This article is condensed
from a digital economy plan that was developed under the auspices of Broadband
RI for use by Commerce RI in its overall economic development plan. The
research and planning was completed by Robert Leaver of New Commons and Jim
Damicis of Camoin Associates.
Access to, and use of, digital technology – fiber and wireless – is
mission-critical to growing the next economy. It is non-negotiable. Most of us
depend on being constantly online to shop, get our news, do business, innovate,
find a job, or engage our friends. The presence of a hearty, reliable technology
infrastructure and thriving digital culture, depend on each other to make a
robust economy possible. The next economy will be significantly shaped by a
robust digital technology infrastructure – fiber and wireless. Digital
technology is driving economic development.
Historic, Current and Next Economic
The US economy has evolved through three waves of technological
change: industrial, knowledge and
No internet to early
internet - dial-up
person…physical meetings…information conveyed through paper copies
High speed internet –
Early social media
conferencing for video and audio…early mobile internet as a resource for
data, news and information provided online
Beyond broadband –
gigabit and beyond
Mobile explosion – handheld computing; variety of prices; real time collaboration; virtual
experiences; mobile governance; Apps for everything; integrated hardware and
software learning networks
Drivers shaping the next economy…
The McKinsey Global Institute defined twelve major disruptive
technologies which will generate $14 to 33 trillion by 2025. Some of the
technologies McKinsey identified have been combined with our own research into
four clusters. Each cluster is already driving the next economy of many places:
Cluster 1: Knowledge and Science
Automation of knowledge work: The pervasive use of tools like voice
recognition software and artificial intelligence that is able to learn and make
increasingly sophisticated judgments.
Next-generation genomics: Medical diagnosis is improved by
combining rapid genetic sequencing with big data.
Tele-health: This technology can effectively and
efficiently deliver the tools and expertise to provide care at the site of the
patient. These secure, clinically meaningful online interactions can help to
significantly reduce the use of the emergency room and reduce the overall cost
Big Data: This is the sharing and processing of
huge amounts of data for research and other applications.
Cluster 2: Infrastructure
Mobile internet: By 2015, wireless internet will exceed
the use of fiber. The future will have more use of wireless and places have
assets to feature. For example, in Rhode Island there is Mobile Beacon and Verizon.
Internet of Things: The use of embedded sensors to
interact with everyday objects as well as to instantly measure and report on
everything in a city or village, e.g., traffic congestion and the flow of water
The Cloud: Data is now mostly stored and
accessed, not in a box-server next to your desk, but “up there” in the cloud.
Smart Grid: This is the application of
near-instant communications technologies to the utilities infrastructure, to
make them more efficient and resilient.
Cluster 3: Making things
Advanced robotics: Use of robots with highly evolved
artificial intelligence and dexterity.
3-D Printing and additive manufacturing: Instead of making something by
extracting material – the historic way of making things from molds or chipping
away at the material – the 3-D printer “adds” raw material to make stuff
ranging from prototypes to productions runs of sophisticated parts such as
Advanced materials: This is the development and use of new
materials that are “smart” or self-healing.
Cluster 4: Next nature of work
Tele-working and freelancing: The labor market has been transformed
by the ability of workers to work anytime from anywhere using instant
communication, cloud storage and other data-intensive technologies.
National Trends in Digital Technology
The US National Broadband Plan has identified six goals for
expanding broadband access with each affecting the next economy:
Goal #1 - At least 100 million U.S. homes should have affordable access to actual download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second.
Goal #2 - The United States
should lead the world in mobile innovation, with the fastest and most extensive
wireless networks of any nation.
Goal #3 - Every American should
have affordable access to robust broadband service, and the means and skills to
subscribe if they so choose.
Goal #4 - Every American
community should have affordable access to at least 1-gigabit-per-second
broadband service to anchor institutions such as schools, hospitals, and
Goal #5 - To ensure the safety
of the American people, every first responder should have access to a nationwide,
wireless, interoperable broadband public safety network.
Goal #6 - To ensure that America
leads in the clean energy economy, every American should be able to use
broadband to track and manage her real-time energy consumption.
