Why being in the middle of nowhere is smarter than it used to be
Just as mass production moved into rural areas after its invention in cities, so too may high tech services move into the countryside as broadband spreads out into sparsely populated areas. Robert Bell identifies the beginnings of this promising new long-term trend.
Cities have been with us for several thousand years, and we understand their magic very well. They attract people, which makes them engines of commerce, which in turn attracts money and more people, as well as giving rise to invention, innovation and entrepreneurship. As urban booster Richard Florida put it in a September 2011 article in The Atlantic, "Cities are our greatest invention, not because of the scale of their infrastructure or their placement along key trade routes, but because they enable human beings to combine and recombine their talents and ideas in new ways."
It's all true, and likely to remain true for another few thousand years. And yet there are other trends stirring that I believe will temper the natural advantages of big cities and offer small, remote and rural places opportunities they have not yet seen. We are in the early stages of this transformation, but the outlines are becoming visible.
Foremost among these trends is that internet services in rural areas can now be delivered at broadband speeds in many countries. Initially the stellar success of broadband as a technology has favoured urban density, because private carriers find a much better business case in a location where subscribers are stacked cheek by jowl, rather than separated by kilometres. But as with highways, the telegraph, the telephone and electricity, rural areas eventually catch up. Market failures to deliver service are eventually corrected by government intervention. That is how Mitchell, South Dakota succeeded in building a fibre-to-the-home network in an American city of only 17,000. It is how Taichung, Taiwan managed to extend high-speed wireless to the 30% of its 2.6 million people who live in rural, mountainous areas. It is how the arts-and-culture city of Stratford, Ontario drove development of a hybrid fibre-wireless netework to bring data centres and a new university campus to town while giving its historical Shakespeare Festival the bandwidth it needs for global online marketing.
Wherever the broadband playing field is leveled between urban and rural, different dynamics begin to arise. The leaders of small cities and remote counties start thinking like their big-city counterparts. They uncover what they are naturally good at and adapt it to the demands and opportunities of the 21st century. In Mitchell, they are using information and communications technology to bring farming into a future of "precision agriculture" that boosts yields, cuts costs and reduces environmental impact. In Stratford they are creating a digital media cluster from the ground up, drawing on the content of the festival to persuade a prestigious university to create a digital media programme in their downtown. In yet another rural town, Bristol, Virginia, a decision to fight incumbents for the right to deliver broadband cost taxpayers $2.5m but led to $10m in cost savings, retention of major employers and the attraction of software and data centre companies to a place where coal and tobacco were once the major employers.
A long-term trend to watch
Are these just nice stories of local success, or is there really something significant taking place? At the Intelligent Community Forum (ICF) we established a programme called the Rural Imperative (ruralimperative.com) to find out. We are documenting stories of change, innovation and progress where information and communications technology is being used to substitute for the density and sheer size that contribute so much to urban success. But in addition to anecdotes, there are some mega-trends that city watchers may want to pay attention to over the next several years.
Economist Paul Krugman won the Nobel prize for economics for his work on the "new economic geography". In his acceptance speech, he said that the clustering effects he had written about 20 years earlier were diminishing in strength. ICF senior fellow Norman Jacknis argues based on several analyses that the characteristics of a business, rather than location or clustering, account for the lion's share of its success. This year's headline example is the BATS exchange located in Lenexa, population 50,000, an outer suburb of Kansas City. It has become the fastest growing stock exchange in the world at a time when the New York Stock Exchange has lost about half of its former market share. What an exchange needs to succeed is cheap, powerful and reliable computing, talent and vast amounts of communications bandwidth. Lenexa seems able to provide all three.
Jones Lang LaSalle, the global real estate company, predicted in a 2011 analysis of commercial office space that the 200 sq ft (18.6 sq m) per employee ratio currently used to calculate space needs would, within two years, drop to 50 sq ft. Why? Because so many employees are, finally, no longer in the office. They are geographically dispersed but intimately connected to the network that is the new backbone of the enterprise.
In a 2007 report, the UN Population Fund predicted that while megacities would be dominant, urban growth in the developing world would be much less extraordinary than the forecasts of the 1970s suggested. By 2011 the UN Department of Economic and Social Affairs reported that the growth in urbanisation would drop from the previous average annual rate of 2.6% in the period 1950-2011, to 1.7% during 2011-2030, and decline further t 1.1% in 2030-2050.
Put it all together and you have the outlines — still dimly drawn and fragmentary — of a new kind of rural evolution. The sharp dividing line between big and little cities, between dense urban and spacious rural areas, is fading just a bit. The middle of nowhere? It's a smarter place to be than it used to be.