Dubuque is a city of middle America, surrounded by farmland, with a central business district beside the Mississippi River. And in recent decades, it has received the brunt of the brutal economic changes brought by automation and ICT productivity gains. In the 80s, its largest employer laid off half of its workforce in Dubuque. This, together with the decline of family farming, drove unemployment to 23%, the highest in the nation, in succeeding years.
In response, the Mayor and City Council led a broad-based effort to forge a new vision for the city’s future. The result was Sustainable Dubuque, a commitment to create a prosperous, livable and equitable community. The vision spawned multiple efforts. One is a set of smart city projects covering water use, electricity use and public transit. Working with IBM, the city installed sensors, connectivity and software to analyze performance and provide data to users. Starting with 300 homes, the smart water system is now available citywide and is credited with a 7% reduction in water use and an eightfold gain in the detection and fixing of leaks. It has also reduced water treatment costs by $65,000 and increased water revenues by nearly $185,000. The smart travel program tracks 1,500 riders and uses the data to set policies that have produced a 28% increase in ridership over 4 years.
Putting Dubuque to Work
Dubuque Works is a workforce program that unites government, business and educators to enhance the city’s human capital, conduct joint research to develop evidence-based recommendations, and provide outreach to guide area students from school to work. Over the past four years, the program has created more than 5,000 jobs and Dubuque, with just 3% of the state’s population, has been responsible for 10% of the state’s job growth. These different initiatives have attracted more than $37 million in Federal and state grants, which the city has used to stimulate additional workforce development and sustainability efforts. Dubuque’s revival is a work in progress but its early successes create confidence in a more prosperous, equitable and sustainable future.
In the United States, the financial crisis of 2008 gave rise to plunging property values, massive government deficits on the national and state levels and an anguished round of budget-cutting. Which makes all the more remarkable the steady, long-term approach of the small city of Dublin, Ohio USA.
Most American cities and towns fund themselves on property and sales taxes, but Dublin has a local income tax. It provides a dependable stream of revenue that allows the city to maintain ample cash reserves and plan for the long term. Dublin also has a successful track record at using its income tax receipts as collateral for what is called tax-increment financing. This has helped make possible a virtuous cycle in which savvy investments by the city attract investments by business that create high-quality employment. With a population of 41,000, Dublin has a labor force today of 70,000, drawn to the city from throughout the Columbus metropolitan area.
Much of this investment in in physical infrastructure Twenty-five percent of the 2% income tax is dedicated to capital improvements, which have included the Emerald Parkway, the Dublin Commmunity Recreation Center, and a planned 1,300 Innovation Park, a next-generation technology business campus that aims to unite the community’s strengths in ICT, research and development. Government services are also well-funded; all three secondary schools in the city were named to Newsweek magazine’s 2010 list of top schools in the country.
But one form of infrastructure stands out in Dublin, and has become a connecting thread that unifies and powers its other economic and social assets. They call it DubLink.
Following telecommunications deregulation in 1996, Dublin began installing a network of underground conduit to encourage deployment of broadband by private carriers. A public-private partnership with the Fishel Company soon followed, and by 2003, Dublin had built and lit the DubLink fiber network to connect city facilities and replace telephone company service. Dublin's contribution to the project came from those tax-increment financing bonds, funded by future increases in tax revenue that would result from the improvements being financed.
In managing the network, the city drew a bright line between public and private use. The city delivers no services except for governmental use, and leases either conduit space or its own dark fiber to carriers serving the local market. It is an "open access" strategy that has proven successful in communities as diverse as Stockholm, Sweden (2009 Intelligent Community of the Year) and Loma Linda, California (2007 Smart21 Community).
As Dublin installed more and more fiber in its conduits, it began doing capacity-sharing deals other public and public-private entities. DubLink now interconnects with Columbus FiberNet, which reaches the state capital and four other cities in the metro area. It partners with the Ohio Supercomputer Center (OSC), carrying some of the traffic on OSC's 1,600-mile fiber backbone. In return, the OSC and Dublin joined forces to create the Central Ohio Research Network (CORN), a fiber infrastructure connecting governments, schools and businesses to Ohio colleges, universities, research institutes and Federal labs. Other fiber transport partnerships include Central Ohio Broadband, linking with other cities that have developed fiber networks, and agreements with two carrier hotels in Columbus to exchange traffic in return for giving DubLink customers connection to global carriers. A Dublin nonprofit, the Online Computer Library Center, was granted two fibers on the DubLink network, and uses them to help provide research services to nearly 70,000 libraries in 112 countries.
