Report Touts Positive Impact of Fiber Broadband on Local Economy

On February 7, the Fiber Broadband Association published a case study report, "Fiber Anchors Sustained Economic Development, Charlottesville, Virginia." The report examined the impact of fiber broadband network deployment on the greater Charlottesville area, focusing on three economic indicators: private sector job growth, housing value, and digital microbusiness density. According to the report: "Availability of high-speed, low-latency broadband accounted for roughly 35% of Charlottesville's private sector job growth during 2015-2019." The report also credits fiber deployment with increased housing values in the area. And it emphasized the benefits of fiber for "microbusinesses" that have 10 or fewer employees, a domain, and an active website. The findings of the report are based, at least in part, on a comparison of the economic activity of Charlottesville compared with similar-sized cities in Virginia.  

The economic benefits, including job creation, of next-generation broadband networks is also the subject of previous studies. For instance, other analysts have observed the positive economic impact from deployment of 4G and 5G wireless networks and 5G networks. 

 

Local communities hoping to timely realize the full potential of fiber networks for creating jobs and economic opportunities for their residents – similar to how Charlottesville, Virginia, appears to have benefitted – should have in place wireline infrastructure siting policies, including for access to public rights-of-way, that enable timely permit application processing, with permit fees that limited to covering review and processing costs. 

Report Highlights Mobile Wireless Advancements and the Future of 5G

For info-rich insight into the current state of the mobile wireless market as well as a glimpse at the 5G future, check out GMSA's report, "The Mobile Economy, North America 2019." The report identifies ongoing subscriber migration from 2G and 3G to 4G and, increasingly, to 5G, and the immediate economic opportunities offered by 5G fixed wireless residential broadband and 5G enterprise services. Additionally, the report charts recent and projected capital expenditures and job creation directly as well as indirectly related to wireless services. 

Senate Tax Bill Will Stimulate Maryland’s Economy

Earlier this month, the Tax Foundation published a study on the Senate’s version of the Tax Cuts and Jobs Act, finding that the plan would grow the economy while simplifying the tax code and reducing marginal tax rates.  Using the Tax Foundation’s Taxes and Growth macroeconomic model, the study finds that the proposed tax plan will create 925,000 new full-time equivalent jobs and will increase GDP by 3.7% over the next decade. Accounting for the increase in GDP, after-tax incomes will rise by 4.4%.

The Tax Foundation also published a state-by-state impact analysis of the Senate’s proposed plan. In Maryland, the study projected 17,322 new full-time equivalent jobs over the next decade and an average increase in after-tax income for middle-income families of $3,245. Lower marginal tax rates will complement Governor Larry Hogan’s efforts to reform Maryland’s business climate. This will further stimulate Maryland’s economy and improve its long-term fiscal health.

Maryland Could Be Future Hub of Data Economy

The Center for Data Innovation recently published a report entitled “The Best States for Data Innovation,” ranking the U.S. states on their ability to foster data innovation. The report also discusses how technological advancements, like faster computing, better algorithms, and more robust communication networks, have made it easier to collect, store, analyze, use, and disseminate data. These advancements have led to the emergence of the data economy: an economy in which success depends on how effectively firms can leverage data to generate insights and unlock value.

Maryland ranks third overall among the fifty states and leads in several categories. Given Maryland’s high ranking, if Governor Larry Hogan – with the General Assembly’s help –continues his efforts to improve Maryland’s business climate and fiscal situation, Maryland could become the national hub of the data economy.

Here are some notable categories where Maryland ranks in the top 10:

• Enabling technology platforms: Maryland ranks 1^st.

• Broadband access: Maryland ranks 3^rd.

• The availability of machine-readable data on public-transit systems: Maryland ranks 3^rd.

• Using data to develop human and business capital: Maryland ranks 6^th.

• Maryland has one of the highest percentages of science, technology, engineering, and math (STEM) degrees, ranking 7^th overall.

• Maryland has the highest number of jobs in the country related to statistics and the second highest number of jobs related to data-science.

• Maryland also was one of the first states to enact an open-data policy, allowing residents and businesses to have access to government datasets.

The report says: “The widespread adoption of data analytics and artificial intelligence is expected to contribute hundreds of billions of dollars to U.S. GDP in the coming years in sectors such as finance, transportation, and manufacturing, while unlocking new opportunities to improve outcomes in fields such as education and health care.” For Maryland, fostering data innovation will continue to attract more economic activity and job creation into the state, establishing Maryland as a hub of the data economy and providing innovations in medicine, education, and transportation for its residents.

As I stated in a July 2017 blog, Maryland has struggled with achieving fiscal responsibility in the past. But new leadership under Governor Hogan has started to reform Maryland’s business climate. If successful, efforts to eliminate unnecessary regulations and lower burdensome taxes and fees will attract jobs and economic activity into the state, increase Maryland’s tax base, and reduce its long-term debt. Alleviating the burden of long-term debt for residents and businesses will spur additional economic activity within Maryland and attract more data-intensive businesses that value Maryland’s emerging data economy.

As the report states:

While data-driven innovation is a global phenomenon, some regions are better poised to enjoy the resulting benefits because they have invested in and supported the conditions necessary to succeed in the data economy. This is also true within the United States, where some states are actively building the necessary foundation for a thriving data economy and others are lagging. Decisions made today that affect the extent to which a state participates in the data economy will have long-term implications for its future growth, as data plays an increasingly larger role in many different sectors across the economy. Early adopters will benefit more quickly from using data to address a multitude of challenges, and by positioning themselves at the forefront of data-driven innovation; they also will be able to grow and attract data-driven companies in a wide range of sectors that will make them the future hubs of the data economy.

The Center for Data Innovation’s report says that some of Maryland’s high-level statisticians and data-scientists may reside in the state for federal government employment. Nevertheless, with this valuable resident workforce, Maryland’s data economy already has an advantage over other states. Governor Hogan and the Maryland General Assembly should continue to reduce regulatory and tax barriers that could inhibit data-intensive businesses from locating in the state.

Governor Hogan and other state leaders should be commended for their efforts to foster data innovation within the state. State leaders should be proud, but not content, with Maryland’s 3^rd overall ranking. There is no reason why Maryland cannot become the United States’ future hub of the data economy.