Dogecoin is the earnest cryptocurrency, born out of a meme that its creators thought was “hilarious.” Now, that random joke created to lampoon the market is becoming a valuable asset itself. Just this year, the animal-themed currency went from trading for less than a penny to hitting a price of 14 cents by mid-April, with 11.7 billion units circulating. Elon Musk, the founder of Tesla, tweeted pictures of Shiba Inus, and YouTuber Marques Brownlee described Dogecoin as “the more accessible, less intimidating crypto for the people.”
“There are many different reasons that people are buying it, and it’s more or less gone mainstream at this point,” said Billy Markus, an IBM engineer and a cocreator of Dogecoin. “It’s one of the most volatile assets you can make a bet on, but people right now have a lot of reasons to make that bet, and that is being reflected in the market.”
Dogecoin started as a joke that quickly grew into a larger movement
Most alternative cryptocurrencies, known as altcoins or clone coins, are fundamentally similar to Bitcoin. They can be “mined” by computers that run complicated equations to create these new assets that can be stored online or offline. In 2013, Markus had tried using his gaming computer to mine Bitcoin when he wasn’t gaming, but said that he found that it “was a very slow and expensive process.”
Using a guide he found online, Markus taught himself how to create his own altcoin. His first was “Bells,” based on the currency in the popular Nintendo life simulator “Animal Crossing,” which he said “flopped.” After spending some time in an internet chat room, he was directed to the Adobe developer Jackson Palmer, who had purchased the Dogecoin.com domain name.
“I found that there was a huge market with new coins coming out daily, and at times hourly, all touting how they were going to become worth zillions and take over the galaxy,” Markus said. “I thought it was silly, and also thought that, considering there were so many coming out, it was probably easy to make.”
Doge, one of the internet’s earliest memes to break through to the mainstream, features a 2010 picture of a yellow Shiba Inu looking quizzically into the camera. In 2013, the meme template of two-word phrases juxtaposed with the curious canine gained worldwide appeal, making it the perfect target for this project.
The pair collaborated, creating a currency so ingrained in meme culture that it would be impossible to take seriously. The website was covered with Comic Sans font, a popular motif of the Doge meme inspired by gibberish such as “much wow” and “so currency.”
“The original intent was a parody of all the ‘serious’ clone coins that were trying so hard to differentiate themselves, but all seemed the same,” Markus said. “Dogecoin was just another clone coin, but instead of taking itself seriously, it was just Dogecoin.”
Over the next few years, Dogecoin would pick up with the irony-loving nihilists who feel the concept of currency is fundamentally flawed, and may have been more interested in “lulz” instead. In 2014, Dogecoin users raised $30,000 to send the Jamaican bobsled team to the Winter Olympics, a reference to the 1993 film “Cool Runnings,” and $50,000 to Charity: Water, which helps give clean drinking water to developing nations.
Palmer would leave the crypto community in 2015, giving over development duties to a group of community followers. “I saw the space being overrun by opportunists looking to make a buck, rather than people investing in evolving the technology,” Palmer wrote in a Vice story.
The value of Dogecoin comes from its meme status
As long as computers can run the equation, Dogecoin may never run out. Unlike Bitcoin, which has a set number of units that can be mined, the yellow dog on a coin can be bought and sold for cheap. For the past decade, Dogecoin could be bought by the thousands for almost nothing, making it easy to collect. This “friendly, low barrier to entry,” Markus said, has allowed the coin to go mainstream in a way that a lot of ironic art rarely does.
Over the past few years, cryptocurrency has exploded in popularity, with Bitcoin hitting a record $64,000 this week. This mainstream awareness created by this virtual gold rush has inspired a fear of missing out that is causing cryptos to skyrocket in value.
“I think the market has been trying to figure out what the intrinsic value of all cryptocurrency is over the last 12 years,” Markus said. “It hasn’t settled on one yet.”
