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By the Numbers:

Driving Broadband's Impact to Economic Development

By the Numbers: Making the Economic CaseBroadband Communities Summit

Lexington, Kentucky – September 16, 2015

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Strategic Networks Group

SNG has been measuring broadband utilization, its impacts, and developing broadband strategies for more than 15 years.

We have worked with more than 10 American States, as well as regions and communities, driving utilization by businesses:

– Illinois– Virginia– Kentucky– Louisiana– Nebraska– Wisconsin

– North Carolina– Georgia– Arkansas– Maryland– Kansas– Minnesota

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Broadband Means Jobs

Internet Enabled New Jobs as Percent of all New Jobs Created by BusinessesBy Size of Employer Group

Broadband enabled 39.7% of all new jobs from 2013-15, up from 25.5% from 2010-12

Source: SNG Digital Economy Database

Impact of Internet on job creation

has accelerated in the last five years

10%

15%

20%

25%

30%

35%

40%

45%

50%

33.1%

21.3%

26.1%24.1%

25.5%

38.2%

31.8%

38.3%

42.9%

39.7%

2010- 12 2013-15

Employees

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A Shift to the Knowledge Economy

Net New Jobs Enabled by Internet as Percent of Net New Jobs Created by Businesses2013 to 2015By Size of Employer Group

When job losses are subtracted from job creation, the impact of broadband on job creation is even more evident

Source: SNG Digital Economy Database

0 - 19 20 - 49 50 - 99 100 or more

Totals30%

40%

50%

60%

52.0%

48.3%50.4%

52.1% 51.4%

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Fiber Impacts Revenue

Percentage of Revenue Attributed to the Internet

Cable 37.2%

DSL 20.7%

Fiber 67.5%

Businesses that use fiber attribute a much higher percentage of their revenue to the internet

Source: SNG Digital Economy Database

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Utilization of Internet Applications – where to focus?Quick to Adopt ‘Laissez-faire’ approach

Slow to AdoptNeed awareness and support

Business Applications Business Applications

Buying Online Selling Online

Basic Website Online media (video)

Research and accessing information

Teleworking

e-mail Delivering Content and Services

Document transfer Social Networking

Household Applications Household Applications

e-mail Entertainment

Banking Investments and Trading

News and Sports VoIP

Information gathering Home Based Business

BIGGESTBENEFITS

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Small businesses lag behind larger peers,particularly in certain sectors

Major Industry Variation# of employees 1 to 19 20 +Retail Trade 6.80 8.45 1.65Real Estate 7.28 8.45 1.17Wholesale Trade 6.89 7.96 1.07Finance & Insurance 7.48 8.45 0.97Arts, Entertainment & Recreation 6.70 7.58 0.87Professional & Technical Services 7.23 8.06 0.83Information 8.45 9.22 0.77Health Care & Social Assistance 6.26 6.99 0.73Accommodation & Food Services 6.41 7.09 0.68Construction 6.26 6.89 0.63Transportation & Warehousing 6.60 7.18 0.58Manufacturing / Processing 6.89 7.18 0.29

Median DEi Score

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The Digital Divide in 2015 is about Small Businesses

Traditionally, the digital divide has been about individual use… – Availability– Expense– Connection Speed

The digital divide in 2015 is with small businesses– There is a “gap in awareness and understanding” and

the capacity / ability to implement

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Economic Growth is Driven by Utilization

Utilization Growth

Availability Adoption Utilization

Broadband Availability is Often the Primary Focus, however …

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Small Businesses Don’t Completely Understand Benefits

Target Market Demand Drivers Feature Benefit Result

Households Netflix, Gaming, Multiple household users, and Devices Speed Enhanced

lifestyle Uptake

Large Businesses

Collaboration, Security and Backups, Cloud Applications Speed Competitiveness

Collaboration Uptake

SMEsEmail, websites, basic online tools, all accomplished with “basic” service

SpeedHow does fast Internet impact my bottom line?

Limited Uptake

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It’s for Everyone

No matter the business, the Internet can help drive…– Awareness and interest – Feet into a store/location– Efficiencies – The ability to reach and leverage new markets

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Bridging the Business Digital Divide

Where to go and how to get there?

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Support skills and training of Internet applications

Help them understand benefits of getting online – not just ‘nice to have’

Develop a “business case” for each business to take action

How do we NURTURE a person’s nature?

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A DEi Scorecard is delivered to each business and organization

Individualized ‘broadband assessment’ that:‒ benchmarks competitiveness against

peers (by size and industry sector)‒ estimates ROI from increased utilization‒ provides links to local advisors and

support

Data based on the individual’s current broadband utilization against industry average

Shared with local economic development agencies so they can raise awareness, increase adoption, and drive utilization

Personalized Incentives: DEi Scorecard

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Detail potential revenues and cost savings by application

Quantify potential benefits from increased utilization

Source: SNG Digital Economy Database n = 27,200

DEi Impact Calculator- choose e-strategy based on ROI -

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Why Drive Utilization?

For an individual business or organization, increasing utilization by 10% means:

Increasing revenues by 24%

Decreasing costs by 7%

For a Region, it means :

Allowing businesses to be more competitive

Creating a demand for high-skilled workers

Adding fiscal revenues

Grows market for service providers

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Michael Curri, PresidentStrategic Networks Group, Inc.+1 202.558.2128mcurri@sngroup.com

Let’s connect !www.sngroup.com

Thank You