT excellence
- Substantial broadband implementation/installation
- Strong Asian entrepreneurial heritage/culture
- Competitive mobile data usage
- Hardworking workforce
- Deep-water port logistics and transportation hub
Weaknesses
- Lack of innovation in new business production
- Rote-learning educational system doesn't encourage free thinking
- Authoritarian national government
- Serious IT workforce shortage
- Shortage of venture capital firms promotes a credit crunch
- Strong government planning tendencies
- High cost of living
Strengths
- Well-documented cybercity development model
- Land-grant university expertise - Virginia Tech
- Strong public/private coalition - (BEV)
- Modest cost of living
- Family-friendly quality of life
- Universal Ethernet linkage
- Strong local government will/acceptance of public financing
- Universal school district-classroom connectivity
Weaknesses
- Remote location
- Limited state support (Virginia is a low tax state)
- Stiff competition with Northern Virginia technology belt
- Limited government presence and interaction
- Agriculture dominated economy " Limited VC funding
- Traditional regional resistance to tax increases could limit future growth
Strengths
- Strong government support for the initiative
- Strong incentive to develop workforce skills and connectivity
- Pre-existing communications infrastructure
- Well-educated population
- English proficient population " IT literate population
- The geographic location attracts investors
- Strong free-market/capitalistic society encourages foreign investment
- The economic status attracts investors
Weaknesses
- Cultural factors lead Singaporeans to distrust the Internet for e-commerce matters
- The over-emphasis on connecting the society may lead to internet addiction problems
- Eventual fees will restrict the universal accessibility aimed for
- "Killer apps" may lead businesses to create non-globally competitive sites
Strengths
- Remote location attracts investors for this project
- Technology-friendly society
- Dependable power supply (considering the remote location)
- Strong government support
- Strong incentive (maintain population)
Weaknesses
- Remote location does not attract many businesses
- Difficulty keeping youth in such a remote town
- Some citizen resistance to the wireless strategy
- Hard to get to
The Cybercity and National Policy
Critical building blocks to establishing a cybercity include the following:
These components are found in abundance in the cities previously cited. But as important as they are, they cannot be produced by the city alone, but require the aid of the state. For this reason, provincial or national educational success or failure directly affects a locality's ability to become a cybercity. If any of these keys are lacking, cybercity status will be hard to achieve.
Apart from financial concerns, educational issues may be the biggest deterrent to cybercity development. Citizens must have both access to computers and the ability to use one. Computer skills must be taught either at school, at home and/or at work. It is expensive and requires strong leadership if a city's training is paid for through public means.
Asia's tradition of strong respect for education and hard work will likely enable it to grow the institutions it needs to supply its high tech workers; however this may take years. Even now, cities such as Hong Kong are faced with a tech worker shortage that may require millions of dollars and substantial immigration to solve. The deep pockets of its government and investment banks will hopefully be able to finance the seed money for educational excellence.
Smaller cities like Taipei and Blacksburg have fewer educational hurdles. Its school systems are excellent and its IT plans are not complicated by the distraction of high profile projects like the Hong Kong Cyberport, which can drain away needed capital. While each city has a very different quality of life, they are similar in that they have a strong desire for responsive government leadership and universal access to empower all of its citizens for more than economic reasons.
Singapore has no natural resource but its own people. For this reason, the island city-state has a good history of a strong educational system. Therefore, when the city decided to build itself up as a technology center, it naturally incorporated the educational system into the process. If Singapore was to succeed at being a major player in the technology world or e-world, it needed to make sure that its workforce was exceptionally well trained. It realized this, and proceeded accordingly. Since Singapore has that unique distinction of being both a city and a country, it has the most enviable ability to do whatever it wishes with its school system. Unlike the other cybercity initiatives dealt with here, Singapore does not have to worry about operating within the confines of national regulations, because it is the nation. Due to these factors, Singapore has one of the most IT literate societies in the world. Singapore also has the benefit of a strong English-fluent population, due to their status as a former British colony.
