Continuing the Broadband Buzz…

by Jim Damicis 4. May 2015 11:20

Camoin Associates and its collaborating partners Tilson, Innovation PolicyWorks, and New Commons are pleased to continue our Economic Developer Navigator series on Broadband and Economic Development. This series is presented to help economic and community developers and regional and local policymakers make informed decisions about expanding the supply and demand of broadband technology and supporting the adoption and use to grow their economies.

 

We start this issue with Developing an Integrated Digital Economy and Culture by Robert Leaver of New Commons and Jim Damicis of Camoin Associates. In this article, we examine the historical role of the Internet in economic development. We then consider how digital technology is shaping the emerging next economy though four clusters that are driving change in commerce including:

  • Knowledge and Science - Including automation of knowledge work, next-generation genomics, tele-health, and big data

  • Infrastructure - Mobile internet, the Internet of things, the Cloud, and smart grid

  • Making things - Advanced robotics, 3-D Printing, additive manufacturing, and advanced materials

  • Next nature of work - Tele-working and freelancing

We then explain that regions must build and leverage an ecosystem to leverage these changes to grow their economies. This ecosystem is based on the foundations of digital infrastructure, digital culture, and public policy. To help practitioners we present specific initiatives and actions, which can be adopted to help build this ecosystem.

 

The next article in this issue then transitions to building innovative communities. In Innovation Communities and Broadband: Critical for 21st Century Development, Catherine Renault of Innovation PolicyWorks indicates that innovation and entrepreneurship are becoming more broadly accepted as key drivers of economic growth and economic developers have come to realize they must help cultivate a culture of innovation and integrate it with entrepreneurship. Within regions and communities, this requires a culture of diversity and tolerance, and an acceptance of trying and learning. It also requires broadband infrastructure. However, in many areas, it may not be economical for the traditional broadband providers to extend their service. Therefore, economic developers must finds ways to work collaboratively within their regions and communities to design new solutions to increase broadband availability and adoption.

So where do communities and regions’ get started?  The answer lies within economic development planning. In Elements of a Broadband Plan, our colleagues at Tilson follow-up from their previous article and present the six basic elements of the planning process to leverage successful public-private partnerships for expanding broadband. They include:

  • Goal Setting - Indentifying high-level goals both technical and non-technical

  • Service & Asset Inventory – Assessing current network assets in the community

  • Needs Assessment – Defining areas where it would like to offer improved broadband

  • Gap Analysis – Analyzing the difference between what communities would like to have available and be used within the area and what is actually available and being used

  • High-Level Design & Cost Estimate – Conducting high-level design that addresses the region’s service gaps and leverages existing assets along with preparing cost estimates needed to fund outcomes

  • Business Case/Operating Models – Developing the model of operating that best fits the locality/region

Finally, to help areas begin thinking about how they stack up nationally, our Featured Indicator for this issue is on broadband adoption by state.

In the spirit of connectivity, collaboration, and innovation, we are trying something a little different for the "Broadband Buzz" series. We are using Google+ to house links to all of the content and—hopefully—generate some discussion around this topic. Join the conversation here.

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Developing an Integrated Digital Economy and Culture

by Guest Author 4. May 2015 10:48

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.

 

Introduction…

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 Drivers…

The US economy has evolved through three waves of technological change: industrial, knowledge and "next."

 

Industrial Economy

Knowledge Economy

Next/Molecular Economy

·         No internet to early internet - dial-up

·         Governance in person…physical meetings…information conveyed through paper copies 

·         High speed internet – broadband

·         Websites

·         Early social media

·         Early online 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 of healthcare.

 

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 in pipes.

 

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 airplane wings.

 

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 Development…

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 government buildings.

  • 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 commerce… 

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 applications including:

 

Online inventory management: “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 customers.”

 

“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 Internet access.”

 

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.”

 

Other operational improvements: “A 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 infrastructure.

 

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 15 years.

 

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 is:

“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.

