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A Decade of Technology Innovations Grant-Making: What Have We Learned?

Keynote Address Delivered at the 8th Annual Conference of the Rural Telecommunications Congress
Spokane, Washington
October 11, 2004

Anthony G. Wilhelm, Ph.D.
Director, Technology Opportunities Program
National Telecommunications and Information Administration
U.S. Department of Commerce

Thank you, Karen, for those very generous remarks. It's a pleasure to have the opportunity to be with all you all over the next couple of days at the Eighth Rural Telecommunications Congress. I'm really happy and humbled to be the messenger for our grantees and all the great work they do in communities across the country, from the largest cities to the smallest rural hamlets. A handful of you out there might be grantees. Some of you may have applied for TOP funding and not received a grant. Most of you probably don't know much about the sorts of projects TOP funds. But I would wager to bet that all of you have interesting ideas and insights for how telecommunications technologies can be used to provide greater opportunity in rural America: greater opportunity to educate all of our people; to provide broader and more diverse economic opportunities; to expand access to and the quality of health information and services; to provide public services; and to enhance public safety.

This list might sound incredibly expansive, but actually TOP does fund projects in all of the areas I just mentioned-and more. Because we were one of the first programs to fund projects that would build out what was then called the information superhighway, our mandate was broad and has remained broad. This is not to say we don't have priorities-of course we do. And I'll talk about them later. But the bottom line is if you have a good idea — if you want to try something out — we want to hear about it.

I wanted to make a few acknowledgements. First, I want to acknowledge Karen Michaelson. She really exemplifies the spirit of what we are trying to support at TOP. She is full of ideas and insights; she's not afraid to try new approaches; she's on the cutting edge of practice and technology; she works with the hardest to serve; she's dedicated to her community; and she knows how to turn ideas into practical, feasible projects and programs that make a difference in the lives of real people.

Karen is one of only a handful of grantees who has received multiple grants from TOP, a rare achievement. She has also been gracious enough to give us the benefit of her experience, taking time from her busy schedule in June on four occasions to review our proposals. I want to thank Karen for her dedication to the youth of Spokane in the project we are funding, the Virtual Online Teen Center, in which teens are developing leadership skills, expanding their knowledge of digital tools, and sharpening their budding entrepreneurial skills. She is also spearheading the launch of a business incubator for women entrepreneurs, a project building on a previous TOP grant. Thank you, Karen.

[I would recommend anyone interested in spending a few days in June with us who is an expert in new technologies and rural economic and social development to email me your resume at top@ntia.doc.gov.]

Not only does TOP enjoy a relationship with TINCAN, but also with the Kalispel tribe outside of Spokane. With TOP support, the tribe is actively pursuing cultural heritage preservation and is doing this through the development of a robust tribal website and through partnerships like the Northwest Museum of Arts and Culture in digitally capturing images and artifacts for culture and language education. So we are thrilled with our relationship with the Kalispel.

I think it's fitting that the City of Spokane be the host for this important conference. While Philadelphia received the lion's share of publicity last month-proposing to develop the world's largest wireless Internet hotspot, a $10 million proposal covering 135 square miles-Spokane had put in a 100 block cloud earlier in the year and has for some time planned to expand its downtown network, in partnership with the private sector, leading the charge nationally in enveloping a city's entire downtown. So thank you Spokane for your vision and vigor in making this investment in your city's future. By being a trail blazer you have made it easier for others to follow in your footsteps. And we thank you for your leadership.

Finally it's a privilege to work again with the Appalachian Regional Commission. I have the highest respect and admiration for Harry Roesch and the leadership he's shown over many decades in demonstrating the power of technology long before the Internet (and the personal computer for that matter!) came onto the scene. Harry, you are truly a trailblazer in your own right and it's a privilege to be working with you on rural issues.

I hope by the end of my remarks I will have accomplished a couple of things. First, I want to demystify the program. And let me clear the air on that one right now. I don't know how many conferences I go to where change agents like yourselves-leaders-come up to me and say that applying for a government grant is just too hard and too complex. It's just not worth the effort. They might go on to say that coming up with a match in non-federal in-kind and cash commitments is a steep uphill climb.

Well, let me tell you that experience tells me otherwise. Approximately half of our grants are rural grants. This past Monday we announced our 2004 grant winners and 13 of the 27 grants were rural grants. We announced grants for telehealth projects in West Virginia, Alaska, North Dakota, and the Intermountain West. We are assisting tobacco farmers to diversify their business with the help of technology in Greene County, North Carolina. And we are helping rural residents of western Massachusetts determine their eligibility and enroll in social services at the point of contact using wireless broadband tools, among others.

