Citizen Relationship Management

Yesterday, our teaching case on aSmallWorld.net was released. It is publicly available on the PNG working paper series site.

The case addresses several issues from the social network and online social networking literature. The case’s objective is to help students understand how existing offline social ties and interpersonal relationships can be transformed into a powerful online social network/online community which is attractive from several perspectives, such as social networking, online advertising, and entrepreneurial activity.

Alexander Schellong and Thomas Langenberg have jointly developed the case in close collaboration with the Program on Networked Governance as well as the support of Erik Wachtmeister, the CEO of aSmallWorld.net, and Louise Wachtmeister, Marketing Director and Co-Founder of aSmallWorld.

In line with David’s recent post on social networks and investing, I stick to the topic and would like to point your attention to Social Finance…

VoIP companies such as Skype, now owned by Ebay, are having a big impact on the telecommunication business. Youtube and blogs are threatening traditional business models in media and communications. The business of head hunting is most likely altered by online social networks. Yet, the tools and structures to do money lending or investing have remained the domain of professional organizations such as banks. Could Social Banking or P2P lending change this?

Social Banking or people-to-people (P2P) lending is a term that is describing web based ventures that provide people an alternative opportunity to lend/borrow money. The banking is called social because it uses social mechanisms used in social software. The purpose of social banking can be for profit or non-for-profit.

How does it work?
Prosper.com was the first people-to-people lending market place (starting in mid 2006). Others followed such as the UK based Zopa, the German based Smava, CircleLending or the soon to be launched Microplace (bought by eBay). Lending club recently announced its collaboration with facebook where its application can be integrated by the 25 Mio+ facebook users. P2P lending allows people either to lend money or borrow money. People who want to borrow money name the amount and their maximum interest rate they are willing to pay. In addition they need a social security number, drivers liecense, a bank account so that prosper can verfiy the identity and other credit information. Borrowers also present their reason for lending the money (i.e. pay for K-School tuition, extend a business), their personal income and expenses and a picture. This information is available to anyone - even non registered members. Former lenders or others such as family members may endorse a borrower. Combined all these measure aim at creating an environment of trust, community and control. Borrowers may also found groups to improve their average credit rating which creates a level of pressure for all group members to avoid late payments which will have an effect on everyone else. Yet, only $25,000 can be borrowed at one time per group or individual borrower.

Lenders can bid on those loans although Prosper is essentially providing the loans and sells it to the lenders. In order to diversify risk, lenders can decide to lend small amounts of money to several borrowers with different credit rating.

Some thoughts
The boundary of interest rate elasticities is obviously determined by the market (central banks and major credit actors). Therefore, lenders are less likely to consider investing money once a borrower’s interest rate is below the one lenders would receive in a risk-free money market account. On the other hand borrower’s are most likely on willing to pay an interest rate that is the same or below the one provided by major market players.

I am just wondering whether this concept is transferable into any culture and nationstate. According to a survey 74% of British citizens would consider using social banking websites. In contrast, anyone I talked about the idea in Germany was very critical about it, especially the trust component. Trust, cultural norms, social circles and government regulations likely play an important role. Social Banking will certainly be an era where economists and experts of social networks and social capital can enrich each others discussion. This is an emerging trend and as I heard a hot topic for online business investors. Its too early to judge whether social banking can be a disruptive to the banking industry. However, that might be an interesting alternative to many people who are afraid of investing in stocks. Speaking of stocks, may be the next platforms allow individual users or groups of users to do their own IPOs - from P2P lending to P2P stocks!?

What do you think about social banking?
Where do you see its advantages and disadvantages?
Would you participate in it?
Can it disrupt the banking industry?

On a sidenote. There is a US based non-profit (Kiva.org) which is trying to do more or less the same thing for microcredits to the poor in developing countries. And the website netbanker is a good way to keep up with trends in the eBanking industry.

Regensburg, September 3 - 7, 2007

Submission Deadline: February 15, 2007

The annual EGOV conferences bring together leading researchers and professionals from all over the globe and from many disciplines. Over the years, the interest has increased tremendously. The 2006 conference attracted about 130 participants from 28 countries all over the world including developing countries, with 30 contributions in outstanding research, 30 contributions in ongoing research, 15 projects contributions and 5 workshops. Hence the EGOV Conferences have become a reunion for academics and professionals as well as an important ground for networking.

