Across the globe the global downturn has had deep impacts. Many households are stretched thin, looking for ways to supplement lost income or to supplement declining or stagnant salaries.
Recently SNG worked with the e-North Carolina Authority to conduct “eSolutions Benchmarking” across the state to understand how households are using broadband to tackle some of their challenges.
The study revealed the potential of broadband for competitiveness and economic opportunity:
- Nearly a third (31%) of the State’s broadband households operate a business from their home;
- The number of households either currently running (31%) or planning to run a business from their home in the
next twelve months (14%) is nearly half (45%) of the State’s broadband
- Even more broadband households are either now using (41%) or planning to use (24%) broadband to sell items online.
That’s nearly two-thirds (65%) of broadband households using it to at least supplement their income;
- Most (85%) of home-based businesses said that broadband was essential to their business. More than half
(54%) said that they would not be in business if they did not have broadband while two in five (41%) would have to relocate if broadband was not available in their community.
For more information about these findings, please contact the e-North Carolina Authority who commissioned this work – see www.e-nc.org, or phone 1-866-627-8725.
In good times and in bad, broadband is critical for community members to earn income (and extra
income). But in bad times, research shows us that home-based businesses and sole proprietorships are more likely to sprout up. More than ever, it is critical for states and communities that want to remain competitive – and even thrive – to have broadband’s platform for innovation and competitiveness in place.
This month we continue our three-part series covering the steps of the broadband lifecycle as we focus on the strategy and the decision to invest, as well as the network build, or expansion.
By Michael Curri – Broadband networks can create a “platform for productivity, competitiveness and innovation” in your community – delivering the infrastructure to capture economic and social opportunities, some known, some yet to be invented. Many communities fail during the broadband strategy, build-out and adoption phases as they lack focus and/or sufficient investment of time, energy, and resources.
Too often communities develop strategies based on following recipes from other regions. Instead of uncovering what the needed resources are, or how to leverage current efforts to best serve the specific and unique needs of the community, civic leaders race to “do what they did.”
There is no ‘one size fits all’ solution for successful broadband strategies that bring economic and civic benefits to a region and its citizens. Each community not only has different needs, but different strengths to best leverage the broadband platform. Strategic Networks Group (SNG) has for years been helping governments, at municipal, regional and national levels, to best understand where investment will make the biggest impact – and each and every time the best approach involves following the broadband lifecycle.
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By Michael Curri
Much too often broadband initiatives that should be successful end up falling flat – for a myriad reasons. Perhaps they do not get off the ground because of a lack of vision, planning, or leadership. Many fail during the strategy and build-out process as they lack focus and/or sufficient investment of time, energy, and resources. Some initiatives may have been successful building the network but fail because they are simply taking a “we built it – you use it” approach and not driving applications and adoption. And even the most successful broadband projects, with ample utilization and economic and social impact can be perceived as a failure if the outcomes are not measured and reported.
It is for all of these reasons that SNG encourages its customers (and all broadband project managers for that matter!) to design and run their broadband initiative with “one eye on the Broadband Lifecycle.” In this issue of Bandwidth, and the next two, we will be taking a look at 2 of the 6 steps of the Broadband Lifecycle. In this issue: step 1 (identifying gaps, needs, and demand) and step 2 (pre-planning and assessment).
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By Doug Adams
Now that you have funding, how can you make sure that your project lives up to the promise that got it funded in the first place? Hundreds of broadband projects are being funded in 2010 – be it from Stimulus or some other funding source – but how many will truly become a community asset that drives economic and social benefits?
Key to making sure your project will have a return on investment with quantifiable outcomes starts with these four guidelines:
- Don’t focus on engineering: it’s all about awareness and adoption;
- Use data to drive decisions before, during, and after the project;
- Create a “platform for innovation”: investing in broadband is NOT just about the financials;
- Frame the benefits, measure them, and promote.
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Under Lev Gonick’s stewardship (Lev is CIO), Case Western Reserve University is connecting 100 neighboring households to its gigabit fiber network. University researchers, technologists and institutions in the region are collaborating to see if high-bandwidth online services can actually reduce violence and crime, increase graduation rates in science and math, and do a better job of identifying and monitoring chronic health problems.
