I’ve been talking to some economic development pros recently and I think that historic economic development model is rapidly changing due to the nature of our new economy. I don’t think there will ever come a time when communities won’t hope for a major employer to move to their area, and we know today that requires having great broadband. But I also think that smart communities will look beyond this model and will find new ways to best leverage fiber.
Probably the biggest recent change in our economy is the work-at-home phenomenon. People are able to work at home for major corporations, and that means they can live anywhere. But the real juice from the work-at-home economy is from people starting their own businesses from their homes.
I’ve worked out of my house for nearly twenty years. When I first started doing this it was rare and I didn’t know anybody else who worked full-time from home. But today its common – just on my one city block there are a half a dozen families supported by work-at-home jobs.
The other big economic trend is that we are becoming more of a service economy. There are numerous businesses making a go of it by supporting others in their community. A few big retail companies like Walmart and Amazon devastated a lot of the small retail community across the country. But I look around and see a thriving service community that is immune from the effects of big retail – restaurants, brew pubs, pet sitters, investment advisors, Lyft drivers, etc.
The new economy also fosters craftsmen and artists. Where I live it’s hard to find a carpenter or electrician since they are all so busy. As I travel around the country I see art and photography studios everywhere.
So what does all of this have to do with fiber and economic development? First, I think it’s becoming clear that communities without fiber are in danger of becoming irrelevant and of withering. The people working in the new economy need broadband to work at home or to sell their services or art work. And communities clearly need good broadband to support good education.
The new model I see for economic development recognizes the new economy and values it in the same way that they used to value drawing in the big employer. A person making $65,000 per year from their home is probably more valuable to a community than somebody making the same in a new factory that relocated for tax incentives. The factory worker might be commuting and carrying the salary elsewhere while the home worker is likely to shop and spend their money locally. And the factory is likely to be shipping profits out of town. We’ve known for decades that there is a huge multiplier effect from spending money locally, and creating jobs that spend locally can really fuels a local economy.
So I think the smart communities are those that will embrace this new economy and foster it. I would venture to say that very few communities even know how many local people work from their homes. And few have any strategy for attracting more people to work from home or for helping local people start new home-based businesses.
Since work-at-home employees can generally live anywhere, cities need a strategy if they want to foster this new economy. One possible strategy is to do everything possible to make a community into a place that people want to live. That means expending economic development resources to promote new restaurants, to foster the local art community, to create better parks and green spaces. It means cleaning up old downtowns and doing everything possible to get businesses to occupy empty spaces. It means eliminating tax or other disincentives for new small businesses. And it means making sure there is good enough broadband to support all of these efforts.