This “invisible infrastructure” has had major positive impacts on the community. CORN allows schools, businesses and institutions to explore experimental networking technologies through Internet2, where the next generation of commercial networking technologies is taking shape. An annual Ohio Supercomputer Center project uses videoconferencing to bring together thousands of elementary and secondary school students for an all-day learning conference. DubLink is used to deliver robust e-government services, from online registration for classes, tax filing and permits to remote attendance at City Council meetings. The city also partners with state government to promote OhioMeansJobs, a career Web site currently hosting 8 million resumes and hundreds of job openings.
Dublin developed a city-center WiFi network, which uses DubLink as its backbone. It has now budgeted for expansion to cover the entire city. In this public-private venture, Dublin contributes its infrastructure (network and hotspots on city property) and a private company, HighSpeedAir, provides services. The city uses the network for mobile computing by its first responders and field staff, fleet monitoring of snow plows and other city vehicles, and video monitoring of traffic. It is also used to support city-sponsored cultural events, like the Dublin Irish Festival weekends and the Jack Nicklaus' PGA Memorial Tournament. And HighSpeedAir markets access to small businesses through corporate buildings and office parks.
The city also views WiFi as a way to reduce digital exclusion. To support widespread, affordable connectivity, Dublin provides free computer training to adults and seniors through its recreation centers.
It takes more than information transport, however, to build a competitive economy. Dublin is a partner of TechColumbus, a regional nonprofit whose mission is to accelerate the growth of the innovation economy through business plan counseling, market assessment and help in gaining access to capital. More than 60 Dublin companies have benefited to date. The $625,000 that the city invested in TechColumbus in 2009 has already yielded $14.6 million in investment, debt financing and new revenue.
The city's Dublin Entrepreneurial Center (DEC) opened in 2009 with one start-up tenant and now houses nearly 50 companies and support organizations, including the Center for Innovative Food Technology and the Ohio Fuel Cell Coalition. It hosts twice-monthly co-working events, where Dublin's business community participates in training and meets the community's newest entrepreneurial class. Inspired by its participation in ICF’s programs, the city is also establishing a Center for Global Business Development at DEC to provide collaboration, education and support for Dublin companies seeking to do business overseas.
This ongoing effort to support and strengthen entrepreneurship helps explain why there are 3,000 companies in Dublin, with an average of just seven employees each, while the city is also home to multinational corporations such as Wendy’s International and Ashland. Innovative young companies include Neoprobe, which develops biomedical devices to improve cancer surgery outcomes; EnergyGateway, which offers energy management services to commercial customers and was recently acquired by WorldEnergy; Sypherlink, whose software automates data-sharing across the enterprise; and Cardiox, which sells detection systems for the prevention of strokes.
Healthcare has been a particular beneficiary of Dublin’s high level of connectivity and the anchoring presence of Cardinal Health, a Fortune 17 provider of healthcare management services. OhioHealth, a nonprofit network of hospitals and healthcare facilities, uses DubLink and partner networks to connect five major hospitals, billing centers and its corporate headquarters across Central Ohio Three years ago, OhioHealth opened Dublin Methodist Hospital, the first new nonprofit hospital in the region in two decades, which has been named one of the “Most Wired” hospitals in America by Hospitals and Health Networks magazine every year since then.
The hospital has deployed technology to create a completely digital, wireless and near-paperless environment that better serves patients while increasing productivity. A comprehensive electronic medical records system provides access to physicians and clinicians both inside and outside the hospital. Fingerprint authorization protects drugs in the pharmacy system from abuse, and a barcode scanning system checks all medications to make sure that the correct drug is being used at the correct dosage. RFID tags keep track of all equipment in the hospital, which reduces losses to theft. Staff and physicians use a wireless system to locate and communicate with each other, saving countless hours, while mobile camera carts can be deployed to provide continuous video monitoring of patients anywhere in the facility.
Workforce of the Future
In 2008, Dublin began a major focus on workforce issues. The city benefits from proximity to Columbus, the state capital, with its many colleges and universities. Eighty percent of residents have a bachelor’s or graduate degree. But Dublin’s leaders understand the vital importance of creating a workforce that meets the specific needs of its major employers and fast-growing entrepreneurial companies.
The city began by hosting a series of education and business roundtables, which led to an annual Business-Education Summit on Workforce Development, now in its third year. Among other results, the effort led to a partnership between the state-sponsored BioOhio program and Dublin’s Tolles Technical & Career Center for the creation of a biotechnology program, and another between the city and the Columbus State Center for Workforce Development to bring targeted training programs to the city.
The old adage says that “slow and steady wins the race.” Through good and bad economic times, Dublin has shown remarkable steadiness in assembling the key elements of 21st Century economic growth. Slow, however, does not appear to be a word in the Dublin vocabulary.
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Dublin was featured in the Intelligent Community Forum book Seizing Our Destiny.
