Tag: economic development

Categories
Current News The Industry

Employees Favor Working from Home

USA Today reported on the results of the fifth annual survey of the State of Remote Work conducted by Owl Labs and Global Workplace Analytics. The nationwide survey was done last summer at a time when almost one-fourth of workers continued to work at least part-time from home.

The survey showed a strong desire of employees to work from home, at least part-time. Here are a few of the most interesting findings from the survey:

  • A little more than half of all employees would choose to work full-time from home. 74% of those interviewed said that working at home made them happier.
  • Almost half of workers said they would take a 5% pay cut to continue to work remotely, at least part of the time.
  • 91% of those working at home say they are as productive or more productive than when in the office. 55% say they work more hours at home than when they are in the office.
  • Almost one-fourth of employees said they would quit their jobs if they aren’t allowed to work remotely. For context, this survey was done at a time when employees were quitting jobs at historic rates.
  • A lot of employees changed jobs during the pandemic. 90% of them were looking for a better career. 88% also wanted a better work-life balance. 87% were looking for less stress. 84% wanted more flexibility for where they work, and 82% wanted more flexibility of when they work.
  • A lot of people relocated during the pandemic, which was made easier through working from home. Two-thirds of employees who relocated were between the ages of 26 and 40. Interestingly to those reading this blog, 63% of employees who moved from urban areas to rural areas were in this age group. More than half of those that moved from suburban to rural areas also were in the younger age group.

This survey shows similar results to other surveys taken over the last few years. It seems that many people got a taste of working from home and decided that they like it more than going to the office every day. A lot of employers are starting to demand that workers return to the office, and many have been reporting a mass exodus of employees who don’t wish to come back.

This has a lot of implications for rural and suburban communities. Many people want to get away from the stress of urban life and lead a more relaxing lifestyle – but they need good broadband to do so. Remote workers don’t want so-so broadband, but reliable broadband that means they can always connect remotely as needed. 56% of younger workers said they would love to incorporate virtual reality and virtual meetings into the workday – something that will require fast upload and download speeds.

From an economic development perspective, work-from-home employees are a huge boon to a rural community that has likely been aging and slowly shrinking over time. Employees making good salaries can provide a huge boost to a local economy. For years, rural communities have sunk big tax incentives into trying to attract new employers. It probably costs a lot less to attract one hundred remote workers than to lure a traditional employer that will bring a hundred jobs.

I have rural clients that operate rural fiber networks who tell me that their communities are seeing a new demand for building new homes and that housing prices are increasing as people want to move to the community.

This presents an interesting challenge to rural communities wondering how to get the word out to prospective work-from-home employees. This new trend is a 180-degree turn from traditional economic development efforts – but communities that master this ought to grow and thrive and bring fresh breath into aging communities.

Categories
The Industry

Quantifying the Benefits of Broadband

Economic development staff in almost every community I’ve ever worked with want to be able to quantify the benefits of broadband. It’s not hard to list the many benefits such as providing the ability for rural students to do homework, or the ability to start a home-based business after getting broadband. However, there has never been any way to put a dollar value to the community for these benefits.

Three economists from Purdue University have tackled the problem and took a stab at quantifying the benefits of bringing broadband to all of the areas served by Rural Electric Member Cooperatives (REMCs) in the state of Indiana. The work was done by looking in detail at the public benefits that would be generated at the Tipmont Cooperative and then extrapolating those results to the six other REMCs in the state.

The results are eye-catching and the study calculates a net present value of $24,293 to every cooperative household. I think most people’s first reaction is that amount seem too large, but when you look at the assumptions behind each component of that number, each assumption seems to be conservative.

Here are a few of the benefits measured by the study:

Medical. The study relied on recent studies that quantified the benefits of telemedicine. Several studies have shown that there is a significant decrease in Medicare costs once a region begins using telemedicine. The biggest savings comes from significantly reduced hospital stays and emergency room costs that come as a result of using telemedicine for preventive medicine – by checking up on patients regularly, resulting in small problems not escalating to severe ones.

Education. Numerous recent studies have shown that students without access to broadband don’t perform as well as students with broadband. Adults also benefit from online education through the ability to pursue college degrees online or to get training for new careers. It’s challenging to quantify the benefit of more education at the macro level, but it’s really easy to understand at the microlevel. We know that those who complete high school degree earn more over a lifetime than those who don’t. There have been numerous studies that quantify the increased lifetime earnings from various levels of post-high school education.

Economic Development. Recent studies have shown that there is a direct positive correlation between broadband adoption and economic development. The old economic model of communities thriving by attracting large employers is crumbling as the US continues to lose factories and factory jobs. But broadband helps existing businesses do better and can help keep an existing business to flee a market due to lack of broadband.

At the local level, better home broadband allows people to work at home, many of them finding higher-paying jobs than are available in the local economy. Good broadband also let’s some households bolster full-time earnings by engaging in ecommerce such as opening Etsy web stores. Numerous studies over the years have shown that anything that increases local wages benefits the local community with a multiplier effect as those extra earnings are spent on local goods and services.

Shopping. If you read my blog from last Monday, I discussed surveys we’ve done at CCG that listed the ability to shop online as one of the things most wanted in areas that have no broadband.

