Can Connectivity Transform a Region?Connectivity has been presented as the great solution to transform many aspects of daily lives of people in recent decades, which perhaps generates more expectations than realities. But, although the idea of connectivity is oversold, it is necessary to recognize that it has a very high and transversal impact on multiple aspects of contemporary life, transversally shaping the development of those places where it is implemented.
How Can Broadband Transform a Region?
Chattanooga would have been an invisible city in the last century, if it were not for the fact that Glenn Miller composed a song called Chattanooga Choo Choo ( in honor of the particular train that was running for 1941), or for the CBS anchorman Walter Cronkite, who in the late 1960s claimed that it was “the dirtiest and ugliest city in the United States”.
This city was radically transformed in the last decade and was named this year by Lonely Planet as “the best city in the United States” and “one of the 10 best destinations to visit in 2018”.
Chattanooga (Tennessee), with less than 200 thousand inhabitants, was radically transformed thanks to a single public strategy: Having the fastest Internet in the United States. It was not only achieved, but it became a sustained model over time that has allowed it to become the city with one of the fastest Internet connections in the world today: 10 GB/s per household, 200 times faster than the average American or a thousand times faster than the average speed of an urban home in South America.
It all began in 2010 with a project designed by Harold Depriest, the executive director of the electric and telephone company EPB (Electric Power Board), who implemented the ambitious plan for a fiber optic network with total coverage in the city. The network would reach all electric power subscribers in the city, providing them with a 1Gb/s connection at a very low cost for that time. That means that a low-income Chattanooga resident would have ten times more Internet speed by 2012 than the fastest residential connection of a high-income citizen in Colombia, Ecuador, Peru or Argentina by 2015. They achieved this with a minimum investment, which did not exceed US$320 million, one third of which came from public resources of the Federal Department of Energy.
From that moment on, thousands of entrepreneurs decided to settle in Chattanooga, because thanks to its Ultra-Fast Low-Cost Internet, digital businesses began to save months of work and hundreds of thousands of dollars in connectivity. When thousands of entrepreneurial projects arrived in the city; the unemployment rate reached zero in just a few months and it became a city that received talent, especially from Silicon Valley, becoming a tank of talent, thought and creativity, which in turn led to a construction boom in view of the growing housing demand. This generated more jobs, resources and wealth for the region, as well as new ventures such as supermarkets, technology stores, stores, laundromats, schools, service and entertainment companies, until it became what Lonely Planet called this year: ” The best city in the United States to visit and live in”.
The role of public investment
The transformation of Chattanooga, as well as the development and prosperity of the Silicon Valley Zone, was possible thanks to the active and visible hand of the State: if it were not for strong, decisive and consolidated state investment, California would not be the largest technology cluster in the world, nor would Chattanooga be the city with one of the fastest connections in the world at present.
“Public funding of early-stage research has largely enabled the development of the technology, energy and pharmaceutical sectors. However, the state is proving to be very ineffective in taking the laurels, and even more so in getting a return on its investment. However, what would have happened to Uber without the public funding for the GPS development? What would have become of google if it had not produced the public funding for the development of the Internet?”
Mariana Muzzcato – Economist Professor at University College London
Understanding that connectivity is in itself a means and not an end, the intervention of the State is key to leverage development in a short time, reducing costs and even subsidizing, which allows citizens to take advantage of these conditions to develop projects that generate value from connectivity. The myth that the State is always obstructive is as erosive as the ideology itself of absolute paternalism on the part of the State.
It is for this reason that Latin America needs greater State intervention to improve connectivity, through large investment projects in connectivity, not to favor the interests of private market agents as is generally the case, but so that the State itself can create conditions of connectivity that will enhance the speed of connection throughout the region, providing the means to promote entrepreneurship based on the creative industries.
Connectivity with Appropriation
As we discussed extensively in the article “The disjointed and anecdotal ICT policies”, Latin American governments have implemented many and diverse initiatives to reduce the digital gap. However, although the continent is better connected than it was a decade ago, the digital gap continues growing, as does the risk of the Internet becoming the main cause of segregation between the poor and the rich, mainly due to the lack of appropriation policies. Therefore, any project developed in the region should not only be accompanied by initiatives and policies like the one developed in Chattanooga, but also by social investment in appropriation processes and projects.
The greatest barrier in the region is possibly the short-term vision of government leaders and their inability to think and execute in a large scale, without fear, believing that it is possible and understanding that any investment made to strengthen the presence of citizens in the information society will result in economic growth and prosperity.
You may be interested in the article: “The Broadband Fallacy on the Internet”
In conclusion, connectivity may be an expeditious tool for the transformation and promotion of a region, if it is accompanied by ambitious and generous state policies, articulated private initiatives and an appropriation plan that results in development and quality of life for the entire population and not only for the most fortunate people.
By:
Gabriel E. Levy B.