Case Western students will be working with the households to identify their needs, train people to join the digital world, and study how they actually do. There’s an eye-opening idea for you: as part of its core curriculum, a major university will study how broadband can be used to address the most intractable social problems of urban America. The best minds in medicine, public health, education and public safety will put the 100 households under the microscope to learn what works and what does not. Eventually, the University Circle Innovation Zone, as the project is called, hopes to connect more than 25,000 residents.
(Read the entire article by Gary Dunmore here) Today, most people and businesses are computer literate, and aware of the Internet’s potential – at least in general terms: about 70% of households have a computer at home with some form of Internet access (increasingly broadband), many others have access to computers and the Internet at other locations (such as the workplace or school) and virtually every business uses computers and over 85% have Internet access. Many households and businesses don’t “use” broadband mostly because it is not available in their area. However that’s changing fast – as private and public investments help make broadband increasingly more available and adoption more straightforward. The proof: current research shows that US household broadband adoption increased from 55% to 63% in the past year, while dial-up Internet use dropped from 10% to 7% over the same period.
But this also means that up to 30% of households remain “unconnected” to the Internet – for a variety of reasons, including uncertain relevance, affordability, and availability. And, while connected to a greater degree, many small businesses face the same issues when it comes to broadband adoption.
What it is missing?
For many, it is a complicated matter: firstly understanding what broadband can do for them, and then understanding that it is worth doing, and finally understanding how to make it happen. Increasing the understanding of broadband relevance contributes to the adoption of broadband by new users and increases the “benefits” of broadband by those that have it.
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In The Economist: IF YOU want to save money, cut the cord. In these difficult times ever more Americans are heeding this advice and dropping their telephone landlines in favour of mobile phones (see article). Despite some of the flakiest mobile-network coverage in the developed world, one in four households has now gone mobile-only. At current rates the last landline in America will be disconnected sometime in 2025.
Good. Mobile phones offer individuals more freedom. Yet confronted by the inexorable march of progress, America’s telecoms regulators have failed to respond.
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We are all connected now, aren’t we? Internet connectivity is simply an essential in a globally connected economy. Large enterprises know this, and have long had the wherewithal to integrate networked applications into their business operations. (At SNG, we talked about this integration as “e-solutions.”) Of course, the increasing availability of affordable broadband Internet access has opened up the same opportunities for small and medium enterprise (SMEs). So, why are many SMEs still unable or reluctant to take on e-solutions? We would like to share a few ideas.
|Of course, there are always the (not so) early (by now) adopters. Where broadband is available, a good number of SMEs do not need a lot of convincing about the cost-benefit of taking service – whether it be via DSL, cable, fiber, or wireless access. For them, higher connection speeds speak for themselves: no need for a complex business case to prove that being able to do the same things faster and more efficiently improves productivity; or that having an affordable ‘always on’ connection can save on phone connection costs or expensive T1 circuits.
|by Gary Dunmore
And beyond the day-to-day efficiencies, there are the things they couldn’t do before broadband, such as: the promotions company that couldn’t transfer artwork files quickly between its offices and remote contract artists and was spending a fortune on time and costs of transportation; or the precision machining company that needed to be able to receive and send complex drawings online simply to be “eligible” to bid for major clients’ business. In fact, SNG research shows that over 60% of SMEs rate broadband as very important for making everyday operations easier and allowing them to make more effective use of resources.
However, more than 50% of SMEs have not (yet) internalized how broadband can increase revenues, reduce costs, or evolve how they do business. Here is the real challenge: why are so many SMEs still not taking full advantage of what broadband can offer?
Looking “inside” the businesses themselves can help. Firstly, some business owners don’t recognize the benefits of broadband. When it comes to “technology and the connected economy,” they often “don’t know what they don’t know” – and they have limited time or resources to figure it out. And, if the case isn’t made in terms of savings, growth or competitiveness they don’t allow much time for convincing. Also, there is often an assumption by business owners that implementing e-solutions requires technical know-how, or is something a small business cannot afford to implement or maintain. In fact, our research tells us that over
two-thirds of SMEs view the cost of development and maintenance and their lack of internal expertise and knowledge as important barriers to adopting e-solutions.
A different angle
We believe that SME owner-managers need to be enlightened about the transformative effects of technology, and the significant benefits they could reap from jumping on the broadband train. Without the jargon, they need to be informed about what happens when technology intersects with business processes; when it becomes possible to do different things and do things differently – creating new operating models and new business opportunities. This is the e-solutions moment. Rather than about speed and bits, business owners should think about “any business activity that can leverage the power of the Internet.”
