Archive for October, 2011

October 2011 Bandwidth: Change, Utilization, and Big Things in SC

Change is Hard… and So is Utilization

by Michael Curri & Doug Adams
In work across four American States, SNG research has found that not all e-solutions are created equally. Some are relatively easy to drive adoption and utilization… some are extremely different and require overcoming great challenges. When we plot out the utilization of various e-solutions versus SNG’s proprietary Digital Economy index (DEi) which measures the utilization of broadband as a platform for innovation, we see just how hard in what we’ve dubbed our “football chart” below. As a reminder, DEi scores range from 1 to 10 (10 being highest), with higher scores reflecting the greater the number, scope and sophistication of the Internet activities deployed in an organization.

As we discussed last month businesses with a high DEi, meaning higher levels of adopting and using e-solutions, experience larger percentage increases of revenues (between 27 and 31%). Increasing Internet utilization dramatically increases corporate revenues and job creation.

So what does this have to do with the football chart? Let’s dig deeper and look at what separates the more successful organizations in utilizing broadband, creating efficiencies and growing revenues. It’s not the easy, “quick to adopt” solutions that include accessing government information online, sharing files, using collaborative tools, online research, and companies hosting their own website. These are all basic and even unsophisticated businesses are doing these.

But what separates the mediocre from the great… who is “winning” according to SNG’s research and the ‘football chart?’ The organizations that take on the difficult challenges, the more complicated e-solutions, are the businesses that are utilizing broadband to grow their business. These include:

  • Teleworking – Using the Internet as your “virtual office,” enabling a geographically disparate workforce.
  • Rich media – Creating multimedia content and interactive tools to market products/services and increase sales opportunities
  • Social networking – Using today’s social network forums to promote business and collaborate with peer groups and colleagues
  • eCommerce – Selling goods or services online – this can include driving leads toward payment and does not require online payment.
  • Deliver services or content online – From customer service departments to digitized products.

Are you focusing on simply providing broadband and waiting for people to adopt… and ultimately utilize e-solutions (the tried and failed build it and they will come mentality) or are you driving utilization? Focus on driving sophisticated use of broadband and you’ll see your region’s economy reap the benefits. SNG has helped to look at where gaps are and prescribe next steps for economic development through broadband in communities and regions.

SNG Workshop in SC Helps to Drive Network Utilization

Earlier this month SNG’s Michael Curri and Derek Murphy travelled to South Carolina to assist in their broadband initiatives. Held by the Clemson Institute for Economic and Community Development and West Carolina Rural Telephone Cooperative (WCTel), the day long workshop gathered stakeholders interested in examining how broadband could help create a healthy and vibrant regional economy.

Dave Herron, CEO of WCTel, explained that after completing a Fiber-to-the-Premise network throughout their rural service area, “we were faced with the challenge of trying to get our communities and economic development professionals to realize the value of the infrastructure they had available to them.”

And that’s where SNG stepped in, along with Clemson University’s Institute of Economic and Community Development, to conduct a workshop for local economic development professionals, educational communities, Chambers of Commerce, State Dept. of Commerce, and several other community leaders. SNG’s expertise in maximizing the desirable outcomes enabled by investment in advanced broadband infrastructure were seen a key to demonstrate “what’s possible” with the WCTel network.

Explains Herron, “We needed to show local leaders how to utilize the network to promote economic and social development. We are committed to educating the community and are extremely hopeful that the leadership group formed will help in that effort, demonstrating to the communities how network utilization will to attract new industries, enhance existing businesses, and create jobs for our communities.”

Michael Curri explained how exciting it was to see a strong desire among the participants to work together – that day and in the future as they organized. “We helped create real momentum – it will be exciting to see the socio-economic benefits that will be realized thanks to the combination of the WCTel network and a mobilized leadership group.”

No Job doesn’t Mean No Earning Potential 

More from the SNG research front before we put a wrap on this month’s Bandwidth. It is encouraging to see 1 out of 4 of unemployed individuals using the Internet to start a home business. Another 25% are relying on the Internet for education and training to help them get their next job. Even the retired are using the Internet for both of these purposes.

Obviously, when considering how to cut back on personal expenses, the Internet bill should be taken off the table. Is it time that unemployment insurance include an Internet stipend? It’s worth considering given our findings.

n= 229 unemployed, 868 retired


Change is Hard… and So is Utilization

by Michael Curri & Doug Adams
In work across four American States, SNG research has found that not all e-solutions are created equally. Some are relatively easy to drive adoption and utilization… some are extremely different and require overcoming great challenges.  When we plot out the utilization of various e-solutions versus SNG’s proprietary Digital Economy index (DEi) which measures the utilization of broadband as a platform for innovation, we see just how hard in what we’ve dubbed our “football chart” below. As a reminder, DEi scores range from 1 to 10 (10 being highest), with higher scores reflecting the greater the number, scope and sophistication of the Internet activities deployed in an organization.
 


As we discussed last month businesses with a high DEi, meaning higher levels of adopting and using e-solutions, experience larger percentage increases of revenues (between 27 and 31%). Increasing Internet utilization dramatically increases corporate revenues and job creation.

