Accelerating Broadband Use and Impacts in Kentucky Strategic

Accelerating Broadband Use and Impacts in Kentucky  Strategic

Accelerating Broadband Use and Impacts in Kentucky Strategic Networks Group, Inc. 2011 Adoption, Meaningful Use, and Economic Development Objectives of Presentation Shared understanding of the importance of Internet utilization Insight into Internet utilization in Kentucky Identify how Kentucky stakeholders can participate and benefit www.sngroup.com 2 Strategic Networks Group, Inc. 2011 Discuss opportunity for improved data collection and analysis in Q1, 2012 Turning Internet Potential Into Reality: 3 Stages Connectivity availability reliability speed affordability Adoption businesses households drive usage and benefits link gaps to opportunities 3 Strategic Networks Group, Inc. 2011 Maximizing Utilization Why Drive Adoption and Use?

Businesses and organizations in 2 States reported that 19.5% of new jobs created in 2010 were attributed to use of the Internet In these 2 States. 27.7% of households and 75% of selfemployed individuals have a home-based business The smaller the business, the bigger the Internets impact on jobs and revenues Over 50% of businesses said broadband is essential in selection of their location 4 Strategic Networks Group, Inc. 2011 Broadband retains and attracts population and businesses The Move to Internet Enabled Jobs Job gains and losses among 1,721 businesses and organizations in two states in 2009/2010 Size of Company by Number of Employees New FT+PT Jobs Lost FT+PT Jobs Net Jobs FT+PT Net Jobs Internet 1 to 49 3,652

3,932 -280 721 30.1% 6.8% 41,881 50 - 99 1,178 2,049 -871 206 8.6% 4.7% 29,098 100 - 249 3,097 2,823 274 419 17.5% 9.0% 55,510 250 - 499 1,825

2,108 -283 354 14.8% 9.2% 56,357 500 + 6,925 7,285 -360 694 29.0% 70.3% 432,841 Totals 16,677 18,197 -1,520 2,394 100.0% 100.0% 615,687 5 Strategic Networks Group, Inc. 2011

Total % of Internet % of all Employees Jobs Created employees FT+PT 6 Strategic Networks Group, Inc. 2011 To realize benefits, you need to know where you are and what it takes to get to where you want to be. How to Measure Utilization? Uncover current Internet use and benchmark against peers 17 e-solutions* by organizations 30 e-solutions* by households Utilization data collected in 2010 directly from 2,073 businesses and organizations and 1,454 households across Kentucky. *Internet-enabled applications and processes 7 Strategic Networks Group, Inc. 2011 The results are rated using a composite score called the Digital Economy index (DEi), with 1 being low and 10 being high. Applying the DEi Highest 3 4 5 6 Lowest www.sngroup.com

8 Strategic Networks Group, Inc. 2011 Ranking process by DEi score 2 The Importance of Utilization Top six benefits of Internet reported by businesses and organizations are: Make day-to-day operations easier 73% Improve service to customers 72% Use resources more effectively 70% Reach new customers 62% Lower operating costs 57% Increase revenues 45% 50% 55% 60% 65% 70% 75%

% Saying Benefit is Very Important 9 Strategic Networks Group, Inc. 2011 40% 56% Regional and Community Impacts Regional and community impacts include job creation and retention www.sngroup.com 10 Strategic Networks Group, Inc. 2011 during shift to a knowledge economy 11 Strategic Networks Group, Inc. 2011 Utilization of the Internet varies greatly among businesses, organizations and households, with major impacts on productivity and competitiveness. Region Rank Average DEi Score Difference from Average Sample size Bluegrass

1 6.39 0.32 1,083 South 2 -0.23 321 West 3 5.84 Average DEi is 6.46 5.83 -0.24 375 East 4 5.38 -0.69 271 State Average 6.07 2,050 12