Beyond e-commerce, SMEs should get a stronger, better feel for the opportunities that connectivity offers to transform how they conduct business (increased market reach, easier processing of orders, cheaper product delivery, smoother – when done right – customer service and technical support, etc.). Business owners, especially those who don’t want to sell online, need to be told about the good news – that there are many affordable e-solutions available online for them – and solutions that don’t need to be complicated to have big impacts, such as: sales force management and CRM tools to more effectively generate revenue, collaborative networks to enhance internal and external interactions and sharing, online national and global supply chain networks to uncover new opportunities, or remote access and tele-working packages to extend out-of-office reach. And of course, because not all solutions are applicable (or important, or useful, or affordable…) for every business, owner-managers need support in navigating through the mass of information, and in figuring out the “what works for my business; what solutions are appropriate; where is the greatest benefit; what should be done first, and what later?” questions.
An important focus
We know because we have been there too: support organizations have long had a hard time convincing the reluctant owners to act. However, we believe that the time has come when many SMEs will be receptive to effective support to find that intersection between technology and their business that works for them – provided it’s done without adding excessive burden that detracts from their business focus. Because making such support available to SMEs is as important as making broadband available in the first place it is becoming an urgent priority for public policy. Let’s keep in mind that that SMEs are a key engine for employment and economic growth (95% of businesses have less than 50 employees). More SMEs adopting e-solutions, enabled by broadband, improves growth, productivity, and competitiveness, with positive effects not only for SMEs but also for their communities and the economy overall. After all, that’s what sustainable adoption is all about.
By Gary Dunmore, SNG
Click here to download this SNG position paper
“Broadband Is This Generation’s Highway System, FCC Chief Says” is the title of an article published today on Wired. The new FCC chairman Julius Genachowski said:
“Broadband is our generation’s infrastructure challenge. It is as important as electricity and highways were for past generations.” “We are just scratching surface of what broadband technology can do for the country.” “I don’t think enough people appreciate the very real, practical benefits that a 21st century telecom infrastructure can provide.”
At SNG, we say: “Nothing new, good to hear it.”
Our star guest Larry Strickling recently expressed his confidence that broadband service providers will not only provide the detailed supply data requested by his agency (which includes more data elements than has ever been provided for a broadband mapping project), but also that they would waive the confidentially provisions that keep this data from being associated with specific companies. Though we certainly hope Mr. Strickling is correct, we don’t believe this will happen. And, just in case we are right, we recommend that states be ready to gather as much broadband data as they can – without relying too much on carrier cooperation.
We suggest a two-pronged approach. On one hand, states should work closely, in good faith, with carriers to develop ways in which they can provide the data elements set forth in the NOFA while preserving their confidentiality.
However, we warn states against becoming too dependent on carrier cooperation in the design and execution of their broadband mapping programs.
The reason: carriers may perceive the public interest goals of NTIA’s broadband mapping effort as too much at odds with their own self interests. Because the truth is: these companies are run to maximize shareholder value—not the public interest.
On the other hand, states need to build their mapping programs to include a strong multi-source data collection process that not only satisfies NTIA’s requirement for verification of carrier-supplied data, but also can “fill-in” for that data if carriers are either unwilling or unable to provide it. That’s what we call an “augment and verify” strategy.
Isn’t that what Strickling means when he says that if carriers refuse to comply, “There are other ways to collect this [data]: there are survey techniques and other ways to collect this information short of the carrier”? “We have appropriated $350 million” to this task, he continues, and “we are expecting the states to be creative, to be collaborative, to work together, and to find some new ways to collect the data, whether or not it is supplied by the carrier.” And he concludes: “Once that is made clear to [the carriers] at the most senior levels, then this thing will work itself out.”
It’s not so simple…
That’s where we beg to differ. Our guess is that, if we just hope “this thing will work itself out,” it probably won’t – because carriers have decades of practice in stonewalling to get their way. However we agree that, as Strickling suggests, the best way to get carrier cooperation may very well be for each state to gather as much broadband data as it can without relying on them, while continuing to invite their cooperation in a shared national effort to serve the public interest.
We strongly believe that if we heed Strickling’s invitation to be creative and collaborative and “work together… to find… new ways to collect the data,” things may work out just fine mapping efforts can succeed. The choice is up to state decision makers as they evaluate their options in the next two weeks. Our suggestion: work respectfully with carriers to obtain their data on mutually acceptable terms, but also augment and verify.