Labor Force: 70,000
Smart21 2008 | 2009 | 2010 | 2011
Top7 2010 | 2011
Forty years ago, Danville was the economic powerhouse of south-central Virginia. But the demise of tobacco farming and textile manufacturing kicked the props out from under the local economy. By the start of the 21st Century, the community had a 15% unemployment rate and a workforce whose limited education was a poor preparation for careers in the broadband economy. But like many small rural cities, Danville owned its own electric utility, which deployed a fiber network throughout the city to better control its operations. It was a small next step to connect city facilities and schools, and add a WiFi overlay for public safety and law enforcement. In 2007, the city decided to open the network, branded nDanville, to private ISPs that would deliver service to businesses and residents.
Having achieved breakeven, nDanville is beginning construction of a fiber-to-the-home network to greatly expand the broadband capacity available to residents. But it has already made its mark in economic development terms. An historic textile mill, long abandoned, is now undergoing renovation as a Tier 3 data center, for which the nDanville network proved the dealmaker. And such projects are not taking place in a vacuum. The public school system offers a full array of educational technology, from smart boards to iPads, and learning labs in technologies such as robotics and CADD. The Galileo Magnet High School offers instruction focused on technology careers for high-performing students. While 73% of public school students are on a free or reduced lunch program – a standard measure of poverty – the same percentage of high school graduates in 2011 pursued college degrees. Danville has also collaborated with the celebrated Virginia Polytechnic Institute and State University to create an Institute for Advanced Learning and Research that delivers an innovative STEM curriculum to grades K-12. This wide ranging effort is spurring local entrepreneurship and has convinced companies like US Green Energy and Ecomnets, which produces low-energy computers, to open new facilities and continue to accelerate Danville's new economic momentum. See "Danville Transforms Its Economy With Fiber" by Andrew Cohill, Broadband Communities.
Smart21 2010 | 2011 | 2012
Stretching from the Minneapolis border in the north to rural areas in the south, Dakota County has been an economic success story. Since 1990, it has grown a diversified economy in manufacturing, information technology, food, energy and chemicals, and has seen its population grow by 45%. But the success formula of the past two decades has gradually lost its power. The county's best available building sites are occupied, and the multinational companies that are its biggest employers have downsized local employment. Dakota Future, a county-wide economic development organization, has responded by driving its members and partners to take a more proactive approach to their joint future. The county is generally well-served with commercial broadband, but coverage in less populated areas lags the region's cities.
The county is now speeding planned fiber build-outs that serve county, local government and school district needs. It is also coordinating the network projects of local government and making unused fiber assets available to the private sector to motivate expanded wired and wireless coverage. In education, the county is well-served by community colleges with innovative technology programs, and local school districts are now collaborating with them to increase STEM education in the K-12 grades. The county's most intriguing effort is the Dakota Future Innovation Network. Because the county's economy is so diverse, few companies interact regularly and share information and best practices with their peers. The Innovation Network establishes cross-industry networks in such areas as advanced computing and lean industrial processes, and organizes regular meetings that combine education and person-to-person networking. The goal is to consciously replicate the kind of effects that happen naturally in industrial clusters, and to do it across diverse industries. If it is successful, this quiet effort could have transformative effects across Dakota County.
Smart21 2011 | 2012
A new 1 Mbps broadband wireless network covering 100% of the city is expected to have a transformational impact in Corpus Christi, thanks to multiple e-government applications, virtual textbooks and Web-based lessons in schools, and deep involvement by local business.
Columbus is a city of sharp contrasts. The capital of the state of Ohio, it has the highest metropolitan concentration of Fortune 1000 companies in America and is the home of the research school Ohio State University (OSU) and Battelle, the world’s biggest private research institute. But the city also has a large, low-income population stranded by the decline of low-skilled factory employment and is ranked 46th out of the 50 largest US cities for upward mobility. As a result, average per-capita income trails America’s and its employers struggle to find qualified staff while unemployment and low-wage jobs afflict too many citizens.
Municipal Broadband Attracts Competitors
Columbus is attacking these challenges on multiple fronts and through collaboration among government, education, business and institutions. It is also leading a regional approach to economic development with surrounding communities including former Top7 Dublin. The collaboration plays out in broadband, where the partners have interconnected their fiber networks supporting schools and universities, hospitals, research institutes and government facilities. This continuing investment in advanced broadband has helped attract multiple competing commercial providers as well as enabling a unified traffic management system and mobile solutions for the city workforce including first responders.
Educators meanwhile are collaborating to improve the chance that low-income students can afford higher education and also succeed at it. The Central Ohio Compact unites K-12, community college and undergraduate institutions to guide low-income students into higher education. Preferred Pathway is one program that guarantees community college graduates a university placement, which lets them turn their 2-year degree into a 4-year degree at a fraction of the normal cost. City government supports this effort with programs including Capital Kids, which provides after-school digital literacy programs for K-12 students, and APPS, which works to give at-risk youth positive alternatives to being on the street, including computer labs funded by Microsoft.
