THE STATE OF RURAL TECHNOLOGY IN
GEORGIA
BACKGROUND
In response to the Georgia Rural Development Council’s
request for an assessment of our rural information technology (IT) status, the
Technical Advisory Committee, in partnership with Georgia Tech’s TechSmart
program, gathered on-site data from 23 Georgia counties on telecommunications
activities and IT. They conducted focus
groups of 12 to 15 stakeholders in 15 counties, and one-on one interviews in
the eight remaining counties. The
participants included city and county government leaders, primary, secondary
and post-secondary school representatives, public library, public safety and
health care officials, economic developers, major employers/industries, small
employers/industries, volunteers, non-profit agencies and telecommunications
service providers. This report reviews
the results of this research, profiling IT usage in our rural communities and
focusing on two main areas: the benefits of IT use and the impediments to IT
access, specifically those unique to rural Georgia.
The data
collection process was comprised of two components. First, open-ended discussions of local stakeholders’ objectives
and challenges were conducted. Second,
current resources, activities and leadership initiatives were compared to
best-practice tactics identified from communities both in Georgia and around
the world. The intent of these
interviews was to determine community IT tactics that were appropriate for the
counties and what resources were available for implementing future
projects. The data gathered for the
assessment may also be utilized for strategic planning and marketing as well as
for the development of community IT projects.
This assessment was not just “desk research,” but rather it was done in
partnership with the community to generate specific actionable recommendations.
Most of the
information was gathered during 2000 and the first five months of 2001. Additionally, efforts to verify information
were made through Web-based reviews of community portals and other Web sites
conducted in May 2001.
OVERVIEW
Information
technology (IT) provides numerous benefits for all types of businesses,
government organizations and individuals.
IT enables firms to operate more effectively and efficiently. Users are able to reach broader markets by
using Web-based technologies.
Therefore, IT plays a major role in economic development and acts as a
linkage between work and home. For instance,
telecommunications advances have created “micro” economic development opportunities
by targeting single individuals- telecommuters, consultants, etc.- who can live
anywhere.
Despite
these benefits, many are deterred from usage because of the cyclical nature of
IT industries and the confusing array of service options. Due to low population densities and lack of
demand, rural Georgians are faced with obstacles when trying to obtain
telecommunications infrastructure for their counties. In addition, telecommunications is heavily regulated and very
expensive to build and operate.
This report takes a candid look at
the existing impediments that lie before rural Georgians and suggests working
programs for technological advancement in their communities.
OBSERVATIONS
● Information
technology companies—including telecommunications and computer hardware and
software—are not like traditional public utilities
● Technology plays a major role in
economic development by enabling firms to be more productive and allowing them
to tap into broader markets more effectively
● Technology-based economic development
links work and home, supporting highly flexible work arrangements
● Changing technology and the complex
nature of service options can confuse potential users and make them afraid to
try IT.
● The South lags the nation in adoption
of information technology
● Georgia counties have different levels
of demand and technical sophistication, which are linked to economic vitality
● Rural Georgia does not have the same
access to broadband telecommunications services as parts of Metro-Atlanta
● Low population density and lack of
demand has inhibited rural Georgia from building information technology
infrastructure
● Many rural communities have leaders
who do not use technology
RECOMMENDATIONS
● Educate communities on technology developments,
potential benefits, and the different service options available
● Encourage communities to benchmark
their technology development and utilize regional assistance providers such as
Georgia Tech’s TechSmart specialists and centers
● Marshall participation from local
citizens and leaders with technology expertise
● Create incentives for community
technology programs and applications
·
Provide funding for cash, loans from the state or
matching funds for community technology initiatives
● Promote and support manufacturer
competition based on technology, not price
● Develop applications that further
utilize the existing telecommunications networks
SUGGESTED COMMUNITY TECHNOLOGY INITIATIVES
● Organize a user group or alliance of
broadband telecommunications users
● Establish and support free computer
literacy training programs
● Create a computer purchase program
● Establish a portal or Web site that
serves as an initial point of entry into other Web sites of significance to the
community
● Hold an e-commerce Web fair to assist
local businesses in establishing or upgrading their Web sites
The State of Rural Technology in
Georgia
What is Information Technology
Information technology (IT) is more than just the Internet
and computers. It includes computer hardware and software, telecommunications
networks, cell phones, digital video, and databases.
Information
technology companies are not like traditional public utilities
Traditional public utilities are regulated because they
provide a service that (1) is basic,
needed by all citizens, and relatively easy to use, (2) is too expensive for
more than one private sector company to provide, and (3) does not change
frequently.
In these ways, IT is not like other public utilities. For
example, they are not considered as essential to society as the telephone, nor
are they as intuitively easy to use.
Moreover, due to constant technological advances, it seems that
computers become obsolete immediately after the initial purchase.