A recent Price Waterhouse Cooper study in England calculated the advantages of online shopping at US $754 per household annually – a combination of being able to buy goods at lower prices and the savings from not having to drive to buy things. That number has to be conservative when compared to rural areas in the US where households have longer drive times to reach retail shopping.

Farming Benefits. Much of the area covered by the study are agricultural and several studies have shown that good broadband can bolster farm incomes by as much as 6% annually – a number that is bound to increase as the benefits or smart-farming and outdoor IoT sensors improve crops and herd management.

Why the Study is Conservative. There are some obvious economic benefits that aren’t even included in the study. For example, there are several studies that show that lack of broadband depresses housing value. Anecdotally, I’ve been told in the last few years by rural real estate agents that they are starting to have trouble selling houses with no broadband – and it’s hard to put a value on the inability to sell a house.

The study pulls together studies done by others paint an overall picture of broadband benefits. looking at specific benefits of broadband – anybody that wants to understand this more should read the links to other studies. They step that made this study relevant to me was layering these impacts onto the specific area served by the Tipton Cooperative. One only has to travel to rural America these days to be able to see the differences between areas with and without broadband. Areas without broadband are unable to take part in things the rest of us take for granted like online shopping, easy access to do homework or pursue advanced degrees and the ability work from home and start new businesses. This is the first study I’ve seen that has tried to quantify all of these benefits for rural America, and the results are startling.

Categories
The Industry

Fiber and the New Economy

Many communities look at having a fiber network as a catalyst for economic development. When fiber was relatively new this was clearly the case. We can look at some of the early adapters of fiber, like Bristol Virginia to see how communities leveraged a fiber network to bring large employers and jobs to their communities.

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.

Categories
The Industry What Customers Want

A New Vision of Economic Development

 

Photo by Drew C. Wilson of the Wilson Times


I attended a forum in Wilson, North Carolina last week that talked about how fiber is transforming their city. They talked about how they are trying a new model for economic development.

The traditional economic development model concentrated on searching for big piles of jobs. Communities made efforts to attract major employers and worked hard to keep companies from leaving their town. But it’s pretty obvious when looking around rural America that this model stopped working somewhere along the line. I visit far too many communities that have lost big employers and that are not finding anybody to replace them. This is due to some degree to the overall huge decrease in US manufacturing jobs. But it also is due in part to the general decline of businesses located in smaller communities.

Wilson is a community of around 50,000. Historically the city was known as the ‘world’s greatest tobacco market’ in the 19th century and tobacco was huge in the area until a few decades ago. Wilson was also the birthplace to BB&T bank, which is still the largest employer in the city. But like happened with many US cities, Wilson also went through a decline. Some small manufacturers closed and the tobacco business died. In a scene that is familiar across the country the downtown business district dried-up as retail moved to other places.

Wilson started its fiber optic business in 2008 under the tradename of Greenlight. They were one of the first cities in the country to offer gigabit broadband to residents. And that fiber network was the linchpin for the city in developing their new vision of economic development.

The concept behind Wilson’s vision sounds simple. They figure that that the best way to attract jobs to the community is by working to make their community a place where people want to live. They want visitors to the city to like it enough that some of them will want to move there. And they figure that when they reach that goal that businesses will naturally want to locate there. So they are looking to grow their economy by concentrating on and improving the assets they already have.

Of course, this is anything but simple. Many cities have tried this and only a few have found a way to rebound from the decaying downtowns we see all over the country. Wilson is making the turn by concentrating on the downtown area. They lured the Wilson Times, a local daily newspaper, to refurbish an old building and move back into downtown. They raised the money to renovate an old theater to create the Edna Boykin Cultural Center. There is a project to build new housing downtown next to the whirligig park (the picture accompanying this blog). They attracted Peak Demand to make a $2.6 M investment to manufacture electrical components in an old tobacco processing plant. And these investments are bringing back other businesses. There are new restaurants and two brew pubs that have opened in the downtown.

Wilson is using an approach that other cities should consider. They involve all of the stakeholders in the community in the effort to improve quality of life there. That includes working with Barton College, a 1,200-student liberal arts university and nursing school. They challenged the arts community to move and grow downtown and have a thriving art scene. They put an emphasis on buying local, which we all know has a tremendous local economic multiplier effect. The various constituencies in the city meet often to discuss ways to make the city better.

But they credit the fiber network for being the change that started everything. While big companies and big employers are important to every community, Wilson understood that the work-from-home entrepreneur movement is creating a lot of jobs and a lot of wealth. And so they foster innovation in a number of different ways and strive to make small and new businesses successful.

The big shame is that the North Carolina legislature passed a law to prohibit other communities in the state from following the Wilson model. Cities are no longer allowed to become retail ISPs in North Carolina. If they build fiber it has to be operated by somebody else – and we know that is a far harder model to make work. One only has to look at what’s happening in Wilson to understand that fiber is an important component these days for economic vitality. But fiber alone is not a guarantee for economic success. It takes a community-wide effort like the one in Wilson to take advantage of what fiber offers. Wilson still has a way to go, but you can feel the excitement in the community – and that is what makes any city a place where people want to live.

Exit mobile version