So investments in rural America are a large part of our grant program. We've streamlined our application kit and all of the forms can be filled out electronically. We provide budget templates and clear instructions on what counts as an eligible cost. And, believe me, people are resourceful and do come up with the match. If you are asking for, say, $500,000 from us, you'd be surprised how enterprising people like yourselves can find the committed partners, including volunteers whose time can count as a match. In extreme circumstances, where an applicant just cannot find the resources to match our contribution, you can request a waiver up to 50% of the required match. My staff are available take your questions anytime and you can get a heads-up on 2005 by reading the 2004 application materials by hitting the "Grants" button on our homepage at www.ntia.doc.gov/TOP. From the homepage, you can also sign up for our Get Updates list where we will notify you of any future developments concerning the program.

So I really want to welcome you to explore what we have to offer. If nothing else, the database of grants we've made since 1994 (we've made 610 grants to date) can really inform your own practice. It's a wonderful catalog of what's been tried and to what effect. We do require a thorough evaluation from our grantees, including an independent evaluation, many of which are on our website. You can search by geography or by keyword, so if you're interested in telehealth projects in South Dakota or Kansas, you can quickly find what's available, including, as I said, select evaluations of what's worked and, equally important, what didn't work so well. This inventory can inform your own practice in terms of what's already been funded, so you can build on prior endeavors.

We did do a book on what we've learned from our rural grant-making called Networking the Land: Rural America in the Information Age. While it's a little out of date, it gives you a good sense of the breadth of our grant-making. If you Google "Networking the Land," it's the first hit you get, so that's the easiest way to find it. [Note: A link has been provided in the online version of these remarks.]

I mention the report too to say that I would welcome others mining our data and conducting more up-to-date research on our rural grants. If there are researchers and academics in the audience, I would enjoy talking to you about getting access to our data for research purposes. We at TOP are literally sitting on a treasure trove of data-including quarterly progress reports, final reports and external evaluation reports-which are public information. And we would welcome partnerships with groups willing and able to analyze this information.

In the final analysis, TOP is looking to encourage innovation, to encourage organizations to take chances with advanced telecommunications and information technologies. As I said earlier, you are the change agents in your communities. It is your ideas, insights, and inventions we would like to cultivate and foster with the federal funds we have. What do I mean by innovation? Well, this is the subject of conferences, so I will only give you my version. Innovation is the fusion of new developments and new approaches to solve problems. Of course, at NTIA we are focused on emerging technologies and their application to the public and independent sectors. So new market entrants-wireless technologies, VOIP, Broadband over Power Lines are all of interest. But these new technologies get integrated into sectors that are themselves in transition.

The public sector, for example, is transitioning to e-government services. In North Carolina, we are funding the Local E-Government Utilization Project (LEG-UP). Here, small towns are not only thinking about how they do the same thing they were doing in a paper world in a paperless world and thereby save money. This is good for many reasons, but they are going well beyond this. They are tying their e-government plans to long-term economic development goals. For example, the town of Fletcher is staging the "Heart of Fletcher," a downtown center that preserves local heritage while creating a high-tech center, providing wireless communications in the downtown area and adjacent park along with a new police network to enhance services to citizens. The goal is to create and attract knowledge-based businesses, support entrepreneurs, stimulate e-commerce opportunities, create networks linking different community sectors, and enhance public safety. This is innovation - it's responding to new developments, trying new approaches and ultimately creating value while preserving and enhancing what's best about rural ways of life. The town of Hot Springs is currently promoting the Appalachian Trail license plate on its web site, part of the fees going to promote tourism, including enhancing accessibility for the traveling disabled. It also links to the local creative economy, a typical example being Emma's Handmades and Antiques, 4 miles northwest of Hot Springs, NC, on US 25/70 in Sleepy Valley. So this is innovation. It's not throwing the baby out with the bathwater and starting over. It's knowing what your assets are while using new approaches, including new technologies, and new methods, such as innovative business models, to enter the digital economy with a flourish.

So I hope I've allayed some of your concerns, and, again, I welcome your ideas and insights for how we can do things better. Assuming there's a 2005 grant round, we will also be doing technical assistance workshops in the early part of 2005 and would entertain ideas for venues. We are talking with possible partners in the Mississippi Delta and also with the Burns Telecom Center in Bozeman, Montana, to conduct virtual technical assistance at this lovely, state-of-the-art facility.

