TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
By: Neal Pierce
The phrase “ISO standard” is something you might find on the base of a light bulb, under your computer keyboard or in the owner’s manual for your refrigerator. It means that these products are made in a way that complies with international standards of quality and compatibility. There are ISOs for financial management, electrical engineering, chemical technology—you name it.
But now, the first-ever set of ISO standards for world cities has been created. And the implications are dramatic. City policymakers will have objective standards to compare their services and performance with other cities around the world. And just as significant, the people of cities—civic, business organizations, ordinary citizens—will be able to access the same new global standards. This means they can ask city leaders tough questions, stoking debate about their own city’s performance on the basis of verified measures ranging from education to public safety to water and sanitation.
The late May start-up list of city indicators by the Geneva-based International Organization for Standardization seems, at a glance, straightforward enough. What’s the particulate matter in a city’s air? Debt service as a percentage of the city’s own revenue? Average life expectancy? Green area per 100,000 residents? The percentage of the city population with regular solid waste collection? The share of the city population that lives in slums?
But many cities, up to now, haven’t recorded data on all those indicators. Or if they did, they were inconsistent in their precise definitions, making it difficult to make apples-to-apples comparisons of cities across continents and diverse societies. Many organizations, in independent media and special interest groups, issue rankings of cities. But in 2008, when the Global Cities Indicators Facility at the University of Toronto compared rankings that had been applied to seven prominent world cities, it turned out that only six of the 1,200 indicators being applied were exactly the same.
Now, cities everywhere will have an internationally agreed upon set of standards indicating data that should be collected, and the definitions and criteria to use in collecting it. They won’t be legally required to do so, but they’re likely to be under pressure from citizen, business, academic and other groups insisting they use the ISO standards so that their performance can be benchmarked clearly against peer cities, both in-country and—in today’s increasingly globalized economy—across the globe.
“It’s a potential game changer for world cities and everyone who works for cities, for journalists evaluating city performance, for the World Bank in determining grants and more,” notes Dan Hoornweg, a former World Bank official, professor at the University of Toronto and an early proponent of world city standard setting.
Global game changer
The goal, say Hoornweg and other supporters, is to encourage higher levels of city service delivery by making the data open and transparent. The need to collect and verify data could improve cities’ credit and bond ratings, appealing to investment decision-makers. Cities that show high performance will be able to argue more forcefully for higher national government assistance and tax sharing.
Conversely, the system could make politically motivated manipulation of data tougher and inefficiencies in city policies and administration more difficult to hide.
The ISO organization is hailing the new standards as a significant breakthrough. Cities, notes ISO Deputy Secretary General Kevin McKinley, share many patterns of behavior “regardless of geography, politics or economic model.” He contends that the new standard, officially known as ISO 37120, establishes a uniform approach to what’s measured and how— “a cornerstone of needed consistency and confidence to improve our cities.” But, he adds, “the standard doesn’t spit out a value judgment on what a particular city should choose as targets. Instead the standard helps provide more consistent expressions of city performance and quality of life.”
Initial city response to the new standards for cities seems positive. “There’s never been a time where it’s been more important to understand how we as a global city compare with other cities,” says Andrew Collinge, assistant director for intelligence and analysis at the Greater London Authority. “We can learn from them and actually use data so we can address challenges facing all of our cities.”
Another city that is excited about the news of the ISO standard is Minna, Nigeria. “To us in Minna, this is an important milestone in city management,” says Abdul Husaini, a town planner and geospatial analyst in Minna. “The presence or absence of information on an indicator is in itself an indication of the adequacy of basic services in a city.”
Rotterdam, notes Nico Tillie, an indicators expert there, strives to be an attractive, resilient, economically successful city. But, he adds, “How do we perform? If we want to improve, we need to know why we rank 3 or 50. If you can’t measure it, you can’t manage it.” But in a study Tillie worked on with the Delft University of Technology, the researchers found that verified and standardized third-party data not only was missing from the rankings but in many cases the entire ranking process was performed in “a black box” without clear definitions. This made it totally impossible to analyze the data outcomes.
