On-Site Broadband and Technology Training for Small and Micro Rural Business Establishments: A model for local engagement

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1 On-Site Broadband and Technology Training for Small and Micro Rural Business Establishments: A model for local engagement Presenter: Eric Frederick, AICP, LEED AP State Program Manager, Connect Michigan Co-Author: Elizabeth Riesser Research Analyst, Connected Nation International Geographical Union 2013 Kyoto Regional Conference Kyoto International Conference Center Tuesday, August 6, 16:00 17:30 Room 501

2 Agenda 1. About Us and Michigan 2. Observations 3. Technology Adoption among Small Businesses in Michigan 4. Education and Training for Small Businesses 5. Small Business Technology Taskforce Model for Implementation 6. Lessons from the Field

3 About Us Connect Michigan: non-profit organization, in partnership with the Michigan Public Service (utility) Commission, tasked with facilitating the expansion of broadband access, adoption, and use throughout the state. Connected Nation: non-profit organization that believes that states, communities, families, and individuals can realize great economic and social advantages when we accelerate broadband availability in underserved areas and increase broadband use in all areas, rural and urban, alike. Connect Michigan Do Not Copy Without Written Permission

4 Michigan Lansing (Capital) 2012 Population: 9.8 million 2012 Unemployment Rate: 9.1% Land area: 146,435 km 2 (approx. size of Nepal), two large peninsulas Major industries: Manufacturing (automotive), agriculture, and tourism 72% Urban, 28% Rural Detroit Metro Area

5 Project Concept Conduct statewide business technology assessment Identify patterns and issues related to economic development, examine further Develop model/ project/program to address issues Implement

6 Conduct statewide business technology assessment Identify patterns and issues related to economic development, examine further Develop model/ project/program to address issues Implement TECHNOLOGY ADOPTION AMONG SMALL BUSINESSES IN MICHIGAN

7 Small Business Technology Use Across States 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 82% 84% 82% 81% 80% Source: Connected Nation, Business Technology Assessment, % 80% 73% 73% 67% 58% 62% 57% 53% 49% Use a Computer Subscribe to Broadband Have a Website Michigan Iowa Minnesota South Carolina Tennessee

8 Why does it matter? Median Annual Revenue Rural Small Businesses 2011 $430,000 Broadband Connected with Website $310,000 Broadband Connected $70,000 No Broadband $0 $100,000 $200,000 $300,000 $400,000 $500,000 Source: Connected Nation, Business Technology Assessment, 2010 Online Sales 29% of small businesses earn at least some revenue from online sales On average, small businesses earn 34% of their revenue from online sales, or ~$190,000 Statewide, this represents $6.9 billion in revenue for Michigan small businesses

9 Why does it matter? Total Value of Online Transactions Made by Michigan $170,000,000 Residents, % Michigan Residents to Michigan Businesses $2,200,000,000 65% $1,100,000,000 32% Michigan Residents to Business in Other States Michigan Residents to Businesses Outside the US Source: Connected Nation, Residential Technology Assessment, 2012

10 Barriers to Technology Adoption Among Michigan s Small Businesses Barriers to Broadband Adoption among Michigan Businesses with Fewer than Twenty Employees We don t need it or we are getting by without it 43% Our business does not use computers 15% Broadband service is not available in our area 10% The monthly cost of service is too expensive 5% It would be too much of a distraction to employees 4% It would take too long to train our employees 4% It poses a security risk 2% The installation cost is too expensive 2% It is too complicated 1% Other 5% Don t know/refused 9% Source: Connected Nation, Business Technology Assessment, 2010

11 Observations 86% of Michigan businesses have fewer than twenty employees; and small businesses provide 30% of all jobs in Michigan (~1,000,000 jobs) Information and communications technologies can expand markets, improve communication, reduce overhead, and help businesses improve efficiency Can an increase in technology use among small businesses help them sustain and grow themselves in Michigan, thus improving local economies? Small businesses, particularly in rural Michigan, adopt broadband and technology at a lower rate than similar businesses in other states

12 Identify patterns and issues related to economic development, examine further Develop model/ project/program to address issues Implement AFTER AWARENESS; EDUCATION AND TRAINING

13 Business Training Model Review Ease of Use Training that makes technology seem less daunting is key to increasing adoption among small businesses (Shore, 2011) Small businesses owners perceptions about the ease of use of new technology impacts whether they adopt that technology (Shore, 2011) Applies not only to owners but employees as well Technology training may also help create a more digitally literate workforce (US Small Business Administration, 2006) Industry and Topic Relevance Programs must meet the specific needs of the business or be industry specific (Berger, et al., 2001) Technology must be directly linked to how it can improve business operations (Fitzgerald and Cater-Steel, 1995)

14 Business Training Model Review Geographic Isolation Widely dispersed businesses, or small concentrations of establishments in rural areas lack access to conveniently located training facilities or programs (West Virginia Chamber of Commerce, 2005) In a survey of rural business owners in Great Britain, 30% cited distance and transport as a constraint for participating in training activities (Bennet and Errington, 2005) Flexibility The US Small Business Association s Training Program Survey found respondents valued training programs that were customizable and had flexible times, delivery methods, and locations (Berger, et al., 2001) 56% of rural small business owners in Great Britain stated that releasing staff from work was the main constraint to providing any type of employee training (Bennet and Errington, 2005)

15 Business Training Model Review Distance to training site Flexibility in time and delivery method Comfort level and ease of use On-Site or More Localized Technology Training for Small Businesses Industry/topic relevance, business improvement

