Counting jobs in the community

Submitted by acohill on Fri, 10/08/2004 - 11:21

The U.S. Dept. of Labor has announced they are going to revise the way they count jobs. In the past, the emphasis was on the Payroll Survey. In this survey, employers are called and asked how many employees they have. Payroll jobs have been shrinking, hence a lot of political heat and smoke about whether the economy is improving or not. But Labor has also been doing what's called the Household Survey, in which households are polled about who is working in the household. Job counts based on the Household Survey have been increasing rather dramatically, but the government has not really factored those jobs into the "jobs" number that typically gets published and discussed widely.

If you have a self-employed husband and wife, both fully "employed" in their own businesses, those jobs never show up on the Payroll Survey. They would on the Household Survey.

This is an important issue for communities trying to measure the impact of new and diversified economic development efforts, like investments in getting affordable broadband and small business training and development. If economic developers are being rewarded for increases in payroll jobs, the community is losing out big time--that's not where the growth is.

Not only that, a factory floor payroll job is not necessarily equal to a self-employed job. A prosperous microenterprise owner with a gross business income of $150,000/year and take home "pay" of half that has a much larger impact on the economic health of the community than a $12/hour full time hourly worker, and it's probably much more than just a simple 3x factor. One economic developer I talked to thought that the impact of a single self-employed professional in the community might be worth as much as ten shop floor jobs, because of the indirect effect. Self-employed professionals are spending some of their business income on local businesses--attorneys, accountants, copy services, and other professionals in the community, lifting all of them.

eRate disaggregates community buying power

Submitted by acohill on Fri, 10/08/2004 - 09:51

The papers have been full of stories this week about the suspension of eRate payments to schools and libraries. The FCC suspended the program because of chronic abuses by some recipients of the payments. That aside, let me point out some structural shortcomings of the effort.

Why USAir is bankrupt, part 3

Submitted by acohill on Fri, 10/08/2004 - 09:40

It's hard to feel very sorry for USAir and the company's financial problems. Yesterday, I saw yet another example of IT stupidity. I got to Charlotte and wanted to catch an earlier flight. The Roanoke flight that was leaving was nearly full, so I had to stand and watch the poor gate agent laboriously hand key every boarding pass into the computer. Fifty boarding passes, each one requiring several keystrokes. And virtually every boarding pass had a bar code on it.

Now Delta has very expensive, custom made scanners that must easily cost $20-30K each (note that Delta is also bankrupt). Southwest, which is making money, has cheap, off the shelf barcode scanners (cost about $50) duct-taped to the side of their cheap off the shelf PC computers. So bankrupt USAir manages their seats by hand, bankrupt Delta buys hideously expensive custom terminals, and profitable Southwest makes good use of off the shelf technology. Get the picture?

But wait, there's more, as they say in the knife infomercials. The USAir agent finally established that there was a seat on the plane for me. By this time, the plane was about to leave. He looks at my ticket and informs me that there will be a $25 charge to change the ticket, and that I have to go to the Special Services desk in the main terminal to take care of it. He then apologizes there is not time to do that, and the plane takes off.

Before leaving, I observe the special, custom keyboard he is using has a card reader on it, but USAir's crack IT department apparently never bothered to give the agent software that would allow him to take customer money.

So we have a bankrupt airline that is not equipped to take money from their customers. Hmmm. Anyone see anything wrong with this picture?

Is space important?

Submitted by acohill on Tue, 10/05/2004 - 08:41

I keep hearing a lot of scepticism over my reporting on the emerging Space Economy. This article on the accomplishment of SpaceShipOne and future plans helps illuminate the growing potential.

If you are inclined to think there are more pressing problems on earth than getting tourists into space, you are both right and wrong. This is not some pie in the sky program for rich tourists--this is the beginning of the greatest economic boom in human history.

Remember the personal computer and the Internet? Those two little innovations touched off the second biggest economic boom in human history, but what enabled those two developments was the integrated circuit.