 

Strategic Initiatives

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

Encourage localized 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 gigabit-ready.

 

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:

  • Use existing assets more effectively

  • Ensure regulatory flexibility and efficiency

  • Aggregate demand

 

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 level.)

 

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, and developers.

 

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
Camoin Associates
Phone: (207) 831-1061
Email:
jim@camoinassociates.com  

 

Robert Leaver, Owner

New Commons

Phone: (401) 351-7110

Email: rleaver@newcommons.com

 

Catherine Renault, Principal

Innovation Policyworks, LLC

Phone: (207) 522-9028  

Email: crenault@innovationpolicyworks.com

 

Aaron Paul, Director Energy and Broadband Consulting
Tilson Technology
Phone: (207) 837-2571
Email:
apaul@tilsontech.com

 

Click here for more broadband buzz!

 

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Innovation Communities and Broadband: Critical for 21st Century Economic Development

by Guest Author 4. May 2015 10:34

Dr. Catherine S. Renault, Principal and Owner of Innovation Policyworks and Senior Advisor to Camoin Associates, authored the following article.

 

Innovation and entrepreneurship are slowly taking their place as accepted strategies for economic development.

 

What was once reserved as a strategy for regions with strong university and/or federal research assets is now accepted more broadly across the country and the world.

 

In this context, innovation means bringing new ideas to market, whether they are new products, new services or new business models. Innovation does not imply only technology inventions, although technology does drive or enable much innovation. Consider, for instance, the many new sharing services like Uber, that require internet and mobile technologies to operate, but are really new business models. The innovations in the agricultural and food sectors reflect new consumer attitudes toward “buying local” and sustainability, but are not necessarily science or technology-based.

 

This suggests that everyone, every day, everywhere, has the potential to be innovative. But, we also know that there are precursors to innovation—namely creativity and a culture—that allows individuals to try and sometimes fail without negative consequences. Organizations that have this culture, such as Apple and Google to name two that are well known, are extremely innovative.

 

Entrepreneurship means innovation in the context of new enterprises, usually for-profits. Some folks say that entrepreneurship is the “carrier of innovation” because there is a great deal of evidence that smaller companies are better at innovation than large ones. We think that is because most large companies do not have the culture of innovation that is required; they have too much to protect, and become risk averse over time.

 

Linking innovation, entrepreneurship, and community development to build a Culture of Innovation.

 

Few have connected the dots between innovation, entrepreneurship and community development until recently. With innovation driving as much as eighty percent of economic growth, it follows that building a culture of innovation could be an important strategy to attract and keep creative and vibrant people and organizations in a community. A culture of innovation requires a place where there is diversity and tolerance, because new ideas come from the intersection of different points of view. It also requires an acceptance of trying and learning, rather than avoidance of potential failure.

 

Some communities are investing in and supporting their creative economy. However, this usually means their artists, writers and performers, but does not often extend to knowledge professionals (e.g., programmers, designers, researchers) who are also creative and innovative. We first need to broaden our definition, and then look at how the creative economy supports our goals of diversity, tolerance and innovation.

 

Other community development activities also contribute to a culture that is innovative, e.g., historical preservation and Main Street revitalization, because they drive authenticity and community that attracts a creative workforce.

 

The single most important investment a community can make to support its innovation culture is Broadband.

 

Like electrification two generations ago, broadband is the utility most capable of increasing innovation and productivity. Innovation and creativity is often driven by new information, and with broadband, the world is available regardless of where one sits. However, in rural areas, it may not be economical for the traditional broadband providers to extend their service. Therefore, there is an opportunity for innovative communities to construct new solutions that will bring economic opportunity along with the broadband capacity.

 

Several communities in Maine, for instance, have formed essentially municipal utility corporations to operate broadband facilities for the benefit of their citizens. With a large anchor tenant, like a college campus or non-profit, these municipal corporations are investing in the last-mile connections between their towns and the existing fiber pathways.

