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Putting it all Together:Broadband and

Economic Development

PresentationConnect Your Economy Practical SeminarPikeville, Kentucky – December 15, 2016

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Broadband Means Jobs

Internet Enabled New Jobs as Percent of all New Jobs Created by BusinessesBy Size of Employer Group

Broadband enabled 36.4 % of all new jobs from 2014-16, up from 29.5% from 2010-13

Source: SNG Digital Economy Database

Impact of Internet on job creation

has accelerated in the last three

years

0 - 19 20 - 49 50 - 99 100 + Totals0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

35.6%

28.7%

33.0%

26.9%

29.5%

35.8%

30.8% 29.9%

40.1%

36.4%

2010-2013 2014-2016 Strategic Networks Group, 2010-2016, n= 6,164

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SNG research states

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SNG: some of our clients

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Takeaway 1:

Broadband impacts are driven by meaningful use

of Internet applications

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Digital Economy index (DEi) isSNG’s scoring system (0-10) of broadband use

Benchmark competitiveness against peers

Personalize return on investment of Internet applications to business owners and managers

Share with local economic development agencies for impact-based broadband planning

Measuring Meaningful Use

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9 up to 10

8 up to 9

7 up to 8

6 up to 7

5 up to 6

4 up to 5

25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0%

52.3%

45.2%

35.2%

33.2%

31.7%

29.5%

R² = 0.981136783071425

Average % Revenue from Internet UseDE

i Ran

ge

N = 1,426

Incr

easin

g U

tiliza

tion

More Effective Internet UseIncreases Revenues

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Benefits to Businesses

NoneIncrease foot traffic to locations

Expand access to skilled resourcesGrow offerings with online products and services

Increase staff productivityImprove market shareStrengthen your brand

Increase sales efficiencyExpand geographic reach & acquire customers

Effectiveness in reaching target customersReduce operating costs

Increase customer loyalty and satisfaction

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

6.2%25.9%

32.4%33.9%

44.0%46.8%48.0%48.5%49.6%51.3%51.6%

54.8%

Businesses' Stated Goals for Going Online

Strategic Networks Group, 2014-2016, n= 6,599

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Jobs Gained from Internet Use

1 - 19 20 - 49 50+ Total0.0

5.0

10.0

15.0

20.0

10.5 11.3

15.713.5

Technology Ratio: Net Jobs Gained From Internet Use Compared to Jobs Lost

Strategic Networks Group, 2014-2016, n= 1,805

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Why Broadband Matters …

Improves business competitiveness, innovation, and growth… leading to job creation

Key for business retention and expansion

Enhances quality of life and household income

Enables “smart” municipal services

Community benefits are not considered by ISPs, as they are outside of their business case

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Impacts from Driving Meaningful Use

Broadband Economic Impact Estimate for Tennessee

Measure ImpactBusinesses Adopting 3,401

New Revenues / Business $63,200Annual GDP $ 267.0 M

Annual Tax Revenues $ 9.93 MRegional Jobs Created 3,940

https://www.tn.gov/ecd/section/broadband-survey

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Impacts from Driving Meaningful Use- Regional -

Broadband Economic Impact Estimatefor Kentucky River Area Development District

Measure ImpactBusinesses Adopting 67

New Revenues / Business $41,200Annual GDP $ 3.5 M

Annual Tax Revenues $ 0.13 MTotal New Jobs 52

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Takeaway 2:

Business Location/Relocation Decisions are Impacted by

Broadband Availability

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Broadband and Business Location

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Half of Businesses Don’t Have Broadband

48.2%

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Broadband Speeds – Rural vs Urban

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Only one provider

Two providers Three providers

More than three

providers

Don't know0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

37.8%

27.3%

8.7% 8.8%

17.4%

ISP Choice for Businesses

Strategic Networks Group, 2014-2016, n= 5,323

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Cost vs. Benefit Also a Barrier

$2,000 or more

$1,000 to $1,999

$500 to $999

$400 to $499

$300 to $399

$200 to $299

$100 to $149

$50 to $99

Less than $50

.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

2.5%

2.5%

3.7%

1.8%

3.6%

7.8%

17.0%

37.9%

15.2%

Monthly ISP Subscription Prices: Businesses

Strategic Networks Group, 2014-2016, n= 5,574

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Takeaway 3:

It’s more than just availability/speed…

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Feature vs. Benefit:Marketing’s Impact on Small Businesses

Target Market Demand Drivers Feature Benefit Result

Households Netflix, Gaming, Multiple household users and devices Speed Enhanced

lifestyle Uptake

Large Businesses

IT staff, Collaboration, Security, Cloud Applications Speed Competitiveness

Collaboration Uptake

SMEsEmail, websites, basic online tools, all accomplished with “basic” service

SpeedHow does fast Internet impact my bottom line?