New World Council on City Data
London, Minna and Rotterdam, plus a dozen other cities including Shanghai, Dubai, Chicago, Johannesburg and Buenos Aires, are inaugural members of a body called the World Council on City Data. Launched at a Global Cities Summit in Toronto in late May, the council will play the important role of verifying that cities are collecting the right data the right way. The council intends to be “a global hub for cities, international organizations, corporations and academia,” sharing ideas for city performance improvement broadly.
The path to an ISO standard aimed at broad global city buy-in was not an easy one. Supporters acknowledge a heroine behind the story—Patricia McCarney, director of the University of Toronto’s Global Cities Indicators Facility, who has made creation of good global data on cities an all-consuming goal for close to a decade.
The project began in 2008, McCarney relates, when Hoornweg and his World Bank colleagues approached her to start working on a uniform set of indicators for cities. Nine pilot cities, including Bogotá, Toronto, São Paulo and Belo Horizonte helped to devise a list of some 115 initial indicators. Over time the number of participating cities would rise to 258 across 82 countries.
But as McCarney and her allies pushed forward on the project, it became clear that independent audits including ISO-like third-party verification of the data would be critical to its acceptance. ISO central in Geneva was approached in 2011 and initially seemed lukewarm to the idea. But as French, Japanese and Canadian bodies showed interest in some form of city standards management, that changed.
A technical committee was formed. With McCarney’s institute acting as a de facto secretariat, meetings were held in urban centers from Japan to France and Britain to Canada. Comments were received from cities worldwide— “fantastic for us, really strengthening the set of indicators we started with back in 2008,” notes McCarney. The analysis winnowed down and rejuggled the list to 100 candidate indicators. Finally, 46 (see them all here) were selected as well-tested core measures that cities must report to prove they’re in conformance with the new ISO 37210 standard.
“Now Geneva is fully behind us,” says McCarney. “Usually an ISO process takes six years. We did it in two. They took a big leap of faith with us.”
And, she notes, there’s been a big change in cities’ attitudes about releasing data on their performance indicators. “In the early days when we were testing and fine-tuning,” she notes, “cities were willing to give us data confidentially and share it with other cities. But they were very uncomfortable releasing it to the public.” But, she notes, cities seem more comfortable opening up this sort of data now and making it public, as it will be under the ISO standard.
Plus, McCarney observes, “researchers in universities and international agencies can now access the data—for analytics, for visualization, for performance analysis,” in a way never before possible.
Looking forward, the ISO city crafters are considering new measures focused on risk and resilience for cities. Indicators might include such things as the presence of early warning systems focused on such threats as stormwater surges and tornados, or seismic preparedness in cities prone to earthquakes. Both for the initial and added measures, auditors in each case will check the data to ensure that the definitions and methodologies in the formal ISO 37210 standard are being followed.
Most of the new city ISO standards apply all across the globe—for example the number of police officers or firefighters per 100,000 population are equally applicable in a Toronto or a Bogotá. But developed-world city standards, for such services as fresh water supply and sanitation services, are tough for developing-world cities of Asia, Africa and Latin America that have fast-filling slums triggered by cascading levels of immigration from poor rural migrants.
European and North American cities did, McCarney notes, “have a strong voice” in planning sessions for the new standards. But “we were very careful,” she asserts, to include special recognition of the conditions developing-world cities face in many of their poorest neighborhoods— “what’s possible for them, what they can report on.”
Another concept the process is encouraging is a focus on “peer” cities. London, New York and Tokyo, for example, may be in a class to themselves, notwithstanding their geographic separation. Toronto’s best global match may be halfway across the globe in Melbourne.
And the expanding data collection possibilities may, over time, identify more global peers—and exchanges—between cities. Potential advocates range from business and citizen groups within individual cities to globally active consulting groups and NGOs, all debating and pushing for expanded standards that correspond to their missions.
“With the initial ISOs, the city-standards issue has made a big leap forward,” says Hoornweg. “But now that the process is launched, it’s sure to spread widely.”
MORE: Here are the 46 performance measures the world’s cities will be judged by.