 

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
Camoin Associates
Phone: (207) 831-1061
Email:
jim@camoinassociates.com   

 

Robert Leaver, Owner

New Commons

Phone: (401) 351-7110

Email: rleaver@newcommons.com  

 

Catherine Renault, Principal

Innovation Policyworks, LLC

Phone: (207) 522-9028  

Email: crenault@innovationpolicyworks.com  

 

Aaron Paul, Director Energy and Broadband Consulting
Tilson Technology
Phone: (207) 837-2571
Email:
apaul@tilsontech.com  

 

Click here for more broadband buzz!

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Elements of a Broadband Plan

by Guest Author 4. May 2015 10:24

Our friends at Tilson Technology wrote the following article.

 

In our last article, we highlighted the fact that instead of continuing to wait for the Universal Service Fund program, states and the Federal government are being proactive and looking for innovative ways to enable coverage in both underserved and unserved communities. Much of the focus is on public-private partnerships that will ensure sustainable, long-lived networks that meet consumers’ needs for years to come. These partnerships require public planning to ensure optimal outcomes. The planning process can be broken out into six basic elements:

 

  • Goal Setting.  Before embarking on a broadband project, a community needs to identify its high-level goals. These goals should include non-technical goals like increasing the number of young families; improving healthcare access to residents; attracting customers to a business park; attracting telecommuters; supporting a burgeoning biotechnical sector; or even saving residents on their video bills. Technical goals include creating an easily upgradeable network, or a specific speed standard, like New York State’s New NY goal of 100 Mbps, and a minimum of 25 Mbps for all communities by 2018.

  • Service and Asset Inventory.  An assessment of current network assets in the community—existing service providers and their key assets plus both nearby telecommunications towers and nearby fiber optic cable—is an important starting point in understanding current and possible future supply.

     

  • Needs Assessment.  A community should define areas where it would like to offer improved broadband.  A needs assessment may include spatial data on households, businesses, and key users like schools, hospitals and libraries for a more detailed understanding of current and future demand.

     

  • Gap Analysis.  A community or region should define a broadband standard based on its goals and needs assessment, and then define the gap relative to the current services offered. Depending on the community’s goals, a service gap may be defined as lack of competition, the need for upgradeability, the lack of basic service, or the lack of speeds above a certain threshold.

     

  • High Level Design and Cost Estimate.  A high-level design that addresses the region’s service gaps and leverages existing assets is important to understanding the funding requirements. Some designs are phased approaches that take capital costs and broadband priorities into consideration. A corresponding rough cost estimate is important to begin the funding process and select a business model.

     

  • Business Case/Operating Models.  The optimal business model for broadband improvement is a function of a community’s size, broadband adoption rates, readiness to run a network, and capabilities of existing service providers. Business models range from and owner/operator partnership between a municipality and electric utility, a single for-profit supplier, to a municipally owned and operated network. 

     

Closing by Camoin Associates:

You might be wondering how to begin this incremental process that involves forming public-private partnerships, research and analysis, information gathering, consensus building, visioning and goal setting, communications, etc. These elements should sound familiar if you have done any strategic planning. Many broadband planning efforts emerge from the knowledge obtained, partnerships formed, and strategies developed during an economic development planning process; particularly in communities working to develop an innovation economy, attract high-tech companies, or simply get everyone connected who wants to be. Our team would argue that ALL communities—large and small—should consider connectivity in the context of their economic development strategy to ensure the current and future needs are met.

 

Does your economic development strategy include a connectivity initiative? If not, it is never too late to incorporate one!

 

 

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
Camoin Associates
Phone: (207) 831-1061
Email:
jim@camoinassociates.com  

 

Robert Leaver, Owner

New Commons

Phone: (401) 351-7110

Email: rleaver@newcommons.com

 

Catherine Renault, Principal

Innovation Policyworks, LLC

Phone: (207) 522-9028  

Email: crenault@innovationpolicyworks.com

 

Aaron Paul, Director Energy and Broadband Consulting
Tilson Technology
Phone: (207) 837-2571
Email:
apaul@tilsontech.com

 

Click here for more broadband buzz!

