Download Economic Development

Economic Development:
The Killer App For Local Fiber Networks
Jim Baller
Baller Stokes & Lide, PC
[email protected]
Overview
•
•
•
•
•
What is a “Killer App”?
What is “Economic Development”?
What Have We Learned About Broadband and
Economic Development?
What Are Successful Communities Doing?
What’s Next? The Future of Work
What is a “Killer App”?
“[A]ny computer program that is so necessary or desirable that it
proves the core value of some larger technology, such as computer
hardware, gaming console, software, programming language, software
platform, or an operating system. In other words, consumers would
buy the (expensive) hardware just to run that application. A killer app
can substantially increase sales of the platform on which it runs.”
Wikipedia, http://bit.ly/P4G7PL
What is “Economic Development”?
“Economic Development creates the conditions for economic growth and
improved quality of life by expanding the capacity of individuals, firms and
communities to maximize the use of their talents and skills to support
innovation, lower transaction costs and responsibly produce and trade
valuable goods and services. Economic Development requires effective,
collaborative institutions focused on advancing mutual gain for the public
and the private sector. Economic Development is essential to ensuring
our economic future.”
U.S. Economic Development Administration
Economic Development Strategies
•
•
•
•
Attract or retain a few large employers, or a larger number of smaller
employers, or a combination of both
Increase profitability of local businesses, the number or quality of local
jobs, or some of each
Support of all local industries, or target particular industries – e.g., hightech, health care, data centers, etc.
Community vs. regional approaches
Common Economic Development Tools
•
•
•
•
•
•
•
Tax incentives (e.g., TIF, NMTC), “zones” and “districts” of various kinds
Loans, grants, loan guarantees, or other financial incentives
Upgrade infrastructure (roads, sewers, power, fiber, etc.)
Make available attractive, low-cost sites
Accelerate franchises, permits, and other authorizations
Support workforce development and training
Help boost sales via marketing support, demand aggregation, etc.
See Texas Municipal League Economic Development Handbook,
https://www.tml.org/p/EconomicDevelopmentHandbook2015_TML.pdf
Why It’s So Hard to Quantify the Relationship
Between Fiber and Economic Development
•
•
•
•
•
•
•
Still early – limited data base
Circumstances vary widely
Many different kinds of economic “success” (or “failure”)
Fiber only one of several critical factors
Competition varies in and among communities
Corelation v. causation
Many more factors
What Have We Learned So Far?
• Studies of First-Gen, Low-Capacity Broadband (2005~2015)
(NTIA, Gillet, Crandall, Ford, Kolko, Whitacre, SNG, etc.)
– At least an association, probably a causal relationship in
some situations
– More rapid growth in employment, number of businesses,
especially IT-related businesses
– High levels of adoption in rural areas cause income growth
and increase in employment
– SNG benchmarking econ impact of small business usage
What Have We Learned So Far? (continued)
• Studies Focusing on Fiber Networks (2010-current)
– Home-based businesses on fiber networks annually add at
least $40 Billion to US economy (RVA)
– Fiber networks increase property values approximately
$5,000-$6,000 on home of $300,000 in US (RVA and several
other studies)
– Early data suggest that fiber networks increase local GDP
more than 1% (Sosa)
What Have We Learned So Far? (continued)
• Recent RVA study of impact of FTTH on local economies
• Compared metro areas that have more than 60% FTTH with
metro areas that have less than 25% FTTH
• Results:
– 10-year impact on jobs: 72% better for FTTH cities
– 10-year impact on gross metropolitan product: 64% better
for FTTH cities
– 10-year impact on business formation: 46% better for
FTTH cities
What Have We Learned So Far? (continued)
• Dr. Bento Lobo’s studies of economic impacts of Chattanooga’s
fiber network in Hamilton County, Tennessee
• Estimated household, community, business, and utility benefits
(e.g., lower communications service bills (incl. from competitors),
new investments and jobs, telehealth, telecommuting, increase
in venture capital, publicity for community, business efficiency
gains, disaster recovery, etc.)
• Results: On investment of $195 million, created 2,800-5,200 jobs
and $865 million - $1.321 billion in economic benefits
What Have We Learned So Far? (continued)
• Steve Ross (Broadband Communities) studies of all US Counties for
the years 2010 through 2013
• Counties in the bottom half of their state rankings for access to 25
Mbps download speeds had a population growth of only 0.27 percent
• The top half enjoyed growth of 2.79 percent – more than 10 times
greater
• Counties in the bottom half of their state rankings added just 134,390
people, and those in the top half added more than 7.2 million
https://goo.gl/ivkKzd
What Are Successful Communities Doing?
•
See “Killer App” paper for 23 examples (https://goo.gl/B6Rmt4)
– Essential: one or more 24/7 local “champions”
– Strong, holistic commitment to success of the community
– Extensive and ever expanding knowledge of community
– Bold, realistic, and pro-active vision
– Extensive research into everything necessary to succeed
– Ability to make, articulate, and execute action plans
– 100% commitment to succeed in face of opposition
What’s Next? The Future of Work
• Some forms of economic development are better than others
• Best ones create work opportunities that enable residents to
earn a decent living and feel fulfilled
• We’re now in the “Age of Accelerations” – especially given
job-threatening artificial intelligence, robotics, and globalization
• How will adaptive communities deal with this?
Questions?
Jim Baller
Baller Stokes & Lide, PC
(202) 833-1144
[email protected]
www.Baller.com