Modalen is a small village in Norway. Norway has very strong social programs, which include the school system. The only problem that Modalen faces, and one that they wish to address with the cybercity initiative, is that the closest higher secondary and beyond education is a two hour bus ride away. While the culture places an emphasis on education, it is hard to reach without leaving. Once the young people travel to increase their education levels, they are only more tempted not to return to their tiny village. Modalen hopes that if the young people, and the citizens in general, are able to use their new high-speed internet connection to access distance learning opportunities, they will be less inclined to leave. This fails to account for those other things that draw the young people away, though. These factors include a more active social scene, more young people, more jobs, more excitement, and in some cases, just to get away from the family. This last factor is not so much of a consideration in this culture, though, where family connections are very close.
The cornerstone of any national IT policy is the requirement for political stability. In all the countries referenced, political stability is the key to attracting capital developing a prosperous, educated, middle class and eventually creating a highly paid IT workforce. Lesser-developed nations such as many in Africa and Asia will find it impossible to implement the cybercity model unless they first have political stability.
Closely associated with political stability is a requirement for economic stability. A country that is politically stable but economically shaky will have no more cyber-success than its war-torn neighbor. Corruption also acts as a source of economic instability in that it distorts capital flows from finding what would otherwise be investment equilibrium. Entrepreneurs must pay bribes for permits and licenses. "Fees" for installation of technology services suppress small business growth and raise the cost of living. Excessive inflation (hyperinflation) lures away capital from local tech companies and growth becomes stagnant or declines. All of these factors combined only encourage citizens to flee to other, more stable, economies in search of a more equitable economic environment and opportunities. For these reasons cybercities may not appear in many of the Eastern European, Central Asian or African countries for some time.
While the cybercities of Blacksburg and Taipei are similar in outlook, they were established under very different government and economic systems. The strong free market laissez-faire heritage of the US attracts venture capital from around the world and provides the private capital and technical knowledge needed to develop a cybercity. Broadband infrastructure installation is usually performed by technology companies that have the expertise to handle such projects. ISPs, which help establish a cybercity, can only thrive when there is a strong customer market.
Asian cities have pursued a different strategy. The governments there have taken the lead in financing high tech projects (although often with mixed results) and created a public appetite for high-speed access, e-commerce, and IT entrepreneurship. Private money follows the government's substantial investment and this Asian public/private partnership funds cybercities and creates high tech hubs. Hong Kong's government provides a prime example. It has poured millions into developing training schools for IT workers. It has also spent lavishly to develop its mobile telecom infrastructure. This investment has resulted in a high broadband access rate and a wired city that is preparing to compete with its rivals in Malaysia and Singapore. Whether through public or private financing or a combination, cybercities can only be financed in both large and small locations with strong political leadership.
Singapore has done the same. It has invested heavily in its people, its infrastructure, and in providing incentives for businesses to operate there. This strong investment in education and infrastructure continues to draw more businesses and foreign investment. The more a business does for Singapore, in the way of developing their economy or investing in national technology initiatives, the more rewards it receives, i.e. extended tax break periods.
If you ask leaders of Modalen and Taipei, they will both cite geography as a prime factor in their decision to become cybercities. In one instance geographical isolation was a barrier. In the other, severe overcrowding is the culprit. But for these and others, cybercity benefits have proved a means to ameliorate these obstacles.
Singapore can also attribute its decision to become a cybercity to its geography and environment. Its location has allowed it to function as the largest port in the world. Though the world will still need to physically move goods from one area to another for some time to come, this is not where the money is. Singapore also happens to be in a prime physical and cultural location to benefit from being a major technology hub. With its proximity to China and the Chinese culture, Singapore can leverage its location as an open doorway to China. Singapore also needs to deal with traffic and overcrowding problems. By connecting the citizens, it hopes that more people will visit shops online, or museums. Currently, Singaporean museums keep many pieces of their collections in storage in order to protect them from the damaging exposure to the large crowds that tour the museums each year. By going online, these museums would allow visitors to view the pieces in detail, and encourage them to stay home in order to do so.
