Michael Curri - Broadband Communities Magazine

By the Numbers:

Broadband Communities Summit Dallas, Texas, April 15, 2013

© Strategic Networks Group, Inc. 2013

Research Findings on Broadband and Economic Development

Agenda

This session will examine what we know today from formal studies, anecdotal evidence, and other important sources of information. We will also explore what lies ahead in documenting broadband's contribution to economic development and job creation. 2


We know intuitively that there is a relationship between broadband and economic development, and we clamor for as much data as possible on the nature, causes, and extent of that relationship.

Broadband’s Profound Impact on Job Creation Broadband is responsible for 22.4% of all new jobs 35%

Percent of New Jobs Related to Internet

31.5%

30% 25%

By Size of Employer Group

21.4%

23.1% 19.2%

22.4%

Small businesses create 12x more Internet jobs relative to large firms

15% 10% 5% 0%

Employees Source: SNG Digital Economy Database n = 3,574 from NC, VA and KY collected in 2010-12

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© Strategic Networks Group, Inc. 2012 2013

20%

Increased Utilization Directly Correlates to Revenue Growth

36.8%

40%

29.4%

35%

25.5%

30%

20.0%

25% 20%

30.7%

14.8%

15.7%

15% 10% 5%

0%

Level of Broadband Utilization (DEi score)

Businesses underutilizing the Internet miss significant revenue opportunities 4 Source: SNG Digital Economy Database n = 1,202 from NC, VA and KY collected in 2010-12


% of Revenues attributed from Internet usage

Contribution of Internet to Revenues / Level of utilization

Broadband and Communities Broadband retains and attracts population and businesses

72% of home-based businesses say broadband was essential for their business

32% of households work from home or have a home-based business, with 14% planning to start in the coming year

55% of business and organizations said broadband is essential for remaining in current location

5 Source: SNG Digital Economy Database n = 27,200


38% of households said they would definitely, or likely, relocate if broadband was not available

ROI from Broadband Networks SNG projects have revealed common return on investment (ROI) multipliers from broadband investments* Economic ROI from Public Investments in Broadband

10 x

Variable

Number of Jobs created and saved

Fiscal revenues increase

the initial public investment

3 to 4 x the initial public investment

*Average multipliers identified from economic impact studies conducted by SNG. 6


Contribution to GDP

Why we Build Broadband Networks Operators Revenues from network subscriptions - Investment, operations & maintenance costs = PROFIT

Local Economy

Increased productivity and competitiveness, increased revenues, new jobs, better quality of life, etc. “Offbalancesheet”

= BENEFITS FOR THE COMMUNITY 7

© Strategic Networks Group, Inc. 2012 2013

- Investment, utilization programs and support

“Crossing the Chasm” *

… so driving awareness and utilization is the next challenge For further information, see “No Field of Dreams: Eliminating the Waiting Game and Driving Uptake” * Geoffrey A. Moore, 1991

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Why “build-it and they will come” does not work? → Because people buy benefits, not features

Impact of Driving Utilization on the Bottom Line

Laissez-faire (A)

Driving Utilization (B)

Year One

10% uptake

12% uptake

Year Three

18% uptake

35% uptake

Internal Rate of Return (IRR) at year 3

5%

24%

* Financial profile of typical fiber network build. Source: Ventura Team LLP, www.venturateam.com

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Network operators are typically* not sustainable with a “build it and they will come approach”

Planning for Success Requires Data

•

to understand local market demand for broadband

•

to assess potential socio-economic impacts (community ROI)

•

to develop an action plan that will achieve desired results


You need the right metrics and data:

Utilization

Gaps and Barriers

Drivers and Needs

How businesses, organizations, and households are currently using, or planning to use broadband and e-solutions.

Where the gaps in the utilization of e-solutions are and which factors inhibit, or prevent adoption.

Understanding the needs and preferences of endusers in order to raise awareness, to increase adoption, and to drive effective utilization.

Benefits

Impacts

Profile Data

How things have improved and which e-solutions have benefitted businesses, organizations, and households.

Quantify benefits in terms of new revenues, cost efficiencies, new jobs, quality of life, etc.

Internet connection type, tested speed, length of time using broadband, organization size, industry sector classification, demographics, etc.

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What You Need to Know to Increase Adoption

North Georgia example Economic Impact for every 100 businesses trained in North Georgia who adopt eSolutions: Aggregate additional revenues (annually)

All Industries

$7.2 Million

Manufacturing

$17.5 Million

Professional and Tech Services

$2.7 Million

Tourism

$4.8 Million

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Industries

Thank-you

Michael Curri, President Strategic Networks Group, Inc.

Let’s connect ! www.sngroup.com

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