Economic development

RuralTelecon Conference one of the best

Submitted by acohill on Fri, 09/03/2004 - 11:17

Early bird registration for the 8th Annual Rural Telecommunications Congress Annual Conference is still available through September 10th.

If you live in a rural community and are interested in economic development and broadband issues, this is one of the best conferences going. The RTC conference works hard to keep the sesssions focused on best practice, lessons learned, funding opportunities, and solid, practical information.

If you are interested in funding opportunities and national policy issues, some of the most important Federal and private agencies will be in attendance, with staff and speakers, including the Appalachian Regional Commission, the USDA, NTIA and the Technology Opportunities Program (TOP), and RUPRI.

The conference is being held in Spokane, Washington, with affordable downtown hotel rates, lots to do after hours, and of course, the conference is a tremendous opportunity to meet vendors, network in the hallways, and get valuable information for your community. Disclaimer: I'm on the RTC Board of Directors, but I agreed to join the Board because I was so impressed by the RTC conferences.

Why USAir is nearly broke

Submitted by acohill on Tue, 08/31/2004 - 09:46

The news is full of stories about USAir's financial woes, which they blame on the airline pilots. Their labor costs are probably too high. But I think there are other contributing factors. I just had to book a flight to Pittsburgh (round trip from Roanoke, Virginia). USAir has a hub there, and direct flights from Roanoke. The other three Roanoke airlines fly you through one of their hubs before getting to Pittsburgh.

You would think USAir would have a natural advantage, since businesspeople don't want to waste time in airports--a nonstop flight is always preferrable to one that requires a stop. Except when the nonstop flight costs two-thirds more! USAir is going broke because they are charging $800 for a single flight segment when all their competitors will fly two legs for under $500. Not only that, the times of the USAir flights are lousy, so I don't really lose that much time with the extra hop.

Another airline got my business, and USAir lost out because of absurd pricing coughed up by hideously complex pricing schemes generated by computer programs that only a bean counter could love. It's obvious that NO human being has ever looked at the Roanoke-Pittsburg pricing and asked, "Does this make sense?" If they had, the prices would be different, and USAir would be making money instead of losing it. Applied over their whole flight network, it's a wonder they have lasted this long. And it explains why the pilots are reluctant to make concessions--why should they if the real problem is not being fixed. Your costs could be zero, but if your prices drive your customers to another airline, it won't make any difference.

In part, this is a natural consequence of the Knowledge Economy. In the old days, travel agents worked mysteriously and invisibly to come up with ticket prices. They had special access to airline fee schedules, and we did not. So we took pricing more or less for granted. We had no information with which to make an informed decision. Today, I can hop onto Orbitz or Expedia and see every price from four or five airlines, and the pricing insanity that USAir calls a "business" is patently obvious.

The changing economic development landscape

Submitted by acohill on Fri, 08/27/2004 - 10:25

There is a mildly partisan op-ed piece in yesterday's USA Today about how jobs are and are not being counted in the U.S. Whichever side of the political fence you happen to be on, it's well worth a read. It does a nice job of summarizing the differences between the Payroll Survey (the traditional measure of jobs growth) and the Household Survey.

Briefly, the growing problem with the Payroll Survey is that it measures Manufacturing Economy growth (or lack of it). It measures only payroll changes. But in the Knowledge Economy, more and more workers are self-employed, and have little or no payroll. Many of these self-employed, if they expand, hire other self-employed workers on a project by project basis. This means that while they are providing employment for others, they are not adding to the Payroll Survey.

The Household Survey tries to take these other employment measures into account. Contrast the results of the two surveys in July of this year. The Payroll Survey reported an anemic 62,000 jobs added to the economy. The Household Survey reported a stunning 629,000 jobs added to the economy.

