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ECONOMIC DEVELOPMENT Broadband for Gazelles Community infrastructure investments should help young, fast-moving companies grow, thrive and return wealth to the community. By Ken Demlow and Tom Chapman / Beehive Industries W hen communities spend signifcant amounts of money on infrastructure for high-capacity, high-speed broadband, economic development is often very high on the list of things they are trying to improve – and it will certainly remain a top priority. However, not all communities are clear about what they mean by economic development. Before making decisions about infrastructure, they should clarify their economic development goals. Tough most communities believe economic development is about jobs and investment, many thoughtful communities are moving to a slightly diferent view. For them, economic development is really about wealth creation within a community. Jobs and investment may have difering impacts, but wealth remains steadfast. When companies create local wealth, most community leaders are pleased and proud. Economic development projects that create local wealth don't produce the hangover efects that may arise from "good projects" that do not create high-paying or numerous jobs. Many communities can point to projects that were supposed to be great but did not live up to their advance billing. A good example of a company that consistently creates local wealth is Nucor Steel, which operates in many locations around the United States. Tis company has excellent proftability and work practices, and it pays its local employees and managers well. It contributes to local charities. Numerous companies do not have this same track record for 94 | BROADBAND COMMUNITIES | www.broadbandcommunities.com successful community and wealth development – even when they create a lot of jobs or have signifcant investment. From a community perspective, it makes sense to ask why. Tis is a metrics problem. Most communities translate their metrics into goals rather than understanding that the underlying goal is very difcult to measure. How do you measure wealth creation? You really can't. Instead, communities try to use jobs and investment as proxy measures for this underlying goal, and as with many substitute metrics, jobs and investments are imperfect ways to predict economic development success. More important, these metrics also lead to behaviors that are not always in the best interest of a local community – seeking out jobs at all costs rather than wealth. Tis approach yields a community strategy that focuses on attraction, often to the detriment of retention and organic growth. Tese three components (attraction, retention and organic growth) are critical elements of any good strategy and should be balanced against one another. Each is important in its own right, and all are part of growing wealth in a community. However, according to the Kaufman Foundation, job creation occurs overwhelmingly within the organic growth part of this triad. According to the foundation, "nearly all net job creation since 1980 has occurred in frms less than fve years old." Tis means that economic developers should be paying attention to their local entrepreneurs and young companies. To do this, communities must reevaluate how they become aware of and provide services to their potential gazelle employers (small, | NOVEMBER/DECEMBER 2013