Broadband and Economic Development

Global to Local

Agenda

• Introduction• What the empirical studies show• Site selectors and broadband• Entrepreneurs and broadband• Local success stories

What is Economic Development?

Joan Spero and Jeffrey Hart

Indiana University

“The process of raising the level of prosperity and material living in a

society through increasing the productivity and efficiency of its

economy.”

Some say “Build it and they will come.”

Who is they, anyhow?

Broadband Vitality Components

ProvidersCommunity Members

Robust Network Subscribers

Technology Service Offerings

Sophisticated Use

Each has an important impact on economic development!

Broadband and Economic Development

What the empirical studies show…

MIT/Carnegie Mellon StudyLehr, Osorio, Gillett, SirbuJanuary 17, 2006• For the period between 1998 and 2002,

where broadband was available by 12/99, communities experienced more rapid growth in:– Employment– The number of businesses overall– The number of IT businesses

• These communities also had higher market rental rates.

• All data was at the zip code level.

Brookings Institution StudyCrandall, Lehr and LitanJuly 2007

• For every 1% increase in state broadband penetration, employment will increase 0.2-0.3% per year.

• Employment in manufacturing, services (finance, education and health care) in positively related to broadband penetration.

More Brookings

• Policy implications– Encourage competition among providers

to lower costs• Reform video franchising• Oppose net neutrality

Broadband and Economic Development

What Site Selectors Think…

Broadband Site Factors

• Broadband is an expected asset, not a competitive advantage– Direct fiber connections– Redundant networks– Competitive services– Reliability measures– Technical talent!!!

Broadband and Economic Development

Entrepreneurial Development

Broadband EntrepreneursFrom InfoWorld’s Greatest Web Moments• 1994 - Yahoo - created by college students• 1995 - e-Bay – broken laser pointer 1st item• 1997 - Craig’s List – emerged from a list serv• 1995 – Amazon – first office was a garage• 1998- Google – created by college students

Would you lend money to this girl?

Whateverlife.com

• Ashley Qualls, 17 year old entrepreneur • Web site has 2.4 M visitors per month• Site ranks 825 of 20.3 M sites• Sells designs for MySpace pages• Employs her mom and several friends• Borrowed $8 to start her company

Attracting Entrepreneurs

• Quality of life– Means different things to different people

• Entrepreneurial culture and connections• Business support systems• Available broadband

– In town?– At the lake?– What about big broadband for power users?

Broadband and Economic Development

Successful Local Strategies

Helping Existing Businesses Grow…• Business technology assessments

– Todd County through MN Technology Inc.• Subsidizing web page development and

improvements– Cambridge

• Linking community businesses together through portals– New Ulm retailers– Mankato area manufacturers

Entrepreneurial Development• Youth as web masters for business

– Five Small Towns

• E-commerce training– U of M Extension– MN Technology, Inc.– MNSCU

Conclusions

• High level research and Main Street anecdotes demonstrate that broadband access and utilization increase business success

• Business prospects expect broadband services– Choice– Customer service– Redundancy– Technical talent

Community Technology Initiatives Make A Critical

DifferenceIncrease knowledge, build a

tech savvy community brand & empower economic growth

Bill ColemanCommunity Technology Advisorsbill@communitytechnologyadvisors.com

651-491-2551

Register today for the Blandin Broadband Conference! www.blandinfoundation.org