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Featured Indicator: Broadband Adoption

by Tom Dworetsky 8. April 2015 15:24

Akamai’s quarterly State of the Internet report has a host of information on issues such as internet security, penetration, connectivity, and speed for countries around the globe. Click to download the report for Q4 2014.

The chart below uses data from Akamai to show the top 10 states in terms of broadband connectivity, defined as the percent of unique IP addresses with average connection speeds greater than 4 Mbps. Delaware ranks first with 96% broadband adoption, followed by Rhode Island with 92%, and Hawaii with 89%. The lowest ranking state (not shown) was West Virginia, with a meager 58% broadband adoption rate.

 

 

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Marketplace Fairness Act 2015 – Yea or Nay for Economic Development?

by Rachel Selsky 8. April 2015 11:59

E-commerce is becoming a larger and larger part of American’s spending, with online purchases accounting for nearly 7% of all retail spending in the United States. One of the benefits of purchasing online, other than being able to avoid crowded malls, is that you do not need to pay sales tax. Consumers who make purchases online are expected to claim those purchases on their annual tax returns and pay applicable state taxes, but very few people actually do. On March 10, 2015 the Marketplace Fairness Act of 2015 was reintroduced to the Senate to make it easier for states to collect sales tax on online purchases. The proposed legislation would reform sales tax laws that predate the Internet with uniform sales tax collection for both e-commerce and brick-and-mortar retailers.

The legislation was previously introduced in 2011 and 2013. In 2013 it was passed by the Senate but was never brought before the House because of concerns that it would be perceived by the public as raising taxes. The 2015 bill is being presented as a way to reduce the “government subsidy” that is given to online retailers who are not required to charge sales tax and therefore are able to offer lower prices. Lower online prices make it more difficult for bricks-and-mortar stores to compete as they have to account for property and sales taxes.

The following figures from the U.S. Census show the rising share of e-commerce relative to overall consumer retailing.

 

 

In terms of economic development, the Marketplace Fairness Act has both positives and negatives:

Pro

  • Local stores have a hard time competing with the large online retailers who are able to offer discounted prices, in part due to not having to charge sales tax. The local retailers in our communities are struggling to remain viable in this climate and leveling the playing field with online retailers, even just a little, could help turn the tide.

  • The increase in state revenue that could be generated through the sales tax collected could reduce the amount of tax necessary from other sources (income, property, etc.) and increase the amount of discretionary funding that consumers have to spend locally.

  • The new sales tax revenue could be used to support economic development efforts including grants for local businesses, infrastructure improvements, and retention efforts.

Con

  • Opponents of the bill such as Dan Grippen, the National Governor’s Association executive director, point out that consumers purchasing goods from states where they don’t live will effectively force them into a situation of “taxation without representation.”

  • Companies with a strong online presence would be induced to move to states with low sales tax rates creating a federally incentivized “race to the bottom” for sales tax rates across the United States.

  • Many local businesses are supplementing their bricks-and-mortar sales with online sales and so they would also be forced to charge sales tax and could lose this business that is supporting their Main Street presence.

I’m sure this will be a heavily debated topic in the coming years as e-commerce continues to make up an ever larger percentage of overall consumer spending. Do you think this type of bill would help or hurt your downtown revitalization efforts? Let us know in the comments.

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The Joke’s on You! Using statistics to fool others and ourselves

by Michael N'dolo 31. March 2015 17:20

Under our cherished tradition of celebrating fools on this 1st of April, let’s not forget that we are just as capable of being fooled as we are of fooling others by one of the least “fool-proof” tools out there: statistics. Two of my favorite fool-tools are “correlation-proves-causation!” and a second, lesser known “random correlation.”