General information for the EGOV conference can be found at egov-society.org; Info on the location and for further conferences at the DEXA conference cluster.

Today’s post ends my entry series on the use of local Social Networking Services by Japanese municipal governments.

Even without knowing the respective research and terms interviewees made the correct assumptions about social networks or tell stories reflecting results of social networks and social support in disaster literature. Drawing for example on the narrative of the family that was helped by many strangers after a the mother of a sons friend (weak tie) wrote about their flooded house in her “Gorotto Yatchiro” blog which supports Granovetter’s weak tie and Burt’s structural hole role in non routine activities (2004; 1983). Those interviewees who joined the local SNS found new friends on the platform and expanded their social network as concluded by Tindall and Wellman (2001). Furthermore, Soiga NPO is a great example how an organization, once brought into existence for one set of purpose (environmental activities), can also aid others for different purposes described by Coleman, thus constituting social capital available for use (1988). The NPO’s blogs were considered a trusted source and can provide an alternative to the mass media which is regarded by many individuals as a more credible source of risk information than government (McComas, 2001). A centralized approach to the provision and publication of local information might not be fine-grained enough to cater to the viral and capillary spread of word-of-mouth information anyway. This informal interaction can only be supported by recognizing the peer-to-peer nature of local interaction which is distinct from the conventional many-to-many, few-to-many, or one-to-many broadcast nature of other online interaction (Foth, 2006). In the past this role was taken by neighbourhood organizations which are already impacted by demographic and cultural change (young generations are not really interested in joining).
Finally, if the majority of the population would be represented on local SNS platform, sociograms could provide snapshots of networks and interaction structures. From these types of diagrams government and citizens can visually identify emergent positrons and clusters of interaction. By examining these patterns of mediated and unmediated interaction they could gain an added perspective on communication structures that underpin explicit community processes as well as those that support affective, less instrumental behaviors (Garton, Haythornthwaite, & Wellman, 1997). Privacy might be a concern for citizens of course. At the moment, local SNS can serve the functions of managing and building social networks. In disasters it covers the areas of “observe and report” and “warn and inform”. Along the lines of La Porte, I argue that the design and rules of the network constrain the character, use and content of member roles and exchanges and the network (1996). Consequently, local SNS could support the community and government beyond its current scope.

Sidenote: As I heard this week MIC is planing to extend their local SNS pilot with 10 other cities. I will keep you posted.

In today’s entry I would like to make some comments on the two Japanes local government SNS case studies I presented earlier.

Mr. Kobayashi, the member of Yatsushiro’s IT department, has a key role for the future development and functionalities of the SNS platform. He started this local SNS completely on his own, inspired by the rise of private social networking platforms and personal interest in technology. His government membership and high level of personal involvement ensure the sustainability of “Gorotto Yatchiro”. By comparison, “Ococo Nagaoka” is managed by an actor outside of government. The NPO, although well connected, has less leverage on the level government support and involvement. Government officials reportedly evaluate success by the quantity of users which influences their willingness of support. Therefore, “Ococo Nagaoka” is in a critical state (only 600-700 users).

Many online activities (i.e. exchanges) are depending on a critical mass for others to be attractive, a criteria which has not been met in both cases (1%< of the total population) and both mostly exclude older generations. In addition, both are competing with big platforms like Mixi.

If the local SNS has more users, the load on technology and burden on involved managers will also grow. Mr. Kobayashi would not be able to monitor user behavior without further help if that happens. Although officials claim to learn something from citizens, there is nobody checking the information in the citizens’ blogs.
Mr. Kobayashi is right when pointing to the importance taking a gradual approach of getting more users and introducing the platform. However, government marketing is not helping much and poorly done which reminded me of discussions with administrators who were wondering about the slow user uptake in their eGovernment projects.

Although Mr. Kobayashi added the map feature, functionality and design of existing platforms led to an early framing of his understanding of the possibilities and limits of local SNS. The lack of feedback by other people in the creation process is certainly a reason why its use in disaster or the government citizen relationship is not fully exploited. Administrative members would also be more willing to join, add content and engage with the citizen if there would be a considerable and visible amount of support by executive level administrators. Again, Mixi and Gree formed their perception of SNS so that in their words local SNS is mainly a way to interact with the public and offer it a way to interact with each other. They miss the aspect of building social capital.

