In Taiwan they discovered a natural resource which is badly needed everywhere, but which at least two Intelligent Communities have developed in an endless supply.  This resource was at first difficult to mine and to harvest, but now it is easy and continues to add wealth to the national economy.  It also adds social capital in the form of low unemployment, pride and a reawakened sense of community and culture.   It was discovered close to home.  In fact right inside the home.  In two communities, both with urban and rural populations, it has helped resolve the "digital divide" and, as one CEO told me, turn the divide into dividends.   The resource is called human intelligence.  We once called it "brainpower."  Companies like Cisco refer to it as "the human network."  I think of it as "Brain Gain."  All of us are right.

In a small nation like Taiwan, which has no oil, rare minerals or raw materials that can be extracted and exported around the world, an economic engine has been created using basic cultural talent increasingly harnessed to the Internet.  In the Intelligent Community of Taichung, a city of about 2.7 million, you will find the world's third largest exporter of high tech precision machinery equipment.  Taichung is also home to Giant Bicycle, the largest producer of those high-end bicycles used by racing professionals and cycling enthusiasts worldwide.  Giant has design offices in The Netherlands and nearly 50% of its sales come from dealers in North America and Europe.  The company employs 200 people to work in R&D alone.  Rather than resource extraction of commodities such as coal or timber, which are the traditional items for many export-driven economies, including nearby China, the exports of Taichung and Taoyuan County are  based on the production or refining of industrial and recreational (or what I call "re-creative") products.  These arise from R&D, applying added value for higher margin sales and an increasingly important layer of hard-to-match technological or logistical processing.  Each is designed by human intelligence, collaboration and massive data sharing and data management.  Each relies on the Cloud and an educational network which takes advantage of the Cloud's ability to eliminate the barriers of distance.

While Taichung is today more well-known because Academy Award winner Ang Lee made his film,Life of Pi,there, Taoyuan is probably the most important city in the digital economy that you never heard of!  With a population of a little over 2 million, Taoyuan County, located in northern Taiwan, is the epicenter of export and logistics for tech products.   Nearly 1,300 companies do business there, accounting for 70% of the national total.   Anyone with a device will be interested to know that the dragon's share of the80%of the world's notebooks that are made in Taiwan are made in Taoyuan County.  In addition, much of the value-added processing for these and other electronics pass through Taoyuan County's remarkable efficient and  coordinated rail, sea or air corridors, as well as its Far Glory Free Trade Zone.  Manufacturers such as Quanta, Inventec and Compal are located in Taoyuan County, which next year will become Taoyuan City.  When this happens 13 cities, which represents 3.5% of the country's total land mass and its youngest population, will use the Cloud to enhance connectivity to the local government.  More important, its massive Aerotropolis Project will demand a more sophisticated use of broadband and the Cloud.  This project combines air, rail and land routes into a modern, high-speed logistical network that enables Taoyuan to add-value to its export products.   Aerotropolis is designed to create an infrastructure coordinated to local economic capabilities.  There will be a sports stadium, a cultural village and "innovation factories" which serve as living museums, places citizens go to watch the nation's economic outputas a form of entertainment.  The new underground subway will have WiMAX and more information available to travelers than most people walking the streets of San Francisco can access on their iPhones.  It will be Asia's most networked and sophisticated free trade zone, cultural community and export processing and delivery center.

The Cloud is the basic conduit for much of the economic activity described.  It is to the human intelligence of Taichung and Taoyuan what drill bits are to oil fields; plows to a fields of wheat or rice and steel rails to trains.

Where the Cloud really counts is in the area of education and vocational training.  It is schools, I was told, that are really the new "factory floors" for the knowledge workers who make these two Top7 Intelligent Communities economically and socially sustainable.

The city's Cultural Affairs Director showed me a real-time demonstration of a Cloud library system at a mountain school in Taichung.  The system enables 39 libraries in 29 districts to access books.  Any books.  In Taichung, individual libraries feature specific types of collections.  One might contain only collections on business while another has only sports.  While connectivity is increasingly available through the national carrier Chunghwa, even among the 61 native tribes of Taiwan, and ASUS laptops are in every school, the knowledge which is not yet digitized is dispersed and unavailable.  In a nation whose schools' motto is, "Drop Everything and Read" (the average elementary school student reads an average of 200 books per year and collaborates to produce another) this was an issue.  The natural resource diminishes students cannot find their way to the top in science, math and logistics.  Students and teachers in the city's mountainous region need access to 8 million books that are not digitized.

To address this, a simple Internet-based reservation system, not unlike Amazon.com, was put into place.  It works flawlessly.  Its automated logistics system enables orders to be processed easily.  The system delivers its orders regularly via special trucks.   It is convenient, free and "considerate."  By New Year's Eve, 3.2 million books will have been delivered to citizens most nations still consider on the "wrong side" of the digital divide.  (It is interesting to note that while the schools have good Internet access, great teachers and a culture of digital use, hard copy books remain in demand.)

The ability to connect the rural districts and the urban is also important.  A few years ago, Taipei, the 2006 Intelligent Community of the Year, was provoked by an agricultural activist known as the "Rice Bomber."  In 2003 Yang Ju-Men, in a protest of what he thought was the government's neglect of farmers, planted rice-filled explosives around the country.  He has adopted a much more peaceful and constructive approach today, thanks to organizations like the Chunghwa Foundation, which is creating Digital Opportunity Hubs to connect rural farmers to new markets.  Agriculture has been revitalized.  Both Taichung and Taoyuan County export their own city-branded products, like peaches and orchids, around the globe.  The work done in genetic tissue research for orchids has helped create new types.  None of this could be done without collaboration enabled by video conferences, file exchanges and the ultimate power of the Cloud.

Stay tuned to view upcoming installations of the Cloud for Local Government blog series or click here to register and reserve your copy of the complete compilation of the blog series, including this blog as well as a variety of cloud resources, which will be available in May.

To read this blog in Spanish, click here.  For Portuguese, click here.