Apr 15, 2013 - sage. Level of Broadband Utilization (DEi score). Contribution of Internet to Revenues / Level of utiliza
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
© Strategic Networks Group, Inc. 2013
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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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
© Strategic Networks Group, Inc. 2013
% 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
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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
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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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© Strategic Networks Group, Inc. 2013
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
© Strategic Networks Group, Inc. 2013
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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[email protected]