Guess where the IC (integrated circuit) came from? The sixties era space program. Anyone involved in economic development who thinks going to the moon was a waste of money needs to go back to the history books--not to study science, but economics. The moon was a bargain, because the money spent by the government to get reliable IC circuitry for the Apollo spacecraft was paid back many times over by the resulting IT boom that started in the late seventies and ended around 2001.

Earthlink adds VoIP services

Submitted by acohill on Tue, 10/05/2004 - 08:23

Earthlink faces the same problem AOL is already struggling with--a shrinking market for dial access to the Internet. Earthlink has been staying in the black by slashing customer support and by providing barebones access, as opposed to AOL's tedious, ad-laden interface.

Earthlink has a lot of customers like me, who need occasional dial access from the road, and don't want the dreck AOL ladles out along with it. But I find I need to dial through Earthlink less and less as hotspots, especially in hotels, become more common. As I've written previously, I and many other travelers now pick hotels based on the availability of broadband, not on the kind of shampoo you find in the bathroom.

AOL has tried to keep its customers by extortion--for example, you can't forward your AOL email to another account, which makes it much more difficult to quit AOL if you have used your AOL email address for a long time. AOL is basically saying to customers, "Leave us and your life will be miserable while all your email goes missing for a while." Most other email account providers let you forward your mail.

But back to Earthlink, which is now providing limited VoIP services if you have an Earthlink broadband account. It's a clever move, because the appeal of free calling (at least to some of your friends and family) will help sell the access part.

We're going to see more bundling of services--the phone companies are trying to win back some broadband customers by bundling local, long distance, and broadband, and the appeal, aside from saving a little money, is that you potentially go to one bill from three. In theory, you should also be able to get better service and customer support (in theory).

Does WiFi work?

Submitted by acohill on Tue, 10/05/2004 - 08:15

In the Telecomm Cities mailing list, Barry Drogin wrote:

The ugly thing here is that in the short term, these [WiFi] deployments will work,
just like shared-media Ethernet networks worked well in the 1980's. But at
some point, user density gets so high that the protocols break down. They
spend more time recovering from errors than they do transmitting good data.
For Ethernet, switches saved the day. But for wireless, that won't work.

I call cheap WiFi the "pizza lady" model. In the grocery store, a little old lady hands out little pieces of pizza, saying, "Try this, it's good!"

WiFi is way of getting dial up users to move at low cost to broadband. What I tell communities is that WiFi will sell fiber. As more and more users crowd on to WiFi, the bandwidth degrades, but by then, people are hooked on broadband, and can't live without the pizza, er, bandwidth.

So they are more willing to support community fiber projects.

WiFi is not THE solution. It is A solution. Fiber is also a solution. There is no one transport mechanism that will satisfy everything we want to do.

Are you a digital immigrant?

Submitted by acohill on Mon, 10/04/2004 - 14:04

CNet has a must read article on the digital divide. The divide the online news site discusses is the one between "digital natives" and "digital immigrants."

Digital natives are those 25 and younger, who have grown up immersed in the Internet, computers, and technology. Digital immigrants are the older group, especially 40 and above, who have had to "cross over" to the new digital world from the old, paper-based world.

As organizations retire more of the immigrants and are replacing them with more natives, the organizations are being changed. The old central command and central authority structures are being undermined and replaced by distributed command and control. Technology and the Internet are the catalysts for often informal lines of communication and collaboration that cut across top-down org charts and limit the ability of managers to "control" the work.

The challenge for communities is to help leaders recognize that this shift is taking place--that the old, authoritarian ways of making decisions in the community don't work anymore--the Internet lets citizens and businesspeople route around the old, top down procedures. If your community is worried that too many young people are leaving, could it be in part because they view community-decisionmaking as out of step with their needs and interests? Conversely, what is the community losing in jobs and opportunities because of outmoded control structures that are not able to lead the community successfully in the fast-paced, highly interlinked Knowledge Economy?