Strategic Networks Group, Inc. 2011 Not all regions benefit equally Regional Analysis by Industry Sectors Major Industry Sector Statewide Bluegrass East South West Information 7.32 7.63 6.40 7.64 7.29 Finance & Insurance 6.71 7.30 6.57 6.20 5.75 Wholesale Trade 6.69

7.23 6.53 6.13 Manufacturing / Processing 6.48 6.74 6.24 5.75 Educational Services 6.36 6.19 6.75 5.75 Professional & Technical Services 6.31 6.84 5.53 5.47 5.48 Other services (exc. public admin) 6.20 6.63 4.99

5.91 6.17 Retail Trade 6.11 6.28 5.83 4.93 6.75 Construction 5.84 6.07 5.83 5.88 Health Care & Social Assistance 5.48 6.12 4.58 5.20 5.03 Public Administration 4.73 4.74 3.84 5.13

4.95 6.34 Example of regional productivity analysis by select industries in Kentucky 2010. 13 Strategic Networks Group, Inc. 2011 Understand the competitiveness and relative performance of a region by local economic sectors Strategy # 1 Each region must develop its own strategy and initiatives based on its own characteristics, values and priorities 14 Strategic Networks Group, Inc. 2011 Each region region requires requires strategies strategies and and initiatives initiatives that that address address its its unique unique Each situation. The The Commonwealth Commonwealth can can provide provide support, support, but but social social and and economic economic situation. developments are are essentially

essentially local local and and regional regional in in nature. nature. developments Strategy # 2 Focus on high opportunity industry sectors within each region rather than undertaking broad but untargeted initiatives 15 Strategic Networks Group, Inc. 2011 Prioritizing industry industry sectors sectors and and other other economic economic groups groups must must be be done done within within Prioritizing regional context. context. In In general, general, focus focus should should be be on on industry industry sectors sectors that that make make aa regional the largest largest contribution contribution to to the the economy

economy and and that that have have the the greatest greatest growth growth the potential. potential. Utilization Increases with Size of Organization or Business Smaller businesses and organizations have difficulty in adopting complex Internet applications and processes Utilization (DEi) Increases with Size of Organization 9.0 8.54 8.5 7.96 8.0 7.57 7.18 7.09 7.0 6.70 6.48 6.5 6.0 5.5 5.92 1-4 5-9

10 - 19 20 - 49 50 - 99 100 - 249 250 - 499 500 or more Median DEi Score 16 Strategic Networks Group, Inc. 2011 DEi score 7.5 Employment Range Bluegrass East South West Statewide 1 to 19 83.8% 86.9% 86.6% 86.4% 85.0% 20 to 49

10.0% 8.7% 8.7% 8.8% 9.5% 50 to 99 3.4% 2.3% 2.4% 2.5% 3.0% 100 to 499 2.6% 1.9% 2.0% 2.0% 2.3% 500 or more 0.3% 0.2% 0.3% 0.2% 0.2% While SMEs may have lower utilization, but they are the most

effective at leveraging the Internet to create jobs 17 Strategic Networks Group, Inc. 2011 SMEs make up the vast majority of businesses and organizations Strategy #3 Prioritize Small Business Focus Focus on on the the small-medium small-medium enterprise enterprise segment, segment, especially especially 1-49 1-49 employees, employees, to to increase increase Internet Internet utilization, utilization, thereby thereby driving driving competitiveness, competitiveness, revenues revenues and and job job creation. creation. Small Small to to medium medium sized sized organizations organizations should should be be aa focus focus for for the the following following reasons:

reasons: 18 Strategic Networks Group, Inc. 2011 Largest Largest number number of of establishments establishments (95%) (95%) and and significant significant employment employment (43%) (43%) Lowest Lowest utilization utilization level level compared compared to to larger larger employment employment segments segments Dynamic Dynamic engines engines for for employment employment growth, growth, especially especially through through use use of of the the Internet Internet Least Least capacity capacity and and expertise expertise to to adopt adopt more more sophisticated

