High-speed internet: Nice to have or essential to economic development?

High-speed internet: Nice to have or essential to economic development?

We are hearing about damaged gas lines, dug-up yards, and other issues because Google Fiber, AT&T and their competitors are installing faster internet infrastructure in Charlotte. There is some misery and some people are asking, “Is the disruption worth it?”

From my point of view, faster digital infrastructure is not just nice to have, but essential for Charlotte to grow its small-business base, expand beyond a big-bank economy and compete globally. Here’s why:

The internet now touches almost every aspect of business operations. If the internet was an economic sector, it would account for 3.4% of the GDP of all developed countries, according to an analysis by the global firm McKinsey & Company. This is larger than the mining, utilities, communication or agriculture sectors.

Faster internet speeds have been directly linked to increased household income. In developed countries, gaining 4 megabytes of broadband speed in a region increases household income by $2,100 annually, according to a study by Ericsson, Arthur D. Little and Chalmers University of Technology.

Gigabit speed (1 billion bits of data transferrable per second) has already been an economic stimulus in at least one city. Chattanooga, Tenn., installed its own gigabit network in 2010 through a combination of federal grants and a local bond issue. Last year, Chattanooga Mayor Andy Berke described the benefits it brought: Gigtank, a startup accelerator, emerged. Startups and tech events popped up. The explosion in the tech sector sparked more downtown living, new restaurants and a higher quality of life. It’s worth noting Chattanooga’s unemployment rate has dropped to 4.1% from 7.8% during this time, and the wage rate has been climbing.

At my own firm, I’ve seen the benefits and problems of our region’s current internet capabilities. We work with B2B clients to improve their customer service, which involves many calls with our clients’ customers. Our interviewers work remotely using VOIP (voice-over-internet-protocol) phones, with a portal for clients to access research results by computer or cell phone. With faster internet, call quality is improved and clients get quicker access to critical information.

But there are problems. As a North Carolinian who grew up in a farming community, I see higher-speed internet as vital to encourage badly needed jobs in rural areas, some not far from Charlotte. Yet current internet providers don’t reach all parts of the region and give equal access to opportunity. We wanted to hire someone who lives where internet speeds are slow. There was no option for her to upgrade to the speed needed to access our phone system and portal. We lost a potentially strong employee. She missed an opportunity for a good-paying job to support her family.

I know internet companies have faced struggles with implementation. But the potential of high-speed internet is worth the current struggles. European countries have already figured out what high-speed internet can accomplish. Both Charlotte and the United States lag far behind them in internet infrastructure.

When you see those damaged gas lines and dug-up yards in Charlotte, know there is a payoff beyond being able to download a movie in seconds vs. minutes. It will come in the new and innovative businesses and business opportunities that are created.

 

Originally published by The Charlotte Business Journal May 15, 2017

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