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 [email protected]
651-491-2551
Register today for the Blandin Broadband Conference! www.blandinfoundation.org
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