Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
The NY Times (reg. required) has a short story on the music industry. Music sales are up 1.6% this past year, for the first time in four years.
What happened? Apple legitimized the online music market with it's highly successful iTunes Music Store, and a horde of competing online music services rushed in to give consumers a wide array of choices. Music sales went up.
The music industry, which fought online music sales for years, and still is, actually, has been dead wrong. The music conglomerates have claimed that illegal online music sales were ruining the business, and instead of innovating, the music business ran to Congress to halt innovation with awful legislation like the DMCA (Digital Millenium Copyright Act).
But Apple and other innovative companies weren't buying it, and found a way to give consumers what they wanted--affordable and convenient online music stores.
The music industry still has massive problems; artists still get too little of the royalty payments, and record companies are still charging the online stores the same fees they charged distributors for CDs, even though record company costs are now essentially zero.
But ordinary consumers have won, in a small way. Broadband (music downloads really don't work over dialup) brought music lovers increased choice in the marketplace, and allowed a host of new music companies to enter the marketplace and increase competition and choice.
Broadband is working.
Here is an excellent multi-page opinion article that discusses the plight of towns and cities in light of the recent Pennsylvania legislation that forces communities to ask Verizon's permission to develop broadband systems.
As you read this, it is important to remember that we still have a "seven blind men and an elephant" problem when talking about broadband. It means different things to almost everyone, which is part of the problem. As I've been saying for years, "It's not about the technology." What communities need to spend more time on is education--of businesspeople, of elected leaders, and of local government officials. If you can get most thoughtful people and leaders in the community using the same language to describe the same things (in the context of broadband), you've accomplished something very significant, and greatly simplified the challenge of getting an appropriate telecom infrastructure for the community.
Here is an excellent article full of details about the citywide wireless project in Rio Rancho, New Mexico. Rio Rancho is a fast-growing suburb of Albequerque. Here is the quote that shows that Rio Rancho leaders "get it."
"We see it as an economic development tool—today's business needs good quality access, Palenick said [the city administrator].
That's exactly right. It's an economic development tool, just as water and sewer were (and still are) economic development tools in the Manufacturing Economy of 40 years ago. It's not some esoteric luxury for a few privileged residents, WiFi is part of a package of services that can both bring businesses to a community and/or help existing businesses lower costs and expand services and markets. It can also help fuel the growth of home-based entreprenueurial businesses and startups.
Jewelry, flowers, clothing, and computer stuff fueled a 25% increase in online buying during the holiday season. This article describes the surge in spending in more detail.
In my own experience, I've seen a dramatic improvement in the quality of many online shopping sites. Even some smaller businesses have excellent and easy to use Web sites that make it quick and easy to find what you want, order it quickly, and get confirmation of the order via email. It sames time and money to be able to shop online, especially if you live in a rural area like I do, where shopping options are pretty limited.
Broadband is a key requirement, though. I'd do a lot less buying online if I had to use a dialup connection, which is just too slow to wade through a graphics-rich catalogue site. Broadband is not only an economic development issue, it's a quality of life issue. Who wants to move to an otherwise beautiful rural area far from big city shopping opportunities if broadband is not available to help mitigate that?
Yet another former third world country has broadband projects underway that leave U.S. efforts in the dust. Andra Pradesh, a state of India, has embarked on an ambitious but entirely doable project to build a statewide network consisting of a 10 gigabit per second backbone, 1 gigabit Ethernet trunks to a thousand locations, and 100 megabit fiber connections to every town in the state. More than 40,000 government offices will get fiber connections, and will be able to deliver government services via town kiosks and other public Internet locations.
Even more interesting, the official tourism site offers 24 hour chat service to online visitors and potential tourists. What about your community? Unfortunately, in the United States, we have the telcos busily trying to usurp the right of communities to develop community infrastructure, with the legislation in Pennsylvania as a perfect example--PA towns now have to ask Verizon's permission to chart their own destiny.
According to Dave Winer, Quizno's has free WiFi at their 3300 U.S. stores. When companies like this are making the substantial investment needed to deliver the service, it's passed from the realm of a nice amenity for a few techno-geeks and has entered the realm of the ordinary.
But to make WiFi really work for a community, a community approach is needed so that it is widely available, not just at one store out by the main road. What is your community doing?
A UK startup called Light Blue Optics has announced they are developing a pocket-size digital projector, using breakthrough holographic techniques that allow using just a few small components, compared to the relatively bulky LCD projectors, which are still too big to carry around conveniently and still too expensive.
The long promised technology revolution in K12 classrooms has never delivered for a variety of reasons, but chief among them is that virtually no teachers have an LCD projector. It's pretty tough to use the Internet to change the way you teach if you can't project what it is you are teaching on the wall so students can see it. Small, inexpensive projectors would have large and mostly unanticipated impacts.
