Community development

The sharp increases in gas and diesel fuel are raising the cost of commuting. Even if fuel prices recede (as they did after the '73 oil crunch), it seems likely that we will never see $2 gas again, and it may be that $3 gas becomes the new normal.

While the cost of fuel affects everyone to some extent, rural communities may be at most risk. Many workers in rural towns drive long distances to work, and a doubling of the cost of such drives may make it too expensive to make those commutes for a $12 or $14 per hour job.

Like the Chinese ideogram that can be read both as "danger" and "opportunity," the fuel crisis may, over the long term, be an opportunity for some rural towns, and could be the end of others. If it is too expensive to drive long distances to work, some workers and families may move closer to the work, further reducing the viability of some rural communities that are already struggling with long, slow declines in population.

But some businesses may decide to move closer to workers, and rural communities with the right economic development strategy to attract such businesses may have an edge--if they have good quality of life, attractive and vibrant downtowns, and .... broadband.

Community broadband projects can have a double impact. Properly designed community networks that extend affordable broadband into residential neighborhoods and along rural roads can bring new kinds of work from home opportunities to a rural workforce--getting them off the road completely and eliminating long commutes entirely. Fiber in business and industrial parks can attract businesses, which won't even consider some communities unless fiber services are available.

Rural communities will have to respond to the fuel increases with well thought out, long term strategies to help reduce commuting costs for their residents. Those that don't will see more workers and families moving away--reluctantly, but leaving nonetheless.

Find Your Spot is an online relocation service that helps business owners and prospective employees find a place to live that matches personal preferences like the weather, arts & culture, recreation, education, the cost of living, health care, and the local economy.

Here is a key quote from the FAQ portion of the site:

Thanks to advances in technology and the economy, more people than ever are choosing where to live based on the factors that really matter to them — the weather, schools, recreational activities, cost of living, and general quality of life.

Notice that they are saying job seekers and relocating businesses are interested in personal and life style factors, not the availability of water and sewer in the industrial park. A community that is offered as a pick is going to be much more likely to get someone to move there if that community has a lively community portal, lots of recently updated community and civic Web sites, and attractive government, Chamber, and economic development Web sites.

Who in your community is responsible for the long term strategy of ensuring the community or region looks great on the Web? What specific activities are they doing regularly to ensure a job searcher or a relocating business thinks, "This community looks like a great place to live and to work?"

In a just released Forbes survey, Blacksburg, Virginia is ranked tenth in the nation as one of the best small places to live and to work. If you live in a small community, it is worth spending some time reviewing the Forbes study. Of the nine factors they use to rank communities, four of the nine are related directly to quality of life. These factors are Culture and Leisure, Crime Rate, Educational Attainment, and Cost of Living.

Among the other factors, Cost of Doing Business is one that any community can work on quickly. Our work at Design Nine takes us to small communities throughout the United States, and one of the most glaring problems I see over and over again is the lack of good "Class A" office space in smaller towns and regions. Too many communities are still trying to bring retail back to Main Street, when they should be rehabbing storefronts and second floor space for small businesses and entrepreneurs.

When Norton, Virginia rehabbed an old downtown hotel for high tech start ups, including affordable fiber to the building, Main Street blossomed as the office workers in the building shopped and ate downtown. The spacious lobby of the building regularly hosts community dinners, weddings, and special events, so the investment does double duty--how many weddings have been held in the typical industrial park incubator building?

The biggest mistake a small community can make these days is to put too much emphasis on business and industrial parks far from traditional downtowns--by making modest investments in high quality office space in traditional downtowns, you get a much bigger community and economic development impact. And as always, fiber has to be part of the mix.

With traffic choking the major metropolitan areas of the country, I think that some smaller cities like Roanoke, Virginia and Scranton, Pennsylvania are poised for growth, if they can adequately address a range of quality of life issues. These smaller cities may have a rush hour, but it usually measured in minutes, not hours, and because they are located outside major urban corridors, it is possible to have a nice house in the woods a few miles from town and still drive to work in fifteen or twenty minutes.

But no one is going to move to those places only because of a shorter commute. There has to be enough activity to attract both entrepreneurs and young people. Entrepreneurs want to talk to savvy and well-informed economic developers, they want inexpensive, downtown office space for their start ups, they want good places to eat, and they want great coffee shops. Young twenty-something workers want good shopping, lots of social activities, and some night life.

Northeastern Pennsylvania, home to Scranton, Wilkes-Barre, and dozens of smaller communities, is poised for growth. The Wall Street West initiative will bring massive bandwidth into the region to attract larger financial firms, and Scranton's investments in sports arenas and recreational activities (how about skiing ten minutes from downtown?) will help attract and retain workers.