By: Ben Schiller
Via: Fast Company
Citizens can support their cities like never before on platforms like Kickstarter. Here’s a look at what makes a winning civic campaign.
Citizens can support their cities like never before on platforms like Kickstarter. Here’s a look at what makes a winning civic campaign.
While most of the action in crowdfunding has been around private entrepreneurial projects, recently there’s been growing interest in Kickstarter-like campaigns for civic ideas. Sites such as Citizinvestor, Neighbor.ly, and IOBY let governments or individuals propose projects like parks, swimming pools, and festivals and potentially open up whole new sources of investment for public goods.
Rodrigo Davies, a researcher with MIT’s Center for Civic Media, has been tracking civic crowdfunding here in the U.S. and around the world and recently released a 173-page report on his findings. We asked him for his take on these projects so far, and where the field might go in the future.
Civic crowdfunding is small, but successful
Davies focused on seven platforms–four in the U.S and one each in the U.K., Spain, and Brazil–and identified 1,224 civic campaigns between 2010 and March 2014. In total, they raised $10.74 million–$6,357 on average. The projects tended to be small in dollar amounts but successful in meeting their goals compared to other categories. Projects labeled “civic” on Kickstarter were fully funded 81% of the time, for instance.
Parks and gardens the most common projects
Greenspaces were the most common civic projects, a fact Davies puts down to three factors. One, communities are used to volunteering for parks and gardens, so crowdfunding isn’t a big step. Two, greenspace projects (like temporary “parklets”) are quick to execute, unlike real estate projects. And three, greenspaces are uncontroversial: Most people want their neighborhood to be greener.
“People will crowdfund projects that are sexy and eye-catching,” Davies says. “But then there are lots of services that aren’t those things but are still essential. Would we see people crowdfund a drug rehabilitation clinic, for example? It’s hard to believe that someone could pull it off. It’s no coincidence that we’ve started with the uncontroversial projects.”
In the future, Davies expects to see more brick and mortar projects, though. For example, campaigns could try to find new uses for disused buildings, like a campaign in Oregon that sought to re-open an old tavern. (A site in Italy is doing something similar).
It’s a few big cities so far, but that could change
Up to now, civic crowdfunding has been dominated by major cities, such as New York, San Francisco, and London. But Davies sees that changing. Or at least he hopes. “There’s a lot of potential to shake up other types of communities–places that have been overlooked and have found it hard to raise resources,” he says.
Governments have a choice of roles
Perhaps the most interesting question is what role governments will play. Davies sees four possibilities. One, they can champion projects on existing platforms, as the New York City Council does on Kickstarter. Second, they can run their own campaigns or even set up their own platforms (both of which may require more resources). Or, they can play more of a “facilitation” role, helping along citizen financing without being directly responsible for it.
Davies sees the last option as the most useful and feasible. He points, for example, to San Francisco’s Living Innovation Zones initiative, which has identified free space along Market Street and seeks community ideas for what it could be used for. Its first project, co-ordinated by the Exploratorium museum, ran an Indiegogo campaign last year, showing how that could have a role. “It really opens up public-private partnerships to a whole range of people who otherwise wouldn’t participate,” Davies says. “And, from the government’s point of view, they don’t need to take much risk or invest too much money.”
End of government or new type of government?
In theory, crowdfunding takes pressure off governments to come up with project money. But Davies prefers it when citizens initiate ideas, rather than officials. If it’s the latter, people might reasonably ask why they are already paying taxes for public services, and wonder if they should keep paying them.
Similarly, if governments sit back from campaigns, they may be accused of shirking responsibility and letting citizens eat cake. “I hope governments engage and see it as an opportunity to remake towns and cities,” Davies says.
By: Alexandria Icenhower
Innovation districts are geographic areas where leading-edge institutions and companies cluster and connect with start-ups, business incubators, and accelerators. These areas are usually physically compact, transit-accessible, and technically-wired. They also offer mixed-use housing, office, and retail space. Innovation districts create an atmosphere for job growth and help people connect across various sectors, generate new ideas, and accelerate commercialization.