No one ever said it was going to be all smooth sailing. We’ve all been in a boat that’s gotten a little rocky, and some of us have even experienced a full-on capsize. In my experience of weathering the storm, there are one of two things that happen to your company: You either go out of business or you stay in business. If you are leading a team, you need to figure out which of those two positions your company is headed towards. Chances are, it won’t be difficult as a lot has already happened and shaken out in the marketplace. That’s good news for entrepreneurs, and even better news for leaders. The companies that weren’t strong enough to survive have already failed. And while we mourn their loss, we also have to recognize that it’s leveled the playing field. This is also a good time to take stock of where competitors have landed and where you currently rank in the pack.
The difference between those who survive and those who thrive
The companies that will win are those who learn how to leverage market uncertainty for their unique competitive advantages and leapfrog their competition with a period of rapid growth. On the surface, this sounds like a brilliant strategy, but there are thousands of ways it can fail if not executed well. A bad bet could take a company down, just as quickly as a good bet could pull it to the front of the line. This is where we’ll see a second round of companies fail, which will set the stage for the winners to double down once again and secure their seats at the top.
Competition is about to get fierce as companies start to position themselves for market dominance. We can expect market sectors to start to shake up and shake out over the next two to three years as the full market impact of the pandemic unfolds.
At the same time, the potential gains are big. With market sectors in flux, the potential to take on the market leader spot has never been greater. This is the kind of opportunity that only comes around once in a lifetime, so I recommend paying attention to your industry competition, closely. Technology is accelerating faster than Corporate America can adopt it, creating a fertile ground for start-up and mid-sized companies to innovate their way into the top seat. However, all bets are not created equal and entrepreneurs need to understand how to weigh bets and when to push the accelerator.
Creating a framework for success
Framework is important. It should be flexible and allow for rapid failure. The best way to win is to fail faster and in smaller chunks. It should also empower winners to make their way to the top faster. Oftentimes, winners lose because they can’t even see they are there. The framework must prevent that from happening, and should allow for rapid experimentation. We never know which idea is a winner until it has a chance to win. So often our strategies are mired in complexity and complicated execution plans. That isn’t going to fly if you want to take the top seat. Instead, you’ll need a space for ideas to be planted, to grow and to reproduce. In execution, this often looks like an idea lab with a budget and a team who knows how to get stuff done at the helm.
So how can leaders understand the chessboard so they can call checkmate on their competition? They have to settle into discomfort. Prepared leaders will be able to make clear-headed decisions while seeing market opportunities that are invisible to the untrained eye. And they will be prepared to move even when it isn’t comfortable to do so.
The road to the top is rather arduous and requires massive levels of organizational flexibility that can’t be taught overnight. The leadership team must be in sync and know how to make the right decisions that are right for the business and its people, even if they are tough or risky. Employees need to feel appreciated, valued for their contributions, and celebrated every step of the way. Customers also need to feel satisfied and delighted by their entire experience. That’s a tall order for a company of any size, but especially challenging for industry behemoths. That’s why it’s a market ripe for the market leaders to fail and the market innovators to succeed.
Taking advantage of future innovation gaps
These are evolutionary times. We’ve never seen a combination of events with such a broad brush of impact. Every industry is primed for rapid transformation and realignment as the full market impact of 2020 continues to unfold. Technology is accelerating faster than it can be adopted by industry leaders, which is opening the door for innovation gaps. These gaps create an opening for new startups to come through and disrupt entire markets.
There’s no telling what innovations will pop up and be the next market leader, but this market is ready. We’ll get excited about the innovation, and before you know it, it will become the new norm. This won’t be the first time we’ve seen industry leaders fail and get overtaken by an unnamed competitor and it won’t be the last. As markets have it, there’s always a play that can win. Will it be yours?
Elon Musk asked Cathie Wood this week what she thought about Warren Buffett’s favorite market indicator flashing red recently. The star stock-pickerreplied that the gauge is likely inaccurate, and argued the heady valuations of certain technology stocks are justified.