Kitty Hawk and Mojave, California: SpaceShipOne wins the X Prize

Submitted by acohill on Mon, 10/04/2004 - 12:00

Bert Rutan's SpaceShipOne won the $10 million X Prize by sending a ship into suborbital space twice in two weeks. The second of two successful flights took place today, and Mojave, California will likely become a historical milestone alongside Kitty Hawk, North Carolina.

Outsourcing and economic development

Submitted by acohill on Mon, 10/04/2004 - 09:07

An op-ed piece in the NY Times (registration required) provides another data point to show that outsourcing jobs to other countries is not the national crisis the mainstream media has tried to make it.

The author provides data that shows the U.S., as other studies have suggested, is actually showing net gains from outsourcing. That is, outsourcing low pay, low skills jobs creates other business opportunities that more than offset the direct job loss.

As the author notes, this data is not a great comfort to a region that has lost those jobs. Factory floor workers who have had their jobs outsourced need training and help to be able to compete for the higher wage, higher skill jobs that are being created.

For rural communities, it's another indicator that business as usual just won't work. The Old Economy jobs being lost cannot be replaced by more aggressive industrial recruitment, better brochures, or a new logo--all things I've seen promoted as "proof" of a revitalized local economic development program.

What does work? Here are some things that are important in the Knowledge Economy:

AT&T slashes residential VoIP prices

Submitted by acohill on Fri, 10/01/2004 - 08:46

In an indication that the company intends to provide still competition to the regional telephone companies, AT&T has cut their CallVantage VoIP service price by 25%, from $40/month to $30/month.

CallVantage, which works only if you have broadband service, provides local and long distance service nationwide for a flat $30 a month--the lowest call plan we've ever seen, including those offered by some of the cellphone providers.

When you add up how much money the residents and businesses of a community are stuffing in envelopes every month for phone service, it turns out it is a lot of money. Broadband, despite the cost, can produce savings in other areas, like phone service. Anything that helps keep a community more of its money (i.e. broadband) is a very good thing.

RadioShark brings timeshifting to your desktop

Submitted by acohill on Wed, 09/29/2004 - 14:59

Griffin's RadioShark is another piece of the convergence puzzle falling into place.

The RadioShark is an AM/FM tuner that plugs into your computer via a USB port. You can listen to broadcast radio in real time through your computer speakers, but of course, an old-fashioned analog radio would do that as well.

The RadioShark comes with software that allows you to record broadcasts and listen to them later. So if you can't listen to Al Franken or Rush Limbaugh at work, your computer can record those and play them back later.

For iPod fans (both Mac and Windows iPod owners), the software is fully integrated with iTunes, so you can transfer the recorded broadcasts to your iPod effortlessly and take them with you.

What I'd like to see is an integrated AM/FM/TV tuner that does all this. You can buy the TV tuner and record television programs on your hard drive, and the RadioShark does the same for radio. But I want fewer devices that do more. It's only a matter of time before someone combines these functions into one simple box.

Who do you know?

Submitted by acohill on Wed, 09/29/2004 - 11:08

Following up on the new Book of the Month (The Hidden Power of Social Networks), here are some of the conclusions from the book, and they may surprise you.

I've been collaborating with Rick Smyre of Communities of the Future on capacity-building needs for organizations and communities, and one of the key concepts we have identified is "learning webs."

A learning web is a small group of people who have a strong trust relationship and who are committed to helping each other learn about and stay current with new ideas, concepts, and information that may be important to individuals in the group.

Do you have a learning web? What about your personal relationship network? Do you have a small group of people with whom you are comfortable asking for help? What about your community? One of the things you can do to help your community get connected with the Knowledge Economy is to help form learning webs centered around economic development, civic affairs, and local governance.

How work gets done: Social networks in practice

Submitted by acohill on Tue, 09/28/2004 - 16:57

The Hidden Power of Social Networks (by Rob Cross and Andrew Parker) is the Book of the Month.