To meet these next economy goals, communities across the country
are taking action to develop the infrastructure necessary to become “gigabit
cities.” Places like Kansas City, KS; Austin, TX; St. Louis, MO; and Provo, UT, are
developing their gigabit infrastructure through a variety of programs, both
public and private. These efforts aim to develop the technology, culture, and
best practices which will accelerate the adoption of fiber technology in
communities and nationwide.
Such programs have spurred many communities into action. In
Vermont, a state telephone company is offering gigabit speed packages to
subscribers for $35/month. In Alpharetta, GA a $600-million mixed-use development, called Avalon, is currently under construction on 86
acres of land which will be pre-wired for gigabit access. The Avalon project is
setting a new technology standard for developers by using financial incentives,
zoning, and ordinances to encourage developers to embed fiber by default.
Other projects are cropping up in places like Chattanooga,
Washington State, and Nebraska. If such trends continue, the power of gigabit
infrastructure to distinguish a community for development of commerce will be
greatly diminished, if not eliminated. For other regions, the window for action
is narrow and closing quickly.
Building and leveraging the ecosystem for
The ecosystem of commerce must do many things at once: connect,
communicate, analyze, transact, and collaborate. It needs to include all
elements that shape commerce such as finance, the regulatory environment,
market forces, etc. Key elements must work in concert to form a "web of
relationships which constantly nurture and interact with one another in
synergistic ways that strengthen the overall economic environment and contribute
to the resilience and sustainability of innovation hubs."
Strengthening the ecosystem for commerce requires a multi-prong
strategy. As the “commerce ecosystem” visual depicts below, there are at least
three drivers for regions to nurture: digital governance, digital commerce and
research/commercialization/innovation. The state’s job is to create the
conditions for these to thrive by fostering a digital culture, strengthening
the gigabit infrastructure, and developing targeted public policy.
History teaches us that, in every economy, having an effective
infrastructure shapes economic growth. Like roads and waterways before it,
digital infrastructure, including high speed internet and gigabit-level
technology, is an enabling infrastructure for sparking the type of disruptive
innovation that grows the economy. Universal access to the gigabit
infrastructure is the foundation for a constantly changing next economy.
Investments in creating gigabit infrastructure and communities must serve as a
key strategy for growing the economy. Here is what RI developed to shape its
ecosystem, but it is applicable to any place.
Three examples of digital technology
driving the economy…
1. Digital Commerce…
Digital commerce is about enabling transactions that bring the
products and services of local businesses into the national/global marketplace.
A recent report by the GAO found that businesses with access to gigabit
infrastructure came to depend on the network to “improve efficiency and streamline operations.” The increased speed allowed businesses to engage in big-data
“A hardware store in
Dawsonville, Georgia, uses its broadband connection to access online manuals
for its small engine repair service. This allows the store to more quickly
review parts manuals, and identify and order the correct part.”
“An oil company in Windom, Minnesota, uses the broadband service
provided by the municipal network to remotely monitor the fuel levels at its
gas stations. This task was previously handled by the station manager faxing in
reports twice a day. Fuel levels are now updated every 15 minutes.”
Customer service: “The owner of a computer support
business in Monmouth, Oregon, stated that he can now have up to six computers
connected to his network. This allows him to more quickly update software and
clear viruses from customers’ computers and, as a result, serve more
“The owner of a resort in northern Minnesota told us that his
customers are able to access the Internet from the resort now. This enables
them to work from the resort without having to commute to a town to get
Technical capabilities: “A manufacturer of countertops for
private airplanes, located in northeast Georgia, stated that the improved
broadband service allows the company to conduct videoconferences to discuss
design issues. This is beneficial because they can look at the designs or any
problems with the product.”
“A lamb distributor in Junction City, Oregon, uses the high speed
broadband capabilities to hold video conferences. He uses this for sales calls
with restaurants, meetings with his employee in Portland, and meetings with the
farmers that raise his sheep.”