“What do you think of the unusually high ratio of S&P market cap to GDP?” the Tesla chief asked the Ark Invest boss. He was referring to a version of the Buffett indicator, which takes the combined market capitalization of a country’s publicly traded stocks and divides it by the latest quarterly GDP figure available.
The S&P 500 represents about 78% of the total market cap of US stocks, as measured by the Wilshire 5000 Total Market Index. The S&P 500’s combined market cap has surged past $33 trillion this year – more than 150% of the latest estimate for fourth-quarter US GDP of $21.5 trillion.
Wood replied to Musk’s question by suggesting that GDP understates economic growth because it doesn’t fully account for increased productivity. Technological innovations today are “dwarfing” those in previous eras, driving down prices and fueling demand, she continued.
The Ark founder also drew a line between the dot-com bubble and the current hype around tech stocks.
“Back then, investors chased the dream before the tech was ready and while costs were too high,” she said. “After gestating for 20-30 years, the dream has turned into reality.”
Moreover, Wood predicted that companies that have failed to innovate and instead have borrowed money to fund stock buybacks and dividends “will pay a steep price.” She expects them to be forced to cut prices to shift inventory and make debt repayments.
In short, Wood’s view is that the disconnect between the S&P 500’s market capitalization and national GDP isn’t worrying because GDP is a flawed measure, unprecedented innovation justifies higher company valuations, and technological advances are cutting costs so inflation won’t be a problem either.
Her stance clashes with Buffett’s praise of his namesake gauge as “probably the best single measure of where valuations stand at any given moment” in a Fortune article in 2001. When the indicator peaked during the dot-com boom, it should have been a “very strong warning signal” of an upcoming crash, the Berkshire Hathaway CEO wrote.
Musk might have to wait a few more months to find out which investor is right.
Entrepreneurship is about treading new ground. It is about taking a step no one has taken before, at least not in that same way or in the same place. So it should not be surprising that much of the scholarly literature on entrepreneurship, since Richard Cantillon in the early 1700s, has focused on entrepreneurship as uncertainty bearing.
Although “bearing uncertainty” might be what entrepreneurs do in the economy from a theorist’s point of view, it is not – and should not be – the rationale for starting a business. After all, uncertainty means the outcome is unknown, which, in turn, means it could end up ugly. In other words, uncertainty is a cost – it is a burden on the entrepreneur’s shoulders. Entrepreneurs are right to attempt to avoid the uncertainty.
The fact is that theorists have it both right and wrong. Yes, entrepreneurs bear uncertainty because they are the ones getting the reward as profit and also the ones suffering the loss if things do not work out. But that uncertainty bearing characterizes entrepreneurship does not make it the point of being an entrepreneur. Rather, it is a “necessary evil.”
What successful entrepreneurs understand
Successful entrepreneurs, both in the past and present, understand the actual meaning of uncertainty. Those who already experienced success have often learned it the hard way, through experience. Those who are more likely than others to become successful have understood it in the abstract or have the right gut feeling. Regardless of which it is, past or present, they understand that uncertainty is “worth it.”
What this means is that they don’t focus on uncertainty, but accept it. Entrepreneurs choose to bear uncertainty much like someone putting in the hard work – perhaps 10,000 hours’ worth – knows that hard practice is the means to achieve success. How to endure those endless hours of seemingly never ending tedious work? Eyes on the prize.
Successful entrepreneurs recognize the prize and what it takes to get there. They realize that the only way their business can convince customers to buy from them and to beat the competition is to provide value. To the extent they are not simply lucky, successful entrepreneurs rely on a value-dominant logic: They place the end value of their efforts first and direct their efforts to maximize value.
There are three key components to the value-dominant logic that help you apply it in your business:
1. Value is the entrepreneur’s superpower
Entrepreneurs bear uncertainty because it is the only way of doing something different, something new, and bringing about value greater than everybody else has. After all, doing what someone else is already doing is not a way to set yourself apart. It is also not a way of being truly successful. To be successful, you need to develop your superpower – to figure out, focus on and deliver real value.