From Brain Drain to Brain Gain
Another partnership, TechColumbus, offers startup acceleration, business mentoring, seed funding and capital attraction. Its First Customer program helps young companies generate their first revenue from established companies in the region.
The East Franklinton neighborhood was once the heart of a vibrant African-American cultural scene and Mayor Coleman has made its revitalization a personal crusade. A community-based planning effort has created a vision for building residential, retail and creative space as well as a business incubator, and private investment has already converted an abandoned warehouse into a performance and studio space supplemented by an art gallery, coffee shop and farmer’s market. Grant funding is going into the development of a makerspace and community workshop.
Go to the App Store on the iPhone or Android and search for MyColumbus. Downloading this app (rated 3.5 out of 5 by users as of June 2012) will put the City of Columbus, Ohio, USA into the palm of your hand.
MyColumbus started out as a student project at Ohio State University. Students worked with the IT department of the city to identify open-data databases that could provide the most up-to-date information on city services, location of facilities and schedules of public events. They then built an app to access the data and turn it into easy-to-understand information. The city’s IT department was so impressed with the result that, with the students’ permission, it hired a software company to expand the app and put a professional gloss on it.
The resulting MyColumbus provides MyNeighborhood (location-based mapping and information about community resources, refuse collection and health inspections), GetActive (links to events, bike and trail guides and healthy lifestyle tips), GreenSpot (with information on sustainability) and 311 (where residents can log service and information requests). Service requests submitted via MyColumbus are resolved 3.3 times faster, on average, than telephone requests. Why? Because users can submit photos and GPS coordinates with their service requests, which helps maintenance workers show up with the right tools and materials to get the job done.
MyColumbus is so effective because of the rich data that Columbus’s IT department makes available to it. The city’s geographical information system (GIS) has hundreds of layers and supports applications including One-Stop-Shop Zoning, Utility Dashboard, Capital Improvements Planning, Fire Hydrants Inspection/Maintenance, and that all-important function in snowy southern Ohio, Snow Removal. The data derived from databases, sensors and GPS flows through to operations managers, planners, businesses and citizens in a never-ending stream.
This range of programs and applications is having measurable impact. Columbus is now one of a handful of US metros that turned a brain drain in 2005-2007 into brain gain in 2007-2009. Employment growth in skilled manufacturing has exceeded 35% over the past decade. And in 2013, Columbus was named one of the top 10 cities in the US for new college grads.
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Columbus was featured in the Intelligent Community Forum book Brain Gain.
Intelligent Community of the Year 2015
Smart21 2013 | 2014 | 2015
Top7 2013 | 2014 | 2015
The Columbus Region is centered on Columbus, the state capital, and includes five surrounding suburbs and cities, of which one – Dublin – has been a Top Seven Intelligent Community for the past two years. A complex region, Columbus contains urban and rural areas, a wide range of income levels, highly-rated universities and colleges as well as traditional industries, from automotive to logistics, which are undergoing severe stress. Fostering tech startups and attracting innovative employers is crucial to its future, but the region has historically been challenged to commercialize its R&D output. It has also seen its per-capita income erode over the past decade as job creation favored low-skill, low-value occupations. The trend has affected not only family income but the public-sector budgets that depend on income tax revenue as well.
The Columbus Region attacked these challenges through partnerships bridging across government, business and university sectors. Columbus Mayor Michael Coleman convened a Broadband Retreat that led to development of the first Broadband Strategic Plan for the city, which led to a doubling of the city's fiber network in less than four years. Regional institutions and the governments of surrounding cities made their own fiber investments to support government operations, education and R&D. The first regional economic development plan, Columbus 2020, set a goal of adding 150,000 new net jobs and increasing per-capita income by 30% by 2020. The region's signature innovation was TechColumbus, a public-private organization that identifies and fosters intellectual property from the region's leading schools and institutions, incubates new companies, and connects them to seed and venture capital. Since 2007, TechColumbus has engaged more than 1,400 entrepreneurs and invested $17 million in startups. These companies in turn have generated over $320 million in revenue, raised more than $400 million in additional capital and created over 1,300 jobs with salaries 44% higher than the average wage.
During the Industrial Age, the city of Cleveland in Northeast Ohio was one of America's great trade and manufacturing centers. A key link in a transport system of rivers, canals and railroads, Cleveland was home to steel companies and was the place where Standard Oil founder John D. Rockefeller made his fortune. Its last "boom" years, however, came just after the Second World War, when its population peaked at 914,000 in 1949. The second half of the 20th Century brought industrial decline, rising unemployment and racial unrest, culminating in 1978 when Cleveland became the first US city to default on its creditors since the Great Depression. Dismissed in the press as "the mistake by the lake," Cleveland appeared to face the bleakest of futures.
