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Putting it all Together:Broadband and
Economic Development
PresentationConnect Your Economy Practical SeminarPikeville, Kentucky – December 15, 2016
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Broadband Means Jobs
Internet Enabled New Jobs as Percent of all New Jobs Created by BusinessesBy Size of Employer Group
Broadband enabled 36.4 % of all new jobs from 2014-16, up from 29.5% from 2010-13
Source: SNG Digital Economy Database
Impact of Internet on job creation
has accelerated in the last three
years
0 - 19 20 - 49 50 - 99 100 + Totals0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
35.6%
28.7%
33.0%
26.9%
29.5%
35.8%
30.8% 29.9%
40.1%
36.4%
2010-2013 2014-2016 Strategic Networks Group, 2010-2016, n= 6,164
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SNG research states
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SNG: some of our clients
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Takeaway 1:
Broadband impacts are driven by meaningful use
of Internet applications
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Digital Economy index (DEi) isSNG’s scoring system (0-10) of broadband use
Benchmark competitiveness against peers
Personalize return on investment of Internet applications to business owners and managers
Share with local economic development agencies for impact-based broadband planning
Measuring Meaningful Use
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9 up to 10
8 up to 9
7 up to 8
6 up to 7
5 up to 6
4 up to 5
25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0%
52.3%
45.2%
35.2%
33.2%
31.7%
29.5%
R² = 0.981136783071425
Average % Revenue from Internet UseDE
i Ran
ge
N = 1,426
Incr
easin
g U
tiliza
tion
More Effective Internet UseIncreases Revenues
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Benefits to Businesses
NoneIncrease foot traffic to locations
Expand access to skilled resourcesGrow offerings with online products and services
Increase staff productivityImprove market shareStrengthen your brand
Increase sales efficiencyExpand geographic reach & acquire customers
Effectiveness in reaching target customersReduce operating costs
Increase customer loyalty and satisfaction
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
6.2%25.9%
32.4%33.9%
44.0%46.8%48.0%48.5%49.6%51.3%51.6%
54.8%
Businesses' Stated Goals for Going Online
Strategic Networks Group, 2014-2016, n= 6,599
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Jobs Gained from Internet Use
1 - 19 20 - 49 50+ Total0.0
5.0
10.0
15.0
20.0
10.5 11.3
15.713.5
Technology Ratio: Net Jobs Gained From Internet Use Compared to Jobs Lost
Strategic Networks Group, 2014-2016, n= 1,805
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Why Broadband Matters …
Improves business competitiveness, innovation, and growth… leading to job creation
Key for business retention and expansion
Enhances quality of life and household income
Enables “smart” municipal services
Community benefits are not considered by ISPs, as they are outside of their business case
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Impacts from Driving Meaningful Use
Broadband Economic Impact Estimate for Tennessee
Measure ImpactBusinesses Adopting 3,401
New Revenues / Business $63,200Annual GDP $ 267.0 M
Annual Tax Revenues $ 9.93 MRegional Jobs Created 3,940
https://www.tn.gov/ecd/section/broadband-survey
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Impacts from Driving Meaningful Use- Regional -
Broadband Economic Impact Estimatefor Kentucky River Area Development District
Measure ImpactBusinesses Adopting 67
New Revenues / Business $41,200Annual GDP $ 3.5 M
Annual Tax Revenues $ 0.13 MTotal New Jobs 52
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Takeaway 2:
Business Location/Relocation Decisions are Impacted by
Broadband Availability
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Broadband and Business Location
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Half of Businesses Don’t Have Broadband
48.2%
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Broadband Speeds – Rural vs Urban
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Only one provider
Two providers Three providers
More than three
providers
Don't know0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
37.8%
27.3%
8.7% 8.8%
17.4%
ISP Choice for Businesses
Strategic Networks Group, 2014-2016, n= 5,323
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Cost vs. Benefit Also a Barrier
$2,000 or more
$1,000 to $1,999
$500 to $999
$400 to $499
$300 to $399
$200 to $299
$100 to $149
$50 to $99
Less than $50
.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
2.5%
2.5%
3.7%
1.8%
3.6%
7.8%
17.0%
37.9%
15.2%
Monthly ISP Subscription Prices: Businesses
Strategic Networks Group, 2014-2016, n= 5,574
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Takeaway 3:
It’s more than just availability/speed…
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Feature vs. Benefit:Marketing’s Impact on Small Businesses
Target Market Demand Drivers Feature Benefit Result
Households Netflix, Gaming, Multiple household users and devices Speed Enhanced
lifestyle Uptake
Large Businesses
IT staff, Collaboration, Security, Cloud Applications Speed Competitiveness
Collaboration Uptake
SMEsEmail, websites, basic online tools, all accomplished with “basic” service
SpeedHow does fast Internet impact my bottom line?