What are the Benefits of Information Technology?
Technology enables existing firms to be more productive
Technology is an enabling tool because it
can help any type of firm or individual do things more effectively and
efficiently. For example, one rural
manufacturer experienced production delays and late deliveries. By acquiring a
new manufacturing production planning (MRP II) software system, the company
saved $200,000 in late delivery penalties and unused inventory, was able to
handle more shipments, and increased sales by 7 percent.
Information technology plays a
major role in economic development because it allows firms to tap into broader
markets
Many Georgia firms sell to customers only within the state.
Only a small minority (one in five according to The Georgia Manufacturing
Survey conducted by Georgia Tech’s School of Public Policy and Economic
Development Institute in 1999) do any exporting. Firms can reach broader
markets through the use of technology. For example, Dickey’s Incubators, a
manufacturer in Millen, Georgia, completely covered the local market and needed
to expand its customer base. By upgrading their Web site, the firm was able to
stimulate sales throughout the U.S., and internationally. Moreover, much of rural Georgia is targeting data
centers, telemarketing firms, and network operating centers - industries that
arose from advances in technology enabling these functions to be located away
from the main company headquarters. The Internet has also spawned e-business
companies in rural Georgia such as Pap Porsche Auto, which sells Porsche, Audi,
and Volkswagen parts over the Internet from Murrayville, Georgia. In addition,
the increased use of computers and the Internet have encouraged entrepreneurs
to support these users. For example, Newnan Utilities’ use of small contractors
to provide equipment and Internet-related services, along with the growth in
Internet use in Newnan, created a cottage industry of at least seven small
Internet service firms (identifiable through AccessCoweta as of early 1999).
One such firm, Door 2 Door Technologies, Inc., which offers custom computer
systems, networking, web development, and training, arose from a local
government employee’s off-hours work as a part-time contractor to Newnan
Utilities.
Technology-based economic development links work and home
Telecommunications advances have created “micro” economic
development opportunities where communities can target single
individuals—telecommuters, people who work from small home offices, and “lone
eagles” (e.g., consultants, actors) who can live anywhere. One Newnan family
profiled in the Atlanta Journal-Constitution in 2000 operated three technology
businesses from their home.
This indicates that broadband telecommunications services are important aspects
of housing policy.
Technology companies pay higher wages
The average high technology firm in the U.S. in 1999 paid
more than $61,000 annually, nearly twice that of the average firm. They are
also traditionally viewed as placing less of a burden on essential government
services. At the same time, many technology firms have automated functions and
few employees; for example, a major telephone company’s largest facility that
operates three shifts for 24 hours a day employs only 45 people. Also,
technology companies typically need a smaller physical space than a traditional
manufacturer, but (because time to market is so critical) they may need it
faster and in a finished form—full structure building cabling, reliable power
with backup, fire suppression, and high-capacity HVAC. Such companies are also
eager to be located near other technology firms (clustering) and in places that
have a technology savvy image.
Much of Rural Georgia Does Not Have the Same Access
to Broadband Telecommunications Services as Many Parts of Metro-Atlanta
In part because of the many things that can be done over the
Internet, there is an increasing emphasis on broadband, which are
telecommunications services that have the capacity to show video clips without
the video looking jerky. (starting at 200 kbps.) However, obtaining broadband services is viewed as a challenge
for rural Georgia. To illustrate, the
Georgia Economic Developers Association’s 2001 Membership E-Mail Survey Report
found that 31 percent of rural economic developers considered lack of
telecommunications infrastructure to be a great barrier, compared to only 15
percent of urban developers.
Broadband service provision is also a national issue. The August 2000 Current Population Survey
conducted by the U.S. Census Bureau showed that nationally only 7 percent of
rural households had broadband access to the Internet, compared to 12 percent
of households in urban areas. Emphasis
on telecommunications infrastructure alone is part of the problem. Equal attention should also be placed on
building demand through increasing user skills and organizational and
leadership capabilities, because low demand leads to less emphasis on building
broadband telecommunications infrastructure.
Why Can’t Rural
Georgia Obtain the Telecommunication Infrastructure It Wants?
Supply Has Been Accelerated
Deployment of advanced telecommunications infrastructure has
been accelerated in rural areas. Statewide efforts of the Georgia Technology
Authority to aggregate government demand for telecommunications services are
occurring in conjunction with private telecommunications companies’
investments, such as BellSouth’s DSL deployment to smaller Georgia communities
and cable companies’ hybrid fiber coax cable installations. As of August 2001,
14 municipalities obtained certification from the Georgia Public Service
Commission to provide some type of local data and/or voice service.