TOP is about marrying federal funds with the most innovative and feasible demonstrations of advanced telecommunications and information technologies to improve the provision of educational, health care, or public information. As I said earlier, I feel I am just carrying the message written by our grantees' accomplishments (and struggles), and the message is a very positive and inspiring one. And let me say that we are only to fund the tip of the iceberg, in terms of the worthwhile projects that come across my desk. This year 494 applicants from every state, Guam, Puerto Rico, and the Marianas Protectorate requested just over a quarter billion dollars ($277.1 million) to implement their vision for how technology can address pressing social needs. In the end we were only able to fund 27 of these projects or just one project out of 20 (5%). For more detail on these grants and others visit our searchable database at www.ntia.doc.gov/TOP. Obviously the demand is there to harness new technologies to expand economic opportunity, to deliver health services and public information in new ways. Communities are eager to try new approaches and experiment with emerging tools. Indeed, that is the American way.

They do this because people know that technology is essential for future success. Whether you're a small business, a nonprofit social service provider, a farmer, a middle school, a library, a fire department, a museum, a minority-serving institution, a rural health clinic, or an emergency medic, you are interested and eager to integrate technology into your mode of business: to do things better; to do things faster; to do things more efficiently; and, yes, to do things differently. To do things as they've never been done before.

And this is where the Technology Opportunities Program comes in. We fund almost any organization you can think of-as long as it's a nonprofit or public institution-eager to put advanced telecommunications and information technologies to use to solve pressing community problems. As I said earlier while the funding areas are broad, we do have priorities. First, and no surprises here, we are interested in projects that expand economic opportunity, enhance productivity, increase worker skills, and create jobs for American workers, especially for underserved communities and those experiencing economic downturns. And in our database you can find many examples of rural economic development projects.

A project that just closed out by the Montana District Export Council, for example, was the Virtual E-Business Incubator which provides e-business tools to small and medium-sized businesses in Wells Fargo banks in twelve of its most rural branches so that entrepreneurs and business people can identify foreign partners and market their products globally. The Virtual E-Business Incubator came to be housed at www.rockymountainbusiness.com and is used by people like Steve Bixby, the CEO of Mortech, a medical equipment supplier in Missoula, Montana, who used the site to research the rules and regulations for exporting medical equipment devices to specific foreign countries.

Second, we have a special emphasis on wireless broadband technologies. With wireless broadband technologies, the potential to change how we educate, how we deliver health services, or how we enhance public safety is enormous. Beginning with this past year's grant round, we are beginning to see the wireless projects quickly catch up to the wireline projects, and this trend is sure to continue. The encouraging trend we've seen in wireless applications is for organizations to use wireless to take services and information to people, to find them where they are, in environments in which they feel comfortable. Rather than building it and hoping the community will come. This has been refreshing.

And finally we are working closely with the DOC Office of Faith-Based and Community Initiatives as well as the Economic Development Administration to conduct outreach to faith-based and community organizations. In Sneedville, Tennessee we are supporting Project Jubilee, in which the United Methodist Church has initiated mission projects to help community residents gain entrepreneurial skills and to provide the capacity and support to engender economic development, including a commercial kitchen and a marketing association. What we are supporting is the TeleGuild Project, an association of farmers who, as their motto describes, are "merging modern technology with traditional values for sustainable economic development." The collaborative online system being developed facilitates the creation of production schedules, inventory and financial spreadsheets as well as the development of an e-commerce strategy for marketing and credit card sales. Farmers are diversifying their operations and developing value-added opportunities to increase profitability. We talked to a beefarmer, for example, who is using the Clinch Powell Community Kitchens to market habañeros honey, which on the face of it might sound weird — but is to die for on ribs!

When I stop and really reflect on what we are trying to accomplish with the Technology Opportunities Program it is this: trusting in today's change agents to take risks with tomorrow's technologies to solve everyday problems. What do I mean by this? Today's change agents are key: that's where you come in. TOP invests in organizations-in organizations with a solid track record, who aren't afraid to take chances. We invest in people with bright ideas, ideas that fuse new approaches and new developments to solve problems that begin to make a difference in people's lives in a few short years. A tall order? Yes, but it is doable. If you look at the bulk of our evaluation reports (and we require external evaluation as well as internal data collection), then you will see a lot of milestones being met and many indicators of positive change: jobs are being created; the quality of service is improving; and the cost of service is coming down; and emergency response time is coming down.