Moreover, MIC should have planned a longer pilot phase since the tendency of a slow user uptake was already visible in the data for Yatsushiro. Central government is still influential in Japan so MIC could have also done more to inform and motivate the public and administrators alike.

The following describes my findings from Nagaoka city. Follow the highlighted area to read the first part about on government social software in Yatsushiro.

Nagaoka is a city located in the center of Niigata prefecture spanning from the northern coast inland of Japan’s main island Honshu. Just like Yatsushiro, Nagaoka merged with a couple of surrounding cities and towns between April 2005 and January 2006 increasing its population by approximately 100.000. Nagaoka was completely destroyed during Second World War and always had to cope with some form of disaster (earthquakes, snow, flood). This fact left its distinctive mark on the now roughly 283.000 people living in Nagaoka and is a reason why the Phoenix was chosen as a symbol of the city. The recovery of the Chuuetsu earthquake (More on the geophysics) in October 2004 is still taking place in some mountainous areas. The community is said to be better connected in those rural areas than in the city. According to city officials internet penetration is now at 60%. During the earthquake the internet and basic mobile messaging were the only communication channels working.

Before Nagaoka introduced the local SNS platform, it had a web bulletin board besides its official city website. Citizens showed the same frustration with the language and inappropriate behavior of some users which led many to abandon the platform. The city’s local SNS called “Ococo Nagaoka” was introduced in mid December 2005. As it is based on “Open Gorotto” I will not go into detail about its functionality. By now (December 2006) there are 600 registered users compared to 300 at the end of the MIC test phase in February. Only a few forums around casual topics like food eco-tourism can be considered active. The local SNS was marketed through publications in city newspapers, banners and section on the city website. In contrast, Mixi has 2000 members just for Nagaoka.

The process that ultimately led to the Nagaoka local SNS started in 2004. Soiga, an NPO, originally founded for environmental activities in April 2004 used a blogs and RSS to inform the public when the region first experienced a severe flood in April and earthquake in October. They provided faster information than government which received wide media attention, especially when they took over communication after Nakanashima government was operational ineffective through flooding. The NPO tried to convince government officials later that year to start an official government blog but their idea was rejected because nobody saw any need or importance in it. Thereafter, the head of the NPO was asked by MIC to join a newly formed working group on local SNS. (Furthere information in Japanese) The group consisted of academics, members from MIC and members of local administrators among them Mr. Kobayashi. They formed two groups to cover the theoretical and implementation/system aspects. First, they all looked at Mixi and Gree as the majority of them had never heard of SNS or used it before. To get the funds, the official project goal was officially about improving civic participation in Nagaoka and Tokyo’s Chiyoda Ward. Although they could not think of a different kind of use, improved information sharing in disasters was a secondary object. MIC covered the costs (¥ 1,500.000) for the local SNS pilot phase whereas the NPO was asked to manage it and work together with local government. Running costs are at around ¥ 30,000 per month.

When Nagaoka’s local SNS started, many sections except for information policy did not understand the SNS concept and why Nagaoka was chosen. In fact, of those interviewed, many admit that they are still wondering what SNS is all about, why they should put their information online and how it could be further utilized for government. Many immediately joined Mixi to get a feeling for SNS. Perceptions of local SNS vary. The dominating view is that local SNS provides a convenient location for communication and information sharing for citizens and government. In the past neighbourhood associations (NA) were the link between government and citizens. However, most leaders and people in the NA are now very old and lack knowledge or interest in the use of IT. Some interviewees think it could complete or add value to real-life relationships. People could help each other more by learning more about each other, what they could do for the community and as a result rely less on government. One mentions a group that started discussing how to have a nicer city and improve economic growth which members first got to each other through the local and later offline. A member of the disaster section adds that it is strengthening the community by building broad networks between the newly merged cities. Sceptics think that there are more dominating means of communication like mobile phones. A council member who uses multiple blogs and the SNS, thinks that the level of impact on the community of the local SNS is very low. To stress this point he compares his networks on Mixi (112 contacts) and the local SNS (12 contacts). In general though, SNS helped the council member to interact with the younger community.