Telework: “High-speed broadband has allowed a
radiologist in Chattanooga, Tennessee, to read X-rays, MRIs, CAT scans, and
ultrasounds from home. The speed of the network allows the radiologist to
create a final report from home, which can be critical in emergency situations,
but previously could only be completed in the office.”
“A print shop in Monmouth, Oregon, has been able to allow its
graphic designer to work from home more frequently and allow the owners to work
from their home office.”
developer of aircraft technical manuals in Sandy, Oregon, can now send and
receive large data files using a high-speed broadband connection. Prior to
obtaining the high-speed connection, the developer sent the files to the
aircraft manufacturer in Germany via overnight delivery.”
Some questions to
consider: What about
existing businesses that are not online? Can we determine how much the cost of
technology is a barrier to access for small businesses? Is it just a question
of cost or is it also about know-how? How is not having broadband acting as a
limitation to business growth? What might local businesses want to be doing
with technology that they are unable to do now?
2. Research, commercialization, and innovation
The use of broadband engenders the practice of open innovation that
allows a business to globally source product ideas and create partnerships. P&G disbanded its in-house R&D unit and now sources globally for
product ideas and prototypes. Crowd-focused activities have become invaluable
for start-ups and small companies, such as (1) crowdsourcing for ideas and
designs and (2) crowdfunding as a source of capital.
Healthcare is another area in which network speeds can be a barrier
to innovation. Gene sequencing is an area of research that will become
increasingly important in the next few decades. Yet the efficacy and cost of
this field is highly dependent on the speed and reliability of broadband
3. Digital Governance...state and municipal
Digital technology is used to streamline and accelerate real estate
development, plan review, and permitting. Having open access to data (forms,
regulations, processes, etc.), will speed up and simplify the user experience
by business owners, start-ups and developers. Having sites for development with
permits pre-issued and/or fast-tracked, such as what exists at Quonset Point in
Rhode Island, is an example of a best RI practice. The Avalon development, mentioned
earlier, is an example of how to encourage developers to install fiber in the
ground when doing the development.
Infrastructure always comes before the
culture catches up…
A gigabit infrastructure, by itself, will not get us down the road
enough in growing the next economy. Regions need to foster a digital culture
that connects people and builds community, relationships, and human networks.
When more people are connected, and more relationships and networks flourish, more
new businesses and industries will start and grow. As a result, more commerce is transacted, and
more collaboration and innovation occurs. We must foster a digital culture
before we can expect any of the crucial digital technology policy decisions to emerge.
Culture is based on deep beliefs and the presence of icons that
shape our behavior. A culture does not quickly change; it evolves. The cultural
change always lags behind the structural change. With digital communities, the
structural change is the rapid introduction of high-speed internet technology
including fiber, wireless, and Apps. The time required for a community to evolve
a vibrant digital culture that leverages the technology infrastructure, for the
greater good—both economic and public—is, by some estimates, between 10 and
Three insights will help us understand how to create a digital
culture. First, culture unfolds layer upon layer. Secondly, culture is not
fixed in time; rather it evolves as we experience change. Finally, culture is
not predictable because it often explodes in mysterious ways (e.g., where did
that iPhone come from so suddenly?).
An excerpt from a paper by Arpad Rab helps us understand what a digital culture
“The computer, digital objects, the Internet, and later broadband,
[have] created new culture-shocks, and all within the last twenty years. Never
before has humankind—due to the impact of globalization can we talk about the
whole of humankind and not only some nations—experienced so many profound
changes in such a short period (based on technology).”
Social Media and the Mobile Web…
Over the next two decades, it is clear that social media and the
mobile web are driving key growth areas in the next economy. It is not only
creating a new platform for the delivery and consumption of content, but a
genuinely new public space; albeit one that is multi-dimensional and
non-linear. This public space is already being used more like the physical
spaces of the past, such as the public market or the commons. More and more
activity is moving to this digital space, from entertainment, to education, to
access to the market. It is likely to affect the way people think, learn and
interact. We are likely to have a presence in two spaces simultaneously; one
the physical space we inhabit and the other, the digital space with which we interact.