TOP invests in tomorrow's technologies. By tomorrow's technologies I don't mean the stuff of science fiction. At the same time it is awesome to watch the torrid pace of innovation in the commercial sector, in advanced computing, new wireless standards, spectrum efficiencies, VOIP, motes (a wireless transceiver that's also a remote sensor), and so forth. Many of these technologies are just entering the commercial marketplace and have enormous economic and social potential. Wireless broadband technologies, such as WiMax, Broadband over Power Lines, and technologies taking advantage of new spectrum efficiencies offer enormous opportunity. What TOP does in encourage nonprofits and public institutions to experiment with these tools, since they are not always the first to benefit from emerging technologies.

Finally, everyday problems are those that are familiar challenges: educating our population, providing high-quality health services, promoting economic opportunity in communities experiencing downturns. These are problems that grantees commit to tackling in new and creative ways with advanced telecommunications and information technologies. Many of these plans are tripped up because the end users grantees are trying to serve don't have access to high-speed services. The greatest hurdle facing the TeleGuild Project I mentioned earlier is the lack of broadband capability in Hancock County and surrounding areas. A similar story is heard with the Montana Export Council project.

These gaps need to be closed soon, given the essential role broadband technologies are already playing in contributing to our Nation's future well-being and competitive advantage. Our nation's productivity will increasingly hinge on the value we can create with the land, with capital, and with our minds-the products and services derived from a free and enterprising people on the leading edge of technological and scientific progress. One project that illustrates the ingenuity of the American people-and one that begins to document the value of intelligent networks-is the Sevier River Basin Water Management Network, a project using low-cost cutting-edge network technologies to enhance water management in south-central Utah. Using environmental sensors and next-generation communication system, Sevier's water regulation in an area encompassing 12% of Utah's land area is under the control of an increasingly self-aware monitoring system that has dramatically increased the water supply for irrigation by providing water managers more timely information on which to make decisions. I wish I had more time to talk about this very exciting and important project, but you can see for yourself at www.sevierriver.org.

And, boy, do we need these breakthroughs like Sevier to become more productive in the coming years. As the baby-boom generation begins to reach retirement age, the ratio of elderly to working-age population will steadily increase until about 2030. Labor productivity will be critical to addressing the impact of this demographic shift, and labor productivity is historically tied to the pace of technological progress and incentives for innovation. Efficiency gains made by workers' innovative use of capital have contributed to about half the growth in labor productivity over roughly the past decade. When you begin to tally the efficiency gains information and telecommunications technologies afford, a clear economic case can be made for accelerating the pace of broadband diffusion.

So what are some of the lessons we've learned at TOP to encourage broadband diffusion and applications that have made a difference in rural America? There are really three elements that are present in practically all of our grant projects. So I want to spend some time talking about these three important ingredients for success. First is organizational capacity and leadership; second, the value of robust partnerships; and third, the importance of durability, sustaining-and even expanding-an initiative after the federal funds dry up.

According to 10 years of research and reflection on our grant program, the best predictor of project success in the long run is an organization's capacity to integrate new developments and new approaches to meet its goals. This fact cuts across geography, size, etc. In short: Your organization's strength is a better indicator of how well you will perform than how big your budget is or where you are located. This is important for organizations that think they're too small or too rural to compete for a TOP grant. It's more about management skills and organizational maturity than it is about size.

What are some of the characteristics of strong organizations? Why are they able to grapple with change and turn it into an asset? Well, it's usually three words: Leadership, leadership, leadership. It's leadership that has solid principles and sets clear goals; it's leadership that invests in people and their talents; and it's leadership that's flexible, that values diversity and rewards risk.

In North Carolina, the General Assembly set the goals and entrusts the e-North Carolina Authority (formally the Rural Internet Access Authority) to oversee the implementation of these goals, including the goals set in 2000 to make high-speed Internet access available statewide. Under Jane Patterson's leadership, the e-NC Initiative has set new targets, including going beyond access to explore the value-added benefits of advanced services in various arenas, such as linking e-government to long-term economic development goals, as I mentioned earlier. These goals are imbued with solid values, including embracing inclusion has the linchpin of a democratic information society in the 21st century, as well as a clear blueprint for migrating a largely agricultural economy toward an information-based economy. I mention the North Carolina project not to suggest that these are the right goals for everyone-clearly there is no one-size-fits-all solution here-but because they have clear goals, buoyed by core values, leadership has set the tone so that everyone is aiming at the same target.