So what does this have to do with the football chart? Let’s dig deeper and look at what separates the more successful organizations in utilizing broadband, creating efficiencies and growing revenues. It’s not the easy, “quick to adopt” solutions that include accessing government information online, sharing files, using collaborative tools, online research, and companies hosting their own website.  These are all basic and even unsophisticated businesses are doing these.

But what separates the mediocre from the great… who is “winning” according to SNG’s research and the ‘football chart?’ The organizations that take on the difficult challenges, the more complicated e-solutions, are the businesses that are utilizing broadband to grow their business. These include:

  • Teleworking – Using the Internet as your “virtual office,” enabling a geographically disparate workforce.
  • Rich media – Creating multimedia content and interactive tools to market products/services and increase sales opportunities
  • Social networking – Using today’s social network forums to promote business and collaborate with peer groups and colleagues
  • eCommerce – Selling goods or services online – this can include driving leads toward payment and does not require online payment.
  • Deliver services or content online – From customer service departments to digitized products.

Are you focusing on simply providing broadband and waiting for people to adopt… and ultimately utilize e-solutions (the tried and failed build it and they will come mentality) or are you driving utilization? Focus on driving sophisticated use of broadband and you’ll see your region’s economy reap the benefits. SNG has helped to look at where gaps are and prescribe next steps for economic development through broadband in communities and regions.


SNG Workshop in SC Helps to Drive Network Utilization

Earlier this month SNG’s Michael Curri and Derek Murphy travelled to South Carolina to assist in their broadband initiatives.  Held by the Clemson Institute for Economic and Community Development and West Carolina Rural Telephone Cooperative (WCTel), the day long workshop gathered stakeholders interested in examining how broadband could help create a healthy and vibrant regional economy.  

Dave Herron, CEO of WCTel, explained that after completing a Fiber-to-the-Premise network throughout their rural service area, “we were faced with the challenge of trying to get our communities and economic development professionals to realize the value of the infrastructure they had available to them.”  

And that’s where SNG stepped in, along with Clemson University’s Institute of Economic and Community Development, to conduct a workshop for local economic development professionals, educational communities, Chambers of Commerce, State Dept. of Commerce, and several other community leaders.  SNG’s expertise in maximizing the desirable outcomes enabled by investment in advanced broadband infrastructure were seen a key to demonstrate “what’s possible” with the WCTel network.

Explains Herron, “We needed to show local leaders how to utilize the network to promote economic and social development.  We are committed to educating the community and are extremely hopeful that the leadership group formed will help in that effort, demonstrating to the communities how network utilization will to attract new industries, enhance existing businesses, and create jobs for our communities.”

Michael Curri explained how exciting it was to see a strong desire among the participants to work together – that day and in the future as they organized. “We helped create real momentum – it will be exciting to see the socio-economic benefits that will be realized thanks to the combination of the WCTel network and a mobilized leadership group.”


No Job doesn’t Mean No Earning Potential

More from the SNG research front before we put a wrap on this month’s Bandwidth. It is encouraging to see 1 out of 4 of unemployed individuals using the Internet to start a home business. Another 25% are relying on the Internet for education and training to help them get their next job. Even the retired are using the Internet for both of these purposes.

Obviously, when considering how to cut back on personal expenses, the Internet bill should be taken off the table. Is it time that unemployment insurance include an Internet stipend? It’s worth considering given our findings.

n= 229 unemployed, 868 retired


September 2011 Bandwidth – SNG Study Shows Broadband and e-Solutions Linked to Business Growth

SNG Study Shows Broadband and e-Solutions Linked to Business Growth

by Michael Curri & Doug Adams
An SNG study of nearly 600 businesses in North Carolina has revealed a direct correlation between revenue growth and the adoption and use of e-solutions.

According to the research, higher levels of utilization generate higher revenues and greater benefits for businesses. The most significant impacts on a firm’s bottom line are more sophisticated e-solutions such as teleworking, selling goods or services online, etc. – which means that firms that are not ‘fully online’ are missing out on significant potential revenue. In some cases they could grow by up to 30%.

By measuring over 17 activities classified as “e-solutions,” or Internet enabled applications, SNG has developed a Digital Economy index (DEi) which measures the utilization of broadband as a platform for innovation.  DEi scores range from 1 to 10 (10 being highest), with higher scores reflecting the greater the number, scope and sophistication of the Internet activities deployed in an organization.

The data indicate that businesses with a high DEi, meaning higher levels of adopting and using e-solutions, experience larger percentage increases of revenues (between 27 and 31%).

SNG’s research thus demonstrates that increasing Internet utilization dramatically increases corporate revenues and job creation.

The Impact of Broadband on Jobs

The North Carolina study reveals that the Internet contributes significantly to job growth, especially among organizations with less than 50 employees who represent over 94% of all firms and 44% of all employment.

The table below shows a complex dynamic where large numbers of jobs in over 1,000 organizations were created and lost over a 12 month period in 2009/2010. As in any economy where there is job creation and job loss, the most important challenge is to drive net positive job growth. North Carolina is seeing job loss (as shown in “% Net Jobs Created”). The key is how many sustainable, knowledge sector jobs they can create through innovation.

