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Can Blockchain really save the Brexit Bacon?

15 Aug

[Editorial co-authored by Susie McAleer of 21c Consultancy & David Brunnen, Groupe Intellex]

Brexit=uncertainty.   Business leaders have no idea how government negotiations with the European Commission will evolve. The likelihood that nothing will change is at, or very close to, absolute zero.

What is certain is that cross-border transactions will be different in at least two ways – pricing and regulation. The consequences (even if the UK moves to WTO tariffs) will probably involve potentially costly administrative adjustments to the way we all do business in any transnational flow whether import or export, inward investment, overseas acquisition, emigration or immigration.

Anyone already immersed in overseas trade will know the current complexities. In recent times it has been useful to (a) simplify the process and/or (b) outsource the hassle. Wholesale elimination of tariffs and trade barriers within the EU expanded the scale of accessible markets on our doorstep. But old customs die hard, so a new industry has emerged – an army of specialist intermediaries to handle the ‘red tape’ and logistical complexities that add extra costs but very little extra value.

Conventional analysis would see easy/local market access shrinking and also increased regulatory red tape, but could Brexit have an unforeseen silver lining? Some enthusiastic Brexiteers have suggested that technology can somehow bridge new borders.

  • Is it possible that we now have the will to design transnational transaction systems sans rubber stamps in triplicate?
  • Is it plausible that the UK could find competitive advantage through some new global protocol to make trading easier?
  • What is the chance that all other countries would agree and fall into line?
  • And could all this be designed and implemented before the guillotine falls?

It may sound unlikely but the underlying spirit of our digital times – disintermediation – should, in theory, sweep away the old (or new) roadblocks.

Consider, for example, the vexed question of a land border between Northern Ireland and the rest of that island. Their border had lost much of its polarising significance but may now return to regulate the flow of people, goods and services. Can technology save everyone the hassle of stopping, searching and rubber-stamping?

Well, in theory, yes. Adopting blockchain technology has the potential to create simple, fast and efficient systems for organisations on both sides of the border enabling them to trade using a robust, secure platform and network with automatically pre-assured customs clearances, dues paid and all boxes ticked.

The chain itself is simply an electronic document ledger that enables people and businesses to share information – financial, legal, electronic or physical asset description – securely across a network of computers without the need for a central authority, be it a bank or government department. No one member of the chain has the power or authority to change or tamper with the records, and the blockchain algorithms keep everyone honest by ensuring data integrity and authentication of the transactions. This transference of governance from centralized institutions to a system of distributed networks of peer-to-peer collaborators ensures a trust protocol is created and managed by the members of the chain, the ones who create and drive value, not by a third-party middleman.

So, that’s the theory, but what would the blockchain mean in real life?

In the Northern Ireland Brexit case blockchain could provide complete trade transparency enabling borders to be kept open without hindrance. For example, supply blockchain’s would ensure the provenance of food (the titular brexit bacon) and of goods that cross the border, ensuring they are transported at the right temperature, in the right volumes, keeping quality from source to destination without the need for overwhelming volumes of paperwork and ‘red tape’.

Selling high value assets, such as property and enterprises between those from Northern Ireland and the Republic could be made faster with automatic and immutable historic ownership data, from copies of deeds to due diligence information, thereby removing fraud and reducing bureaucracy.

The use of faster, secure payments means local businesses could rival bigger companies. Imagine if a local mini-cab firm could take on Uber by placing transactions on the blockchain, thereby removing the centralized organistation taking a 30% cut from fees. The idea of blockchain is to give better value/more money to those in the network, rather than large corporates based in, say, China or the USA.

Whilst the potential of blockchain is still largely theoretical, advances in its use for trade are being made. At the start of 2017 seven European banks (Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit) created the Digital Trade Chain (DTC) consortium in order to collaborate on the design, development and commercialisation of a shared supply chain management and trade finance platform for small and medium-sized companies (SMEs) using blockchain technology. In addition, a new initiative called BlockchainCITIES provides an EU membership platform of local authorities in BlockChain transition. Could we be on the cusp of reinventing the trusted city trading partnerships of the Hanseatic League in the 15th Century?

Perhaps a good UK starting point would focus on trade between cities within Commonwealth countries where we have a shared heritage of law and commercial frameworks.