Limited Uptake
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Broadband’s Applications are Technologies, not Utilities
When people buy, adopt, and utilize technology – they buy benefits, not features
… so driving awareness and utilization is the next challengeFor further information, see “No Field of Dreams: Eliminating the Waiting Game and Driving Uptake”
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What’s Preventing Businesses from Meaningful Use?
Time and effort required to develop expertise
Lack of internal resource with necessary skills
Too much information - not enough time to research
Lack of local external support resources
Affordability of local external support resources
Higher priorities to focus on
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
19.7%
18.4%
20.2%
16.4%
21.8%
21.7%
42.8%
36.2%
36.6%
29.4%
29.1%
33.3%
Barriers to Acquiring Internal Expertise
Critical barrier for progress Challenging but manageableStrategic Networks Group, 2014-2016, n= 6,960
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Broadband Demand – what are we building for?
Active Demand Latent Demand Potential Demand
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Economic Growth is Driven by Utilization
Utilization Growth
Availability Adoption Utilization
Broadband availability is often the primary focus, however …
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Subscription Revenues- Operations & Maintenance Investments
= PROFIT vs.Economic Case
Increased business productivity and revenues+ Good, high-paying new local jobs
+ better quality of life, competitive Internet choice - Investment, utilization programs and business support
= BENEFITS FOR THE COMMUNITY
The Economic Case for Broadband Cannot Be Found on a Balance Sheet
“Off- balance-sheet”
Community benefits > Network Profit
Balance sheet
Business Case
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Provide information and tools to drive meaningful use of Internet applications
Help them understand the benefits of going online – not just ‘nice to have’
Develop a business case for each business to take action
Personalize the Value of Broadband to Local Businesses
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Drive more effective internet utilization
This is a process!
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New good-paying local jobs in technology and media
Local business retention and expansion through better use of technology
Investments that maximize local economic growth
The Win-Win-Win
+
=
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Michael Curri, PresidentStrategic Networks Group Inc.+1 202.558.2128mcurri@sngroup.com
Thank you.Now let’s connect.
facebook.com/strategicnetworksgroup
linkedin.com/company/strategic-networks-group
@SNGroup
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Connecting the Dots Between Broadband
and Economic Development
WorkshopConnect Your Economy Practical SeminarPikeville, Kentucky – December 16, 2016
sngroup.com/poll/
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Agenda
• 15 min - Why is economic development through broadband not automatic?
• 10 min - Breakout session #1: What are your challenges?• 15 min - What has worked for economic development through
broadband• 15 min – Start Breakout session #2: Action planning for economic
development through broadband• 10:55-11am Break• 15 min – Continue Breakout session #2• 15 min – Discussion • 15 min – Community broadband tools and resources• 15 min – Summary and wrap-up
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SNG research states
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SNG: some of our clients
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Broadband Means Jobs
Internet Enabled New Jobs as Percent of all New Jobs Created by BusinessesBy Size of Employer Group
Broadband enabled 36.4 % of all new jobs from 2014-16, up from 29.5% from 2010-13
Source: SNG Digital Economy Database
Impact of Internet on job creation
has accelerated in the last three
years
0 - 19 20 - 49 50 - 99 100 + Totals0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
35.6%
28.7%
33.0%
26.9%
29.5%
35.8%
30.8% 29.9%
40.1%
36.4%
2010-2013 2014-2016 Strategic Networks Group, 2010-2016, n= 6,164
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Relationship between Utilization and Speed
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Challenge: The Smaller the Business, the Lower the Internet Utilization
1 - 4 5 - 9 10 - 19 20 - 49 50 - 99 100 - 249 250 - 499 500 or more
5.00
6.00
7.00
8.00
9.00
6.08
6.62 6.85 6.877.09 7.20
7.57
8.00
The Small Business Digital Divide
Number of Employees
Utiliz
ation
(DEi
) Sco
re
Strategic Networks Group, 2012-2016, n= 20,420
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Compounding Challenge: Rural Businesses Lag Farther Behind
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This is Troubling as Small Businesses Have Much to Gain in Terms of Revenues…
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...And Cost Savings!