Limited Uptake

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Broadband’s Applications are Technologies, not Utilities

When people buy, adopt, and utilize technology – they buy benefits, not features

… so driving awareness and utilization is the next challengeFor further information, see “No Field of Dreams: Eliminating the Waiting Game and Driving Uptake”

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What’s Preventing Businesses from Meaningful Use?

Time and effort required to develop expertise

Lack of internal resource with necessary skills

Too much information - not enough time to research

Lack of local external support resources

Affordability of local external support resources

Higher priorities to focus on

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

19.7%

18.4%

20.2%

16.4%

21.8%

21.7%

42.8%

36.2%

36.6%

29.4%

29.1%

33.3%

Barriers to Acquiring Internal Expertise

Critical barrier for progress Challenging but manageableStrategic Networks Group, 2014-2016, n= 6,960

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Broadband Demand – what are we building for?

Active Demand Latent Demand Potential Demand

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Economic Growth is Driven by Utilization

Utilization Growth

Availability Adoption Utilization

Broadband availability is often the primary focus, however …

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Subscription Revenues- Operations & Maintenance Investments

= PROFIT vs.Economic Case

Increased business productivity and revenues+ Good, high-paying new local jobs

+ better quality of life, competitive Internet choice - Investment, utilization programs and business support

= BENEFITS FOR THE COMMUNITY

The Economic Case for Broadband Cannot Be Found on a Balance Sheet

“Off- balance-sheet”

Community benefits > Network Profit

Balance sheet

Business Case

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Provide information and tools to drive meaningful use of Internet applications

Help them understand the benefits of going online – not just ‘nice to have’

Develop a business case for each business to take action

Personalize the Value of Broadband to Local Businesses

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Drive more effective internet utilization

This is a process!

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New good-paying local jobs in technology and media

Local business retention and expansion through better use of technology

Investments that maximize local economic growth

The Win-Win-Win

+

=

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Michael Curri, PresidentStrategic Networks Group Inc.+1 202.558.2128mcurri@sngroup.com

Thank you.Now let’s connect.

facebook.com/strategicnetworksgroup

linkedin.com/company/strategic-networks-group

@SNGroup

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Connecting the Dots Between Broadband

and Economic Development

WorkshopConnect Your Economy Practical SeminarPikeville, Kentucky – December 16, 2016

sngroup.com/poll/

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Agenda

• 15 min - Why is economic development through broadband not automatic?

• 10 min - Breakout session #1: What are your challenges?• 15 min - What has worked for economic development through

broadband• 15 min – Start Breakout session #2: Action planning for economic

development through broadband• 10:55-11am Break• 15 min – Continue Breakout session #2• 15 min – Discussion • 15 min – Community broadband tools and resources• 15 min – Summary and wrap-up

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SNG research states

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SNG: some of our clients

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Broadband Means Jobs

Internet Enabled New Jobs as Percent of all New Jobs Created by BusinessesBy Size of Employer Group

Broadband enabled 36.4 % of all new jobs from 2014-16, up from 29.5% from 2010-13

Source: SNG Digital Economy Database

Impact of Internet on job creation

has accelerated in the last three

years

0 - 19 20 - 49 50 - 99 100 + Totals0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

35.6%

28.7%

33.0%

26.9%

29.5%

35.8%

30.8% 29.9%

40.1%

36.4%

2010-2013 2014-2016 Strategic Networks Group, 2010-2016, n= 6,164

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Relationship between Utilization and Speed

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Challenge: The Smaller the Business, the Lower the Internet Utilization

1 - 4 5 - 9 10 - 19 20 - 49 50 - 99 100 - 249 250 - 499 500 or more

5.00

6.00

7.00

8.00

9.00

6.08

6.62 6.85 6.877.09 7.20

7.57

8.00

The Small Business Digital Divide

Number of Employees

Utiliz

ation

(DEi

) Sco

re

Strategic Networks Group, 2012-2016, n= 20,420

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Compounding Challenge: Rural Businesses Lag Farther Behind

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This is Troubling as Small Businesses Have Much to Gain in Terms of Revenues…

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...And Cost Savings!