Under Mayors Michael White and George Voinovich, however, the metropolitan area began to recover. New investment poured into real estate projects in the downtown area, bringing hope for the future. But traditional economic development strategies had only limited impact. At the end of the century, Cleveland had one of the highest poverty rates among large American cities, with almost one-third of adults and 47% of children living at or below the poverty line. As a result, many inner-city neighbourhoods remained troubled and the school system faced serious problems. More importantly, the economic environment in which Cleveland had to compete was changing fast. The original advantages that had powered its growth were of little value in a knowledge-based economy.
Among the metropolitan area's assets, however, were strong government and nonprofit institutions, including Case Western Reserve University, Cleveland State University, Cuyahoga Community College and Nortech. These organizations teamed with the city, the regional transit authority and other partners to form a nonprofit called OneCleveland, now known as OneCommunity (www.onecommunity.org). Its mission: to deploy a community-based ultra-broadband network in the metropolitan area and to build a new knowledge economy on its foundation. The project was the brainchild of Lev Gonick, CIO at Case Western. The network was switched on in 2003 and today has a dozen institutional subscribers ranging from the city and the regional MetroHealth System to the Cleveland Institute of Art and the Cleveland Orchestra. Applications running on the network include high-definition videoconferencing connecting Cleveland Clinic doctors to city schools for the delivery of healthcare, best-in-class programs from the Cleveland Museum of Art delivered to branch libraries, and a pilot wireless project with Intel to enable city and county inspectors to file and exchange data on building permits in the field. In 2005, Intel named the greater Cleveland area as one of three Worldwide Digital Communities deploying wireless broadband applications to improve government and other services.
Under President Scott Rourke, OneCommunity has focused as much on human factors as technology. The nonprofit has raised hundreds of thousands of dollars from governments, foundations and businesses to invest in technology training and network expansion. A model program called Computer Learning in My Backyard or CLIMB focused technology and financial literacy training on low-income, working-age residents, and included funding to subsidize PC and Internet access purchases. The Fund for our Economic Future, a collaboration among 66 regional foundations, launched in February 2006 an 18-month program called Voices & Choices. The program aimed to engage an estimated 50,000 area leaders in Internet-enabled "town meetings" and smaller-scale discussions in order to educate people about the realities facing the regional economy and create an action plan for fostering growth. OneCommunity became the Web services provider for this public dialogue.
OneCommunity has also been a relentless and skillful marketer of its efforts, and has received coverage in publications ranging from Computer World to The New York Times. Its high profile surely played a role in a decision by IBM to select Cleveland as the first region to benefit from a grid-computing initiative called the Economic Development Grid, which allows government, institutions and businesses to leverage computing power. Northeast Ohio has also become home to Cisco's wireless technology operations and research center, Agilysys, Progressive Insurance and other companies.
Still very much a work in progress, OneCommunity is recognized by the ICF for the breadth of its vision – encompassing technology, education, digital democracy, innovation and marketing – and the very real progress it has achieved in a relatively short time.
Labor Force: 1,800,000
Every time you take a sip of Coca-Cola, you are tasting a bit of the history of Chattanooga. In 1901, the Atlanta-based company was selling its sugary syrup base to restaurants and drug stores, where it was mixed with carbonated water at the point of sale. Then a group of young Chattanooga businessmen persuaded Coke to sell them the right to pre-mix and bottle Coke. So skeptical was the company of their success that it sold the rights for $1. The businessmen turned that modest investment into a nationwide empire of bottling plants that sparked the global distribution of today.
For a century following the end of America’s Civil War in 1865, Chattanooga thrived on this kind of entrepreneurship. The tow truck was invented and commercialized there, and a number of national food brands were launched from Chattanooga. Chattanoogans also founded two of America’s largest insurance companies. But foundries, casting metal parts, were the mainstay of the economy. Heavy industry created wealth and ample employment for blue-collar workers. It also produced pollution. Local joked about changing their shirts twice a day and turning on the headlights of their cars at noon, but in 1969, the US government cited Chattanooga for having the dirtiest air in America.
The designation shocked the community into action. The city council joined with local manufacturers and doctors to pioneer an air-quality control program a year before the creation of the US Environmental Protection Agency (EPA). An air pollution control bureau covering all of Hamilton County, which surrounds Chattanooga, motivated manufacturers to invest $10m in pollution control. The effort proved so successful that the EPA recognized it as a national model in 1972.
Local government, business and institutional leaders did not know it at the time, but they had just created the team they needed to steer the community through tough times to come.
The Lost Decades
The 1970s began a period of long, slow decline as Chattanooga’s manufacturers fell victim to the forces of rising global competition. Legacy companies shrank and closed, and few new ones stepped up to take their place. The entire decade of the 1990s passed without producing a single new major employer.