sophisticated Internet Internet applications applications Switching from Who to Prioritize to 19 Strategic Networks Group, Inc. 2011 What Areas to Prioritize Facilitating the Adoption Process for e-Solutions Not all Internet applications and processes are adopted with equal ease or speed Quick to adopt Access government information Electronic document transfer Purchasing Goods and Services Research by staff Slow to adopt Teleworking Rich media or service creation Selling goods or services Deliver services or content *Rich media describes Web pages that use advanced technology such as streaming video, downloaded programs that interact instantly with the user for advertising. 20 Strategic Networks Group, Inc. 2011 Web site The Adoption Process for e-Solutions Relationship Between DEi and Specific Internet Uses 100% Fast / Early Adoption 80%

70% 60% 50% 40% 30% Slow / Late Adoption 20% 10% 0% 0 up to 1 1 up to 2 2 up to 3 3 up to 4 4 up to 5 5 up to 6 6 up to 7 7 up to 8 Respondents by DEi Scores Access government info Purchasing goods or services Selling goods or services Deliver services / content Research by staff Teleworking Electronic document transfer Rich media or service creation Web site 8 up to 9 9 up to 10 Strategic Networks Group, Inc. 2011 Percent of respondents using each e-solution

90% Strategy #4 Focus On Critical e-Solutions 1. Delivery Delivery of of services services and and content content 1. 2. Rich Rich media media or or service service creation creation 2. 3. Teleworking Teleworking 3. 4. Staff Staff training training and and skills skills development development 4. 5. Advertising Advertising and and promotion promotion 5. 6. Social Social networking networking 6. 7. Government Government transactions transactions 7. 8. Customer Customer service service and and support support

8. 9. Selling Selling goods goods or or services services 9. 10. Supplier Supplier communication communication and and coordination coordination 10. 22 Strategic Networks Group, Inc. 2011 Initiatives aimed aimed at at increasing increasing utilization utilization among among small small to to medium medium Initiatives enterprises should should focus focus on on the the following following 10 10 categories: categories: enterprises Household broadband adoption depends on awareness and skills its about personalizing value. 23 Strategic Networks Group, Inc. 2011 in utilization of e-solutions

Broadbands Value to Households Internet patterns of use depend on awareness In the United States: 66% of households have broadband * 2/3 of Americans feel that broadband at home is important for finding out about jobs or learning career skills* Connectivity Adoption Utilization *Source: Home Broadband 2010, Pew Internet & American Life Project 24 Strategic Networks Group, Inc. 2011 Yet, 48% of non-Internet users do not go online because they do not see the value* Region Rank Average DEI Score Difference from Average # Households Bluegrass 1 5.39 0.24 526 West 2 5.14

-0.01 381 South 3 4.95 -0.20 286 East 4 4.92 -0.23 261 Kentucky www.sngroup.com 5.15 1,454 25 Strategic Networks Group, Inc. 2011 Regional differences in Household Utilization Productivity Category Bluegrass East South

West Accessing workplace 49.2% 36.8% 39.7% 36.8% Home business 28.1% 16.5% 19.4% 19.3% Teleworking 23.6% 14.7% 14.0% 16.0% Education or training courses 42.9% 38.1% 38.4% 39.0% Urban areas use the Internet more for productivity Kentucky patterns in home-based businesses differ from

26 Strategic Networks Group, Inc. 2011 Regional Dimensions on Household Productivity The Digital Divide Impacts Household Earning Power Increasing Percentage of Households Using Relationship between DEi Score and Frequency of Use 100% 7.5 7.0 70% 6.9 76% 6.8 6.7 6.6 6.5 6.5 6.5 6.5 6.4 60% 50% 40% 39% 42% 39% 40% 30% 33% 20% 22% 21% 18% 17% 10% 37%