2. Value is subjective
It sounds strange, but it is true: Value is subjective. This does not mean value can be anything or that it is relative or that there is no such thing as real value. It just means that value is in the eyes of the beholder. The important lesson here is that you, the entrepreneur, do not determine what value is. Your job is to figure out how what you offer can be of value to others. That is what you should be focusing on, not on what you think would make your offering “better.”
3. The consumer is the ultimate valuer
Any entrepreneur, whether in B2C or B2B, should recognize that, ultimately, the consumer is king. Or, as scholars put it, the consumer is sovereign. If you are selling directly to consumers, it is obvious enough. You cannot place a sale unless consumers value your offering. But even in B2B, you cannot stay in business long unless what you contribute to the economy is of value to the final consumer. Even if your customers like what you are doing, you’re not going to sustain profitability unless the consumer of the final good likes it.
Another way of adopting the value-dominant logic is to adopt the “4 Vs” model developed by Hunter Hastings of the “Economics 4 Business” podcast. He summarizes these points for thinking like a successful entrepreneur using four value statements: value potential, understanding and assessing potential consumer subjective value; value facilitation, making it possible for them to consume; value capture, how much the firm realizes of the value facilitated by a value ecosystem that the customer orchestrates; and value agility, how well does the firm respond to changing consumer preferences and competitive propositions and how well does the firm sustain a continuous delivery of innovation to the consumer.
The point is not the terminology or model, but the lesson: that value should come first. And when you place value first and recognize that it is subjective and for the consumer, the burden of uncertainty becomes bearable. It is but a means for attaining the end. It is costly for sure, but it is a necessary cost in order to pioneer production and break new ground.
Importantly, the burden of uncertainty is justifiable because it makes it possible for you to bring about value. This point is key to being successful.
If city leaders across the country learned anything from the past year, it’s the value of resilience.
The COVID-19 pandemic exposed cracks in infrastructure, posed mobility challenges, and revealed a digital divide. The places that have fared the best are the ones that have been investing in the future, specifically in areas like digital transformation, manufacturing, sustainability, infrastructure, and innovation.
“I don’t think we talk about resilience enough,” Diana Bowman, co-director of the Center for Smart Cities and Regions at Arizona State University’s School for the Future of Innovation in Society, told Insider. “Resilience talks about our capacity to respond in a quick way to address whatever those external challenges are.”
While investing in technology and infrastructure is key for cities of the future, Bowman said that resilience also depends on strong partnerships across the public, private, and local university sectors.
“One of the things that we’ve seen in this last 12-month period is if you take your eye off the ball at any single one of these, then your ability to have a fully engaged school system, fully engaged workforce is really challenged, and everybody suffers as a consequence of that,” she said. For example, the influx of people working and learning from home revealed a lack of access to high-speed internet in some places.
Cities of all sizes should be thinking about building a better tomorrow through investment and policy, or risk getting left behind.
The need for cities to innovate and be more sustainable is coming, whether they’re prepared or not, Zachary Schafer, CEO and executive director of United for Infrastructure, a nonprofit working to modernize and repair the country’s infrastructure, told Insider. “It’s better to be developing frameworks early to understand how to deploy them, how to use them, how to benefit from them, and how to talk to residents about these technologies.”
Several US cities are already leading the way. Here’s a look at 10 places making big strides when it comes to innovation.
The cities are listed in no particular order.
The city of Chicago has several programs in the works aimed at updating infrastructure and advancing manufacturing.
One example is the Smart Lighting Program, which some have referred to as the largest streetlight modernization project in the nation. It involves installing wireless, LED lights across the city, which can be dimmed or controlled remotely. The goal is to cut energy costs and improve public safety.
To function as a kind of “fitness tracker” for the city, the Array of Things (AoT) project included placing sensors throughout the city to collect data on the environment, infrastructure, and activity. The purpose is to address traffic safety and flooding, reduce costs, and make the city more efficient and equitable.
Both the streetlight and AoT programs come with interactive elements, so residents can track their progress and view the data collected.