The issue of the "digital divide" takes new meaning for these cities because here the problem is not one of economic access to the Internet, but one of physical proximity to their neighbors. Both large and small cities are finding that cybercity status helps them avoid the problems associated with uncontrolled growth and the expenses required in laying high speed network infrastructure. Villages such as Modalen will find that a wireless alternative to laying a lot of wire is much more feasible and affordable. Because success breeds success, we predict more likeminded cities in their respective provinces will attempt to become cybercities. As they see the benefits of a wired, educated and prosperous town near them, cybercities will increase; but due to varying degrees of leadership, not all will succeed.
The technology exists today to connect rural towns around the world. One such technology is a GSM system (global system for mobile communications), which can be drop-shipped to any location in the world. Such a system is roughly the size of a personal computer tower, and connects networks via satellite. The size of the equipment allows for several modes of delivery. The only complication is the price, which can be quite high (~$500,000).1
Cybercities and Local Business Culture
Before becoming a cybercity, communities must consider their values and cultural traditions. They must also analyze their commercial practices and determine if changes must be made. For instance, if residents conduct most purchases in person, they may be reluctant to engage in trade with an unseen partner in cyberspace. This obstacle to e-commerce might make establishing a cybercity economically unfeasible for some localities. Lawmakers may still choose to become a cybercity, but they will need to do so with objectives other than promoting e-commerce.
In places like Modalen, even local shops can be too far to browse through, or too difficult to reach when snowed-in. A cybercity in such instances could provide a boost for the local businesses, which are too small to operate catalog businesses. In small, rural, isolated towns, catalog shopping is the primary means of acquiring goods. In such an instance as this, the cybercity might help to grow local businesses, and not pose as a threat in the small market.
In crowded cities like Singapore, one might think that local businesses would not have a problem finding customers. On the contrary, since traffic is so bad, many citizens restrict their shopping to neighborhood stores, or shops right next to public transport stops. By getting their little shops online, these neighborhood stores can attract businesses from across town that they might not otherwise get.
Local governments must also consider how they will market themselves, though. Many people haven't heard of cybercities and will not immediately understand the benefits of living and working in one. In order to reap the full benefits of the cybercity, merchants must actively participate in the initiative, and figure out how they can use it to grow their business, locally, nationally, and maybe even globally. Merchants can devise a marketing campaign over the Metropolitan Area Network (MAN) to promote local retail opportunities and light industry. For example, if the local businesses make arrangements to be featured on the cybercity pages, they would significantly increase their business opportunities. Residents can soon shop their virtual "downtown" with credit cards or smart cards. Cities can feature these advantages in their quests for new businesses and residents. They can also use the benefits to lobby for state assistance in more economic development. A cybercity that projects a successful image will be a bigger magnet for jobs and public and private capital.
One potential pitfall to the cybercity initiative is that it might create a business bubble that local businesses cannot escape. The amazing speed that Singapore ONE provides "opens up a new dimension for application and service providers."2 This gives the local Singaporean businesses the chance to really capture potential customers through impressive website content. The problem here is this: will this allow these businesses to 'leave the island'. Our concern is that the local businesses might fall prey to some enthusiastic programmer or government spokesperson, and wind up establishing an online business site that is so impressive that most of the world cannot even view it, due to the large amount of content, graphics, and other multimedia special effects. This is sort of like the old folktale "The Emperor's New Clothes", where the emperor fell prey to two very clever 'tailors'. When he went out in this most impressive suit of clothes the tailors made for him, the suit that only the most fashionable could see, he actually walked around town naked. The lesson is this: a local business in a cybercity must not be so eager to create an attractive site that takes full advantage of the broadband capabilities that it winds up creating a site that the standard global user has not the time to download.