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Audience Poll – Results

Poll Q1 - What type of organization do you represent? https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxMjQ3ZjM4ZDM4MWEyMTAwZGQ0YjAx

Poll Q2 - What is your current primary role in broadband initiatives in your community or region? https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxMjQ5OTZiY2UyNmYxOTAwZmI0Y2Qz

Poll Q3 - With respect to broadband, what are the key challenges you face in your community or region? https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxNzgyNjBmZDVlNzYxODAwY2Y0ZWIw

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Breakout session #1:

What are your challenges?

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Provide information and tools to drive meaningful use of Internet applications

Help them understand the benefits of going online – not just ‘nice to have’

Develop a business case for each business to take action

Personalize the Value of Broadband to Local Businesses

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All Internet Applications Are Not Equal

Quick to Adopt ‘Laissez-faire’ approach

Slow to AdoptNeed awareness and support

Business Applications Business Applications

Buying Online Selling Online

Basic Website Online media (video)

Research and accessing information

Teleworking

e-mail Delivering Content and Services

Document transfer Social Networking

BIGGESTBENEFITS

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The Payoff from Driving Utilization

0 - 19 20 - 49 50 - 99 100 - 499 500+ Totals0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

21.6%

14.7%

21.5% 22.8%

11.7%

19.1%

45.8%41.2% 39.7% 39.7%

66.9%

46.0%

New Jobs, Low versus High Internet Utilization

Low DEi (0 up to 7) High DEi (7 to 10)

Strategic Networks Group, 2014-2016, n= 1,805

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Benefits to Service Providers

When providing businesses with better service and speed… show them how to use it

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Benefits to Local Business Retention and Expansion

For a business,increasing utilization by 10%:

Increases revenues 24%Decreases costs 7%

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Benefits to Community / RegionalEconomy and Workforce

For a region, increasing utilization:

Allows businesses to be more competitive

Creates a demand for high-skilled workers

Adds fiscal revenues

Grows markets for service providers

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Tips and Tools to Drive Economic Development through BroadbandUnderstand how to assess current broadband availability and demand at the micro-level

Use tools to identify gaps, barriers, and opportunities for growth – basis for partnerships to drive utilization

Design a network that has the capability to meet potential demand

Find out the tried and true services that drive local growth and improve the quality of life in your community

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Breakout session #2:

Action planning for economic development through broadband

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Challenges Poll – Results

Poll Q4 - At what stage are the efforts to address broadband challenges in your community or region?https://co1.qualtrics.com/results/public/c25ncm91cC1VUl83VkNQTHNkVFJxUG44cWctNTgxMjRhNDY3ZGMwYmQxNDAwMWUyMGE3

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Action planning: How do we ensure economic development

success through broadband?

• Resources• Goals, Vision• Tasks• Challenges• Success Factors – what is working?

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Moving to Action forImpact-based Broadband Planning

http://sngroup.com/broadbandresources/

http://www.arc.gov/images/programs/telecom/ARCBroadbandPlanningPrimerToolkit.pdf

http://www.soar-ky.org/blueprint

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Broadband Toolkit: Designed to Follow a Process

http://sngroup.com/broadbandtoolkit/

• Save time, accelerate process

• Focus on the right things

• Avoid pitfalls, reduce risks

Best practices to leverage broadband and the economic opportunities it creates:

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Toolkit Overview

Information, research, guidance, methods, and resources that include: – Overview of broadband and impacts– Guide to define goals and needs– Options for network models– Community readiness assessment– Guides for implementation

A comprehensive approach adaptable to different municipal needs

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Community Readiness• Effectively engage community stakeholders in the process –

buy-in through participation• Template to evaluate key success factors– Leadership– Vison and Plan– Organizational Stability– Community Awareness– Implementation Ability– Market Profile

• Minimize risks by optimizing readiness before committing to a path

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Guides and Templates

• Guides and templates to support you–Adaptable– Time savers

• Ensure you’re using best practices• Allow you to apply your own resources more

efficiently

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Drive more effective internet utilization

This is a process!

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A DEi Scorecard is delivered to each business and organization

Individualized ‘broadband assessment’ that:‒ benchmarks competitiveness against

peers (by size and industry sector)‒ estimates ROI from increased utilization‒ provides links to local advisors and

support

Data based on the individual’s current broadband utilization against industry average

Shared with local economic development agencies so they can raise awareness, increase adoption, and drive utilization

Personalized Incentives: DEi Scorecard

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New good-paying local jobs in technology and media

Local business retention and expansion through better use of technology

Investments that maximize local economic growth

The Win-Win-Win

+

=

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Michael Curri, PresidentStrategic Networks Group Inc.+1 202.558.2128mcurri@sngroup.com

Thank you.Now let’s connect.

facebook.com/strategicnetworksgroup

linkedin.com/company/strategic-networks-group

@SNGroup