For communities, it is critical to understand the difference between the two and to adjust your economic development strategies appropriately. These numbers are nonpartisan statistics gathered by the Department of Labor. If you are measuring the success of your economic development program by the local growth of payroll jobs, you are missing (potentially) some 90% of the new jobs being created, based on the July numbers.

Are your economic developers shifting course and reallocating resources to better foster growth locally of self-employed workers, microenterprise businesses, and small business? If not, your region is at a major disadvantage--just look at the numbers.

Map your hotspots

Submitted by acohill on Wed, 08/25/2004 - 07:33

Dave Winer, who in many ways invented blogging, is on a coast to coast road trip. Guess what his number one complaint is? How hard it is to find hotspots at night so that he can get online and take care of work.

Everyone I've talked to in the past couple of months has laughingly agreed that they no longer care about hotel chains, frequent traveler points, or the quality of the breakfast buffet. One road warrior summed it up this way: "I'll sleep on the floor in a sleeping bag, but I want broadband."

Hotels are catching on, and many chains now advertise their broadband access heavily. But others don't, and Winer's complaint is that it is too hard to find public hotspots. He wants local and regional maps he can pull up on the Web that identify where WiFi is available.

How does your community portal measure up? Can visitors quickly determine where the hotspots are in your community? How about your economic development Web site? Can your out of town relocation prospects find broadband access locations easily on your Web site?

A robust community portal, designed to meet the needs of visitors and economic development prospects, sends a strong message that your community "gets it." I still visit too many communities complaining about their lack of jobs and lack of economic development activity, but a quick check of the Web often reveals the following: no county Web site or a very limited one that looks like it was last updated in 1998; no community portal or a mediocre "tourist brochure" approach that is mostly pretty pictures and little information. Or the worst of all--dueling Web sites that all claim to be the "official" community portal. The latter situation is a clear signal that the community lacks leadership and direction.

The community portal is the world's window into your community. How your community portal portrays your schools, your civic organizations, your recreational activities, and the business life of your community counts.

Concrete and indium

Submitted by acohill on Mon, 08/09/2004 - 09:25

Indium sounds like one of those made up compounds, like Intel's "Itanium" or Volkswagen's "Turbonium." but indium is a little known metal that is essential to the manufacture of LCD panels. The Wall Street Journal reports on a potential shortage of the transparent, conductive metal. It's refined from the tailings of commodity metals like zinc and lead.

The problem is that only a few hundred tons mark the entire world production, and the price has been rising rapidly. Even with the price increases, so little is sold that it's hardly worth it to the big zinc and lead producers to bother refining it. So while supplies are adequate right now, the exploding demand for big screen TVs and LCD panels suggests shortages may develop.

Cement is also creating a slowdown in the world economy. Paradoxically, the global Knowledge Economy is suffering from the high prices created by, of all things, cement. It's a useful reminder that for all the hype, the IT business is not the major driver in the global economy. It's a driver, but not the primary one (if there even is one). Businesses around the country, even in rural areas, are feeling the effects of the cement shortage because of demand in China and Iraq....proof positive that we can't ignore the interconnected, increasingly complex world beyond the borders of our own county and community.

Broadband is a "necessity"

Submitted by acohill on Wed, 07/28/2004 - 08:33

A Ziff-Davis news article chronicles a series of new broadband projects and applications using broadband, and calls broadband a "necessity."

Big Stone Gap, Virginia is keeping some employers in town and attracting new ones with the help of their fiber network. Led by Skip Skinner of the Lenowisco Planning District, the region has been laying fiber in Emtelle microduct for the past year, building a regional fiber backbone and making fiber available to downtown businesses in Big Stone Gap.

Design Nine has been working with Skinner and Lenowisco Planning District since early spring on a telecom master plan for the entire region, and of course, the fiber buildout is a cornerstone of future plans.

Broadband use soars in the United States

Submitted by acohill on Fri, 07/23/2004 - 08:30

There are still plenty of community leaders and elected officials who are not taking broadband seriously. Bluntly put, it's a critical economic development issue. Ignore it at your peril.