Roanoke, Virginia, nestled in the foothills of the Blue Ridge mountains, has convenient access to some of the best hiking, biking, and whitewater sports on the east coast, with a dizzying array of recreational options. The City's leadership has embarked on a wide variety of initiatives to attract younger workers, including a newly revamped Web site. This week, the City is also announcing a new initiative called MyRetailRoanoke.com, which is designed to help retailers easily learn about the Roanoke area market.

Lively and attractive small cities are also important to nearby rural towns. Not everyone wants to live "in town," and a vibrant small city an hour or two from a rural community enhances the value of that small town as well. Regional collaboration on marketing, recreational activities, and economic development can pay big benefits.

Ken Pigg, from the University of Missouri, has been studying community use of technology for more than a decade, and is among a handful of truly informed experts about community technology issues. At his RTC session, he talked about communities and the challenges they are facing as they try to grapple with the issue of broadband.

Pigg started off by noting that "...broadband is the base of the economy." I could not agree more, but we still have many economic developers making decisions for communities that have not yet figured this out. Ken went on to list three specific issues that communities have to deal with.

• Leadership -- Community leaders have to make a long term commitment to shared leadership and regional collaboration. Pigg noted that successful community broadband projects need local broadband champions to keep the community headed in the right direction. Communities also need to recognize that in a global economy, local political boundaries don't matter very much, and communities that can't work with their neighbors on issues like broadband are likely to face difficulties.

• Quality of Life -- Businesses interested in relocation are seeking specific quality of life attributes in candidate communities, and a successful economic development program needs to focus on more than water, sewer, and industrial parks. Workforce amenities--what employees and business owners do outside business hours--are now very important.

• Post deployment marketing -- Pigg noted that communities are still using the "field of dreams" model for broadband projects, in which they buy some stuff, deploy it, and then forget about it. A year or two later, they are inevitably disappointed when their "broadband" project has not produced any significant economic impact. Pigg says that providing local businesses with education and technical assistance (to learn how to make best use of broadband) now has to be central to an economic development strategy.

Pigg's main point was that local leadership (or the lack of it) can make or break broadband projects. Are your local leaders technology savvy? Do your economic devlopment leaders make broadband a central part of the overall economic development strategy, or are they constantly doing another "study" without ever making significant investments in community broadband?

The Agency for Healthcare Research and Quality (AHRQ) has confirmed the participation of Dr. Carol Cain in this year’s Rural Telecommunications Congress Conference, October 22-25, 2006, at the Wyndham Riverfront Hotel in North Little Rock, AR. For those who might be unfamiliar with AHRQ they are the lead agency managing the Federal inventory of projects for the Department of Health and Human Services related to the transformation of the national healthcare system. In 2007 they will help disburse approximately $130 million in health information technology projects as well as another $300 million in other research areas that focus on health services, quality, patient safety, sustainability, etc. AHRQ's web site: http://www.ahrq.gov/

Rural Telecon '06 is exciting because it will help answer a critical question about community broadband:

How do we pay for it?

Participants will be able to return home being able to motivate change in economic/community development, healthcare, education, and telecommunications infrastructure. Open Access Service Provider community broadband initiatives are, in my opinion, the most exciting thing that has happened in telecom for communities since the early 90s.

For the first time ever, it is possible to develop a comprehensive cost and operations model for a community broadband system and show exactly what it will cost and how much revenue potential exists--and most importantly, to show how to pay for both initial investments and ongoing operational costs. Most importantly, open access networks energize the private sector and get government out of the telecom business, while maintaining community control of the infrastructure.

What is probably most exciting about Rural Telecon '06 is that it will present solutions that are just as valuable to urban settings as rural. Rural communities will have a chance to establish a leadership role in identifying how this future reliance on broadband telecommunications will play out.

More information about the conference is at the Rural Telecommunications Congress.

As Design Nine works with more and more communities on broadband development, I have become convinced that the only financial model that is going to work over the long term is the Open Service Provider Network (OSPN). What this means is that the network is designed, constructed, and managed specifically to allow and support a marketplace of service providers that compete for subscribers.

It does not really matter if your broadband system is part of a privately owned duopoly (i.e. the cable or telephone companies), or if your system is municipally owned. If you don't have choice for services, you are going to pay more for those services and get less for your money.

The longer term issue is financial viability. With a private company or government officials choosing which of a handful of services they think you should have, there just is not enough money flowing through the system to support and maintain a broadband network over decades. It is not enough to get the system built; you have to have a business model that will produce enough income to pay for maintenance and system upgrades over the long term. Many of the public systems that seem to be doing well right now are likely, in my opinion, to run into capacity and maintenance problems five to seven years out, as equipment wears out and/or requires upgrades.