In the Manufacturing Economy (1850 to 1950), where you were located mattered because stuff was heavy. Being near an airport, a highway, or a river was a key part of an economic development strategy. In the Information Economy (1950 to 2000), what you had mattered. What kind of technology you had--computers, networking equipment--often created a competitive edge, especially in the last ten years of that era.

In the Knowledge Economy, many goods and services are weightless--software, music, and videos can be delivered over the Internet, among many other services and products. Location is less important, and if you don't already the computers and networking stuff, your business is dead or nearly so. So what counts in the Knowledge Economy?

In the Knowledge Economy, we are awash in an ocean of information. We can't possibly absorb all of it. It flows into our computers in an ever-increasing torrent. It is now impossible to master any field of study; there is simply too much to know. Collaboration is fast becoming not just a nice thing to do, but a business and organizational necessity. To survive and prosper, you have to have a trusted network of associates, peers, and colleagues to whom you can direct questions and get answers.

In the Knowledge Economy, who you know is what matters, not where you are or what kind of technology you have.

Having said that, developing and maintaining a network of reliable colleagues is hard work--but with a big payoff. This book delves into why these networks are effective, how to set them up, and how to maintain them. It is thoughtful and well-written, and mildly academic in style, but the chapters are short and to the point. Reading this book won't put you to sleep. I think it is well worth a read.

For past Books of the Month, visit this page.

Light poles are worth $7,666

Submitted by acohill on Mon, 09/27/2004 - 08:51

The New York Times (registration required) has an interesting article on municipal WiFi and the role of local government in jumpstarting broadband access.

One nugget buried in the second page of the article is that the City of New York got $23 million in return for access to 3000 lightpoles in the city. Wireless providers will place antennas and small equipment boxes on the lightpoles. This means the value of the lightpoles is an astounding $7,666! I suspect the leases are probably for ten years, which brings the value down to $767 per year, that that still illustrates the potential for a pro-active local government to self-finance the transport layer of a modern telecommunications infrastructure in a community.

The Knowledge Economy pharmaceutical company

Submitted by acohill on Mon, 09/27/2004 - 08:10

I met a scientist and researcher a few days ago who is putting together a pharmaceutical startup in a very rural community. He owns several patents and putting together an operation to manufacture and market the new drugs. Size of the company? Approximately ten highly paid scientists, researchers, and marketers. Virtually all other operations will be outsourced.

This businessperson chose where he lives based on two criteria: great quality of life and the availability of broadband.

This story is being repeated over and over again across the country. Here's the question for rural communities: Do your economic development efforts (marketing, services, Web site) provide the information that businesspeople like this one want to make a relocation decision? How do you assess "success" in your economic development efforts? Do you have a formula that considers the value of microenterprises in your community? For example, are you still just counting heads as a measure of success?

By that, I mean if you don't have a way of considering the financial impact of ten scientist/researcher jobs on your community compared to ten factory floor jobs, you are in trouble (my guess is that one scientist/consultant/professional job could be worth as much as ten factory floor jobs).

Virgin Galactic to build commercial spaceships

Submitted by acohill on Mon, 09/27/2004 - 08:02

I've been writing for some time about the emerging Space Economy. Almost ten years ago, Virgin Atlantic, the big British media and airline company, registered "Virgin Galactic" as a trademark.

Virgin Galactic is now a real company, and has signed a contract with Mojave Aerospace, the company that owns the rights to SpaceShipOne, which is likely to win the X prize in the next couple of weeks by flying two suborbital flights in less than two weeks.

Why is the Space Economy important? The equipment, services, and support systems needed for space are not likely to be provided by $1/hour workers in Asia. Knowledge Economy companies all over the United States are likely to benefit from the high technology systems that will be needed--if they can compete successfully with other smart Knowledge Economy companies worldwide.