However, it remains to be seen if the traditionally bureaucratic institutions such as banks and government can actually drive an innovation of this nature and overcome a range of deterrents from high initial capital costs to large computing power consumption. The new energy for development of blockchain-enabled cross-border trading will almost certainly come from major cities where inward investors could be attracted by frictionless trading environments.

BUT, all this hope (and hype) for an easier trading life requires massive concerted effort.

In the US-State of Illinois, for example, 107 students have been immersed in a month-long ‘hackathon’ to explore the possibilities.  Five pilot projects undertaken by the state include the areas of land title registry, academic credentials, health provider registries, energy credit marketplaces and vital records.

‘The state’s idea is that if it can figure out blockchain, there are a lot of record keeping and transaction processes that can be made more secure and more reliable.‘ – statescoop.com  But none of these pilots have yet tackled International Trade Transactions – most probably because they live in a giant single market where import/export rules are a minority sport.

As yet there is little sign that here in the UK we are assembling any similarly scaled collaborative efforts – and time to organise these before Brexit is slipping away.

Does the UK government have any clear idea of the investment required for such innovation?

And if the Department for International Trade is not on top of this, will some of our leading Cities take the lead?

Will we let go of something that we’ve not yet fully grasped?

One thing is certain; we have a golden opportunity now to transform digital platforms for the borders of tomorrow with Blockchain forming the central nervous system of trade.  Surely, regardless of Brexit outcomes, it’s time to start a chain reaction!

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(C) (2017) 21c Consultancy & Groupe Intellex

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Smart, Smarter, Smartest – Cities Seeking Superlatives

9 Aug

We all know – or think we know – that Smart Cities are driven by Smart Technologies, but what about the people?

In much the same way as industries hype their products (Broadband, Superfast Broadband, Ultrafast . . .) so it is with entire cities.

Beyond Smart Cities we have Social Smart Cities (tackling poverty), Green Cities (very Circular), Resilient Cities (prepared for the unexpected) and even Compassionate Cities – caring about digital inequity and boosting Inclusion. And whilst the ‘smart tech’ systems and infrastructures are key to enabling all these variants there is still the human element – the citizens and their business that must live work and play in these communities.

All the place-based systems in the world still need to serve the citizen – not the other way around.

So enter, stage left, the ‘Intelligent Community’ with its fabric woven from all the usual economic sector metrics and demographics plus the threads of social wellbeing policies.

The question is: Is your city ready? You may be contemplating an impressive array of investment proposals to deal with Transport, Air Quality, Housing, Social Care – the list goes on – but will all those plans knit together to match your citizens’ and community needs?

One way of finding out – free of charge – is to nominate your community for assessment by the Intelligent Community Forum.  Who knows, you may even be selected as one of the world’s Top 21 or Top 7 Intelligent Communities.  Melbourne, Australia, went on this year to be acclaimed as the Intelligent City of the Year.

That achievement was announced in New York at the ICF Global Summit last June. Next year’s great event (with mayors, civic leaders and community developers from across the world) will be in June, in London – the first time in two decades that this very special occasion will be held outside of North America.

You could be there – and your community could find its place on the global stage.

Nominations before 13th 21st September via http://www.intelligentcommunity.org/nominations

 

DEADLINE FOR NOMINATION EXTENDED – now 21st September

For more information please contact David Brunnen or call 07714 325 657

Common Ground: the strength of local leadership.

24 Jul

What do Belfast, Bristol, Glasgow, Manchester and London have in common?

They may have very different needs and priorities but they share a common interest in resilience – a determination to be prepared for whatever.  They are all members of the Rockefeller Foundation’s 100 Resilient Cities Network – 100RC.

Today marks the start of the 2017 Urban Resilience Summit – a major gathering of Urban Resilience experts in New York.   Local leaders in the UK – even if not attending in New York – will listen to the proceedings with keen interest.

We didn’t need this year’s terrorist incidents, floods and a tower fire to highlight the need for enhanced response-abilities but local Chief Resilience Officers know that proficient planning pays dividends.

100RC is just 4 years old but in that short time the network has made great strides – fuelled by Judith Rodin’s ‘Resilience Dividend’ and financed in large part by 100 ‘Platform Partners’.

