Broadband and Economic
Development
Global to Local

Agenda
• Introduction
• What the empirical studies show
• Site selectors and broadband
• Entrepreneurs and broadband
• Local success stories

What is Economic Development?
“The process of raising the level of prosperity
and material living in a society through
increasing the productivity and efficiency of its
economy.”
Joan Spero and Jeffrey Hart
Indiana University

Some say “Build it and they will
come.”
Who is they, anyhow?

Broadband Vitality Components
Providers Community Members
Robust Network Subscribers
Technology Service
Sophisticated Use
Offerings
Each has an important impact on economic development!

Broadband and Economic
Development
What the empirical studies show…

MIT/Carnegie Mellon Study
Lehr, Osorio, Gillett, Sirbu
January 17, 2006
• For the period between 1998 and 2002, where
broadband was available by 12/99, communities
experienced more rapid growth in:
– Employment
– The number of businesses overall
– The number of IT businesses
• These communities also had higher market rental
rates.
• All data was at the zip code level.

Brookings Institution Study
Crandall, Lehr and Litan
July 2007
• For every 1% increase in state broadband
penetration, employment will increase 0.2-
0.3% per year.
• Employment in manufacturing, services
(finance, education and health care) in
positively related to broadband penetration.

More Brookings
• Policy implications
– Encourage competition among providers to lower
costs
• Reform video franchising
• Oppose net neutrality

Broadband and Economic
Development
What Site Selectors Think…

Broadband Site Factors
• Broadband is an expected asset, not a
competitive advantage
– Direct fiber connections
– Redundant networks
– Competitive services
– Reliability measures
– Technical talent!!!

Broadband and Economic
Development
Entrepreneurial Development

Broadband Entrepreneurs
From InfoWorld’s Greatest Web Moments
• 1994 - Yahoo - created by college students
• 1995 - e-Bay – broken laser pointer 1st item
• 1997 - Craig’s List – emerged from a list serv
• 1995 – Amazon – first office was a garage
• 1998- Google – created by college students

Would you lend money to this girl?

Whateverlife.com
• Ashley Qualls, 17 year old entrepreneur
• Web site has 2.4 M visitors per month
• Site ranks 825 of 20.3 M sites
• Sells designs for MySpace pages
• Employs her mom and several friends
• Borrowed $8 to start her company

Attracting Entrepreneurs
• Quality of life
– Means different things to different people
• Entrepreneurial culture and connections
• Business support systems
• Available broadband
– In town?
– At the lake?
– What about big broadband for power users?

Broadband and Economic
Development
Successful Local Strategies

Helping Existing Businesses Grow…
• Business technology assessments
– Todd County through MN Technology Inc.
• Subsidizing web page development and
improvements
– Cambridge
• Linking community businesses together through
portals
– New Ulm retailers
– Mankato area manufacturers

Entrepreneurial Development
• Youth as web masters for business
– Five Small Towns
• E-commerce training
– U of M Extension
– MN Technology, Inc.
– MNSCU

Conclusions
• High level research and Main Street anecdotes
demonstrate that broadband access and utilization
increase business success
• Business prospects expect broadband services
– Choice
– Customer service
– Redundancy
– Technical talent

Community Technology Initiatives
Make A Critical Difference
Increase knowledge, build a tech
savvy community brand & empower
economic growth

Bill Coleman
Community Technology Advisors
bill@communitytechnologyadvisors.com
651-491-2551
Register today for the Blandin Broadband
Conference! www.blandinfoundation.org