TechnologyLed Economic Development in Rural Communities

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Technology-Led Economic Development in Rural
Communities

• Nancy Stark, Director
• Comm/Econ Development
• Natl Center for Small Communities
• Washington, DC

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Session Goals

• Introduce NCSC and its role in rural
  telecommunications/technology issues.
• Outline the challenges facing most rural,
  distressed communities.
• Provide snapshots of current technology issues,
  statistics.
• Share preliminary findings and recommendations
  from an EDA-supported research project.

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National Center for Small Communities (NCSC)

• Research, training and technical assistance for
  small community leaders
• Grew out of the National Association of Towns and
  Townships (NATaT), public policy organization.

• Staff expertise and materials on
  local govt management, community/econ.
  development, funding and fundraising,
  environmental issues, telecommunications.

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Why Focus on Small?

• Of the 36,001 sub-county local governments
  
  - 90 are less than 10,000 pop.
  - 82 are less than
  5,000 pop. - 51
  are less than 1,000 pop
• Most small cities, towns are governed by
  part-time officials with little professional
  training
  (esp. in technology issues)

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Challenges facing many small, rural communities

• Preoccupation with traditional economic
  development strategies (attraction) discomfort
  with regional approaches.
• Demographic shifts increased ethnic diversity,
  exodus of young people.
• Lack of skilled workforce, cooperation between
  business and schools.
• Digital Divide dial-up versus high-speed
  broadband telecommunications.

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Growth in Technology Use

• Approx. 50 of homes in the U.S. have Internet
  access. 51 of users are women 49 men.
• 84 of public school classrooms are online.
• In 2000, 39 of rural households had IT access,
  versus 42 nationwide.

• 60 of jobs today require some form of tech
  literacy.
• Small-medium enterprises are being pushed into
  e-commerce by the bigger companies they are
  affiliated with symbiotic relationship.

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Speed Is a Critical Issue

• 31 of Americans have high-speed access, most at
  work.
• Contrast times to download a 10-megabyte file
  46 min. with dial-up (28.8K) 52 sec.
  with T-1 line 10-20 sec. with DSL or cable.
• In 2000, cable or DSL were available in fewer
  than 5 of towns less than 10,000 pop., but
  56-65 of cities over 100,00 pop.
• More recent deployment, esp. by small co/coops
  and municipalities, but RBOCs still control more
  than 90 of local phone-service market.

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Bursting the Dot.Com Bubble

• 57 of those without Internet access are not at
  all interested in going online seniors make up
  43 .
• The total number of Internet addresses worldwide
  fell in December for only the second time in six
  years.

• No companies with dot-com in their names made
  initial public offerings (IPOs) in 2001. Compare
  to 12 in year 2000 and 22 in 1999.

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NCSCs Work in Tech-Led Economic Development

• Getting Online a guide to the Internet for small
  town leaders
  - approx. 35,000
  guidebooks since 9/99. - update and issue
  in Summer 2002.
• AOL Rural Telecommunications Leadership Awards
  
  -
  recognized and rewarded innovations in
  communities less than 10,000 pop.

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U.S. Dept. of Commerce/EDA Sponsored Research
Project

• Best Practices in Technology-Led Econ.
  Development in Rural, Distressed Communities.
• Practical study of 14 rural communities and
  regions.
• Focus on information technology.

• Two products in March 2002
  - Best Practices Guidebook
  distrib. via agencies, organizations
  - Thriving Hometowns Network,
  electronic database of 50 small town ED case
  studies.

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14 Rural, Distressed Communities/ Regions

• Abingdon, VA
• Ashley, ND
• Bethlehem, NH
• Colville, WA
• Douglas, WY
• Elsa, TX
• Garrett County, MD

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14 Communities (contd)

• Klamath County, OR
• Maddock, ND
• McDermitt, NV
• Meadville, PA
• Southeastern Kentucky (3 rural counties)
• Watford City, ND
• Wautoma, WI

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Information Gathering Process

• Announcement via Internet, through intermediary
  organizations, Project Design Team.
• Screening Survey to identify economic
  development accomplishments.

• Informant Survey to collect info on tech.
  environment, strategies, outcomes.
• 90 minute structured telephone interviews with
  2-3 primary local leaders/facilitators.
• Onto preliminary findings...

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Telecommunications Infrastructure

• 14/14 some high-speed IT
  (inc. ISDN limited sites and high
  cost)
• 8/14 ISDN (maintenance problem)
• 12/14 T-1 (often limited expensive)
• 7/14 DSL (not without a struggle!)
• 4/14 cable (often limited sites)
• 8/14 fiber (limited exc. Abingdon)
• 8/14 last mile wireless to very rural

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Key Barriers to Tech-Led Economic Development

• Attitudinal Lack of widespread understanding of
  technology by citizens
• Infrastructural Lack of local telecom
  infrastucture.
• Financial Cost of implementing telecom
  technology.

• Barriers substantially overcome citizens
  understanding of technology local technical
  expertise.
• Barrier not overcome Utilizing the E-rate
  discounts across business or govt sectors.

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Tech-Led Economic Development Strategies

• Furnishing telecom infrastructure
• Promoting public access
• Engaging youth utilizing schools
• Assisting local entrepreneurs
• Enhancing local labor skills
• Increasing local business productivity fostering
  e- commerce

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Furnishing Telecom Infrastructure

• Colville, WA
  Engineered a high-speed,
  fiber-optic connection, providing full redundancy
  and positioning the region for a regional call
  center, expanded business incubator, and daily
  manufacturing and sales operations of local
  existing businesses.

