Submitted by acohill on Wed, 02/13/2008 - 08:07
There are still a lot of community leaders who doubt the importance of broadband, but one city official I spoke to earlier this week said they had a Fortune 500 company that told him the firm loses a million dollars an hour for every hour their Internet connection is down. This firm is urging the city to help get additional fiber cable paths in and out of the community so those kinds of outages can be avoided.
Submitted by acohill on Mon, 02/04/2008 - 08:59
A group of economic development and technology organizations are holding a reverse job fair tomorrow (February 5th) in Blacksburg. A traditional job fair has employers at booths, and job seekers walk around looking for a job. In this reverse job fair, graduating students (mostly from Virginia Tech) are at tables, and the employers walk around.
This is an interesting idea born out of the understanding that many workers are now picking a location and lifestyle first and then looking for a job. The advantage to employers who attend is that there is a room full of prospective workers who are interested in living and working in the area.
Submitted by acohill on Wed, 01/23/2008 - 12:48
Galen Updike, with the State of Arizona, opened the Digital Cities Expo this morning, and told of speaking to a woman who was trying to run a business out of her rural home.
She said, "You know, I can do without public water--I can have my own well. I can do without public sewer--I can put in my own septic system. I can do without a paved road to my house. I can even do without electricity--I can generate my own. But without Internet access, my business will fail."
And that story illustrates the relative importance of broadband with respect to economic development.
Submitted by acohill on Tue, 12/18/2007 - 14:28
A new report by the Kaufmann Foundation indicates that 465,000 new businesses are being created every month in the United States. This probably represents a million jobs or more being created by small businesses every single month. The growth in start ups demonstrates why a community or regional economic development strategy has to include not just business attraction as a strategy, but also business creation.
Submitted by acohill on Tue, 12/18/2007 - 14:08
Here is an interesting analysis done by Stuart Mease, who works for the City of Roanoke, Virginia. Mease's job is trying to recruit young people to live and work in the Roanoke area. He has provided a cost of living comparison between Roanoke and some of the bigger towns and cities that are more likely to attract younger workers.
Roanoke compares very favorably; you can make less money and still live as well or better than you could in some bigger towns. Most smaller towns and cities would also fare very well with this kind of analysis, and could be an important factor when trying to convince a business to relocate to your area. The ability to pay lower salaries but still offer employees a great standard of living could be very attractive.
Submitted by acohill on Mon, 12/03/2007 - 09:24
Here is an article about how Northrop Grumman is moving jobs to small towns and cities. The company reports that labor savings can be more than 40%--a substantial amount that pays off year after year, and more than covers the initial cost of moving facilities. One of the locations cited is the small Virginia town of Lebanon. Lebanon is a small town located deep in the heart of the Blue Ridge mountains, a good 30 minute drive from the interstate.
Why did Northrop Grumman put 600 jobs there? Lebanon had participated in a regional fiber project that assured Northrup they would have the broadband connectivity the firm needed to get its work done.
Hat tip to Ed Morrison's excellent economic development blog.
Submitted by acohill on Mon, 12/03/2007 - 09:18
In yet another indication that quality of life is increasingly affecting economic development, a HUD newsletter had the following snippet:
“California has begun losing college-educated residents, on net, to other states, in large part because of the high cost of housing,” Virginia Postrel notes in Atlantic Monthly. “The South’s population growth since the 1980s has come from the lure of cheap housing created by liberal permitting policies, according to new research by the Harvard economists Edward Glaeser and Kristina Tobin. By lowering the cost of housing, these policies give residents higher real incomes compared with similarly paid workers elsewhere – a strong incentive to move, even if you don’t like bugs or hot summers. The mobile middle class gravitates to the cities where housing is affordable.”
Smaller cities that have affordable housing and affordable broadband would seem to have a valuable edge over communities that can't offer one, the other, or either of them.
Submitted by acohill on Thu, 11/08/2007 - 08:09
I was in another meeting with economic developers, and there was a growing recognition that broadband and power are the new water and sewer. In the Manufacturing Economy, it was water and sewer capacity that often made the difference when trying to attract manufacturing plants to a region.
Today, it is redundant broadband cable routes, multiple broadband service providers, redundant electric service, and reliable backup electric power that is driving relocation decisions. Medium and large companies are decentralizing their back office and server farm operations, moving them into more rural areas with good quality of life and a lower cost of living. But they are looking for business parks with electric power coming from two different substations, so one electric line could go down and there would still be power available. A single medium-sized server farm building may require 30 megawatts of power, and needs a substantial backup diesel or natural gas generator.
Companies also want broadband access not just from two or three different firms but also two or even three different cable routes. And they want all these facilities in place--they can't wait twelve to eighteen months while they are built. Relocation decisions are often made in as little as two to three months.
