Economic development

Broadband Properties '08: Fiber is part of the ED toolkit

Submitted by acohill on Mon, 04/28/2008 - 14:47

Dan Rogers, President of the Kendall County, Texas Economic Development Corporation, just spoke at the Broadband Properties Summit here in Dallas-Fort Worth. Kendall County is a rural area between Austin and San Antonio, and is part of the Texas Hill Country--a beautiful area of mostly very small towns.

Kendall County is served by a rural telecom coop that is deploying fiber to the home, and Rogers indicated it has had a significant impact on economic development. He now views fiber as a relocation "eliminator," as he termed it, meaning that communities without fiber services are eliminated early in the relocation process.

Rogers also said something interesting about retention. He indicated he viewed fiber as part of Kendall County's retention strategy. Businesses already in the region are telling him that they are able to stay because the high capacity fiber services are enabling them to get bigger contracts with companies that expect them to have the same kind of broadband connectivity that is available in bigger metro areas.

Rogers also talked about "big broadband" and "little broadband." He viewed "little broadband" as areas with copper-based DSL and cable modem services, and noted that he saw Kendall County as having a significant advantage because they had "big broadband," meaning fiber-based broadband.

The notion of "big" and "little" broadband is a useful shorthand for cutting through the fog of just what kind of broadband is available in a community, and could be a useful marketing slogan: "Bring your business to our community, where we have BIG broadband."

When an audience member asked Rogers what he would tell elected officials who are reluctant to make an investment in community-wide broadband, he had sobering advice: "Tell them they won't be able to bring in the kind of businesses they want."

Find your spot

Submitted by acohill on Sun, 04/06/2008 - 10:04

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?"

Best small places to live and to work

Submitted by acohill on Wed, 04/02/2008 - 08:18

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.

Fiber pulls relocating businesses

Submitted by acohill on Fri, 02/22/2008 - 07:55

This article [link no longer available] from a rural update New York paper illustrates the power of fiber. The Adirondack region of upstate New York has a regional community fiber backbone that is pulling companies to the region--a region that would not give a second thought without the community fiber.

Fiber is basic economic development infrastructure. It is not a luxury for business anymore, it is a necessity. Communities that have competitive fiber today, or even have a plan for getting some in the next twelve to eighteen months, have a distinct competitive edge over communities that do not.

One million dollars an hour

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.

Reverse job fair

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.

Digital Cities: "My business can't survive without broadband"

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.

465,000 new businesses every month

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.

Show them the numbers

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.

Rural America: 40% less costly

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.

Affordable housing draws workers

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.

Broadband and Power is the new Water and Sewer

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?

Location, location, connectivity

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.

Rural Telecon: "Industrial" development is dead

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."

Marketing a community

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.

How to start a business

Submitted by acohill on Mon, 09/17/2007 - 13:20

Roanoke
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).

Quality of life continues to influence relocation

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.

Broadband does not replace the basics

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.

Electricity and economic development

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.

Does your state have the slowest broadband?

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.

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