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Furnishing Telecom Infrastructure (contd)

• Klamath Co, OR
  Used demand
  aggregation techniques to convince a local
  carrier to invest 5 million in a new fiber optic
  route. Then, applied an innovative
  public-private sector approach to develop an
  alternative open access fiber route through the
  countys under-served rural communities.

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Promoting Public Access

• Abingdon, VA
  Early on (1996),
  launched the Electronic Village of Abingdon, an
  affordable, high-speed telecommunications network
  with 25 free public access computers throughout
  the town. EVA is the only fiber optic network in
  Virginia owned by a local government entity.

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Promoting Public Access

• Four SE Kentucky Counties
  Placed 12 kiosk computers in country
  stores, other local gathering places in four
  remote Appalachian counties. Created a fleet of
  14 lending laptops for home use by low-income
  families. Established a friendly online portal
  to community information located at
  www.actionteam.org.

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Engaging Youth
Utilizing Local Schools

• Douglas, WY
  Boosted the
  leadership, technology and entrepreneurial
  development skills of local youth by engrossing
  them in community problem-solving and business
  assistance projects. Students earned 6/hr
  creating Web sites, constructing databases,
  designing graphics, and diagramming business
  facilities.

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Engaging Youth
Utilizing Local Schools

• Elsa, TX
  Through sustained
  electronic conversations, HS grads (now at Ivy
  League, etc.) became influential leaders,
  contributing ideas and strategies for critical
  projects back home. Many returned during
  vacations, or upon graduation, to orchestrate
  community research, communications and
  policy-development projects.

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Engaging Youth
Utilizing Local Schools

• McDermitt, NV
  Launched an ISP (Humboldt
  Internet Provider) for the town of McDermitt and
  adjacent rural communities by having high school
  students, who are organized under a nonprofit
  corporation, staff and run the organization.
  Pre- HIP, citizens had to place a long distance
  call to Idaho to connect to the Internet.

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Assisting Local Entrepreneurs

• Wautoma,WI
  Non-profit
  organization (CAA/CDC) constructed a suite of
  free, electronic-based technical assistance
  programs for low-income entrepreneurs in five
  rural counties. Web resource (www.virtualincubate
  .com) is augmented by business mentoring,
  bizchats, computer purchase program, and
  TechSource Center.

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Assisting Local Entrepreneurs

• Bethlehem, NH
  Womens Rural
  Entrepreneurial Network (WREN) launched a
  skill-building and networking program for
  low-income women entrepreneurs, featuring
  Technology Center (computer equipment and
  one-on-one tech asst) online resources, forums,
  calendar (www.wrencommunity.org) and online
  marketplace (www.shopthewrens.org).

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Assisting Local Entrepreneurs

• Maddock, ND
• Local EDC created the Maddock Rural Business and
  Technology Center, a high-speed telecom,
  multi-purpose facility delivering business
  development, childcare, training and education
  services. The Center has incubated several new
  businesses, helping to ease out-migration and
  economic distress.

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Enhancing Local Labor Skills

• Watford City, ND
  Set up a
  virtual community technology center, served by
  high-speed telecommunications, where local
  citizens upgrade their technology skills to move
  into new or more advanced jobs. The promise of a
  tech-skilled workforce attracted three companies
  to the area, generating 80 new jobs.

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Inc. Local Business ProductivityFostering
E-Commerce

• Meadville, PA
  Opened a full-service
  Regional Conference Training Center, at a
  former industrial park site. RCTC is the
  regions premier venue for affordable in-house
  training and complex, interactive communications
  (e,g, participatory design, distance
  learning, computer classes, training via
  satellite downlinks, interactive meetings).

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Inc. Local Business ProductivityFostering
E-Commerce

• Ashley, ND
  Launched a publicly owned
  technology assistance business, of which the
  majority owner is the City of Ashley. TechLink
  has designed and implemented sophisticated
  e-commerce applications for local businesses,
  built company Web sites linked to the citys
  site, and incubated or recruited new businesses.

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Why These Strategies?

• Achievable, affordable, replicable -
  not necessarily cutting edge.
• Least common strategies Setting up
  municipal-owned communications utility to provide
  high-speed telecommunications. Building a smart
  park for high-tech firms.
• Emphasis on providing tech assistance to tradl
  economy businesses, versus pinning hopes on
  high-tech, info-intensive firms.

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Most Common Direct Outcomes of Tech-Led ED

• Attracted more highly skilled workers.
• Stimulated more entrepreneurial endeavors.
• Expanded markets for local products .
• Attracted more tech-based businesses.

• Increased the number of people employed by local
  businesses.
• Improved access to business support services .
• Moderate increases in local wages number of
  locally-owned firms.

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Least Common Direct Outcomes of Tech-Led ED

• Spurred agricultural diversification, value-added
  production.
• Increased inmigration of retirees.
• Stopped or reduced population out-migration.
• Retained more local capital.

• Some outcomes of tech-led economic development
  may also be enablers.

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Lessons Learned / Recommendations

• See technology as a tool, not a savior.
• Reach out and engage citizens in tech decisions
  (surveys, town meetings, news items).
  Must be inclusive and diverse.
• Exploit local technical expertise (ISPs).
• Employ Intro to Computers classes as a
  mechanism for generating local support for
  telecom investment (seniors, city leaders).
• Utilize the local school as a critical resource
  and community access point (computer lab).

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Stay in touch!

• Nancy Stark, NCSC
• www.smallcommunities.org
• nstark_at_handsnet.org
• 202-624-3556