Currently the members of Soiga (Japanese only) are working on an updated version which should be online by early 2007. The biggest change lies in the use of the Google Maps API. They are as well talking about online advertisement space and how to attract more users to the platform. Significant changes to “Open Gorotto” can only be introduced if they are implemented by Mr. Kobayashi or someone with his skills.

As I wrote in an earlier entry I am currently in Japan doing research in 2 areas. First, I look at local SNS (social software) and how this could be useful for disaster management. Second, I will do another case study for my research on Citizen Relationship Management.

Yatsushiro is the second largest city of the Kumamoto prefecture and is centrally located about 40 km from the Kyushu west coast, the southernmost of the four Japanese islands. As part of the eGovernment efforts in 2002/03 the city started “Gorotto Yatchiro”. It offered a bulletin board, calendar, link posting and email form functionality. However, it never got quite of the ground with a final community size of 600, 40 truly active users and 10.000 page views per month. Usage decreased over time and since membership offered anonymity some members did not stick to accepted conventions of online behaviour. As for Japanese culture, this keeps a lot of people critical of such initiatives paired with general mistrust in government and public administration in Japan. More than 900 local governments around Japan had set up citizens’ virtual conference rooms by 2004 as part of their eParticipation efforts. Though, most of these projects met the same fate as the one in Yatsushiro city.

Meet Mr. Takao Kobayashi who had/ still has the biggest influence on local government social networking services in Japan with his ideas and “Open Gorotto” platform which is available free as openSource software (click the above link to download the latest version).

In response to the decline of the bulletin board and inspired by bigger and popular social networking platforms such as Mixi, Mr. Takao Kobayashi, a young member of the Yatsushiro IT department, decided to design and program a new version of Gorotto in 2004. Interestingly, he was neither ordered to do so nor did he ask for permission. Within three months the first version of the “Open-Gorotto” SNS using openSource software as Free BSD, PostgreSQL, and PHP was developed. Except being inspired by existing social networking platforms no additional surveys on user needs were conducted. As the platform is hosted on government servers and development was done in work and free-time costs can be considered insignificant. Up to this day there is no additional budget set aside or significant recognition of political or administrative leadership except that that there is no interference.

Mr. Kobayashi mentions four points that motivated him to create the SNS platform: First, citizens are much better at sharing government information, so each citizen’s network serves as a multiplier. Second, the platform helps the community to grow stronger, meaning that people who share mutual interests can get together in a pleasant atmosphere. Third, the platform presents general and government information in a different way. Finally, administrators can interact and learn from citizens. Disaster is missing here but was picked up by the Ministry of Internal Affairs and Communications (MIC) as a goal. MIC conducted empirical testing of SNS communities in the City of Nagaoka which will be described in LINK and in Tokyo’s Chiyoda Ward in early 2006.

The SNS platform exists parallel toYatsushiro city’s website which links to the former. “Gorotto Yatchiro” functionality includes a blog, networking, personal profile, picture/media library, calendar and newsgroups (see picture below). Its uniqueness compared to sites like Mixi, Gree, MySpace or Xing lies in additional features as GIS/Google maps mash-up, a fire alert or open architecture with allows for integration of other features. Besides that the platform is mobile friendly. Although everybody can use the platform registered users can invite contacts. In order to prevent a development similar to the bulletin board “Open Gorotto” includes the “Alien” or “Grey Person” feature. This automatically scans for swearwords and the like and also sends a quick note to the administrator (Mr. Kobayashi) and another person supporting him with this task.

Since the new version was made available online by end of 2004, member expansion was left to invitations of users only. Mr. Kobayashi thinks that this allows for a healthier online community and avoids the objections citizens might have towards government although it is much slower. Advertising was only done through links on the city website, flyers and ads in the city magazine. Additional public attention came through press articles first in the regional and later in national press which is visible in higher website traffic after key interviews. By now the platform has around 2800 members with 70% being from Yatsushiro. Average age of members is 39 with males tending to be more active than females (ratio: 7:3). 400 users can be counted as truly active in terms of their blog, commenting or in forum behavior. The most used features are the diary followed by the internal email system and forums. 400 users have also subscribed the RSS feature. Smaller forums are managed by citizens; bigger ones are managed by the admins. 100 members of the community belong to the local administration or politics. When asked, Government officials see the local SNS mostly as another communication channel. They are still thinking about further use, especially with regard to disaster though.