Can your economic developers answer all these questions? Does your region have an economic development strategy to address the broadband and power needs of Knowledge Economy businesses?
Submitted by acohill on Tue, 11/06/2007 - 09:23
I spent a good part of the day with a group of economic developers in a major northeastern state. We had some businesspeople in the meeting as well, and listened as two business owners described their frustration with the lack of connectivity outside of major metropolitan areas. In one case, the business owner had moved his staff and business headquarters from the New York metro area to a small city with a lower cost of living and great recreational opportunities near by (relocation based on quality of life issues, not water and sewer availability). The other business was moving many of its operations centers into rural areas for much the same reason.
But both had broadband horror stories. One business, located in a downtown area, said they needed a fiber connection to service provider facilities a block away, but thought that the city permitting process might take as much as a year. The other business, which had moved from the New York area, had to leave their data servers there because they could not get redundant data connections to an appropriate facility in the more rural small city.
Both stories illustrate the shift in economic development. The old real estate truism about the three most important issues for a business ("Location, location, location") has changed to "Location, location, connectivity." There is a growing trend among medium and large businesses, after 9/11 and Katrina, to decentralize operations and to have multiple data centers to ensure that the business can keep running after a local emergency. Communities that have the right connectivity options and good quality of life will have lots of opportunities.
Submitted by acohill on Tue, 10/16/2007 - 10:25
Morning keynote speaker Rex Nelson, who is the alternate Federal Co-chair of the Delta Regional Authority, delivered a lively, tough love talk this morning at the 10th Annual Rural Telecommunications Congress. Nelson said that too many rural communities have economic development programs that are "stuck in the fifties and sixties," with strategies that amount to little more than trying to sell "pastures....with water and sewer."
Nelson calls for programs similar to the ones undertaken in the first half of the twentieth century, when state and Federal officials invested heavily in essential infrastructure like roads and levees. Nelson drew heavily on the history of the Mississippi River region and the profound effect that levees had on taming the river, controlling flooding, and thereby enabling more stable local economies all up and down the river.
Today, Nelson said that telecom is an essential infrastructure for rural region that is the only hope of holding back "...a flood of poverty, poor health, and despair."
Submitted by acohill on Tue, 10/02/2007 - 08:19
The Northwest region of Pennsylvania has started a great blog on broadband. And some folks in Roanoke, Virginia have started a terrific blog on news and issues of interest to business people in the area.
Efforts like these move a community up in the rankings of search engines, help promote and support local economic development initiatives, and project a "modern" image to the rest of the world, where there are always businesses and entrepreneurs looking for a great place to relocate.
Submitted by acohill on Mon, 09/17/2007 - 13:20
In a great example of collaboration, a wide range of economic development groups and two local governments are sponsoring a workshop on starting a business or expanding an existing business. Part of a series of entrepreneur workshops being held around southwest Virginia, the October 5th workshop includes advice and materials from local, state, and national resources, a panel discussion led by successful entrepreneurs, and personalized break out sessions.
It is great to see that some regions are beginning to realize the economic development potential of small and start up businesses (where 90% of new jobs come from).
Submitted by acohill on Tue, 09/11/2007 - 07:07
This article from the New York Times (registration required, link may disappear) is an excellent discussion of how quality of life is, more and more, driving relocation decisions not just of businesses but of workers, especially younger workers.
Everywhere I go, smaller towns and communities are worried that young people are not staying and living in their communities, but at the same time, many of these communities are not making the kinds of investments that are going to attract young people. This article identifies some of the things workers looking for a better quality of life want.
Hat to Stuart Mease.
Submitted by acohill on Thu, 07/05/2007 - 06:23
Affordable, high capacity broadband does not replace the basics. Roanoke has a small regional airport with the second highest landing fees in the country; lousy, overpriced coffee; poor food service; and extremely high ticket prices. That's not a formula for attracting businesses to the Roanoke and New River Valley regions.
With the focus on broadband, it may be easy to forget that the in the global Knowledge Economy, we still have to travel. When HD quality business videoconference systems like HP's Halo Studio are commonplace, we may see a slight reduction in travel, but what is more likely is that HD conference systems will replace telephone conference calls, not face to face meetings.
Skeptics of the importance of broadband should take a look at the off the shelf HD conference systems already being sold. It takes anywhere from twenty to forty megabits of bandwidth just to have a single two way meeting, and you have to add another ten to twenty megabits of bandwidth for each additional location. Try that with DSL, cable modem, or wireless (Hint: it won't work).
Communities and regions that can show they understand the full range of business needs--affordable aire travel options, affordable broadband, affordable, high quality office space, and the right mix of business services have a winning combination.