The project is part of a $2 billion buildout plan that has already created 2,850 direct jobs to date and has sparked 1.5 million square feet of office and research space, housing, infrastructure, and retail in the Cortex area of St. Louis.
Research Triangle Park’s 50-year master plan calls for a greater concentration of buildings and amenities and possible construction of a light-rail transit line.
More than 200 technology, life science, and other companies have now moved into the Innovation District in South Boston, adding over 6,000 jobs to date.
The member institutions from Pennsylvania, New Jersey, and Delaware are leveraging their assets in teaching, research, and medicine to build the area as a hub of innovation and entrepreneurship.
Learn more about the innovation districts report by Bruce Katz and Julie Wagner here.
By: Richard Florida
Via: The Atlantic Cities
America’s biggest metros are getting bigger, accounting for a disproportionate share of U.S population growth, according to new population estimates covering the period up to July 2013, released Thursday by the Census Bureau.
While most of the initial coverage of the report has focused on the year-long period from July 2012 through July 2013, I decided to look at the trends over the longer 2010-2013 period, which more or less coincides with the economic recovery. With the help of my Martin Prosperity Institute colleague Charlotta Mellander, I examined the rate of population growth across five key categories of metro size. (See the chart below).
The pattern is striking. Large metros (those with more than a million people) registered the fastest growth by far, 3.2 percent. This explosive growth, in large part due to their capacity to attract immigrants, is considerably better than the 2.4 percent growth rate for the U.S. as a whole. Medium size metros, those with between 500,000 and a million people, grew just a bit faster than the nation as a whole, at 2.5 percent. Metros with between 350,000 and 500,000 people grew at slightly below the national rate, 2.3 percent, while metros with less than 250,000 people grew at just 1.7 percent. And the nation’s smallest geographic units, its 536 micropolitan areas, grew on average just 0.2 percent. More than half of them (286) saw their populations either decline or register no increase whatsoever between 2010 and 2013.
And when we zoom in on which of these specific metros that are gaining and losing population, it’s clear that America’s new geography is increasingly defined by the two pillars of recovery – knowledge and energy – that I initially defined in a piece for the Atlantic this fall.
Of large metros, Austin – a leading knowledge and tech hub – saw the largest percentage increase in population, growing by 9.7 percent between 2010 and 2013. Raleigh, an anchor of the North Carolina Research Triangle, grew 7.4 percent. Houston, San Antonio, Orlando, Denver, and Dallas each grew 6 percent or more.
Some of the fastest growing areas of the country were in the energy belt stretching from Texas up through the Dakotas. Midland and Odessa, Texas; Bismarck and Fargo, North Dakota; and Casper, Wyoming all saw 2010 to 2013 population growth rates of 7 percent or higher. College towns like Auburn, Alabama; Provo, Utah; Durham, North Carolina; and Boulder, Colorado also registered gains at more than twice the national average.
On the flip side, Rustbelt metros continue to see population stagnate or in some cases even decline slightly. Cleveland and Buffalo saw the slowest population growth of large metros, losing small numbers of people, while population virtually stagnated in Detroit, Providence, Pittsburgh, Hartford and Rochester. Pittsburgh and Cleveland saw small population losses in the more recent 2012-13 period.
Once booming Sunbelt metros, where populations exploded alongside suburban sprawl in previous decades, saw their population growth slow substantially from 2010 to 2013. Las Vegas grew by 85 percent in the 1990s, making it America’s fastest growing, and more than 40 percent in the 2000s. But Vegas saw its population growth slow to 3.9 percent between 2010 and 2013, placing it 75th among all metros. Phoenix, which grew by 45 percent in the 1990s (and where population growth topped 4 percent a year for nearly four decades), saw its population growth rate decline to 4.9 percent in 2010-13, leaving it 49th of all metros.
All told, 40 percent of U.S metros (156 of 383) saw their populations grow faster than the national average, while 51 metros grew at twice the national rate, and 13 metros grew at three times the national rate. Seventy-two metros lost population over this period, most of them smaller metros in the Rustbelt and old South.
