Irving Wladawsky-Berger

The Science of Cities

Last April, New York City Mayor Michael Bloomberg and NYU President John Sexton announced the formation of the Center for Urban Science and Progress (CUSP), an applied science research institute led by NYU and NYU-Poly in partnership with academic institutions, global companies and New York City government agencies.  CUSP is focused on the grand technical, intellectual, engineering, academic, and human challenges posed by a rapidly urbanizing world.  Several weeks ago, I was appointed executive-in-residence at CUSP by its Director, Steve Koonin. 

Urban systems are the quintessential example of complex sociotechnical systems, the emerging field studying systems that combine powerful and ubiquitous digital technologies with the people and organizations they are transforming.  Such systems exhibit a level of complexity that, until recently, has often been beyond our ability to understand and control.  Not only do we have to deal with the complexities associated with large scale IT infrastructures, but with the even more complex issues involved in human and organizational behaviors. 

This emerging field aims to go beyond the analysis of cities and similar sociotechnical systems.  It aims to be prescriptive in nature, applying its findings to help us design better performing systems and organizations, as is the case with other engineering and management disciplines.  It is multidisciplinary in nature, and should enable us to address a particular domain, - e.g., transportation, energy, finance, - by bringing together a number of different methodologies, including: systems-oriented techniques like optimization, stochastic systems, systems simulation and systems dynamics; social sciences, management and planning; and engineering capabilities focusing on design, development, testing and operations. 

Social Business in the Age of the Customer

Social Media is one of the hallmarks of our digital age, enabling individuals and communities to create and share user-generated content.  Starting about a decade ago with the rise of Web 2.0, we have seen the explosive growth of social media technologies, - e.g., blogs, wikis and podcasts, - as well as platforms like Twitter, Facebook and YouTube with hundreds of millions of users.  Social media is giving individuals unprecedented influence over business and governments, - causing Netflix to reverse its business strategy in October of 2011, and helping to topple governments in the Arab Spring. 

But, despite the widespread success of public social networks, many companies have been slow to embrace social media as an integral part of their workplace.  This is a problem, particularly for younger employees who are extensively using social media technologies in their personal lives, but cannot properly do so at work.

The Social CIO, a recently published study by Forrester Research, concludes that the number of businesses that are truly executing social initiatives remains surprisingly small.  Companies are making investments in social platforms and technologies, but, in general, their efforts remain haphazard and disjointed.  They may succeed within individual silos of the business, but they are not fully realizing the potential power of becoming a social business, - which Forrester defines as: “removing the barriers between people (employees, customers, partners) and information while making it easier for people to work together using that information to solve business problems.”  The report observes that:

“While the speed at which ideas traverse public social networks is phenomenal, surprisingly few organizations have managed to fully exploit the power of open knowledge sharing inside and outside their company walls.  Many businesses have set up social technologies in their organizations, yet few have truly made the technical, cultural, and process changes necessary to reap the full opportunities and benefits of these tools or the vast amounts of data they capture.  This puts business and government leaders at risk of being overcome by the tidal wave of rapid change and innovation spearheaded by knowledge-empowered customers, partners, and competitors.”

Transmedia Storytelling and Collaborative Innovation

Communications and related activities have played a major role in my work over the past twenty years.  The key reason is that over this period, I have been involved in a number of emerging business opportunities such as the Internet and e-business, Linux, cloud computing and digital money.  Marketing and communications are essential when introducing a disruptive innovation in the marketplace, given the need to explain what the new initiative is all about to key constituencies including clients, analysts and reporters.

Over the years, I have learned that in order to capture the attention of your intended audience and differentiate your offerings from those of competitors, you have to develop a compelling brand for your new products or services.  This is particularly important when you are introducing a new and potentially disruptive offering in the marketplace.  

Establishing such a brand requires much more than advertising.  It is akin to engaging in a conversation with your intended audience, where you talk about what's in your mind, your aspirations, your questions, your doubts, what you know and what you don't know.  In short, you are creating and telling a story about your brand.  And, the more powerful, important and complex the messages you are trying to convey, the more important it is that you do so by telling a compelling, emotionally resonant story.

I believe that developing and communicating the storyline behind a disruptive innovation requires the close involvement of those who best understand and care about the new initiative and offerings.  Marketing experts and design agencies are invaluable in this work, but by themselves they cannot properly communicate the in-depth understanding and passion of those most responsible for the innovations.

So, I was very excited when several months ago I learned about transmedia storytelling, a concept originally developed in the entertainment industry to tell a common story across multiple media platforms by moving characters and storylines across books, films, video games, comic books, TV series, and so on.  The rise of social media and other digital channels makes the concept particularly powerful as a way of engaging the target audience with more depth and over a much longer period of time than would be possible within a single medium.

Why Innovation is Critical to Help Governments Adjust to the Realities of the 21st Century

Last week I wrote about the structural changes underway in countries around the world, driven primarily by the digital technology revolution and the forces of globalization.  The private and public sectors have reacted quite differently to these structural changes.  For the past twenty years, companies have embraced digital technologies to significantly improve their productivity and reduce costs.  

Government has lagged the private sector.  Government spending in affluent nations has been steadily going up over the past century.  As shown in this chart published in March of 2011 as part of a special report on The Future of the State by The Economist, the average government spending as a percentage of GDP in thirteen rich world countries went from 26 percent in 1960 to 45 percent in 1990 and 48 percent in 2009.  In the US, government spending went from 27 percent in 1960 to 33 percent in 1990 and 45 percent in 2009.  

Given that these countries are confronted with aging populations, low birth rates and slow economic growth, the special report argues that the continuing growth of government is no longer sustainable.  “With ageing populations to care for, many rich-world governments are on course for bankruptcy - unless they raise taxes to levels that would wreck their economies.”

The Impact on Government of the Structural Changes in 21st Century Economies

Most everyone agrees that economies and societies around the world are going through structural changes of a historical nature, driven by a number of powerful forces including digital technologies and globalization.  Over the past two decades, companies, especially large, global companies, have been going through major transformations to help them adapt to these structural changes.  In particular, they have embraced digital technologies to improve their productivity while leveraging globalization to better manage their supply chains and reduce their costs.

Over these same period, government has lagged the private sector in improving its productivity and reducing its costs.  In a study, The Evolving Structure of the American Economy and the Employment Challenge, which was published by the Council on Foreign Relations in March of 2011, Michael Spence and Sandile Hlatshwayo examined the changing structure of the US economy over the past two decades.  Professor Spence is the recipient of the 2001 Nobel Prize in economics.  He is currently in the faculty at  NYU’s Stern School of Business, as well as professor and dean emeritus of the Stanford Graduate School of Business.

Their study divided the economy into two distinct sectors, tradable, - which includes mostly private sector industries, - and nontradable, - which includes government and a number of government related industries.  The tradable sector is the part of the economy most exposed to global competition from foreign companies and suppliers.  It includes most manufacturing, agricultural, mineral and energy products, and more recently, many business and financial services.  The nontradable sector is the part of the economy that must be produced and consumed locally, including government services, health care, education, transportation, construction, retail stores, restaurants and hotels.