How Does Broadband Really Impact Economic Development?

A lot of people accept that broadband will improve local economies. But how does the technology do this, exactly?

Over the years, I’ve heard some rather impressive claims about the economic healing power of broadband. Talking to people in the trenches, though, I get a different sense of what we should expect and how we will achieve it.

Policymakers, government agencies, and elected officials, as well as the big telecos trying to con their way into more government subsidies for delivering empty broadband promises, seem to fall in two camps. You have your bold weavers, folks who throw out a blizzard of numbers and statistics that seem woven from whole cloth, indicating broadband’s responsible for “x” million new jobs or “y” billion dollars. The other camp consists of the assumptive forecasters, people who tout economic outcomes that seem reasonable, but whose validity is based on assumptions and anecdotal evidence.

Why is this important? Decision makers in local, state and federal government who don’t fully understand broadband or local economic development launch major broadband initiative and funding programs involving millions, maybe billions, of dollars. Unfortunately, the results can be frustrating, insufficient, wasteful and generally less than desirable. The solution? Start by going to the people who have the answers.

Talk to the pros

I’ve consulted in the community broadband space since 2005, yet I marvel at how many initiatives were championed, funded and guided by people who, judging by their words and decisions, needed to spend more time where the broadband meets the economic road. This is why, in partnership with the International Economic Development Council (IEDC), I started conducting an annual survey of economic development professionals, the folks who work daily improving local economies.

In 2006, for example, every mayor who could walk and hold a microphone at the same time preached the gospel of broadband and economic salvation, telling constituents “we need muni WiFi to convince kids who’ve gone away to college to move back.” “Muni WiFi will help increase our convention business.” They’d proclaim these and other benefits with the force of conviction of true believers. And thus, great expectations were built.

However, my survey revealed that bringing kids back after college and generating more convention business were low on the pros’ list of economic outcomes they received or expected to receive from broadband. Furthermore, fiber rather than WiFi networks were considered the best technology for impacting local economies.

More recently at all levels of government, politicians and administrators have latched onto the idea that a great economic benefit of broadband is helping people find jobs. Subsequently, governments will spend mini fortunes getting people connected to the Internet. It’s a valuable first step but it’s not where the greater goal lies.

Of the economic development pros surveyed in 2011, only 5% believe that finding a job is how broadband can best help individuals economically. 31% indicated improving job skills and professional development were the best target outcomes, while 25% replied that starting home-based businesses was the best. Reaching higher education levels and transitioning to a new industry or profession topped the list for 20% and 19% respondents respectively.

From my time spent watching the broadband stimulus program up close and personal, sitting in on FCC workshops and public meetings, and meeting with community stakeholders, I’m convinced policymakers must do better at talking – and listening – to the people who are using broadband well to achieve great economic results. At least at the local and regional levels, elected leadership seems more willing to let city planners and economic development staffs get out front on broadband projects.

Beyond the bold weavers and their attempts at creating some quantifiable “if, then” statements that justify investments in broadband, and the assumptive forecasters’ anecdotes are some truths about how broadband improves local economies. The question is, are community stakeholders and leaders willing to seek out and respond to the pros? Do they even know what questions to ask?

For the next few days you can contribute your views to the 2012 survey asking how broadband assets are impacting your local economy. Or you can add valuable input about what kind of broadband infrastructure you need and how several funding options for broadband infrastructure might work out. We’re hoping for a good cross section of respondents who influence economic development in your communities. Results from the survey will be released September 30 at IEDC’s annual conference, and will be available online. Besides contributing to a killer analysis report, your efforts could win you an Apple iPad to show off to your colleagues.

Craig Settles is a consultant who helps organizations develop broadband strategies, host of the radio talk show Gigabit Nation and a broadband industry analyst. Follow him on Twitter (@cjsettles) or via his blog.

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