America continues to see population growth around the twin pillars of its knowledge-energy economy. Many hard hit industrial metros of the Rustbelt continue to stagnate or decline, and the growth of the sprawling, housing-driven metros of the Sunbelt has slowed considerably from the boom years.
Most of all, size clearly seems to matter. America’s biggest metros registered not only the largest absolute increases but also the largest percent gains.
By: Rob Sentz
Click here to see the interactive map
Which industries are the top drivers of job growth for each of the 100 largest U.S. markets? Which metros have added the most jobs post-recession? Which metros have the biggest concentration of jobs in healthcare, technology, construction, manufacturing, energy and other top fields?
The U.S. economy is composed of hundreds of industries that are spread across thousands of counties, and the interactions of these industries are huge engines for job formation and economic prosperity.
CareerBuilder and EMSI have teamed up to create a powerful interactive map that applies big data to visualize the enormous size, scope and diversity of the U.S. economy. The map uses EMSI’s rich labor market database of over 90 national and state employment resources to identify key industries that are driving job growth for the 100 most populous U.S. metros. 1
Viewers can click on each metro and the map reveals 10 of the most important detailed industries for that location, based on number of 2013 jobs, job growth since 2010 and job concentration. From well-known economic forces (e.g., finance in New York City and aerospace products and parts manufacturing in Seattle) to emerging sectors (e.g., motor vehicle body and trailer manufacturing in Nashville and data processing and hosting in San Antonio), the map provides comprehensive – and often surprising – insights.
Viewers can also click on an industry menu to see a list of metros where a specific industry is a major economic driver.
“Since 2010, the national workforce has grown four percent, but more than 40 large metros have eclipsed the national growth rate,” said Matt Ferguson, CEO of CareerBuilder. “These are metros with a strong concentration of computer systems design, software publishing and data processing and hosting firms. These are metros benefiting from the resurgence in U.S. manufacturing, and the nation’s need to find new energy sources and expand healthcare services.”
In a separate study of the same 100 metros, CareerBuilder and EMSI discovered which metros have added the most jobs per capita post-recession:
1. Salt Lake City, UT – added over 62,000 jobs since 2010, up 9% (534 new jobs per 10,000 people)
Originally a farming community, Salt Lake City has grown into an industrial center for the state. Industries that have experienced strong job growth in this metro include electronic shopping and mail order houses (up 43%), software publishing (up 28%), specialized freight trucking (up 23%) and credit intermediation (up 22%).
2. Grand Rapids-Wyoming, MI – added over 39,000 jobs since 2010, up 10% (513 new jobs per 10,000 people)
This manufacturing heavyweight has benefited from the rebound of production jobs after the recession. The metro saw job increases in various manufacturing segments such as plastics product (up 35%), motor vehicle parts (up 33%), metalworking machinery (up 30%) and office furniture (up 12%). Hospitals also accounted for an upswing in jobs (up 16%).
3. San Jose-Sunnyvale-Santa Clara, CA – added over 91,000 jobs since 2010, up 10% (498 new jobs per 10,000 people)
It’s no surprise that software publishing (up 30%), computer systems design (up 19%), data processing and hosting (up 16%), computer manufacturing (up 12%) and scientific research (up 9%) are big contributors to employment for this Silicon Valley metro.
4. Austin-Round Rock- San Marcos, TX – added over 90,000 jobs since 2010, up 11% (488 new jobs per 10,000 people)
Austin has made a name for itself as a technology and business hub, fueling job growth in management, scientific and consulting services (up 35%), computer systems design (up 35%), data processing and hosting (up 35%) and semiconductor manufacturing (up 17%).
5. Houston-Sugar Land-Baytown, TX – added over 281,000 jobs since 2010, up 10% (451 new jobs per 10,000 people)
Energy-rich Houston continues to see job growth in utility system construction (specifically, oil and gas pipeline, up 45%), mining support (up 38%), metal and mineral (except petroleum) wholesalers (up 31%), oil and gas extraction (up 25%), and architectural and engineering services (21%).