71% 70% 96% 7.0 79% 81% 81% 6.5 67% 57% 6.2 6.0 5.9 5.9 5.9 5.7 5.7 5.6 5.6 27% 5.5 5.5 5.5 5.4 5.3 t s s s s s g g g il m lace ice nin am e o kin nin cha ent tion tion ort tion line tion ma i di e v k e n d a a sp

a n a Eo p i n ai v v it rv ai e gr si or ra eb w / t ce o bu l w h m ing ork t se r tr pro or v e ba d tr lin ty e orm orm nd orm ng o orm e n i i l s f f f f a i a atc e ll g w en o V e c n Te e nt Vo om son T usi nlin n an O un t in l in ws h in Buy t in S in m o W c h m e n t s ti H er

n O tio c m v Ne al M e du st e s ve r uca at P a om nm Tra e o c e c C r H c W v r u P A G o Ed In Ed ve o G ng ng P rI s es e si t s

ie s 5.0 Pct. Households Ave. DEi Score Increasing Level of Sophistication and Higher DEi Biggest benefits! 27 Strategic Networks Group, Inc. 2011 80% 93% 88% 90% DEi Score Percent of households using each e-solution 90%7.4 The Digital Divide in Utilization Age and income determinants in use of e-solutions by households The younger and the richer you are, the more you use The older and the poorer you are, the less you use Respondent Age Less than $30,000 $30,000 to $49,999 $50,000 to $100,000 More than $100,000 18 to 34 years 5.09

5.47 5.79 6.84 35 to 54 years 4.62 5.20 5.72 6.75 55 to 64 years 4.58 4.85 5.50 6.31 65 years and over 3.32 4.45 5.23 4.75 28 Strategic Networks Group, Inc. 2011 Household Income Driving Adoption among Target Populations Preferred Learning Method for Seniors 15.4%

Classroom 15.3% Books Online Course Webinar 40.4% 35.7% 49.0% 26.5% 61.1% 21.2% 25.5% 38.8% 42.2% 45.7% Online Info 45.7% 10% 12.3% 40.0% Talk to Others 0% 44.2% 20%

32.3% 45.1% 9.3% 47.0% 30% 40% Preferred 50% Sometimes 60% 70% 7.3% 80% 90% 100% Never Target the population that under-utilizes and know how to reach them 29 Strategic Networks Group, Inc. 2011 Workshop Looking Forward To propel innovation and economic benefits, the Kentucky Internet benchmarking initiative for 2012 will add the following areas: Impacts (benefits, revenues, job creation) Home based businesses Customization of reports for regions and industries

30 Strategic Networks Group, Inc. 2011 ???? Stakeholder Benefits Stakeholder participation is key to maximizing regional, local, and industry specific data. Stakeholders will also become the prime users of the resulting data and analysis. Understand where investment can have the greatest impact by identifying needs, gaps, and demand for broadband Promote awareness, drive utilization, and leverage assets to maximize socio-economic benefits Develop regional and sectoral strategies based on a customized analysis of the current patterns of Internet use. 31 Strategic Networks Group, Inc. 2011 Improve local productivity and competitiveness by benchmarking against peers and industry sector leaders, within and outside your region How Stakeholders Can Participate Survey Deployment Letters of encouragement to constituents Contacts lists (e-mail addresses) Co-sponsorship for key sectors Identify strategic priorities for data collection and analysis Participate in regional planning efforts Utilize data and analysis www.sngroup.com 32 Strategic Networks Group, Inc. 2011 Planning Next Steps

Questions, comments (plenary) What are high priority issues for broadband utilization? Top three per group. What additional utilization data would be of high value. Top two per group. Use flip charts to record group priorities. www.sngroup.com 33 Strategic Networks Group, Inc. 2011 Breakout sessions: Setting priorities for data collection Next Steps Afternoon session: Use of breakout groups for detailed exploration by issue / sector. www.sngroup.com 34 Strategic Networks Group, Inc. 2011 Identify opportunities for collaboration on collection and use of data and analysis. Thankyou Derek Murphy Strategic Networks Group, Inc. Lets connect ! www.sngroup.com 35 35 Strategic Networks Group, Inc. 2011 + 1.250.226-7182 [email protected]

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