This article that summarizes recent growth in broadband use in the U.S. is a must read for economic developers. If your community is behind in broadband use compared to the general population, you have a serious problem that demands immediate and continuous attention.

Wondering how to get your community leaders more interested? How about taking one out to lunch next week and reviewing this data with them?

Broadband everywhere?

Submitted by acohill on Mon, 07/19/2004 - 09:40

We just rented a beach house for a week, and the contract had a list of amenities. To my surprise, broadband Internet access, a computer, and WiFi comes with what is a very moderately priced beach rental.

It's one more signal that your region, to be competitive in the global economy, needs to be working with your local hospitality, recreation, and travel businesses to make sure they understand this is what travelers want and expect.

If your local businesspeople are saying they don't understand it or don't think it's worth it, then you have an education and training challenge to help them identify what they need and why they need it (they need to keep customers coming). And your region needs hotels, motels, restaurants, and recreation spots to have these services. It's no longer some esoteric marketing strategy....it's become part of the base services package, like electricity, water, and sewer.

A rural advantage for high tech businesses

Submitted by acohill on Thu, 07/08/2004 - 11:11

An article in today's Wall Street Journal (B1) details the success of Hutchinson Technology, a company with four plants in southern Minnesota. Hutchinson manufactures most of the world's supply of the support arms used to hold the read/write head in hard drives. Most of its output is exported to Asia, where most hard drives are manufactured now.

Hutchinson relishes its remote location in rural Minnesota, and uses it as a competitive advantage. Hutchinson's products are highly sophisticated, and the company's leaders have considered moving some parts of the business closer to customers, but recognized it would also mean exporting their manufacturing processes and techniques. Their view is that they do not want to train workers in other countries on how they manufacture their products, as those workers could then quit and take that knowledge to other companies. Locating the business in rural Minnesota makes it much more difficult for brain drain and technology leaks to occur.

Muncipal WiFi a worldwide trend

Submitted by acohill on Fri, 06/25/2004 - 08:42

An article in The Register provides a nice synopsis of the worldwide trend for municipalities to offer public WiFi. It's happening most often in the big cities first, where businesspeople congregate in public spaces more and expect Internet access.

The new mesh network WiFi equipment is making it much easier to create WiFi zones at less cost (there are some very good Open Source mesh network WiFi solutions). Mesh networks provide some redundancy and eliminate the need to have wired connectivity at each access point.

If rural and smaller communities want to attract microenterprise businesses and entrepreneurs who are making relocation decisions based in part on lifestyle choices, WiFi zones throughout the downtown area in these smaller communities is one inexpensive way to help get on the short list of relocation sites. If two communities both have good schools, a slower pace of life, and good recreation options, the community that is planning for technology and offers WiFi zones is much more likely to appear attractive to a relocating business. Public WiFi is an indicator of a progressive community that understands the needs of business. How does your community rate?

Spokane wireless to drive economic development

Submitted by acohill on Fri, 06/25/2004 - 08:21

The City of Spokane has rolled out a new wireless zone that covers most of the major downtown area (more than 100 square blocks). Rather than leaving the growth of WiFi entirely to the private sector, which typically leaves lots of dead zones in an urban downtown, the city mapped its own antenna sites and was able to cover the entire area with just ten antennas--a much more efficient design that provides virtually 100% coverage.

The city estimated the cost as a very affordable "$50,000 to $75,000." Meter maids and police in the zone will use WiFi-enabled devices and laptops to improve their efficiency, which over the long term should pay back the entire investment. The city also made the investment to attract more businesses to the downtown area.

Florida pokes a hornet's nest

Submitted by acohill on Thu, 06/24/2004 - 09:08

I've been writing for some time about the looming battle over local and state telecom taxes. As more traditional telecom services move to the Internet, the telecom taxes that localities and the state have become so fond of just disappear. I've yet to talk to an elected official who A) understands this, or B) has a plan for dealing with it.