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Audience Poll – Results
Poll Q1 - What type of organization do you represent? https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxMjQ3ZjM4ZDM4MWEyMTAwZGQ0YjAx
Poll Q2 - What is your current primary role in broadband initiatives in your community or region? https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxMjQ5OTZiY2UyNmYxOTAwZmI0Y2Qz
Poll Q3 - With respect to broadband, what are the key challenges you face in your community or region? https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxNzgyNjBmZDVlNzYxODAwY2Y0ZWIw
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Breakout session #1:
What are your challenges?
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Provide information and tools to drive meaningful use of Internet applications
Help them understand the benefits of going online – not just ‘nice to have’
Develop a business case for each business to take action
Personalize the Value of Broadband to Local Businesses
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All Internet Applications Are Not Equal
Quick to Adopt ‘Laissez-faire’ approach
Slow to AdoptNeed awareness and support
Business Applications Business Applications
Buying Online Selling Online
Basic Website Online media (video)
Research and accessing information
Teleworking
e-mail Delivering Content and Services
Document transfer Social Networking
BIGGESTBENEFITS
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The Payoff from Driving Utilization
0 - 19 20 - 49 50 - 99 100 - 499 500+ Totals0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
21.6%
14.7%
21.5% 22.8%
11.7%
19.1%
45.8%41.2% 39.7% 39.7%
66.9%
46.0%
New Jobs, Low versus High Internet Utilization
Low DEi (0 up to 7) High DEi (7 to 10)
Strategic Networks Group, 2014-2016, n= 1,805
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Benefits to Service Providers
When providing businesses with better service and speed… show them how to use it
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Benefits to Local Business Retention and Expansion
For a business,increasing utilization by 10%:
Increases revenues 24%Decreases costs 7%
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Benefits to Community / RegionalEconomy and Workforce
For a region, increasing utilization:
Allows businesses to be more competitive
Creates a demand for high-skilled workers
Adds fiscal revenues
Grows markets for service providers
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Tips and Tools to Drive Economic Development through BroadbandUnderstand how to assess current broadband availability and demand at the micro-level
Use tools to identify gaps, barriers, and opportunities for growth – basis for partnerships to drive utilization
Design a network that has the capability to meet potential demand
Find out the tried and true services that drive local growth and improve the quality of life in your community
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Breakout session #2:
Action planning for economic development through broadband
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Challenges Poll – Results
Poll Q4 - At what stage are the efforts to address broadband challenges in your community or region?https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxMjRhNDY3ZGMwYmQxNDAwMWUyMGE3
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Action planning: How do we ensure economic development
success through broadband?
• Resources• Goals, Vision• Tasks• Challenges• Success Factors – what is working?
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Moving to Action forImpact-based Broadband Planning
http://sngroup.com/broadbandresources/
http://www.arc.gov/images/programs/telecom/ARCBroadbandPlanningPrimerToolkit.pdf
http://www.soar-ky.org/blueprint
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Broadband Toolkit: Designed to Follow a Process
http://sngroup.com/broadbandtoolkit/
• Save time, accelerate process
• Focus on the right things
• Avoid pitfalls, reduce risks
Best practices to leverage broadband and the economic opportunities it creates:
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Toolkit Overview
Information, research, guidance, methods, and resources that include: – Overview of broadband and impacts– Guide to define goals and needs– Options for network models– Community readiness assessment– Guides for implementation
A comprehensive approach adaptable to different municipal needs
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Community Readiness• Effectively engage community stakeholders in the process –
buy-in through participation• Template to evaluate key success factors– Leadership– Vison and Plan– Organizational Stability– Community Awareness– Implementation Ability– Market Profile
• Minimize risks by optimizing readiness before committing to a path
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Guides and Templates
• Guides and templates to support you–Adaptable– Time savers
• Ensure you’re using best practices• Allow you to apply your own resources more
efficiently
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Drive more effective internet utilization
This is a process!
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A DEi Scorecard is delivered to each business and organization
Individualized ‘broadband assessment’ that:‒ benchmarks competitiveness against
peers (by size and industry sector)‒ estimates ROI from increased utilization‒ provides links to local advisors and
support
Data based on the individual’s current broadband utilization against industry average
Shared with local economic development agencies so they can raise awareness, increase adoption, and drive utilization
Personalized Incentives: DEi Scorecard
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New good-paying local jobs in technology and media
Local business retention and expansion through better use of technology
Investments that maximize local economic growth
The Win-Win-Win
+
=
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Michael Curri, PresidentStrategic Networks Group Inc.+1 202.558.2128mcurri@sngroup.com
Thank you.Now let’s connect.
facebook.com/strategicnetworksgroup
linkedin.com/company/strategic-networks-group
@SNGroup
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