Economic development

This article provides more data on the fast-shifting but likely permanent change in how we decide where we want to live. We are probably seeing the biggest shift in housing since the end of World War II and the rise of the suburb. Suburbs are not going away overnight, but the cost of commuting to and from often rural subdivisions has caused sharp drops in the value of homes in such locations, and there will be a counterbalancing increase in the value of homes closer to work and shopping--welcome back, downtown neighborhoods.

Smart communities will aggressively begin rehabilitation of neglected older neighborhoods--street and sidewalk repairs, park improvements, fiber to the home--as this will help draw workers and families that want to reduce or even eliminate commuting costs. It also suggests a tremendous opportunity to finally bring back Main Streets, which have been struggling since the sixties as commerce moved out to the edge of town.

The "new" Main Street will be focused primarily on business and professional companies and food/entertainment--things to do after work and places to eat for business professionals. Class A office space on Main street and Main Street business incubators will draw businesses looking for "quality of business life," where walking to work, walking to lunch, and easy access to professional services (copy services, banking, accounting, legal) are all within a few steps of the office.

And as always, downtown fiber will make this work.

VPNs, or Virtual Private Networks, are fast becoming a major issue with respect to broadband. A VPN is a way for a remote user (e.g. from home, traveling) to be connected to the corporate or business network as if he or she was in the office. It gives the home-based worker or business traveler complete access to all the documents and services he or she would normally have sitting at their desk.

But here's the rub: VPNs work best over high performance, well-designed broadband networks. I'm on vacation right now, and have to connect through a wireless signal. The VPN barely works. I can connect, but transferring files is painfully slow, and I keep getting time outs.

As more and more people start working from home part time to avoid the high cost of driving, community broadband efforts will begin hearing more and more about VPNs. If we are going to save energy, community broadband networks have to support business class connectivity and bandwidth. Neighborhoods are going to be business districts in the Energy Economy.

Despite high oil prices, small businesses created 61,000 jobs in May. Too many communities discount small businesses in their economic development strategy, and fail to include small businesses needs in their broadband planning. Big industrial companies get lots of attention, but those firms are the ones shedding jobs. Fast, nimble small firms can adapt more easily to changing economic conditions and changing customers needs.

Graham Richards, the former Mayor of Ft. Wayne, Indiana, spoke at the Broadband Properties Summit about why Ft. Wayne pushed fiber to the home. Some of the services and benefits included:

A green affordable housing initiative cut monthly energy costs for lower income families, and the broadband network was used to monitor energy use.

The network enabled live video monitoring of latchkey children whose parents had to work. Parents could have high quality video chats with their children as soon as they arrived home in the afternoon.

Local schools were able to offer enhanced distance learning opportunities to their students, including afternoon and weekend mentoring with tutors (enabled by the fiber network).

Their vision was fiber everywhere: a community broadband network dedicated to equality of opportunity and universal access.

They began a pilot initiative to have the city use hybrid plug in vehicles to reduce fuel and transportation costs for city workers.

They set a goal of saving 5% of the city budget through IT/broadband and green strategies--helping to conserve taxpayers dollars.

While Richards was mayor, he was able to turn the economic growth of the city from a deep loss of jobs to a dramatic turnaround in jobs creation and new businesses, and he attributed it to setting a vision, sticking to it, and broadband.

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 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.

This article 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.

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.

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.