“Chicago has a good program for launching projects using digital technologies to transform the city landscape,” Schafer said. “You’re building the foundational infrastructure for a smart city or for a city to use to make smart decisions.”
On the manufacturing front, Chicago is home to MxD (Manufacturing times Digital), which opened in 2015 to focus on digital design, automation, and digital in manufacturing. MxD is part of the Manufacturing USA initiative, which established institutes across the country to focus on different areas of technology and digital transformation in manufacturing and supply chain.
MxD helps educate manufacturers about digital tools and processes. It has a mock production line, projects to help digitize equipment, and cybersecurity technology developed with the University of Illinois at Urbana-Champaign.
The entire state of Hawaii is leading the charge on sustainability, Bowman said. Two years ago, Gov. David Ige issued a declaration of commitment to sustainability — though the state’s focus on sustainability started long before.
In 2014, Hawaii kicked off the Aloha+ Challenge to address six metrics from the United Nations Sustainable Development Goals (SDGs) by 2030, including clean energy transformation, local food production, management of natural resources, solid waste reduction, creating smart and sustainable communities, and building and educating a green workforce. The initiative comes with an online dashboard that allows the public to track the progress the state is making in these areas.
Bowman said the program is a great example of the state legislature in Honolulu working with nonprofits and private companies to achieve sustainability metrics. “If you don’t measure it, you can’t act upon it, so it’s crucial in terms of sustainability and resilience,” she added.
The city of Honolulu has a resilience strategy and set up a Resilience Office to track how climate change is affecting the city. It’s examining “shocks” and “stresses,” such as hurricanes, tsunamis, infrastructure problems, cost of living, and vulnerable communities.
Smart streetlights are also being added, and the city is testing a gunshot detection system that would send alerts to 911, police patrol cars, and residents’ smartphones. Other systems would help drivers detect parking spots. Atlanta partnered with Georgia Power, AT&T, and Current by GE for the project.
“There’s a lot of activity going on just in general around transit and Atlanta, in and around the larger metro area,” Christopher Le Dantec, associate professor in the School of Interactive Computing and School of Literature, Media, and Communication at Georgia Tech, told Insider. That means thinking through the transportation of people and goods around the city and its suburbs.
“It’s a very difficult problem to solve because there are so many different agencies at play,” he added.
Other initiatives center on reducing the number of cars on the road. Atlanta is expanding its walking and biking plan, providing grants to help communities become more pedestrian-friendly and encouraging different types of commuting like carpooling, flexible work schedules, and working from home.
Incorporating more bike infrastructure has been several years in the making and involved collecting and analyzing data, Le Dantec said. “It was part of a transformation within the urban core of Atlanta, where there is now a lot more people moving around on bicycles, even prior to the past year’s events,” he added.
San Antonio, Texas
Through its Office of Innovation, San Antonio has several infrastructure and technology projects in the works.
Some are still in the development phase, but so far some city vehicles have been equipped with sensors to gather real-time data on infrastructure and identify problems like potholes and then report them to the appropriate agency for repair. The goal is to reduce calls to the city and provide upkeep to areas that tend to be neglected.
Recently, San Antonio launched a Smart Streetlight Project that will have remote controls and sensors to monitor parking, air quality, temperature, noise, and flooding. The city also installed interactive digital kiosks at its transit hub and other locations to give residents and visitors real-time access to information about traffic, transit systems, and attractions, like local restaurants. The kiosks also provide free WiFi and access to city services.
Cities should view digital infrastructure as a way to rethink how people interact with their government and policymakers, and give residents easy access to details about what’s going on in their city, Le Dantec said.
“Being able to actually show what those outcomes look like becomes a really powerful way to mobilize people toward addressing these issues,” he said.
Technology in manufacturing is another key area for San Antonio. CyManII (Cybersecurity Manufacturing Innovation Institute), a Manufacturing USA institute located there, is focusing on cybersecurity and secure automation in manufacturing. These issues are critical today, as the manufacturing sector saw an uptick in ransomware attacks in 2020.