The city did not go down quietly. The civic leadership, which had conquered the air pollution problem, organized and funded a massive effort to revitalize the urban core. In the 1990s, they constructed the Tennessee Aquarium, the world’s largest freshwater aquarium when it opened, and a children’s Creative Discovery Museum. They redeveloped the waterfront, built riverside parks and an 11-mile river walk to reconnect the city to the Tennessee River.
In fact, Chattanooga gained a national reputation for downtown revitalization, which created confidence and produced a cityscape that made citizens proud. But once the construction stopped, the projects did little to change the economic fundamentals. Community leaders entered the new century realizing that they needed a new game plan. What emerged was not a single, coherent strategy but a set of coordinated actions by different members of a close-knit leadership. Decades of battling decline gave them the determination to move ahead on many fronts.
Like many manufacturing cities, Chattanooga had an educational system designed to turn out large numbers of low-skilled workers. It gave secondary school students a choice between vocational and college preparatory tracks. In 2003, the Hamilton County school superintendent junked this system with the support of the Chamber of Commerce and began holding all students to the higher standard. In a world where traditional blue-collar jobs increasingly require problem-solving and technical certification, there seemed no other choice.
Hamilton County schools also partnered with local companies and business associations to develop more than 30 Career Academies, in which secondary school students learn core academic subjects through their application to a particular industry. At a construction academy, students learned math by applying it to costing and completing construction projects. They still read Shakespeare but also learned how to read a construction contract and write a job proposal. That project and a health care academy were instrumental in boosting student scores. In the 2009-2010 academic year, the school system increased its graduation rate by 10%.
Chattanooga is home to a branch of the University of Tennessee and the Chattanooga State Technical and Community College. Their leaders established a close working partnership with each other, the Chamber of Commerce and a dozen local organizations to bridge the education last-mile. With the help of 1,000 volunteers, they deliver school-to-work programs to 15,000 secondary school students. One program, “Reality Check,” lets students role-play being a head of household at different levels of income based on their educational attainment. As they simulate paying utility bills, obtaining child care and making choices about transportation, they quickly learn that a single parent with a high-school diploma cannot afford to buy a sports car.
The two institutions have also partnered to help lower-income students start their education at Chattanooga State and finish it at the University, which can save the students tens of thousands of dollars. Chattanooga State offers a full range of technical degrees in health sciences, robotics, mechatronics and other leading fields, while the University offers a high quality College of Business, programs in engineering, computer science and math, and the National SimCenter for computational engineering, one of the world’s pioneers in solving engineering problems through computer simulation. The state of Tennessee ranks 48th out of 50 states in education, but the percentage of Chattanoogans with bachelor’s degrees exceeds the national average.
Putting Smarts into the Grid
When electricity was first commercialized in the US, the utility companies focused on America’s largest cities, where they could get a faster return on investment at lower risk. (The same would later be true of telephone service and broadband.) Chattanooga shares with many smaller American cities a valuable legacy of that earlier commercial neglect: a local electric utility owned by the City Council. The Electric Power Board (EPB) has delivered electricity to the city since 1935, telephone service since 2000 and Internet service since 2003, always with a mission to improve quality of life and economic opportunity for citizens.
A decade ago, EPB began studying the installation of a fiber-optic network to better control electric distribution. The technology looked promising: the business plan forecast that real-time information from smart meters and distribution systems would let EPB reduce its transmission capacity by 40% while delivering a higher quality of service.
But fiber was too expensive to meet the utility’s 25-year payback requirement. EPB’s technology team put the plan on the shelf and waited. They watched as, after the dotcom bust, the price of optical fiber cable fell sharply then continued to decline year by year. When the price was right, EPB moved.
By the end of 2010, EPB had installed its network into all of the 170,000 businesses and homes in its service area. With each fiber install went a smart meter able to provide real-time data on energy usage at that location. The meters are also capable of controlling energy-hungry devices in the home or office as well, but EPB is taking it slow in exploring their use. Some smart meter installations in the US have been controversial. Customers have accused their utilities of using the new metering systems to raise rates. EPB has kept the good will of Chattanooga for decades by ensuring that the innovations it introduces actually make its customers happy.
A fiber network, of course, is not just a control system for electricity distribution. Each home or business receives 1 Gbps symmetrical broadband as a standard offering, making possible Internet, voice and television service. The interesting thing about the EPB deployment, however, is that the telecommunications services are almost an after-thought in business terms. The network is fully cost-justified just for its impact on electricity distribution; revenue from communications is just a bonus.
Not only does Chattanooga have one of the smartest smart-grid systems in the world, it is providing every resident who pays for electricity –nearly every resident, rich or poor – with the world’s most advanced broadband network. The adoption rate in Chattanooga’s poorest neighbourhoods is little different from the rest of the community, and programs from its Housing Authority have provided training and computers to more than 600 housing units.