As the column “% Net Jobs Created thru Internet” indicates, small, nimble firms (less than 50 employees) are leveraging the Internet and e-solutions and creating new jobs at a rate of more than 8% of their existing base, which is a significant difference from the over 14% decline in job losses overall.

This picture of both job creation and loss is a more realistic insight into the process of economic change and development within North Carolina. One key finding from this table is that jobs associated with use of the Internet grew across all organizational sizes, even while major job losses were being experienced. This is particularly significant in organizations with 1 to 49 employees.

Broadband for Startups and Small Firms

Contributed by Roland J. Cole, Ph.D., J.D.
Residential broadband (distinguished from commercial broadband) is critical for bottom-up economic development. With this, there are a number of regions in the US (and in other countries) where big entities – private firms as well as government agencies, universities, and hospitals have access to broadband that is high speed and affordable, but the residences in that same community do not. In the US, while federal funds are being allocated to extend broadband to “community anchor institutions,” including hospitals, there is little or nothing being done to extend it to the residences around those institutions. I’ve seen one hospital program myself that refuses to share access with the offices of doctors that serve in the hospital, let alone the homes where they live. I’ve learned of a city that has, to great acclaim, extended its fiber to large firms, but feels that residences and small firms do not need anything better than the cable and telephone companies are currently providing.

As SNG has reported (most recently in the June Issue of Bandwidth that prompted me to write this piece), a lot of purely “economic” activity takes place in homes or in sites small enough that broadband network operators treat them as homes. In North Carolina, 1/3 of those with broadband already had a home-based business, and more than 1/10 were planning to start one within the year. These activities are in addition to employees of large firms that work from home. They are also above and beyond those using the Internet to seek employment opportunities, apply online, improve their skills, etc.

We’ve all heard stories of firms – countless numbers of them – that grew from basements, spare bedrooms, and garages. HP started in a garage; Dell started in a university dorm room. Some large firms that now include access to high-speed affordable broadband for their buildings as a top five or top ten item are now including access for their employees’ homes as a part of that item.

Residential broadband is important even for the firms that are out of the home, because small non-residential sites get offered the same bandwidth deals that homeowners get offered, albeit usually at twice or three times the price. The network providers (both public and private) do special deals for large end-users, but NOT for small ones.

Better bandwidth for these purposes is not just “speed” and price, because “speed” usually refers to download speed – largely a measure of consumption, not production. These individuals and small firms are producing, as well as consuming, and can use upload speed as well as download.

Video files are huge, CAD files are enormous, high-resolution photo files are large, database files have never been dainty… and you’re hard pressed to find organizations that do not include designers, marketers, architects, and engineers who need to transport these files.  Of course you could deliver thumb drives with such files… but I also could send a letter as opposed to an email. I need to remain competitive, agile, and flexible to succeed in 2011. Lack of better broadband may not prevent home-based and small firm economic activity, but it sure discourages it. Better broadband provides the platform… the foundation to foster activities that grow businesses, and with them, our economies.

So for one measure of how “fertile” the ground is for bottom-up economic development activity in your community, track the price and upload speed offered to your residences. Do not be satisfied when your big companies and your “community anchor institutions” have reasonable broadband while residences do not. A big aid to the firms of the future, both large and small, is better residential bandwidth now.

Roland J. Cole is a lawyer and policy analyst (PhD/JD Harvard) who has been studying small business and economic development for over 30 years. His work has included three textbook chapters on the role of residential broadband and the development of a toolkit for community action in support of broadband improvement. He is currently a freelance policy analyst in Austin Texas, launching a new organization entitled Fertile Ground for Startups and Small Firms.

Learning about Learning Preferences

As a part of each SNG study, we take a close look not only at adoption rates and driving utilization – but also at preferred learning methods to bridge their skills gaps. It’s about individual users understanding which e-solutions will give them the biggest benefits and having the capacity to use those applications.

When individuals and households need to acquire knowledge, they turn to the resources they have at hand – and of course, the learning methods they prefer. It’s about moving businesses, organizations and households up the learning curve more effectively so that they realize the benefits from broadband and e-solutions as quickly and fully as possible.

Not surprisingly to our marketing department, among households “word of mouth” still scores high as a means for learning. But traditional methods are clearly taking a back seat to online learning – both informal (general surfing) and formal (webinars and online courses). Books, workshops, and classes all come after online methods (and word of mouth) as preferred learning methods. So it is clear that we have a bit of ‘chicken and the egg’ situation here as the question becomes – how does someone maximize their learning potential, without having online resources? The digital divide obviously goes hand-in-hand with a knowledge gap.

The same study revealed that 2 in 3 organizations plan to acquire at least two distinct skills sets over the next year – some through hiring, and some through training.

Here again we see a preference for online learning methods as self-directed methods of knowledge development, including online research and webinars, are the most likely to be used by the majority of organizations. In-person classroom training is the least likely method to be used.

So, when planning for broadband, also plan for learning. Not only is it important to understand where the awareness and skills gaps are, but also understanding the preferred modes of learning. An effective strategy for economic development through broadband requires this.