Glut of Fiber
In the late 1990s, significant investment was made in fiber
installations within and between major metropolitan areas, which did not yield
high returns due to lack of use. Merrill Lynch reported that only 2.7 percent
of US fiber-optic capacity is actually in use in the average moment (with the
exception of high traffic corridors such as Washington DC to New York). CS
First Boston estimated that less than 1 percent of the fiber in the ground is
used. Telecommunications companies, especially those linked to fiber production
or services, have seen their valuations drop dramatically. The result is that
these companies may be less willing and even less able to make further
investments.
Changing Technology Developments
There are numerous technology developments aimed at
squeezing more information into less “space” on the airwaves, traditional
copper wire, and even fiber. This can create a “wait and see” attitude among
telecommunications service providers who may be wary about committing large
investments to a certain type of technology. In essence, they fear they will
face the same situation as Betamax video tape recorders did when VHS became the
standard. However, with
telecommunications services, it is much more expensive to switch.
Confusing Service Options
Against the backdrop of many technologies, there is an array
of providers in different industries offering different services. These
services do not have the same recognition as housing or consumer products have.
In fact, some potential users may find it confusing to weigh their options and
choose the service that best fits their needs (where options are available)
while others may be too afraid to try. The following table summarizes key
telecommunications services for accessing the Internet.
Table of Telecom Services for Internet Access
|
Service
|
Provider
|
Minutes for 10MB Novel
|
User
|
Comments
|
|
Dial-up
|
Phone
Company
|
23
|
Households
|
|
|
ISDN
(Integrated
Services Digital Network)
|
Phone
Company
|
10.4
|
Businesses
|
Dedicated
line for data and voice
|
|
DSL
(Digital
Subscriber Line)
|
Phone
Company
|
.9
|
Households/
Businesses
|
Uses
existing telephone lines, requirement of 3 line miles from the phone company
central office is common
|
|
T-1
|
Phone
Company
|
.9
|
Businesses
|
Dedicated
phone line for data and voice
|
|
Cable
Modem
|
Cable
Company
|
.07
(depends on # uses on system and monitoring)
|
Households/
Businesses
|
|
|
Fixed
Wireless
|
Wireless
Provider
|
Up
to .9
|
Households/
Businesses
|
-Need
antennas
-Line
of sight
-Closer
to the base station can be faster
|
|
Mobile
Wireless
2,
2.5, 3G (Generation)
|
Wireless
Provider
|
10.4
|
Households/
Businesses
|
-Need
lots of antennas
-Need
more spectrum for true broadband (fast) Internet access
|
Regulation
Voice services are probably more heavily regulated than any
other service except for air transportation and banking. A company is prohibited from offering voice services unless it
receives approval from the state Public Service Commission. The Federal
Communications Commission through its spectrum auctioning process regulates
wireless services covering a wide area. Cable services are regulated primarily
through local franchise agreements with communities.
Total Cost of Ownership is High
Telecommunications technology infrastructure is VERY
expensive. The initial outlay for one community was $10 million for a four-mile
fiber ring. Upgrading a central office to offer DSL can cost up to $100,000.
Even a simple small wireless system cost one community $700,000. And these are
only the initial costs. Ongoing operating costs are more than half the total
cost of the service. Such costs can include marketing, customer service
(installations and removal from the network), maintenance, hardware and
software upgrades, accounting, and legal.
Telecommunications
Firms Need to Establish a Strong Business Case to Take the Risk of Investment
To justify the high costs amidst a changing technology and
extensive regulatory climate, telecommunications firms need incentives to make
investments in broadband telecommunications infrastructure.
What are Rural
Georgia’s Challenges to Establishing a Business Case for Broadband
Telecommunications?
Compounding the difficulties of making a business case in
rural Georgia, which has low population densities, is the lack of demand for
broadband telecommunications services. Key elements impacting demand are:
The South lags the nation in adoption of information technology
The South had the lowest percentage of households with
computers in 1998, and the slowest gains between 1998 and 2000. In 1998, the percentage of households with
computers in the South stood at 38 percent, almost the same as the Midwest and
lower than the Northeast and the West. By 2000, all regions were over 50
percent in household except the South, which was only 41 percent. If Atlanta
households are removed from the total, the percentage falls to 35 percent.
Georgia counties have different levels of demand, which are linked to economic
vitality
Not only is there a lack of demand for computers and the
Internet in the South, but even basic telephone usage is a concern and it
varies widely across the state. More than 90 counties had percentages of
households without a phone higher than Mississippi’s rate of 13 percent, and 24
counties had 20 percent or more households without telephones. These were in
lagging and declining counties as defined in the Economic Vitality Index
developed by the Rural Development Council Technical Advisory Committee and
Georgia Institute of Technology. On the other hand, 11 counties—designed as
rapidly developing or developing in the economic vitality index—had fewer than
5 percent of households without telephones. These counties were in the suburbs
of Atlanta, Augusta, and Columbus. Overall, Georgia falls behind the U.S.
average for having a basic telephone. Nationally only 5 percent of the
households lacked a telephone, whereas in Georgia, that percentage was 8
percent.