Raleigh-Durham, North Carolina
The tri-city area of Raleigh, Durham, and Chapel Hill has long been known as a hub for innovation, technology, and entrepreneurship.
Being a tech hub and supportive of entrepreneurs and startups has attracted new residents, making Raleigh one of the fastest-growing cities in the country.
The three cities also form the Research Triangle, along with North Carolina State University, Duke University, the University of North Carolina, and Wake Forest University. The Research Triangle Park is home to several major tech companies and known as a center for innovation and technology.
The presence and partnerships with universities is a central part of a smart, resilient city, Bowman said.
“You have world-class universities that have been fundamental to driving the innovation agenda,” Bowman said. “It has attracted leading tech companies and other multinationals to that space. Not only is there the benefit of having universities in terms of being able to engage with them and co-create and co-test, it becomes a supplier of high-quality talent to those companies.”
Several nonprofits exist across Raleigh-Durham, including Innovate Raleigh and RIoT, that are devoted to supporting innovation and entrepreneurship. The tech focus also extends to the manufacturing sector. The area houses a Manufacturing USA institute, PowerAmerica, focusing on semiconductor technology and electronics.
The Wisconsin state capital has an ambitious sustainability plan to reach zero-net carbon emissions and use 100% renewable energy for city operations by 2030. The plan sets specific goals for slashing overall energy and fuel consumption and making half of city buses electric by 2035.
Other city initiatives include increasing solar power by training unemployed and under-employed people in solar panel installation.
The city also has goals to improve air and water quality and transportation systems, support sustainable construction, affordable housing, and local food systems, economic and workforce development, and more.
The University of Wisconsin-Madison has a number of sustainability initiatives, too, like housing and grants for students who have ideas for enhancing sustainability on campus. The university is also working to align its sustainability goals with academics and research.
A part of its efforts are engaging key stakeholders, including universities, nonprofits, local business, and members of the public. Interviews, public meetings, and a new website in development will keep citizens informed of the progress and promote transparency.
Local governments too often overlook the need for communication, especially in innovation and digital transformation projects, Brian Chidester, head of worldwide industry strategy for the public sector at information management firm OpenText, told Insider.
“[Madison] has really embraced that piece of it,” he said.
Phoenix, and the entire state of Arizona, has been working to become a leader in autonomous vehicles since 2015, when the governor signed an executive order to support the testing of driverless cars.
Phoenix has partnered with companies like GM and Lyft to allow hundreds of driverless cars to be tested on their roadways. Recently, the city began working with Waymo to launch a self-driving taxi fleet in nearby Tempe and Chandler.
“You just see the vehicles everywhere, the Waymo vehicles in particular, and we now have a long history, and it’s just part of the landscape,” Bowman said.
The state also created the Institute of Automated Mobility with Intel, Arizona State University, and other universities and organizations to research autonomous vehicles. Part of the goal is to create a regulatory framework that other places can model.
One setback to the self-driving initiative was a 2018 incident when a driverless Uber struck and killed a pedestrian in Tempe. Bowman said city leaders handled the investigation in a transparent way that regained community trust and investment in the program.
By investing in autonomous vehicle infrastructure and innovation, the hope is to cut down on traffic fatalities, help older people age in place, reduce traffic and the need for parking, and protect the environment, she explained.
“Integrating autonomous vehicles into your fleet has the potential to reduce congestion within cities, and that brings an environmental benefit with it,” Bowman said.
Los Angeles, California
Los Angeles has emphasized its commitment to sustainability while addressing some of the city’s biggest infrastructure concerns, like traffic and road safety.
A digital dashboard, called the pLAn, debuted to track and measure its Green New Deal sustainability plan. It keeps tabs on metrics like water and electricity usage, greenhouse gas emissions, and other sustainability efforts. And the data is open to the public.