6. Nashville-Davidson-Murfreesboro-Franklin, TN – added over 71,000 jobs since 2010, up 9% (432 new jobs per 10,000 people)
A popular music center, Nashville saw a 25% increase in jobs for independent artists, writers and performers. The metro also saw notable jumps in jobs for motor vehicle manufacturing (up 61%), accounting services (up 37%), general freight trucking (up 17%) and specialty hospitals (up 15%).
7. Provo-Orem, UT – added over 24,000 jobs since 2010, up 12% (427 new jobs per 10,000 people)
The mid-sized Utah metro is well concentrated in a number of fast-growing tech industries: software publishing (up 51%), computer systems design (up 30%) and semiconductor manufacturing (up 14%).
8. Dallas-Fort Worth-Arlington, TX – added over 267,000 jobs since 2010, up 9% (400 new jobs per 10,000 people)
Part of the Silicon Prairie, Dallas saw a boost in jobs in computer systems design (up 32%) and communications equipment manufacturing (up 18%). Other key growth areas include oil and gas extraction (up 27%), office administration (up 22%) and credit intermediation (up 13%).
9. Bakersfield-Delano, CA – added 33,000 jobs since 2010, up 11% (394 new jobs per 10,000 people)
Growth in this metro has been fueled by agriculture-related industries such as crop production (up 14%) and dairy product manufacturing (up 11%). Bakersfield has also benefited from an upswing in utility system construction (specifically, oil and gas pipeline), an industry that has more than doubled in employment since 2010 and is nearly seven times as concentrated in Bakersfield than the national average.
10. Charlotte-Gastonia-Rock Hill, NC-SC – added over 70,000 jobs, up 8% (381 new jobs per 10,000 people)
In addition to spectator sports (up 37%), this metro also experienced growth in tech-related industries such as telecommunication carriers (up 31%), management, scientific and consulting services (up 22%), scheduled air transportation (up 17%) and data processing and hosting (up 14%).
Meanwhile, the poorest-performing labor markets are in Scranton–Wilkes-Barre and Albuquerque, both of which have roughly the same number of workers today as they did in 2010. Ten other metros, headlined by Providence, Dayton, and Syracuse, have only grown 1 percent.
The map also reveals pockets of the U.S. where key industries are clustered among the largest cities:
Oil and gas extraction is a major driver of high-wage job growth in Texas, Oklahoma and the surrounding region. It’s also becoming a driver of job growth in Denver.
General freight trucking is concentrated in the Mid-Atlantic and Southeast (Nashville, Memphis, Jacksonville, etc.), where transportation routes are plentiful and huge population centers are in close range.
Software publishing has a big presence in Silicon Valley, but is also growing in major markets such as Seattle, Boston, Atlanta and Denver.
General medical and surgical hospitals are driving jobs in Columbus, Chicago, Baltimore, Boston, Rochester and St. Louis, among others.
Highway, street and bridge construction has seen an uptick in jobs in Baton Rouge, Oklahoma City and San Antonio as cities rebuild after natural disasters and address other public concerns.
CareerBuilder and EMSI are national leaders in providing labor market data and tools to dig deeper and better understand national and local economies.
1 EMSI data is collected from more than 90 federal and state sources, such as the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and state labor departments. EMSI removes suppressions often found in publicly available data and includes proprietors, creating a complete picture of the workforce.
Economic Modeling Specialists Intl., a CareerBuilder company, turns labor market data into useful information that helps organizations understand the connection between economies, people, and work. Using sound economic principles and good data, we build user-friendly services that help educational institutions, workforce planners, and regional developers build a better workforce and improve the economic conditions in their regions. For more information, visit www.economicmodeling.com.
