Economic Development and Fiber

sibley1898One of the main reasons smaller communities give for wanting fiber networks is economic development. They believe that fiber will help them attract new jobs or keep existing jobs. There are examples where fiber networks have led to these two things directly, but it’s not always so clear cut

I know one rural town that can attribute over 700 new jobs directly to fiber. The call centers and defense firms that came to the town said that fiber was the main reason they chose that community. And I know of another town that built fiber and was able to convince the major employer in town not to relocate elsewhere.

But economic development is a funny thing and fiber projects often don’t lead to these kinds of direct home runs — where fiber is the major reason for economic improvement. I saw an announcement this morning that shows there’s often a more tenuous line between cause and effect. The city of Gaylord, Minnesota just announced that a medical school is going to be built there. Gaylord is a small city in a rural county in Minnesota that is known more for growing Del Monte corn and producing ethanol than they are for attracting things like a medical school.

But Gaylord is in Sibley County which has been actively pursuing fiber for over five years. They are within months of completing financing and starting construction of a county-wide fiber network that is going to pass homes and businesses in 10 towns and the surrounding farms. Gaylord learned about the potential for attracting the medical school as part of their investigation into building fiber, and without the fiber initiative they would never have known about or pursued the medical school.

You can’t draw a direct line between the medical school and fiber because there are certainly reasons other than bandwidth why a medical school would locate in a rural location. But by the same token, the fiber is a very important part of why the area was chosen. The desire for fiber clearly shows how progressive the area is in terms of being friendly to technology. And it certainly is not going to hurt in attracting staff and students to a medical school if they know that they can get gigabit fiber at home.

Clearly, something like a medical school will be great for a small community. It will attract high-paying jobs, which is going to boost real estate and rentals for students. It’s likely to attract a new hotel, and one can imagine that there are numerous businesses in town that will do better simply because of the presence of the medical school – it’s going to be good for local banks, car dealers, restaurants, grocery stores – you name it. I would certainly put this into the category of success due to fiber because it’s clear that without the fiber initiative this probably would never have happened. But the impact of fiber on rural communities is often more subtle than this.

One thing that you don’t hear mentioned in public discussions of economic development is the phrase brain drain. But every rural town and county in the country is extremely aware of this phenomenon. Rural families almost universally lament that there are not enough jobs for their kids, and it’s routine for high school or college graduates from rural areas to relocate elsewhere to find work. Fiber can’t, by itself, solve this problem for a rural community. But it helps.

A fiber network generally creates a few new technical jobs. But more importantly, it gives people the ability to work from home. I’ve noted numerous times in this blog how poor the bandwidth is in rural America. There are numerous jobs today that people can do at home. My consulting company went virtual a few years ago and we all live in small towns and work from home. Bandwidth allows writers, architects, engineers, salespeople, and all sorts of employees to create a home base in a place they want to live while working from home.

So, for every success of a town getting something amazing like a new medical school, there are hundreds of small successes in the form of people using bandwidth as the tool needed to live where they choose rather than have to move to a big city to find work. The income and tax base that such people bring to the rural communities that have bandwidth probably has an overall larger impact than the occasional home run. It’s just very hard to measure because it happens under the radar.

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