Mr. Kobayashi is currently promoting the idea of having local interconnected SNS in all of Japan’s municipalities that also mirror each other in case of a failure/disruption like a disaster. Modifications of “Open Gorotto” are already used by other local SNS throughout Japan. However, many times Mixi is able to attract more people from the same area as the local SNS. This relates very much to questions raised by Ines Mergel regarding individual social networking platform online behavior.

In any case, the actions of Mr. Kobayashi are unique. It is proof of an individual’s impact on a smaller and ultimately broader scale. I could not find similar projects of government SNS in the world with regard to eDemocracy or disaster management. Hence, “Open Gorotto” is an innovation for local government worthwhile spending more time thinking about.

Apparently, the government in Japan is promoting the use of Social Networking Services (SNS) as they are hoping to take advantage of this for consultation and during a crisis like a disaster. As I will take a look at the attempts in my case studies of Yatsushiro-city, Kumamoto prefecture and Nagaoka-city, Niigata prefecture I will keep you updated in the upcoming weeks.

Let’s take a look at one of the big social networking platforms in Japan the meantime. Its called Mixi and has some of the following features:
- Invitation only
- It includes a sort of diary or blog which can be shared only with the people directly connected.
- Users review goods and services
- Miximusic / iTunes integration
- You can see who visited your profile
- Anonymous profiles mostly.
- Groups. Mixi has up to a million groups that users have created
- Heavily mobile-based / friendly. Japanese people spend a lot of time commuting on the train so there is plenty of time to take advantage of the 3G network and advanced phone features like chat, mms or GPS.

I begin to wonder when we will move into the mobile SNS world. Imagine when vast ammounts people start tagging their environment with the integrated GPS or connect with their direct or in case of dating, interested “peers”. This will also allow for new types of government citizen interactions with regard to disasters and everyday management.

In my entry on Google bombs on 11/19/2005 I raised the following question:

“How will governments react to such movements of altering the search results in an unfavorable way in the future as knowledge becomes more important? How will search engine providers react? The easiest way to approach this would be to influence or enforce rules on search engine vendors. Hence, we could ask whether search engine providers need to be kept as autonomous as central banks with respect to knowledge?”

Well, as of 1/25/2006 we got an answer to this when reports on Google’s self-censored search engine for China came out. However, as a other reports show, censorship also exists in other countries like Germany or France for certain terms. So in fact there is a need to watch developments in this regard carefully…What do you think or propose?

Related articles:
Harvard Law School, Berkman Center for Internet & Society
NY Times on Google and China search engine version
Wired on Google and their geolocations on searches
NY Times on Google and Privavcy
Newscientist on China and Google search
Washington Post on Geolocator

The crawlers of Google, Yahoo, MSN and other search engine providers are automatically indexing the web. All of the web? No not all of it, just the surface which consists of billions of documents like HTML pages or directly linked file of any kind (i.e. mp3, PDF, doc, zip…). If we use complex search strings we are also able to plunge a little into the grey matter below the surface web (SW). Many documents are not directly linked but are still indexed.

The deep Web (DW), is web data that resides in databases and is only dynamically available in response to queries (i.e. you do a search on a specific website, login or load a website). It is supposedly much bigger and provides more valuable data than the surface web.

Bergman (2001) estimates that the DW contains 7,500 tb of data compared to 19 terabytes of data in the SW. Current Link analysis and crawler activity does not help to tap into those sources. It is much more complex and labor intensive and would probably exceed storage capabilities currently available to Google. A market exists as organisations such as the CIA, FBI or private companies have interests in using those additional (high quality)resources.

Related links:
Search engine trends, marketing
The Deep Web: Surfacing Hidden Value by Bergman (2001, U Michigan)
Search for the invisible web by Sherman (2001, The Guardian)
Index Structure for querying the Deep Web by Qiu/Shao/Zatsman/Shanmugasundaram (2003, Cornell U)
Accessing the Deep Web: A Survey by He/Patel/Zhang/Chen-Chuan Chang (2004, U Urbana-Champaign)
Deep Web Search engine
Introduction to the deep web by Laura Cohen (2005, SUNY Alabany)
Finding unpublished research by Mathews (2004, ACRL)