CareerBuilder is the global leader in human capital solutions, helping companies target and attract great talent. Its online career site, CareerBuilder.com®, is the largest in the United States with more than 24 million unique visitors, 1 million jobs and 50 million resumes. CareerBuilder works with the world’s top employers, providing resources for everything from employment branding and talent and compensation intelligence to recruitment solutions. More than 10,000 websites, including 140 newspapers and broadband portals such as MSN and AOL, feature CareerBuilder’s proprietary job search technology on their career sites. Owned by Gannett Co., Inc. (NYSE:GCI), Tribune Company and The McClatchy Company (NYSE:MNI), CareerBuilder and its subsidiaries operate in the United States, Europe, South America, Canada and Asia. For more information, visit www.careerbuilder.com.
By: Edward Wyatt
Via: The New York Times
CHATTANOOGA, Tenn. — For thousands of years, Native Americans used the river banks here to cross a gap in the Appalachian Mountains, and trains sped through during the Civil War to connect the eastern and western parts of the Confederacy. In the 21st century, it is the Internet that passes through Chattanooga, and at lightning speed.
“Gig City,” as Chattanooga is sometimes called, has what city officials and analysts say was the first and fastest — and now one of the least expensive — high-speed Internet services in the United States. For less than $70 a month, consumers enjoy an ultrahigh-speed fiber-optic connection that transfers data at one gigabit per second. That is 50 times the average speed for homes in the rest of the country, and just as rapid as service in Hong Kong, which has the fastest Internet in the world.
It takes 33 seconds to download a two-hour, high-definition movie in Chattanooga, compared with 25 minutes for those with an average high-speed broadband connection in the rest of the country. Movie downloading, however, may be the network’s least important benefit.
“It created a catalytic moment here,” said Sheldon Grizzle, the founder of the Company Lab, which helps start-ups refine their ideas and bring their products to market. “The Gig,” as the taxpayer-owned, fiber-optic network is known, “allowed us to attract capital and talent into this community that never would have been here otherwise.”
Since the fiber-optic network switched on four years ago, the signs of growth in Chattanooga are unmistakable. Former factory buildings on Main Street and Warehouse Row on Market Street have been converted to loft apartments, open-space offices, restaurants and shops. The city has welcomed a new population of computer programmers, entrepreneurs and investors. Lengthy sideburns and scruffy hipster beards — not the norm in eastern Tennessee — are de rigueur for the under-30 set.
“This is a small city that I had never heard of,” said Toni Gemayel, a Florida native who moved his software start-up, Banyan, from Tampa to Chattanooga because of the Internet speed. “It beat Seattle, New York, San Francisco in building the Gig. People here are thinking big.”
But so far, it is unclear statistically how much the superfast network has contributed to economic activity in Chattanooga over all. Although city officials said the Gig created about 1,000 jobs in the last three years, the Department of Labor reported that Chattanooga still had a net loss of 3,000 jobs in that period, mostly in government, construction and finance.
EPB, the city-owned utility formerly named Electric Power Board of Chattanooga, said that only about 3,640 residences, or 7.5 percent of its Internet-service subscribers, are signed up for the Gigabit service offered over the fiber-optic network. Roughly 55 businesses also subscribe. The rest of EPB’s customers subscribe to a (relatively) slower service offered on the network of 100 megabits per second, which is still faster than many other places in the country.
Some specialists say the low subscriber and employment numbers are not surprising or significant, at least in the short term. “The search for statistical validation of these projects is not going to turn up anything meaningful,” said Blair Levin, executive director of Gig.U, a high-speed Internet project that includes more than three dozen American research universities. Mr. Levin cited “Solow’s paradox,” the 1987 observation by Robert M. Solow, a recipient of the Nobel in economic science who wrote that “you can see the computer age everywhere but in the productivity statistics.”
Such is the case with many new technologies, Mr. Levin said. No one is going to design products that can run only on a one-gigabit-per-second network if no such networks exist, he said. But put a few in place, he added, and soon the supply of applications will drive a growing demand for the faster connections.
Chattanooga’s path to Gig City is part of a transformation that began long before most Americans knew the Internet existed. Named America’s most-polluted city in 1969 because of largely unregulated base of heavy manufacturing, Chattanooga has in the last two decades cleaned its air, rebuilt its waterfront, added an aquarium and become a hub for the arts in eastern Tennessee. In more recent years, an aggressive high-tech economic development plan and an upgrade of the power grid by EPB moved Chattanooga toward the one-gigabit connection.