As this digital space grows more important, it will create new
business opportunities and challenges for regions. If people are going to want
or even need to act in both spaces, regions will need physical infrastructure
to support it. A gigabit infrastructure will be needed to support growth in the
current market and to allow for the development of new markets we have not even
considered. In terms of teaching and learning, schools will need to adapt to
the non-linear thinking of a new, wired generation. Government will need to
interact with businesses and constituents the way we interact online with each
other across multiple platforms in real time.
The development of a smart ecosystem for commerce will focus on
leveraging three points for change: gigabit infrastructure, digital culture, and
public policy. Regions will be challenged to develop regional digital
technology plans that capitalize on assets. The focus has to be on what
businesses need, not just on speed. A
needs-based approach would determine where gigabit speeds are needed most. We
need to identify what individual communities need and build out to that; not
just what we think it ought to be. We also should not assume that that all high-speed
connections need to be fiber. Wireless systems are in place that could be
leveraged to expand coverage for any region.
An effective, comprehensive strategy will need to:
Strike a balance between supporting technology providers—commercial and public good—who are willing to commit to long-term investment and insuring adequate competition among providers.
Increase adoption among
home-based and bricks-and-mortar businesses through support programs,
education and mentoring.
Adequately assess the
needs of the community at the local, state and regional level and craft
regional technology plans. There is no single solution that fits every need.
Initiative 1: Gigabit Infrastructure
ownership of gigabit initiatives
How can regional technology assets be combined and customized to
serve underserved communities and businesses?
Community-based technology planning teams could be established to
plan and create locally owned technology hubs to serve businesses and
residents. Communities will need to determine if they have service providers
that deliver internet access at sufficient speeds, capacity, and quality to
address their needs as defined by the individuals and businesses in those
communities. Such plans will help determine whether communities are truly
Communities in some states have adopted models wherein publicly
owned assets have been leveraged to attract private investment in the gigabit
infrastructure. Publicly owned but underused fiber or wireless infrastructure
and public land rights-of-way are two of the most powerful assets that can be
mobilized by a community.
Whatever the ownership model, increasing access and reducing cost
are paramount to developing a competitive digital infrastructure. To do this
communities are able to apply 3 basic strategies:
Initiative 2: Digital Culture
Assess and promote
digital technology trends and uses among regional businesses
More and more businesses are moving into the virtual space to do
business, but not all of them.
Programs are needed to determine which businesses are online and to
provide support to those that are not. Real estate developers and their
constituents likewise, need help understanding digital technologies' full
economic benefits. Support programs should determine how a region’s existing
businesses are using broadband technology and what might be stopping them from
using it more effectively.
Leverage the assets of
community anchor institutions/state and local governments
Community anchor institutions, like libraries, universities, and
non-profit centers, often already serve as the only point of access for many
communities. This makes them ideally suited for development as hubs for
community-wide deployment of fiber or wireless technology for increasing commerce.
Regions should identify community-owned assets that are already in place or
ready to be developed which could aggregated to function as hubs for bringing
gigabit access to a community.
Initiative 3: Public policy
(The recommendation is for localized public policy at the municipal
Pilot 2 to 3 municipal
fast-track plan and permit review projects
Local municipalities have a role in determining how to make it
easier for new companies to enter the local market and increase competition.
Ready access to data (forms, regulations, processes, etc.) for permitting and
plan review will speed up and simplify the use by business owners, start-ups,
As mentioned earlier, the Avalon development in Georgia is an
example of how a municipality encouraged developers to install fiber and
conduits in the ground.
Our interdisciplinary collaborative of
Camoin Associates, Tilson Technology, Innovation Policyworks, and New Commons
will be digging deeper into these issues in the coming months and reporting on
our findings. We invite you to check out our other content on this topic and
join the discussion on the Economic Development Navigator Google+ page.
Or reach out to one of us directly:
Jim Damicis, Senior Vice President
Phone: (207) 831-1061
Robert Leaver, Owner
Catherine Renault, Principal
Aaron Paul, Director Energy and
Phone: (207) 837-2571