Second, high-performing organizations invest in their people. This is a serious challenge, especially in the nonprofit sector. First we've invested so much in infrastructure relative to training and professional development that it's not surprising that we see mirrored in the public and nonprofit sectors what industry experienced when computers were first introduced into the office: the productivity paradox. What this means is that investments in technology have not necessarily led to productivity increases.

One very interesting organization is addressing non-profit capacity building issues, using two-way telecommunications to provide remote training to nonprofit managers across West Virginia. The West Virginia University Research Corporation is delivering services to over 10,000 end-users across the state and offering a Nonprofit Management Certificate to middle and upper level managers of nonprofit organizations, including training on how to use technology effectively to improve operational effectiveness. Now that the project has closed they are applying for funding from the Appalachian Regional Commission. This is a great example of how the technology itself can be an important mechanism to deliver training to organizations in isolated areas who might otherwise need to travel many miles for training, saving time and money.

Finally, high-performing organizations are opportunistic, nimble, and reward risk-taking. TOP takes risky grants, and the risk is in encouraging organizations take a leap with technology as a catalyst for doing business faster, cheaper, better and differently. Sometimes organizations are excellent service providers, have wonderful trusting relationships, with their clients, but have limited experience with technology. Our outreach to faith-based organizations, for example, often involves working with organizations with excellent leadership, passionate volunteers, and inspired communities. These are the groups that need the extra technical assistance, the helping hand, the close monitoring by program officers. These investments in organizations and leaders close to the ground who have earned the trust of the people we are trying to reach are by and large are paying off.

While leadership and organizations strength will get you a long way down the road, forging robust partnerships with committed likeminded groups who share your vision is essential for meeting the needs of underserved communities and in ensuring that projects are sustained beyond the scope of the federal investment. Here I think the rural cooperative model is a lesson for anyone interested in pooling and leveraging their assets to take advantage of network effects. Going it alone is the Achilles' heel of any project trying to innovate with technology and at the same time address pressing societal needs.

One of the models for robust partnerships is Jane Leonard's Bizpathways Initiative. This is a project we funded in 2001 where Minnesota Rural Partners, itself a membership organization, has organized with public and private partners to expand the reach of economic developers and to target business assistance when and where it's needed. Bizpathways has really become a virtual office assistant, using technology to streamline the assistance process while maintaining high-quality face-to-face interactions. So it's high tech and high touch. This sounds good, but to pull this off really requires strong partnerships. And these aren't letterhead partners, ones that provide a letter of support and then disappear into the woodwork. These are contributing partners who share in MRP's goal of lifting up rural places and peoples who provide technical support, such as Agiliti. Inc., a company out of St. Paul, that is providing Internet connectivity for the BizPathways hosting environment. Or content partners who are feeding usable, high-quality materials for small businesspeople, such as the Department of Employment and Economic Development and the Northern Tier High Technology Corridor. A foundation nationally renowned for its work in cultivating entrepreneurship, the Ewing Marion Kauffman Foundation, is also contributing. The list goes on and on-including many local partners who contribute time and talent and work with MRP to make the regional training and workshops welcoming and user friendly.

The importance of partnership really bleeds into the final topic I wanted to talk about, sustainability. Now, Jane Leonard and the folks at MRP believe that, yes, you need the heavy-hitters to make a project go. The fact that the U.S. Department of Commerce, DEED, and the Kauffman Foundation are all involved is no small feat. But local ownership is key to a project's durability. So in their endeavor to promote broadband in rural Minnesota, MRP is changing minds one person at a time. It's holding a Tech Fair in Camby; it's teaching seniors what they can accomplish with computers in Tracy; or addressing after hours events at the Moose Lake Area Chamber of Commerce. It's training the trainers and aggregating demand one organization at a time. Becoming institutionally rooted takes time-but the day arrives when broadband technologies are so imbedded in how an organization, or a community, or a region, or a state, or a nation or, finally, a global community does business that they're so everyday that you don't even notice they're there.

We are proud of our success rate at TOP. The fact that upwards of 85% of grantees continues in operation after the grant period ends is testament to the leadership of organizations committed to find the partners and resources to sustain a project and to sustain a vision.

In the end our Nation's competitiveness and future quality of life will depend on continued innovation. Our pragmatic nature as a people fuses with our idealism to make this Nation an unending testbed for new approaches, approaches that hopefully will usher in a more democratic society in the years ahead.

Thank you very much.


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