One of the best ways to create new jobs in your region is to make sure the businesses that are already in the community have access to good advice, including advice and guidance on technical matters.
The traditional role of the economic developer in the Manufacturing Economy was to recruit jobs from other parts of the country. But that has not been an effective primary strategy for many years. In a global economy, many traditional manufacturing jobs have moved offshore, and no amount of tax incentives are going to change that.
A diversified economic development strategy would put more time and resources into helping existing businesses grow. And there is plenty of simple and effective things that can be done. For example, I still find many businesses have poorly designed Web sites. Why not use some ED funds to pay for Web site critiques and reviews of business Web sites? This could be done on a 50% match basis to ensure that the businesses are likely to take the advice seriously.
As an example of how bad things could be, I just found a business with this statement on their "Contact Us" page:
To email us, order a free catalog, check on an order, etc., please call 1-800-829-xxxx.
I'm not making this up--to email the company, you have to call them first! Here is a business that has apparently been asleep for the past ten years, and still does not recognize that current and potential customers may want to email the company. I find that the majority of small businesses are still not taking the Web seriously, largely because they simply don't know what to do.
Part of the problem is not their fault. Too many businesses have been burned badly with bad advice. There are basically two ways to get help with a business Web site.
Rethinking the way a company does business is not always costly or time-consuming. Like the clueless company in the example above, it sometimes means asking simple questions, like "Who is going to answer the email?"
Economic developers, acting as coaches, can really make a difference with local companies that need help, not just on the Web, but with marketing, advertising, business management, accounting, and the whole range of services that companies need. And the ED staffs don't have to be expert in all these areas--it could be that you once you have identified what a business needs help with, you help them find a qualified firm. That alone can be a big help for a small businessperson who can't find enough hours in the day to do everything that needs to be done.
The New York Times (reg. required) has an article summarizing a new study on the impact of the Internet on our lives. As past studies have found, TV is the big loser, with Internet users watching about 17% less television. That's probably not bad news.
The article goes on to say that the Internet is also causing us to sleep less (by 8.5 minutes) and that it reduces contact with family members by 23.5 minutes per day. The researchers acknowledged that they cannot answer the question of whether or not it strengthens or weakens social relationships. That's been a burning question since the rise of the Internet, and many tons of paper was wasted in the mid and late nineties to print handwringing articles about how the Internet would probably turn us all into introverted, pale-faced geeks sitting in our basements in the dark night after night, hanging out in seedy chat rooms.
None of that ever happened, but this study is likely to produce an echo effect of those hysterical articles, using the data that contact with family members is down.
The problem with these studies is I have yet to see one that really tries to find out the other side of the story. I may talk slightly less to my wife face to face, but we are emailing each other all day long. So if you really studied the entire social interaction, you'd probably find we communicate more now than we did ten years ago.
The article estimates that 75% of the country has Internet access now. Unfortunately, we still have some elected leaders in our communities that don't think any of this is important, because they are viewing it through the lens of their own (somewhat limited) experience, rather than trying to look at the community as a whole. When 75% of your constituents are using the Internet, it's not a fad or a luxury for the well off--it's a necessity of daily life. In rural communities, the Internet has broken the chains of rural isolation and dramatically improved the quality of life in areas like shopping. Living in a rural area no longer means long drives (or doing without) to obtain needed items--a couple of clicks online and the products are delivered to your door, or even via broadband, if you don't live near a well-stocked music store, as just one example.
1995 was the year the Internet really took off. Ten years later, we've gone from a tiny number of people who had Internet access back then to 75% of the country--that's the fastest diffusion of a new technology ever. We're on to something here, and I believe it's mostly for the good. We're more aware of world events, better informed on local, national, and international issues, have more control over our time, and have all kinds of new business and work opportunities available to us.
Just one example: despite the sheer awfulness of the tsunami, we all know about it in a way that we never could have even five years ago, to say nothing of ten or twenty years ago. Is the knowing a good thing? Well, charitable giving, propelled by hundreds and thousands of Web sites helping to organize aid, will likely break every fundraising record in the world.
In the face of horrible suffering and pain, the Internet gives us an opportunity to demonstrate our basic humanity and caring for others--an opportunity to rise above our own needs, to rise above political, social, economic, and language differences--and we are doing so.
Happy New Year--all my best for a prosperous and healthy 2005.
Andrew
I just bought an inexpensive audio mixer to help with some recording tasks I have. It is sold by a small German firm. I was struck by the User's Manual, which came with instructions in the following languages:
Do the businesspeople and merchants in your area understand the importance of providing multilingual instructions if they are trying to sell internationally? Has your economic development organization identified qualified translators to save each business from having to do so? Have you prepared a handout that walks a business through the steps of preparing a product or service for the global marketplace? How will the businesses in your region compete with market-savvy businesses from other countries? Can they do the job right?