The network is also having an impact on Chattanooga’s healthcare system. The city’s three primary care facilities include a teaching hospital, children’s hospital and Level 1 Trauma Center. They are working with healthcare business ventures to leverage EPB’s broadband capabilities. A partnership between BlueCross BlueShield of Tennessee and Cerner Medical is implementing a Web-based medical records system able to store and transmit high-resolution medical images. Chattanooga’s public hospital has received a grant to use the new network for telemedicine: remote diagnosis of patients at outlying health clinics to determine if they can be treated locally or need hospital care. One radiological group has found that the EPB network has so reduced waiting time for large medical image files that the productivity gain is equal to having another doctor on staff.
What have all of these separate but coordinated efforts brought about? By its own admission, Chattanooga began the 21st century as an economic development non-entity, with lots of great parks and museums but not much in the way of long-term job generation. By 2007, a survey of US site selectors rated it among the “50 Hottest Cities.” The EPB fiber project played its part in that turnaround. Stories on the project have appeared in The New York Times, Bloomberg TV and dozens of other news sites, as well as garnering 9 million Twitter impressions. The city has attracted relocating customer care centers, which are bringing hundreds of jobs into the region. The National SimCenter at the University is in talks with IBM about locating one of its most powerful computers – one not even commercial available – in Chattanooga to take advantage both of the highly reliable power and communications infrastructure. Its crowning achievement has been to land a $1 billion Volkswagen assembly plant, which will provide both white-collar and blue-collar jobs and have a substantial economic impact.
There is also a steady uptick in the community’s entrepreneurial spirit. Nonprofit organizations have stepped up to accelerate the base of small company formation and innovation. The Chamber of Commerce runs one of America’s largest business incubators, with 60 companies employing more than 500 people under one roof. The Lyndhurst Foundation funds a program called CreateHere, which provides business planning and support to sustain and grow Chattanooga’s arts and artisan community. Culture and tourism are increasingly important parts of the local economy. Lyndhurst has also launched a second project, InnovateHere, which provides incentives for technology companies to locate in Chattanooga. Providing additional impetus is the Renaissance Fund, an angel investment group of Chattanooga investors seeking to build a pipeline of local companies that can mature to the point of attracting venture capital.
With its unemployment rate below state and national averages, Chattanooga received good news in February 2010, when the Moody’s financial rating service named it among the first wave of US cities entering economic recovery. With so many different actors pushing forward in so many different sectors, the recovering economy is more flexible and balanced than at any time in the community’s past. That leaves Chattanooga’s leadership well-positioned to keep doing what they do best: adapting to a fast-changing world.
More About Chattanooga
Labor Force: 162,000
Bristol is one of the few communities in the world with a political boundary running down its spine. Lying to the south of the center line on State Street is the city of Bristol in the state of Tennessee. On the north side is a different city with the same name: Bristol, Virginia.
Bristol is nestled deep in Appalachia, a mountainous rural region of the American Southeast known for coal-mining, tobacco-growing and their traditional companions: poverty, poor education and lack of opportunity for bright young minds. The city's per-capita income in 2007 was only $20,000 compared with the Virginia average of more than $41,000 and the US average of nearly $39,000. Bristol is proud of its reputation as "The Birthplace of Country Music" and as home to a 160,000-seat NASCAR car racing venue known as "The World's Fastest Half-Mile." But Bristol's leaders knew that a proud history and the ability to attract fans on race day are no foundation for prosperity in a 21st Century community.
Electric Legacy, Broadband Future
Like many rural American communities, Bristol Virginia owns and operates its own electric company, Bristol Virginia Utilities (BVU). City-owned and cooperative utilities are a legacy of the last wave of rural development in the United States, which focused on electrification. In 1998, Bristol's city council voted to allow BVU to construct a fiber-optic backbone to improve communications and control among its eight electric substations. The business case was straightforward and the implementation successful. By 2000, BVU had extended the network to local schools and government offices to support telephone, data and broadband Internet, which reduced the city's operating costs and expanded the capabilities available to users. It also spurred demands from local businesses and real estate developers to provide service to them. So, in 2001, the council and BVU agreed to begin offering fiber-to-the-user (FTTU) service, branded OptiNet, to all residents and businesses.
Private-sector carriers were quick to challenge the move. One incumbent objected to the Virginia public utility commission, which regulates communications, stating that Virginia law barred municipalities from offering retail telecommunications services. Such a law was indeed on the books but, in Bristol's view, had been rendered invalid by passage of the federal Telecommunications Act of 1996. Only after Bristol sued the state did the Virginia General Assembly pass legislation in 2002 overturning the old law. As BVU prepared its commercial launch later that year, the incumbent cable TV operator claimed that the utility lacked the legal authority to provide television service. A court agreed. BVU returned to the Assembly seeking legislative and charter changes, which were granted in 2003. But later that year, the company's chief financial officer was back in the state capital testifying before a commission on the issue of cross-subsidies. The incumbent had accused BVU of charging phone rates that were below its costs and making up the difference on other services. The commission ruled against the complaint. Finally, after three years and $2.5 million in legal fees, BVU had won the right to deliver retail communications.
