Michael Curri Defends Benefits of Broadband to Businesses

I'm excited to today introduce a new feature to App-Rising.com: our first guest column.

The central goal of this site is to engage thought leaders in a robust discussion about the potential and ramifications of the broadband revolution. To that end I could not be more excited about posting the first entry from the leading expert in what broadband can mean for local economic development and App-Rising.com's first guest columnist Michael Curri.

You should remember him from a VidChat we did on how broadband drives economic development, which you can watch here. Michael runs Strategic Networks Group, a consultancy with offices in North America and Europe that helps communities, network operators, and businesses around the world track, quantify, and encourage broadband's positive impact on local economies.

In his first column, Michael responds passionately to a May 23 Economist article entitled "The broadband myth."

-----

A colleague of mine during lunch recently shared with me an article from the Economist "The broadband myth" May 23, 2008. Having read the article, I have two sets of comments:

1) The authors are correct that there is a lack of data on broadband. The current measures used for OECD rankings are limited to what national statistical agencies are collecting. From this, one of the data sets that is readily available is on the number of broadband subscribers per 100 population - this is an indicator, however the evaluation community would call this an "activity-based measure". This data does not tell you how broadband is being used, nor does it quantify its value to the end user. This has been an ongoing issue ever since people have tried to measure broadband - at SNG we have addressed this. Our tools and methodologies capture how broadband is being used and quantify its value in terms of new revenues, cost savings, new jobs, etc.

2) To say that "there simply is not good data that broadband matters" or that "there is little evidence to support the notion that faster is inherently better" are comments that you saw five years ago, I would not have expected to see them now. Personally I find it irresponsible to suggest that "there is time for the slowpokes to catch up". The dynamics of technology diffusion are much more compressed today than in the 1900s for electrification and, furthermore, over the last decade the Internet has become a standard business tool globally. You would think that something published in the Economist would have been more thoroughly researched. Having conducted two extensive literature reviews in the last three years on this topic, there is a growing evidence base that suggests the contrary of what the authors have claimed. Communities and regions that lead in broadband have something to show for it. In SNG's research since 2003, we have found significant increases in local economic activity attributable to broadband. In fact, the increase in local GDP is more than ten-fold the value of the investments in broadband infrastructure.

Broadband impacts need to be tracked over time - they do not occur immediately as there is a learning curve to transform business processes and implement applications and processes that leverage the Internet. Dial-up connections open the door to the Internet, but effective business operations require always-on reliable high-speed connections that can only be offered through broadband. In all our interviews over the last 8 years, we have not spoken to one business owner that would go back to dial-up after having used broadband for their business operations.

Our research has shown that without broadband, communities and regions are at a competitive disadvantage - and this gap is growing. We have documented and quantified new business opportunities (e.g. reaching new customers), cost avoidance and cost savings (e.g. supplier coordination), improved customer service, systems integration with Internet (e.g. customer orders, financial) from businesses and organizations across North America that would not have been realized without broadband. Affordable reliable broadband is necessary infrastructure and communities and regions without this will continue to see jobs, youth and industry move away.

We need to move away from traditional practices and use new tools and methods to understand why broadband matters and to quantify broadband usage and benefits. The value of this information is to improve broadband strategies and planning, identify usage gaps, assess new service opportunities - profile potential markets (data on price sensitivity, potential demand, penetration rates), increase service uptake, and inform stakeholders about broadband impacts. SNG is currently rolling-out online tools to empower communities and regions to collect and manage such information on their own. We believe that taking ownership of tracking this data, communities and regions position themselves better to influence the benefits of broadband through increased productivity and competitiveness, business retention and growth, attraction of new industries and businesses, and higher paying jobs.

With capital borrowable, resources buyable, and technology copyable, businesses in this day and age have many options as to where they locate, or shift, operations. Retaining and attracting businesses without broadband is increasingly difficult. Those communities and regions that stay behind risk being left behind as they are hollowed-out from departing skilled workers and businesses who are leaving for more competitive and profitable business environments.

-----

As a quick aside, if you'd like the opportunity to learn more from Michael, you're in luck as later today at 2pm EST he'll be leading an eNATOA online presentation and discussion about broadband and economic development.

NATOA does charge a fee to attend, but it's a reasonable $45 for members and $85 for non-members. And both because of the sneak peak I got of Michael's presentation and the many fruitful, though-provoking conversations I've had with him I can guarantee you that if you're interested in these topics, you'll definitely get your money's worth. In fact I can think of no better way to get up to speed quickly on these issues than spending an hour this afternoon listening to Michael speak and asking him questions.