“One of the things I really like about what we see in LA is not only do they make this public — and they have a fantastic dashboard that any citizen or any individual anywhere in the world can go to and see how they’re doing based on hundreds of metrics — but they also have held themselves accountable,” Bowman said. “They’ve done a voluntary review of how well they’re doing, and the results of that review has then gone on to inform the next step.”
Governments holding themselves accountable in this way is something other metros can learn from, she added.
Mayor Eric Garcetti has also set a goal of reducing carbon emissions to zero by 2045, and has a number of other goals to make the city more sustainable and reduce traffic.
For example, they’re working on a network of bus-only lanes, adjusting traffic lights to put trains first over cars, launching an electric bus fleet, creating better traffic light synchronization, and debuting bike- and pedestrian-friendly projects.
Los Angeles is also home to one of the Manufacturing USA institutes, CESMII (Clean Energy Smart Manufacturing Innovation Institute), that focuses on smart sensor and digital process technology to make manufacturing more efficient.
One of Boston’s many innovation, infrastructure, and sustainability projects is the Vision Zero initiative, a smart-street project with the goal of reducing traffic accidents and fatalities through data gathering and analysis.
Through the program, Boston is investing in new infrastructure on the streets, including LED lights, surveillance cameras, sensors, and a public dashboard. The data collected will inform future decision-making on roadway improvements, like safer sidewalks and streets and advanced signage.
Other traffic-centric innovative infrastructure programs include giving drivers real-time information about where to find parking spaces or suggestions for taking another form of transportation. The point is to reduce traffic congestion and carbon emissions. The city is also working on driverless car testing, smart parking sensors, and IoT.
Additionally, Boston is working to modernize information systems and technology in utility infrastructure to make utilities more affordable, equitable, and sustainable through the Smart Utilities Vision project.
“[Boston] has been trying to position itself as a technology hub, so that’s part of what’s driving a lot of their digital transformation infrastructure,” Chidester said.
Investing in innovation and infrastructure tends to attract larger companies and a highly skilled workforce, which boosts the economy, he added. Specifically, Boston has developed an environment to draw and support fintech companies.
The Boston area has the advantage of having several universities, including Harvard and Massachusetts Institute of Technology, which the city partners with to test new technology and other projects.
“One of the things you see is cities with large, very advanced universities with good engineering programs are some of the furthest along, simply because they’ve got the partnership between academia and city government,” Schafer said. “You’ve got engineering programs going to the city to say, ‘Hey, we’re working on this technology to be tested in our city.'”
Denver’s population has increased 20% over the last 10 years, so the city has seen more construction and traffic, which has worsened its air quality.
To address the issue, they launched Love My Air, a program to measure air quality in real time using pollution sensors.
The city is tackling its transportation issues by participating in Vision Zero, like Boston. This includes launching an intelligent transportation system to address traffic and road safety. The program will deploy connected vehicle technology to allow trucks to communicate with traffic signals and connect city vehicles.
And to address and manage data around its infrastructure, Denver is creating an IoT platform to gather data about transportation, environmental health, weather, and freight. The data is pulled from road and weather sensors, street lights, universities, and other city infrastructure, which the city will use to drive future projects.
Denver also has a partnership with Panasonic on a project called CityNow. It’s creating smart city infrastructure in a remote area that includes high-tech highways and driverless vehicles. They’ve installed WiFi, LED street lights, pollution sensors, security cameras, and a solar-powered microgrid.
One challenge cities face in their digital transformation and innovation initiatives is that they start small, maybe with specific neighborhoods. While this makes sense, Chidester said it often creates disparate technologies, giving cities an additional challenge of making everything work together for the benefit of residents.
“You’re not going to drop a whole bunch of technology to encompass the entire city,” he said. “Ultimately, as you crawl, walk, run, there’s the need to ensure interoperability, and the ability to take information and analytics and drive value on behalf of their citizens.”
Data and analytics are necessary for sustainability and infrastructure efforts. But another issue cities will need to address revolves around the data they’re collecting through sensors and other means, Schafer said — specifically, who owns the data and what it’s all used for. And do citizens have the right to take their data back?