The changing shape of the news

Submitted by acohill on Fri, 09/24/2004 - 08:51

Andrew Sullivan, in Time magazine, illustrates perfectly the changing landscape of writing, journalism, and more generally, the power of the Web that we now all have in our hands. Here is the most instructive quote from the article.

"Ten years ago I edited a money-losing magazine, The New Republic, which had 100,000 subscribers. Two weeks ago on my four-year-old blog,, I had 100,000 readers in one day alone. After four years of blogging, I haven't lost a cent and have eked out a small salary. And I don't even have an editor! Technology did this. And it's a big deal most people have yet to understand."

Not all of us are going to be bloggers. The really successful ones have a passion for something and are also great writers. But we are all users of content, and these new information channels, applied on a community level, will get good and useful information to us about our communities quickly and easily.

We also need to make sure that our children continue to learn the difference between truth and falsehoods, the difference between sarcasm and thoughtful commentary, and the difference between typing and writing (hat tip to Truman Capote). These are exciting times, and we still have much to do, but the technology, used appropriately, can make our communities truly great places.

Philly plans world's largest mesh WiFi network

Submitted by acohill on Thu, 09/23/2004 - 14:37

Back in the early winter of this year, I wrote about the potential of a new generation of WiFi mesh network software and hardware to make it much easier to design and provision community wireless networks.

Philadelphia, which has been in the news recently for their announcement that they were looking at WiFi, has now released more details about their plans, which will include using mesh WiFi equipment to create a wireless blanket over most of the city (135 square miles). Only between 8 and 16 antennas will be needed per square mile.

Mesh networks are less expensive and are designed to be easy to deploy. Mesh networks also are fault tolerant. In a properly designed mesh, you can lost some antennas and equipment and most users will still be able to stay connected to the network.

Record companies making a fortune

Submitted by acohill on Thu, 09/23/2004 - 14:23

According to this article in the UK Independent, the record companies are making a killing from online music sales. The paper says that of the average ninety-nine cent cost of a downloaded song, the record companies are taking sixty-two cents, or apparently almost double what they made on a CD. Not only that, their distribution costs have fallen to virtually zero.

Meanwhile, the same record companies have been prosecuting grandmothers and 14 year olds, claiming online music was killing the business.

The online stores are making a paltry four cents, which will cause most of them to go out of business, says the paper. And the artists? Well, apparently the artists, who actually create the product, aren't making a penny more. That's why many artists, like this one, don't even bother to sigh with a record company. They cut their own CDs, make a lot of live appearances, and sell their CDs online and at their concerts. It's a living, apparently. Jah Works has been around since at least '96.

For music lovers, as more bands forgo the record scene, it's likely more music with more variety will be available over the long term.

800 communities are building their own networks

Submitted by acohill on Thu, 09/23/2004 - 11:39

According to an article in USA Today, more than 800 communities in the United States are building their own networks. There is some fascinating stuff in this article, which highlights a high speed fiber network and MSAP (Multimedia Services Access Point) in Danville, Virginia.

A high speed fiber network and MSAP for the Danville area was first proposed by me in a 1999 document study I did for Virginia's Center for Innovative Technologies, which was encouraging Danville to "think big" as they designed and built a business incubator.

Here are some of the other highlights from the USA Today article.

"We used to have to beg businesses to locate here. Now our phones are ringing off the hook," Hamlin (Mayor of Danville) says, beaming.

"This was never a case of 'Build it and they will come,' " says Hamlin, the Danville mayor. "This was a case of, 'If you don't build it, you know they won't come.' "

...nDanville paves the way for a raft of possibilities: advanced college placement courses, home-based instruction, teacher-parent meetings via the Internet and videoconferencing galore.

"If you want to recruit high-tech, you have to be high-tech," says Locker, adding: "Nobody moves to Danville without first looking at the schools."

In the Knowledge Economy, as they have found out in Danville, it's more than just infrastructure that makes a difference. Good schools, quality of life, and support for entrepreneurs all contribute to success in economic development.

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