Cyber-initiatives also affect the town's social interaction. Some transactions that were previously completed in person can now occur over the net. Citizens can reach each other and simultaneously learn and discuss local news and events in real time. For neighborhoods with few pedestrians and local gathering spots, this can contribute to improve community cohesiveness and improve safety. Many have expressed concern that an increased popularity and usage of the Internet might create a society of hermits, which would be no society at all. However, according to a study from the Pew Internet and American Life Project, internet users are not anti-social, as was feared. On the contrary, more internet users use the internet to interact with a group than to shop, or look for general information.3 In Singapore, however, the citizens are dealing with the problem of Internet addiction. Children in Singapore are becoming increasingly addicted to the internet. This phenomenon concerns the government, and the schools have begun to warn parents and students about the signs and dangers of the addiction.4
In some locations, privacy issues may pose a concern. Europe, in particular, has privacy laws that may complicate the ability of local merchants to send advertisements to residents without their permission. Merchants would also become responsible for safeguarding their advertising and local customer e-mailing data from unauthorized access. Smaller merchants may not have considered the higher costs this may entail.
In addition to these problems, in many Asian countries, the citizens feel uncomfortable giving out personal information, such as credit card numbers, online. This can also restrict the ability to use the cybercity initiative to encourage online shopping and reduce traffic. The way to counter this effect, however, is to have a similar system to that which Japanese 7-elevens have established. In this model, the citizens can browse online stores, place their orders as deliverable to a particular 7-eleven, and then pay the store when the product is delivered.
As cybercities market themselves to attract IT and other educated workers, they must also consider how their town's cyber-advantages can help shape and control the population. As high-speed access attracts business and hopefully improves government services, more businesses may choose to stay or relocate to the area. The presence of numerous and varied businesses can help smaller towns like Blacksburg or Modalen retain talented young people who might otherwise leave for more lucrative opportunities in bigger cities. A sizable demographic of younger workers demands day-care facilities, good schools, attractive starter housing, restaurants, home-repair stores, etc. As the population increases, towns can plan for controlled growth by encouraging restricted development and improvements. As these are made, prosperity will become more long term and stable because the economy will be able to compete and interact with the best in the outside world.
Businesses go where their customers are or where their costs are lowest. IT companies are no different in that they seek to market themselves to a target market and make their customer transactions as convenient as possible. High tech firms have opened manufacturing hubs in Asia and Latin America in a quest to drive down their manufacturing costs. Some cybercities such as Hong Kong and others can take advantage of their traditional transportation and logistical expertise to attract many technology firms who need a reliable, low-cost, manufacturing and shipping hub. Hong Kong seeks to build on its banking industry, its transportation facilities, and its manufacturing skills to establish a new technology industry which will focus on creating Asian web content and Asian style mobile e-commerce. Its government is willing to work with IT firms to help them gain entry into the billion dollar China market and they are creating a multi-million dollar waterfront development zone to make this happen. While it remains to be seen if Cyberport will be a success (reviews are mixed), if it attracts its hoped for tenants and draws IT firms from around the glove, the resulting economic benefits to the city could be sizable.
The Singaporean cybercity initiative is only one phase of a larger plan to establish Singapore as a major IT center. The country already has a healthy IT business community, and is planning to expand into the ICT industry. They are using the cybercity initiative as a means to swing the local IT focus away from manufacturing disk drives to providing content.
The cybercities mentioned in this examination are different in many ways and yet they have many common characteristics. They are populous and sparse, have various industries and cultures. Yet in spite of their variety, they are committed to uniting their residents on the Internet and using its power for social and economic advancement.
Whether they are laissez-faire economies or socialist, each city has leadership that recognizes that the Internet can bring benefits to their town in much the same way that the railroads brought the world to villages in the 19th century. For these reasons, the future of cybercities is attractive, but not without some pitfalls. We anticipate the following will be among the future trends of cybercities:
Cybercities are another sign that the world is getting smaller in the 21st century. As communities continue to search for better ways of working, living, and playing together, cybercities will help make their search compatible with the goals of "smart growth" and planned development.