In 2009, a $111 million federal stimulus grant offered the opportunity to expedite construction of a long-planned fiber-optic network, said David Wade, chief operating officer for the power company. (EPB also had to borrow $219 million of the network’s $330 million cost.) Mr. Wade said it quickly became apparent that customers would be willing to pay for the one-gigabit connection offered over the network.
Chattanooga has been joined in recent years by a handful of other American cities that have experimented with municipally owned fiber-optic networks that offer the fastest Internet connections. Lafayette, La., and Bristol, Va., have also built gigabit networks. Google is building privately owned fiber systems in Kansas City, Kan.; Kansas City, Mo.; and Austin, Tex., and it recently bought a dormant fiber network in Provo, Utah.
The systems are the leading edge of a push for ever-faster Internet and telecommunications infrastructure in a country that badly lags much of the world in the speed and costs of Web connections. Telecommunications specialists say that if the United States does not keep its networks advancing with those in the rest of the world, innovation, business, education and a host of other pursuits could suffer.
Even so, few people, including many who support the systems, argue that everyone in the country now needs a one-gigabit home connection. Much of the public seems to agree. According to Federal Communications Commission statistics, of the households where service of at least 100 megabits per second was available (one-tenth as fast as a gigabit), only 0.12 percent subscribed at the end of 2012. In Chattanooga, one-third of the households and businesses that get electric power from EPB also subscribe to Internet service of at least 100 megabits.
But just as few people a decade ago thought there would be any need for one terabyte of data storage on a desktop computer (more than 200 million pages of text, or more than 200 movies), even the most prescient technology gurus have often underestimated the hunger for computer speed and memory.
Fiber-optic networks carry another benefit, which is the unlikelihood that a potentially faster network will come along soon. Fiber optics can transmit data at close to the speed of light, and EPB officials say the technology exists for their network to carry up to 80 connections of 10 gigabits per second at once.
Those who use Chattanooga’s one-gigabit connection are enthusiastic. Mr. Gemayel, the Florida native who moved Banyan here from Tampa, first passed through Chattanooga in 2012, when he heard about an entrepreneurial contest sponsored by The Company Lab with a $100,000 prize. Banyan, which was working on a way to share real-time editing in huge data files quickly among far-flung researchers, won the contest. Mr. Gemayel returned to Tampa with his check.
But once there he discovered that his low-bandwidth Internet connection was hampering the development of his business. By the beginning of 2013, he had moved to Chattanooga.
Other companies have become Gig-related successes. Quickcue, a company that developed a tablet-based guest-management system for restaurants, began here in 2011 and over the next two years attracted about $3 million in investments. In December, OpenTable, the online restaurant reservations pioneer, bought Quickcue for $11.5 million.
Big technology dreams do not always pan out, of course, and Chattanooga is familiar with failed experiments. The city spent millions of dollars in the last five years to build a citywide Wi-Fi network, known as the “wireless mesh,” intended for use by residents and city agencies. It sits largely unused, and its utility has largely been usurped by 4G wireless service.
Few people here would say that the Gig has even begun to be used to its fullest. “The potential will only be capped by our selfishness,” said Miller Welborn, a partner at the Lamp Post Group, the business incubator where Banyan shares office space with a dozen other start-ups. “The Gig is not fully useful to Chattanooga unless a hundred other cities are doing the same thing. To date, the best thing it’s done for us is it put us on the map.”
For all the optimism, many boosters are aware there are limits to how far the Gig can take the city, particularly as it waits for the rest of the country to catch up.
“We don’t need to be the next Silicon Valley,” Mayor Andy Berke said. “That’s not who we’re going to be, and we shouldn’t try to be that. But we are making our own place in the innovation economy.”
Correction: February 7, 2014
An article on Tuesday about the high-speed broadband Internet service available in Chattanooga, Tenn., misspelled, in some editions, the surname of the co-founder of Banyan, a software start-up that moved there to take advantage of the fast connection. He is Toni Gemayel, not Gemeyal.