Florida state officials have knocked a telecom tax hornet's nest off the tree, and are about to start poking it with a stick, unless someone comes to their senses.

You need to read the whole article in Wired to get the full story, but briefly, an old telecom law enacted well before the Internet allows the state to tax business telecom networks. It was intended to collect taxes from businesses with their own PBX, but is so broadly written it applies to home business networks as well, and beginning in July, state tax officials may start taxing home-based businesses for having a desktop computer, a laptop, and a printer on a local network.

Aside from the fact that many small business taxes are inherently unfair (for example, in Blacksburg, a home based business gets taxed by the town on gross revenues, but a next door neighbor with a salary of the same amount pays nothing), home-based businesses are one of the fastest growing parts of the economy, and small business generally is creating between 75% and 90% of all new jobs, depending on who you ask. So a strategy of layering more taxes and paperwork on your economic development engine is probably not a good idea.

Mountain bikes and the Knowledge Economy

Submitted by acohill on Mon, 06/14/2004 - 06:57

As far back as 1998, I was telling folks to pay attention to business park amenities like bike/hiking trails. I usually got blank stares. More recently, I've had a slide in most of my presentations about the importance of marketing to businesspeople who have mountain bikes strapped to the top of their cars on the weekend. I still get a lot of blank stares--not as many, but a lot of economic developers seem to have trouble relating.

This morning, the Roanoke Times has a major feature on the glacial pace of trying to develop a more coherent and connected set of hiking/biking trails around the city. The article relates that recently, a Colorado high tech company was considering relocating to Roanoke.

Did they ask about business parks and incubator buildings? No. Were they interested in water and sewer capacity? No. What they wanted to know about was the biking trails, and here are some of their questions.

The paper notes that the company was willing to give up skiing to move to southwest Virginia, but ultimately decided to stay in Colorado.

That particular company was making a relocation decision, at least in part, based on quality of life, lifestyle options (like good biking trails), and a regional approach to recreation. Don't be tempted to think that bikers, hikers, and other small businesspeople with interests in recreation are all in their twenties. One of the leading bike trail advocates in Roanoke cheerfully admits to grey hair. In Blacksburg, the local cycling groups have large numbers of members over 40.

I find that many rural areas take their recreational amenities for granted--not only do they not market them as part of a comprehensive approach to economic development, many communities fail to fund and develop them at levels high enough to make them effective drivers of economic development.

WiFi and warchalking as marketing

Submitted by acohill on Fri, 06/11/2004 - 09:04

Schlotzky's, the popular deli chain with hundreds of stores across the country, has been rolling out their free WiFi offering with great success, apparently. The original plan had been to provide it only to the company-owned stores (95% of the stores are owned by franchisees), but the popularity of the WiFi offering has attracted the attention of the franchise owners, who want it for their stores as well.

Part of Schlotzky's marketing campaign has included "warchalking," which the WiFi user community has adapted from the old markings hobos used during the Depression to indicate where a good place to get food was, or places to avoid. There is a simple set of symbols that are literally drawn in chalk on the sidewalks in front of locations where there is free WiFi.

Korea's Simple Vision

Submitted by acohill on Thu, 06/10/2004 - 10:03

South Korea has announced a new initiative called Ubiquitous Korea that has a very simple vision for the country:

To transform the country into a more modern and technology-oriented society, which has been nicknamed U-Korea for Ubiquitous Korea, the government is envisioning a future that allows people to have uninterrupted access to the Internet, via fixed lines or mobile networks, any time, anywhere.

Korea has already committed $80 billion over the next five to seven years to run fiber by every home and business in the country. This vision for the citizens and businesses of South Korea is crystal clear, specifies no particular kind of transport system, protocols, or technology, and and provides a measureable benchmark for knowing when they are done.