 

Let’s take the second one first—completely random correlation where two sets of data with not even a trace of connection between them appear to coincide as if by magic. For fun, just check out the following site prepared by a student of statistics to show how data correlations can be hilarious: http://www.tylervigen.com/. My favorite is how the divorce rate in Maine is very highly correlated to the US per capital consumption of margarine. Who would have thought? In this case, not only is there no causation happening (eating margarine in Los Angeles is not causing heartbreak in Augusta) but the correlation itself is just spurious. How did the author come to these magnificent finding? Simply, he just threw every set of statistical data into a model and out popped these (completely random) correlations.

 

Divorce rate in Maine correlates with Per capita consumption of margarine (US).

 


If you go to the site, you can click each of the headings and make your own funny correlations. For example, I played with it a bit and found that US per capita consumption of cheese correlates nicely with the number of lawyers in Iowa.

 

 

Clearly, some things are correlated by shear randomness. Now on to the better known, “Correlation proves causation!” argument. We have all been told that this is a big no-no. But, how often are we guilty of the error? Below is a great cartoon that very wittily shows just how easy it is do fall into that trap.

 

 

We find two data points that are correlated and seem to have a logical connection and voila! We believe one caused the other. The above is a silly example, but in our own work, how do we avoid drawing erroneous conclusions? Example: “The number of jobs in my county grew by 10% last year, boy I’ve done a great job! Where’s my raise?” If the number of jobs fell by 10% in a given year, we might blame the economy or the fact that the major employers in the region are all in an industry in trouble (think “oil and gas exploration” right now). As consultants, we joke that our best “success” stories for plans we have completed may or may not be an actual result of our work—randomness plays a role in every deal and in every success or failure. On the flip side, “failures” can’t be pinned on us either! Joking aside, we hope that we have made a real difference, but it is nearly impossible to prove anything. The best we have is a long-term set of projects and plans we have worked on being correlated to another set of data about successful projects/initiatives. That’s correlation. We hope causation is involved!

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Effective Public Policy: New York State’s Investment of VLT Revenue in the Thoroughbred Racing Industry

by Dan Stevens 11. March 2015 14:41

Whether purposefully or serendipitously, New York State’s investment of gaming revenue from Resorts World Casino New York City in the state’s thoroughbred horse racing industry has not only turned around an industry in decline, but has also boosted other industries including the state’s agriculture and tourism industries.

 

Gaming revenue from Video Lottery Terminals (VLTs) at the Casino began flowing in 2011 with the bulk of revenue going to New York State Education. A smaller portion (though a still significant sum) was reserved for the thoroughbred racing industry. The 16% annual share that New York State funneled to thoroughbred racing totaled over $120 million in 2013. That is further divided into operating and capital expenditures at thoroughbred tracks operated by the New York Racing Association (NYRA), purses (awards) for race winners, and a special New York State Thoroughbred Breeding & Development Fund that distributes awards to owners and breeders of Thoroughbreds bred in New York State.

 

The impact was immediately significant. The on-track handle (amount wagered at tracks) grew 16% between 2010 and 2013 while in the U.S. it declined by 1% during the same period – a strong indication of an industry rebound. Licensing of thoroughbred race participants, a general proxy for jobs in the industry, increased 8% during that timeframe. Purses are another indicator of the strength of the industry with higher purses corresponding to more competitive racing, more race participants, higher numbers of spectators, and greater wagering on races.  Pursues in the U.S. racing industry overall were stagnant between 2011 and 2013 while those offered by NYRA at New York thoroughbred tracks increased more than 53%.

 

The policy of New York to divert a portion of VLT revenues to horse racing has supported the state’s agriculture industry. VLT revenues increased purses restricted to New York bred horses and the awards given directly to owners and breeders of winning horses. This generated a significant spike in demand for quality New York-bred race horses. The number of New York-bred yearlings sold at auction increased 49% between 2011 and 2013 while the average sale price jumped from about $38,000 per horse to $52,000, a 39% increase in just three years.