Financial Success Spurs Growth
As it turned out, the private sector was right to fear competition from BVU. Market research conducted by the company in 2001 suggested that 70% of respondents might switch telephone and television service from the incumbent operator, while half might switch Internet service. By August 2008, BVU's OptiNet FTTU service had captured more than 62% of the available residential and business market in its service area, thanks to effective marketing to electric customers with whom BVU already had a relationship. Despite millions of dollars of investment, OtpiNet had reached financial self-sufficiency on $16 million in net revenues in the 2009 fiscal year. A 2008 study conducted for the BVU Board determined that OptiNet customers, while enjoying the bandwidth bonanza of FTTU, had saved nearly $10 million over incumbent competitors' rates or special offers since the start of service.
The OptiNet service area was no longer limited by the city lines. BVU entered into partnership with the Cumberland Plateau Planning District Commission in 2003 to build CPC OptiNet. Managed by BVU, the network began with a 45-mile fiber-optic circuit reaching to Richlands, Virginia, funded by grants from the US government and the Virginia Tobacco Commission. It grew gradually to 200 miles across four rural counties with the help of additional grants. (The Tobacco Commission distributes money paid to the state by US tobacco companies following the 1998 settlement of the largest class-action lawsuit in US history.) BVU's success in designing, building and operating the network led it to establish a business unit called BVU FOCUS, which stands for Finding Opportunities for Communities throughout the United States. BVU FOCUS offers consulting and management services to other entities that seek to build advanced telecom networks. The unit's first customer in 2007 was MI-Connection, a telecom co-op owned by two communities in the state of North Carolina. Under BVU's management, the $80 million network grew its customer base nearly 5% in its first year and exceeded budget by 27%.
Creating a Broadband Culture
While the struggles of OptiNet make an exciting story, Bristol did not become a fiber carrier in order to win competitive battles with business. The city council's goal was economic and community development and, though the network is still so new, early results are positive. BVU's extension of the network convinced two major companies – CGI and Northrop Grumman – to build multi-million-dollar facilities in a regional business park during 2007. Since the network extension was completed in 2007, 185 businesses in the four-county service area have become customers and two new industrial parks began construction. Recent media reports indicate that business growth resulting from the broadband build-out has created 1,220 jobs in seven coal-producing counties worth $37 million in annual payroll, and attracted $50 million in new private investment. The new jobs entering the area are paying about two-thirds more than the normal weekly wage. To leverage this success, Bristol has launched a marketing campaign called AccessBristol, which makes its 1 Gbit broadband capacity the centerpiece of business attraction.
The entry of these major employers into the region has sparked a multi-level effort to develop a local knowledge workforce. Both CGI and Northrup Grumman discovered that it is difficult to attract outside employees to the region because payrolls are scaled to its very low cost of living. No matter what the arithmetic, employees resist accepting a reduction in salary as part of a move to a new area. The University of Virginia at Wise stepped forward to create the first undergraduate software engineering program in the Commonwealth, while three community colleges have joined forces to offer advanced technology classes.
These efforts are not occurring in a vacuum. Northrup Grumman's decision to locate a data center in southwest Virgina was not random; it was part of an outsourcing contract with the Commonwealth. A Southwest Virginia IT Task Force lead by Virginia's Secretary of Commerce brings together major area employers with state, county, educational and nonprofit organizations to identify requirements, develop programs and monitor their progress. In addition to the educational programs, projects include a "Return to Roots" campaign that seeks to attract highly skilled former residents to return to Southwest Virginia. Thirty percent of employees in Northrup's data center are locals and the percentage is expected to rise as the University graduates its first software engineering majors.
Bristol is also using the now 800-mile network to build quality of life and create opportunity for the next generation. Virginia High School in Bristol has nearly one computer for every student and relies on the rock-solid, high-speed access provided by the network to conduct all of its state-mandated standardized testing. BVU OptiNet has partnered with the Mount Rogers Regional Adult Education program to offer online access to preparation courses for the GED, a set of tests that give passing students the equivalent of a secondary school degree. The fiber network now links local, county and university libraries, giving residents access to more than 1.8 million items, as well as rural health clinics and city hospitals. The Bristol SeniorNavigator program provides online access to a database of services for seniors, adults with disabilities and their caregivers through libraries, community centers and senior citizen housing. Programs like these aim to power deep cultural change in Bristol, which will ensure that the hard work and innovation of its current generation of leaders pays dividends far into the future.
Labor Force: 8,120
Smart21 2009 | 2010