The beauty of an OSPN system is that you don't put limits on either services or revenue. As new services become available, new income streams to help pay for maintenance and upgrades also becomes available. This is completely different from the current model of simply selling chunks of bandwidth, which immediately puts a cap on how much revenue is returned to the network operator (i.e. the community).

The good news is that there is off the shelf OSPN systems available. I was in Houston, Texas this week to see a cable TV operator preparing to roll out an OSPN, all fiber network, and the versatility of the system was simply amazing. If you would like to know more about OSPN designs and how to finance a community broadband network, give Design Nine a call. We'll be glad to help.

This article was sent to me by a county administrator who has long recognized the potential of small towns, good quality of life, and broadband. Forbes has selected 150 small towns and small cities and divided them into six categories, based on amenities and quality of life. It will be no surprise to many of you that the one thing Forbes has identified as a key enabler of economic growth is not water, sewer, or industrial parks.

It is affordable broadband.

If your economic developers have not yet completely overhauled their economic development strategy, print out a copy of this article and send it to them. The author talks about geographic arbitrage, meaning that a lot of white collar professionals are selling their high-priced homes located in major metropolitan areas and using the cash to buy an equivalent home for a lot less money somewhere else. How do they find work? They bring their work with them, using broadband to stay connected to clients and contacts.

A lot of these folks are working out of their homes, making neighborhoods the business districts of the 21st century. As I do periodically, I will list the four elements of my 21st century economic development plan.

• Traditional industrial recruitment -- you certainly want to try to attract the traditional manufacturing or office-based business, but it should be no more than 20% to25% of your total ED time and budget.

• Entrpreneurial recruitment -- This is attracting the professionals with portable businesses, who are making relocation decisions based on quality of life and availability of broadband in neighborhoods. Traditional ED sales pitches turn them off or don't attract their interest. To attract these folks, you have to sell the whole community, not just the 50 acre business park by the railroad tracks--they could care less about that. This should be at least 25% of your total ED time and budget.

• Existing business enhancement -- At least 80% of all new jobs created in your region next year will be created by businesses already in place. So what kinds of programs do your economic developers have to help existing businesses expand and grow? This should be at least 35% to 40% of your total ED time and budget.
• Local entrepreneurial growth -- Help people already in the region with new business concepts and ideas to get their business started. Make this at least 20% of your time and budget.

If your economic developers do not have a plan like this in place, you may want to ask them why. And of course, underlaying all this is the understanding that a community-based digital transport system (shared fiber and wireless digital roads) is the new water and sewer--it's basic and essential infrastructure needed to support economic growth. If your locality does not have a line item in its budget for regular annual expenditures to develop and expand a common digital roadway, it should. How else will you attract businesses and business professionals? Great quality of life without affordable, high performance broadband gets you nothing.

Roanoke is a city near Blacksburg, and the city's demographics are skewed, like many rural towns and cities, toward older people. The City recently decided to stop wringing its hands about the paucity of young people and actually do something. First they hired someone whose primary job responsibility is to solve the problem, and then gave him free rein. Stuart Meese, who landed the job, has both a blog and a city-sponsored online database of young people looking for work in the area.

With over 450 young people in the database after just a few months, the database is fast becoming a valuable resource for area businesses looking for talent. A hat tip to Roanoke and Stuart Meese for putting resources behind the problem and doing something other than just complaining. And while you might ask, "What about Monster.com?" I'd say, "What about it?" They are two different tools, and employers searching the Roanoke database can do so with a reasonable certainty they are looking at motivated potential employees who really want to work in the area. You can't say that with any certainty when you pull up a bunch of Monster.com listings.

If your job involves working with youth, or if it should (economic developers take note), you may want to read this article about the kind of people that visit Apple's iTunes Music Store. You might call people that fit the profile the "iPod Generation."

Not only do these folks comprise nearly 14% of everyone on the Internet, they have very specific interests and preferences, and I'm not talking about their musical preferences. If you are wondering why young people keep leaving your community or region, or why you can't attract young workers to your area, you should probably print this article out and circulate it widely in your community while asking, "What do we have that is of interest to these young people?" Some of the interesting data includes:

• One of their favorite television channels is BBC America (a broader worldview?).

• Their favorite car is a Volkswagen.

• They are very likely to be a reader of Wired magazine (do you read it?).

• They are much more likely to be young than the average Internet user (have you ever visited the iTunes Music Store?).

If you want to solve the disappearing youth problem in your community, you have to start by understanding their interests. Here's an easy way to get started.