 

That created a tremendous incentive for horse farm owners in New York to invest in their operations through hiring workers, purchasing new land, and making other improvements. It is also attracting breeding operations from out-of state accounting for a new infusion of spending to the state economy. For example, the number of horse farm properties in Saratoga County grew 14% between 2010 and 2013. The increase in breeding activity is significant given the high cost of breeding and raising thoroughbreds. Many of those costs include spending at local businesses such as agriculture supply business and veterinary offices. In fact, the recent upswing in the breeding industry drew a new branch of an out-of-state world-class veterinary hospital to the Saratoga area.

 

VLT revenue invested in horse racing has also supported the state’s tourism industry. The revenues not only increase the quality of races, but also have implications on the length of the racing season and thus the number of visitors that spend money at local businesses near tracks. Furthermore, revenues are used to improve the visitor experience at NYRA’s thoroughbred tracks through major capital improvements. Visitor attraction is significant given the economic impact of that tourism activity. Take for instance that a 2014 visitor survey conducted at the Saratoga Race Course found that 39% of visitors come from outside of New York State. That visitor spending (about $227 per-person per-day) represents new money coming into the state. The recent analysis conducted by Camoin Associates found that visitors represent the most significant economic impact associated with the Saratoga Race Course accounting for a total annual regional economic impact of $123 million and 1,000 jobs.

 

The “spillover” impacts of the VLT support for thoroughbred racing into the agriculture and tourism industries represent a robust return on investment. The evidence has proven this public policy to be a highly effective tool for catalyzing economic growth beyond the racing industry.

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What’s All the Broadband Buzz About?

by Guest Author 11. March 2015 11:31

The following article is a collaborative effort between Tilson Technology (www.tilsontech.com) and Camoin Associates (www.camoinassociates.com).

 

Broadband, or high-speed internet access, has been getting a lot of media attention lately. Recently President Obama stated that “high speed internet is a not a luxury, it is a necessity.” Governor Cuomo proposed a $1 billion “New NY Broadband Program.” Tom Wheeler, Chair of the Federal Communications Commission (FCC) and a former cable lobbyist, has advocated striking down laws that protect incumbent broadband providers’ markets.

 

Why all the buzz? Better broadband—defined here as faster speeds, higher adoption rates, lower prices, and more reliability than the status quo for the roughly 45% of Americans called out by Obama—is a powerful economic development tool. It is linked to business growth, improved educational opportunities, better consumer welfare, improved healthcare access, improved government services, innovation, entrepreneurship, and more!

 

If you’re reading this article from a broadband connection, you’ve likely experienced the benefits of broadband that are not available to many rural Americans. Perhaps you’ve shared a file with a co-worker, taken an online course, Skyped with a family member, looked at the results of your recent bloodwork at the doctor’s office, or registered your motor vehicle online. The possibilities are growing exponentially, and are virtually endless. For some. The digital divide is splitting the broadband haves and have-nots along geographic lines that are shaping the course of economic development and—more importantly—quality of life.

 

Key findings from the FCC’s 2015 Broadband Progress Report include a new broadband benchmark of 25 megabits per second (Mbps) for downloads, and 3 Mbps for uploads. Speeds meeting the 25 Mbps/3 Mbps benchmark are available to 92% of urban Americans, but only 47% of rural Americans. Nonetheless, Americans living in rural and urban areas adopt the new benchmark broadband speeds, when available, at similar rates (see below).

 

 

The FCC, members of Congress, the President, and the Governor of New York have a common theme to their broadband message: they want to stimulate competition in broadband, and they are looking for innovative ways to enable coverage in rural areas that have to date been underserved by the Universal Service Fund program. In 2014, the FCC announced $100 million of funding for Rural Broadband Experiments as part of its Connect America initiative. More recently, the agency is considering a draft decision to intervene against state Laws in Tennessee and North Carolina that limit internet access operated and sold by cities. In New York, Andrew Cuomo is proposing to use $500 million from the state’s bank settlements to provide a one-to-one match for providers improving service in underserved areas on the state. The current method of expanding broadband service—whereby incumbent providers of regulated phone and TV provide add-on internet access service—is on the cusp of change.