16 Develop model/ project/program to address issues Identify patterns and issues Implement related to economic development, examine further SMALL BUSINESS TECHNOLOGY TASKFORCE: A MODEL FOR LOCAL IMPLEMENTATION

17 A Model for Local Implementation Can leveraging existing local resources increase the adoption of technology among small businesses? Founded on basic planning process Convene, assess, catalog, organize, and implement Build public-private partnerships

18 A Model for Local Implementation Create a Small Business Technology Taskforce 1. Select organizing entity and gather local stakeholders and resources 2. Assess the need 3. Inventory community technology assets 4. Create partnerships 5. Build awareness 6. Follow-up and support networks

19 1. Select organizing entity and gather local community stakeholders and resources Collaboration and cooperation are key Find a champion, create a taskforce Chamber of Commerce Regional MI-SBTDC offices Regional MEDC staff Local and regional ED orgs. Main Street programs DDAs A Model for Local Corridor Improvement Auth. Local business assoc. MI Smart Zones MI Skills Alliances MI Works offices Local SCORE chapter Implementation Technology/bus. oriented non-profits Community colleges Private-sector technology companies (e.g. web developers, etc.) Community is not defined Organize around a geographic area that ultimately benefits the small business community

20 A Model for Local Implementation 2. Assess the need Understand the current technology adoption and use at a local level Taskforce members interact with small businesses and provide an opportunity to assess their needs 3. Inventory community technology assets Comprehensive list of programs, resources, and organizations and individuals with the interest and skill to train small businesses. Identify capacity and gaps in local technology resources

21 A Model for Local Implementation 4. Create partnerships Identify topical experts to serve as resources for businesses and the taskforce Will need to include hardware and broadband experts for businesses without any technology Build a catalog of training services along a continuum of need Needs Assessment Asset Inventory Identify Gaps Public- Private Partnerships

22 A Model for Local Implementation 4. Create partnerships - Examples High school seniors, needing community service requirement for graduation, help businesses establish social media accounts Local web developer offers 4 hours of free on-site assistance and web development for one-year of hosting subscription Work with local media and communications students to create a video highlighting local businesses and their technology use to help raise awareness and play on local access channels

23 A Model for Local Implementation 5. Build awareness Most oft-cited barrier, we don t need it, or we re getting by without it. Gather stories Provide local examples with local businesses Gather before and after accounts of adoption success Develop one-pagers, post videos on taskforce websites, etc. 6. Follow-up and support networks Transparent diffusion of the needs assessment, case studies, technology resources, and success stories creates an informal network of technology users and support Inclusive and regular peer-to-peer assistance can create sustainable local technology adoption

24 Implement Develop Identify patterns model/ and issues project/program related to economic to development, address issues examine further LESSONS FROM THE FIELD

25 Lessons from the Field Connect Michigan (CM) partnered with the Community Economic Development Association of Michigan (CEDAM) to implement the Small Business Technology Taskforce Four pilot communities were chosen by application CM & CEDAM facilitated a day-long taskforce training session in each community to assist them with establishing their taskforce and identifying their resources and course of action Empowered newly created taskforces to implement projects to raise the local adoption and use of technology among small businesses CM & CEDAM created a toolkit to assist other communities through the taskforce creation process without direct technical assistance

26 Lessons from the Field: Pilot Communities Village of Port Sanilac - Small, rural village on the shore of Lake Huron - Primarily a tourist destination - Some value-added agriculture Clare County - Rural community - Agriculture and tourism heavy - Gateway to northern Michigan St. Clair County - Shares a border crossing with Canada - Large, border city, but mostly rural - Some tourism and agriculture, dying manufacturing sector - High unemployment (19.3% in 2010, down to 12.3% in 2013) - Detroit suburban bleed from the south Barry County - Quite rural, but borders a major metro area to the north - Boxed by major highways, but none crossing the county - Agriculture, resort living, small-scale service and production

27 Lessons from the Field Projects currently underway in pilot communities In-person surveys of local businesses to assess their current technology use Hire interns to organize resources, tabulate surveys, and create a single source of information (directory of services) to help businesses with questions Create a video highlighting local businesses using technology to inspire others to do the same Launch an online and offline awareness campaign for the benefits of technology Host a community-wide small business summit focused on technology to raise awareness and connect businesses with local resources Connect individual businesses with on-site training resources Create a technology makeover competition to help struggling businesses sustain and grow with technology

28 Community Spotlight: Barry County Organizations Involved: Pixelvine Studios Hastings Public Library City of Hastings Hastings Charter Township Diamond Propane Radioshack/Verizon Barry County Telephone Barry County Community Foundation Yankee Springs Township Putnam District Library Message Express Internet Barry County Chamber of Commerce Economic Development Corporation Action Steps: 1. Define taskforce and recruit additional partners 2. Hire an intern 3. Launch awareness campaign 4. Host summit and competition 5. Provide targeted technical assistance

29 Conclusions Michigan has many local organizations dedicated to helping small businesses, but none focus solely on technology Many of these organizations realize the importance of technology for small businesses, but don t know how to address the issue With targeted technical assistance and some education, a partnership of these organizations at a local level can help raise the adoption and use of technology by small businesses

30 Further Work Continued monitoring of technology adoption at state and local levels will provide feedback on program success Currently seeking funding to expand the program beyond the four pilot communities and adjust based on experience Efforts are underway to better inform state policy makers regarding technology adoption among businesses

31 THANK YOU QUESTIONS?

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