Is it ambitious? You bet? Can it be done in a year or two? No, and they know that. But is the right stake to plant in the ground? Absolutely. How about your region? What's the vision for technology and telecommunications?

Comfort Suites--A Knowledge Economy hotel

Submitted by admin on Thu, 06/03/2004 - 16:37

I stayed in a Comfort Suites last night, and it wins hands down as a Knowledge Economy hotel.

Some of the amenities include wireless in meeting rooms and public areas, wired broadband in the rooms, a full service work area off the lobby that includes an Internet-connected pc, a fax machine, laser printer, and copy machine.

In the rooms, the Ethernet jack is above the level of the desk, as are four convenient AC outlets--no crawling on hands and knees under desks or behind beds to get a connection.

In the future, I'll be going out of my way to stay at Comfort Suites locations. How do the hotels in your community measure up? Can you offer business travelers to your community a place to stay with similar amenities?

Smart Mobs--Book of the Month

Submitted by acohill on Wed, 06/02/2004 - 07:16

Howard Rheingold is one of the best observers and commentators on how technology is affecting us. Not from a technical or "geek" perspective--Rheingold is interested in what is happening in our social, civic, and business relationships.

This book is easy to read; you can dive into in bits and pieces, and is meticulously researched and referenced. It's our pick for Book of the Month.

A second state readies a spaceport

Submitted by acohill on Mon, 05/24/2004 - 19:49

California is following New Mexico in preparing a commercial spaceport. An article on Space.com describes the effort in the Mojave Desert, down in southern California.

At least four space transportation companies are located at the spaceport or are planning to use it, including Bert Rutan's Scaled Composites. Rutan's company is expected to win the $10 million dollar X prize for the first commercial sub-orbitals flights.

Where the jobs are

Submitted by acohill on Mon, 05/17/2004 - 09:49

The Thursday New York Times had a fascinating article on the op-ed page (page A27) that is worth chasing down if you can snag a copy. It's a graphic and a couple of paragraphs on data from the Federal Reserve Bank about where the jobs are and are not. The bar graph really helps clarify and make understandable the changes we have been seeing in the job market over the past several years. It's no surprise that in the "Manual Dexterity," "Muscle Power," and "Formulaic Intelligence" categories, steep declines are being registered (Formulaic Intelligence includes jobs like bookkeepers, clerks, and typists--work that technology is shifting).

Steep increases have been registered in "People Skills and Emotional Intelligence" (financial services sales, nurses, recreation workers, lawyers), "Imagination and Creativity" (actors, architects, designers, photographers, cosmetologists), and "Analytic Reasoning" (legal assistants, scientists, engineers).

The authors, who include the chief economist at the Federal Reserve, note that Americans have, many times in the past, adjusted to changing economic conditions and have learned new skills. They also note that whenever these shifts take place, in the long run, people end up with better jobs that pay more. Finally, they note that "trying to preserve existing jobs will prove futile."

Communities need to learn what the jobs of the future are and make sure the training is available for them. The best thing about this--many of these jobs do NOT require four years of college. Two year colleges and trade institutes can pro

India market crash not a surprise...

Submitted by acohill on Mon, 05/17/2004 - 09:38

If you had read our recent book of the month Adventure Capitalist, you would not have been surprised by the market crash and unrest in India following elections. The author, Jim Rogers, predicted that India's rise in economic status would be bumpy because of the huge disparity between the rising middle class that has been fueling the economic development there and the desperately poor in rural areas, who represent a majority.

India potentially has a very bright future, but the country has to create economic conditions that most people can access, not just a few. America has, by and large, done a good job providing opportunities for people that are willing to work hard. That's why so many people want to migrate here.

Closer to home, our rural communities also face some challenges, but unfortunately, the population of U.S. rural areas is a minority, making it more difficult to influence politics and state and Federal spending. That's why I think rural communities need to look to the future, set a vision, and execute--with whatever resources can be mustered.

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