 

In Maine, the municipalities of Islesboro, Ellsworth, Sanford, and Rockport are developing solutions that employ public-private partnerships to expand broadband in their underserved markets. Their solutions range from issuing a bond to fund a fiber-to-the-home network to using grant money to build key infrastructure that will enable future private broadband investment.

 

Because of the critical role of broadband on the economy as well as on community and individual well-being, it is imperative that economic and community developers understand these recent trends and begin taking action. Now is the time to begin actively working with partners to prepare and implement strategies that support the continued development of infrastructure, policies, and practices that will increase broadband access and adoption. Actions community leaders can take include:

  • Develop a Plan: Develop broadband plans, within or related to economic and community development plans, that address issues around infrastructure, organization, supply, demand, and adoption.

     

  • Build an Implementation Network: Develop and support learning and implementing networks, partnerships, or collaboratives for "strategic doing" among economic and community development, education, business, social services and healthcare, and cultural communities.

     

  • Initiate Cultural Change: Focus not only on technical, infrastructure, and funding issues but also around fostering a digital culture that supports innovation, entrepreneurship, and improved quality of life.

Our own interdisciplinary collaborative of Camoin Associates, Tilson Technology, and others will be digging deeper into these issues in the coming months and reporting on our findings. If this topic is pertinent to your community, we invite you to join the discussion by checking for updates on Camoin’s blog, joining our mailing list specific to this topic (click here), or reaching out to one of us directly with questions or suggestions for future articles:

 

Jim Damicis, Senior Vice President
Camoin Associates
Phone: (207) 831-1061
Email:
jim@camoinassociates.com

 

Aaron Paul, Director Energy and Broadband Consulting
Tilson Technology
Phone: (207) 837-2571
Email:
apaul@tilsontech.com

 

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5 Tips for Acing the CEcD Exam

by Rob Camoin 11. March 2015 10:55

Looking to broaden, or sharpen, your economic development skills? Then you should strongly consider fulfilling the requirements of, and sitting for, IEDC’s CEcD exam. If you’ve fulfilled the requirements and are now ready to take the exam, past results indicate you will need to prepare. The pass rate on the exam last year was a meager 35%.

 

Here are 5 suggestions on how you can be prepared to pass the exam the first time out:

  1. Study!! You need to be ready to devote a considerable amount of time studying and preparing for the exam. I have mentored a number of people preparing for the exam. Those that spent the time studying passed and those that didn’t failed.

  2. Find a CEcD mentor that is willing to work with you. Even if it is accomplished by phone, a mentor can cover various exam topics with you, ask and answer questions and help you assess how prepared you are leading up to the exam.

  3. Take IEDC’s prep course. IEDC wants you to pass and they have offered preparation assistance through their prep class. Take them up on it!

  4. All the exam answers are in the manuals, so read them. Sitting for the required classes isn’t usually enough. There is lots of material. Don’t assume that everything on the exam will have been covered by instructors and is thus in your notes. Most material is, but you will get a lot more detail from the manuals than can possibly be covered in a class. Plus, you will need to read the manuals of the classes you haven’t taken if you want a shot at answering questions in those subject areas correctly.

  5. Lastly, practice writing essays. I have graded the exam at least 6 times. When I speak with other graders they all make the same assessment—an overwhelming majority of individuals taking the exam are not able to articulate their responses in a clear and concise manner. As a result they run out of time and don’t earn all the possible points.

Click here to register for IEDC’s upcoming training courses.

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About Camoin Associates

Camoin Associates is a professional service firm that utilizes its understanding of the public and private sector investment process to assist businesses and developers in capitalizing on funding, financing and tax programs established to encourage private investment. We also specialize in advising economic development organizations and municipalities in creating strategies, policies and programs that support investment and job creation.   [Click Here for More]

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