Submitted by acohill on Wed, 07/04/2007 - 07:33
If I was an economic developer in any state but California, I would be preparing a new marketing strategy that includes touting my region's reliable and affordable electric power. And I would be talking to my local electric utility about making sure every business park in my region has redundant electric feeds from two different substations.
If you missed it, California is having electric supply woes again in the midst of a heat wave. This is bad for California businesses that use lots of electricity (many high tech firms, among others), but good for other regions of the country that have done a better job of providing for electric needs.
Not sure what the electric situation is in your region? It's time to put that on the short list of essential infrastructure, along with broadband. Expect relocating companies to be asking lots of questions about both.
Submitted by acohill on Tue, 06/26/2007 - 06:59
It is every economic developer's nightmare. On the front page of today's USA Today (no link online), there is a list of the five states with the slowest broadband in the country. Who wants to be on that list?
In Australia, slow broadband has been recognized as a major economic development issue. Officials there have said that slow broadband hinders the ability of commercial, manufacturing, and agricultural businesses to be fully integrated into international supply chains. In other words, if your businesses don't have the right kind of affordable broadband services available to them, they are going to lose business.
Submitted by acohill on Mon, 04/09/2007 - 09:09
The Wall Street Journal (page B5) reports today that the number of workers who have to commute 90 minutes or more each way to work has doubled since 1990. That adds up to three hours or more in the car every day. It takes a toll on job satisfaction, personal life, and family life.
Some of those commuters are looking for a place to work where commutes are not as long and not as stressful. When we lived in Craig County, I had a thirty minute "commute" back and forth to work, but the drive was so easy (no traffic) and so beautiful (down a highly rated Virginia Byway) that I looked forward to it at the end of the day as a way of unwinding on the way home.
For rural communities that have a plan, these millions of commuters are potential residents that can stop the flow of people moving away. What's in the plan?
How about your community? Do you have an economic development plan that is carefully targeted at attracting businesspeople tired of long commutes? Are you making the right investments to get them to take a close look at your region?
Submitted by acohill on Mon, 03/26/2007 - 06:51
The Internet has not made travel obsolete. Despite the eventual ability to make high quality video "phone" calls as often as we make voice calls today, the need to travel for business is not going away.
Three trends are converging that could be very good news for rural regions that are far-sighted enough to take advantage of them.
Rural regions of the country that have invested in smaller, regional airports (smaller than what the commercial airlines will use) will have a key economic development advantage in the Knowledge Economy. Commercial flights are beginning to nudge $800 to $1000 for business travel, because it is usually difficult to schedule travel weeks in advance to take advantage of bargain fares.
At those price points, air taxi service begins to look attractive, especially if you can save a full day of meals and an overnight stay. Time is also money, and point to point nonstop air taxi flights can save many wasted hours of travel time. Rural regions that have both affordable broadband AND a well run and well maintained small airport with air taxi service will have a hard to beat competitive advantage.
Here in the New River Valley, communities are debating whether we need one or two small, local airports (they are located about 30 minutes apart). Both serve important business and economic development needs, and both should be maintained and improved. In the end, it is all about attracting new businesses and keeping the ones you have. Small airports are going to become more important than excess water and sewer capacity, and at least as important as high performance, open access digital road systems.
Submitted by acohill on Tue, 02/06/2007 - 09:36
Greenways, bikeways, and rails to trails projects can be a money maker for a community or region when combined with a long range plan to build open service provider broadband roadways throughout a community. Greenways and trails not only provide recreational opportunities for existing residents, but they also help attract younger people to a community. By combining recreation with economic development, these greenways can be a net generator of revenue for a town or region. Design Nine can put together a team of broadband architects and transportation/land use planners to energize and connect your community. Call us if you would like more information.
Submitted by acohill on Fri, 01/26/2007 - 09:14
Broadband is not the only fuel of the Knowledge Economy. Rural leaders often discount the importance of having good places to eat in smaller towns. Microbusinesses and entrepreneurial start ups do a lot of business over breakfast and lunch, and one of the key quality of life factors that drive relocation decisions for enterpreneurs is the right kinds of restaurants--along with good coffee. Small town restaurants don't have to be fancy, but they have to be clean and comfortable, with excellent food and great service. Those are easily achievable goals, but small town restaurant owners may need coaching to bring their food, service, and decor up to the standards needed to attract Knowledge Economy business people. One small town that has the right kind of place is Quechee, Vermont, which has The Farmer's Diner. The Farmer's Diner has great food in a friendly, casual atmosphere, but the establishment also serves up locally grown food whenever possible--leveraging the interest in fresh and organic food, while providing a local sales opportunity for nearby farmers-a nice synergy.
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