Resilience is a hugely important theme for local leaders and sits alongside a series of programmes that have a huge influence on local economic growth and community wellbeing. With cities growing fast the challenges of local management demand ever-greater empowerment to develop local responses to local priorities.

Some put their faith in technology – enhancing the scope for knowing what is going on across all aspects of urban life – traffic, weather, crime, health, air quality, river levels and a host of environmental factors.

Conventional sector-based economic analysis in this context provides few useful clues. Far more importantly, the themes that cut across sector silos provide a rich agenda for Urban Resilience Officers.

  • Business start-ups and many established ventures need knowledge workers and a host of new skills.
  • Hospitals need citizens who can engage with remote diagnosis. Commuters need better information on public transport.
  • Whole cities need skilled advocates to attract inward investment.

These are just a few of the themes that mark out the differences between ‘smart cities’ and those who could claim to be developing intelligent communities.

Investing in resilience is far more than assurance against unexpected disasters – for some shifts might be better-described as lost opportunities. The key lies with mayors and local leaders who are enabled to develop a holistic view of local needs – not just for economic growth but for wider societal wellbeing.

That is why, in June 2018, the Global Summit for the Intelligent Community Forum will be hosted in London to bring together mayors and civic leaders from around the world. Resilient Place-Making – a local priority – has become central to survival.

Community Cohesion – Part 2

18 Jun

‘Sombre’ was the word chosen this week by Her Majesty to describe the UK’s mood following the awful fire tragedy in West London.

Once again the media lauded heroic responses and the generosity of the wider public towards those shattered families who have lost everything.

Once again great community strength was exposed – and this time, sadly, evidenced by their repeated well-documented warnings of a disaster waiting to happen.

 

But, this disaster was very different.

After the Westminster Bridge car rampage, the bomb in Manchester, a terrorist arrest in Whitehall and the Borough Market/London Bridge van and knife rampage , this week’s consuming fire was  entirely of our own national making with no reason/excuse to attribute blame to some other malignant force.

This disaster was also very different in its aftermath.

Whereas in Manchester the local leadership response was strong and immediate (and in Central London we marvelled at the 8-minute incident closure) local citizens and the media have rounded on the apparent lack of Governmental and Local leadership actions.  The entire incident – from cause to conclusion – is raising fundamental questions.

Government Ministers, past and present, (and property-owning politicians with Landlord interests who voted against regulations on ‘fitness for habitation’) cannot escape or avoid deeper examination.  Those who happily presided over the debilitating drive to cut costs and reduce Local Authorities to mere agencies for the delivery of top-down austerity will be held to account.  As MP David Lamy said, we must now ask if the post-Thatcher shift away from public duty and towards private profit in the name of ‘efficiency’ requires us now to consider if the nation still believes in a welfare state with a safety net for citizens who fall on hard times.

The underlying design story is still unfolding – not least the marginal capital expenditure savings in chosing the cheapest building materials, the lack of sprinkler systems and alternative escape routes – but, beyond the physical, design failures in local empowerment and national democratic accountability cannot now be overlooked.

There are many factors that contribute to community well-being.   One of those is Resilience – particularly the preparedness for unexpected disasters.  From around the world, most of the examples of  Resilience programmes stem from ‘natural’ disasters – floods, tsunamis, earthquakes and wildfires.  But Resilience needs also to be present in systemic design of administration and governance.  The plight of ‘I Daniel Blake’ and a thousand other cuts to dignity imposed in thrall of efficient markets and a demonisation of local leadership has been exposed for its rampant retreat from the societal values that most of us hold dear.  Deep down, naively perhaps, we do not expect leaders to lead us astray.

Not surprisingly local people in West London are now angry.  They are now moving beyond the instinctive community-led support for their neighbours and re-examining these fundamental questions.

A week is a long time in politics.  The recovery from this dreadful week will take years.  It will demand new leadership at all levels of society.  In that process there will be a great deal of learning – and it is in that reflection, as a nation, we may find some redemption.

‘Sombre’ has more than a hint of thoughtful silent sadness.  The mourning process must be sober.  A national get-well plan is urgently required.

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See also earlier blog:  Community Cohesion – 28th May 

Picture source: BBC