“That’s a thorny issue that a lot of them are going to have to deal with,” he said. “Whether they like it or not, it’s coming.”
America is a global leader in business and innovation. And yet despite this reputation we haven’t put that ingenuity to work to tackle one of our country’s most critical economic challenges: how expensive it is to be poor.
America’s financial system systemically fails low income families and communities. As our country faces both an unprecedented public health crisis and a struggling economy, those who were already financially vulnerable now find themselves without the means to meet their basic needs and at risk of falling further behind.
Communities of color, particularly Black families and Black business owners are disproportionately impacted by chronic market failure. The median net worth of white families is ten times higher than that of Black families and Black consumers spend 50% more per month for basic banking services. Over a lifetime this adds up to a staggering burden which can reach about $40,000 in elevated interest costs, surcharges and excessive fees to access money through payday lenders, auto title loans and other alternative financial arrangements.
In New York City, there are, on average, three times the number of bank branches per 1000 residents in areas with majority white populations, compared with areas with majority-minority populations. And traditional credit scoring models effectively exclude vulnerable communities from accessing the financing they need to build their business. Without economic access, efforts at improving social justice will sound like one hand clapping.
Making our financial system work for everyone
Achieving equal access to financial services requires established players to bring a new mindset to the table and new players to challenge the status quo. We need innovation that is both commercially sustainable for businesses and can foster trust amongst cautious consumers.
For example, allowing people to use digital technology to receive money and send money to relatives affordably or make real-time bill payment and check deposits by phone can go a long way toward addressing this need. It may start with a simple mobile app, but soon enough, savings, insurance, credit building start becoming a reality for far more people.
Progress in expanding digital financial tools has historically been glacial. As important as they are, philanthropies and nonprofits, cannot solve for these challenges alone.
Our organizations, Mastercard and MoCaFi are coming together to explore a digital-first approach, to create affordable, sustainable, and scalable solutions that can create a more level playing field.
There is a long history of overly high interest rates and extractive fees charged to underserved communities by payday lenders, pawn shops and other alternative service providers. Alternative financial services is a $180 billion industry. Low-income people don’t have fewer needs than affluent consumers, so reaching them with better products makes commercial sense for entrepreneurs and established companies alike.
Making business work for minority-owned business
The need for innovative finance doesn’t just apply to individuals. This year has also put a much-needed spotlight on the need for secure, reliable and digital access to capital for micro and small businesses across the US, as many have struggled to survive through the pandemic and move their services online.
Community Development Financial Institutions (CDFIs) have been a lifeline, particularly for minority-owned and women-owned businesses that have been disproportionately adversely affected and have struggled to get support through traditional channels.
CDFIs have had to undergo their own innovation curve this year – processing more digital applications and issuing loans electronically at scale. One organization, Community Reinvestment Fund, USA (CRF), created the online Spark Platform to address the increasing demand. The platform helped ease the application process and enabled more than one hundred small lenders to disburse $6 billion of loans from the federal Paycheck Protection Program.
For many underserved entrepreneurs, having a support network like that provided by CDFI’s enabled them to ask questions about federal funding, ensure deadlines for applications were met, and allowed for secure, digital access to capital during the darkest times. We need to ensure these organizations receive the technology, tools and support they need to scale operations.
Creating a more equitable future is the right thing to do and makes business sense. The only truly sustainable growth is inclusive growth. Should we succeed in bridging the wealth and opportunity gap faced by Black Americans, the benefits would be felt by all. It is projected that should progress be made on economic equality, we would see not only greater social cohesion in the United States, but an additional increase in economic activity of over $1.5 trillion over the next 10 years. That is a worthy investment.
Coaxum is a Founder and Chief Executive Officer of Mobility Capital Finance, Inc. (“MoCaFi”). MoCaFi is a start-up financial technology company that leverages mobile technologies, data analytics and digital strategies to improve the financial behaviors of underbanked communities.
Froman is Vice Chairman of Mastercard and Former U.S. Trade Representative