Youth are predisposed
to technology
The Current Population Survey found that more than half of
children age 9-17 use the Internet compared to less than 30 percent of people
age 50 or more. Similarly, Engaging the Voices of Youth, by the Georgia
Rural Development Council, 4-H and the University of Georgia, found that three
out of four eighth graders surveyed wanted to spend time on a computer.
However, only 40 percent of eighth grader homes had Internet access.
Georgia manufacturers compete on price rather than technology
The strategies that Georgia manufacturers use to win sales
highlight that many firms emphasize low cost rather than technology. According
to the 1999 Georgia Manufacturing Survey of over 700 firms conducted by Georgia
Tech, more than twice as many Georgia manufacturers compete for customer sales
through low price than through technology and innovation. Furthermore, a large
minority (43 percent) of manufacturers isolate themselves from getting help
from public organizations or private vendors, accountants, and other assistance
sources to deal with the challenges of implementing technology. However, firms that focus more on innovative
uses of technology were rewarded with returns on sales averaging nearly 40
percent more than firms competing on price.
Lack of “Technology
Leadership” Impedes Rural Georgia
Technology leadership involves participation by people with
technology expertise or experience in the education, dialog, planning, and
strategy development necessary to ensure that technology benefits the
community. An important component is the ability of existing community leaders
to identify, support, and encourage local technology leadership.
Many rural communities have leaders who do not use technology
The city of Conyers put Georgia on the map with its third place
ranking out of 400 state and local government sites in the Center for Digital
Government and Government Technology 2001
Best of the Web competition. At the other end of the spectrum, fewer than half
of the 23 rural Georgia communities served by Georgia Tech’s TechSmart had city
or county government Web sites. For a few counties with e-government sites, the
sheriff’s home page was the only Web presence. Very few of the local government
Web pages delivered services beyond basic contact information. Three government
Web sites had telephone numbers but not e-mail addresses listed, suggesting
that local government staff do not use the technology themselves despite having
a Web site. Furthermore, only 4 of the 23 local governments offered simple
posting of meeting minutes on their Web sites, and only one local government
provided services such as tax records and on-line permitting, licensing, and
public certifications.
Technologists lack organizational support to take on leadership
Professional support for IT specialists in the community is
important for sharing expertise and enhancing the IT capability and services
within the community. User groups, training programs, and formal mentoring
programs can provide this support. Only four of the communities visited have
mechanisms for supporting IT professionals. Two communities have IT user groups
or technology associations. In another community, the hospital has a user group
and there are informal meetings at the library for IT specialists. The result
is that there are islands of sophisticated IT users that are not always well
integrated into their communities.
Recommendations:
Focus on Implementation of Community Technology Projects
This report recommends that rural communities be encouraged
to focus on enhancing the demand side through an emphasis on usage. One of the
best ways to increase usage is through implementation of community technology
projects. These projects enable community members to learn about IT in a
hands-on manner, while building demand and attracting telecommunications
infrastructure capital investment. Examples of such projects include:
(1)
Organizing a user group or alliance of broadband
telecommunications users
(2)
Running free computer literacy training workshops
(3)
Setting up a computer purchase program
(4)
Establishing a portal or Web site that serves as an initial
point of entry into other Web sites of significance to the community
(5)
Holding an e-commerce Web fair to assist local businesses in
establishing or upgrading their Web sites
Enhancing Implementation of Community Technology Projects
Create incentives for community technology
projects
Historically, State funding initiatives have effectively
supported large capital investments. However, there is an additional need for
these funding organizations to investigate the degree to which their programs
can provide micro-financing support for Web-based or PC-based community
technology projects. Alternatively, such organizations may be able to furnish
assistance to local communities to establish financing themselves.
Marshall participation from local people with technology expertise
Including local technology experts in community and economic
development projects is critical to enhancing the use of IT in rural Georgia.
This could involve training elected officials, civic representatives and
leadership program participants to provide support for local residents with
technology expertise so they can make a difference in their community’s IT
services. It is these technology experts that can supply project management
expertise necessary to bring technology programs to fruition.
Encourage communities to benchmark their technology development
The changing technology developments and confusing nature of
available services tends to deter potential community users. Therefore, efforts should be made to
encourage communities to engage in a process to look toward outside information
and assistance sources for gauging their ongoing IT progress. For example, a
certified technology literate community designation or rural learning network
could be considered pre-requisites for technology/telecommunications related
financing. Regional assistance services such as Georgia Tech’s TechSmart
centers and regional offices as well as universities, technical colleges, and
state agencies can provide assistance with IT issues. Many of these providers
are co-located together with other providers to enhance convenient service
accessibility.
