Our economy needs a fully connected nation.

Our economy needs a fully connected nation.

At S2G, we believe that an investment in broadband internet connectivity is an investment in our future and prosperity. The critical need for high-speed internet has become even more clear in light of our efforts to mitigate the spread of COVID-19, as more families work and learn from home, businesses operate remotely and patients access medical care through tele-health.


It’s in everyone’s best interest, especially as technology continues to evolve and advance, that we make a significant investment in rural broadband infrastructure. To show our commitment to this important initiative, S2G has joined the American Connection Project championed by Land O’Lakes and supported by numerous companies and organizations. And we have shared our perspectives on the critical importance of rural connectivity with Congressional leadership.


It’s time to breakdown the digital divide.

Universal broadband access is the shot in the arm that our economy needs. As innovators, entrepreneurs and job creators, we know the economic promise and power of a fully connected nation – and have seen firsthand the negative consequences of the digital divide, which could have serious implications for America’s economic recovery and future growth in a post-coronavirus world.


In the short term, our nation’s response to the coronavirus pandemic should, of course, continue to focus on meeting immediate needs: keeping Americans safe and healthy, supporting the continued operations of essential industries and their workers, and easing the financial pressure on workers and small businesses.


As we look ahead to long-term recovery, Congress will be asked to consider many competing priorities. We believe ensuring nationwide broadband access should be a top priority for Congress in the next coronavirus response bill. Addressing this issue can actually drive progress on a wide range of other issues and assures our nation’s continued role as a global leader.


Ensuring access to high-speed internet better position hospitals, schools, small businesses and other essential services to respond and pivot in future crises.


The digital divide in our country is well documented. The Federal Communications Commission (FCC) estimates that 18 million Americans lack high-speed internet access1, although another analysis suggests that the number may be as much as twice as high, at 42 million2. According to the FCC, nearly one in four rural Americans do not have rural broadband coverage. By some analyses, the United States does not even rank among the top ten countries with the fastest broadband speeds.3


Many of the best-connected states in the country are located on the East and West Coasts, while people in predominantly rural and Southern states on average have lower access to stable, wired, high-speed broadband coverage and low-price wired plans. In Kentucky, which ranks 40th in the nation for broadband access, 142,000 people don’t have any wired internet providers available where they live and less than 40% of the population has access to a broadband plan that costs $60 or less. Just over half of Arkansans have terrestrial broadband access, and only about half have access to a broadband plan that costs $60 or less. While New York (2nd in the nation) and California (13th in the nation) are among the top states for broadband access and coverage, 30% of people in both states do not have access to a low- priced plan.4


While many Americans have moved work, education and healthcare activities online during the pandemic, doing so has proven difficult, if not impossible in some rural communities. The lack of access to high-speed internet in some areas of the country has compounded the health, business and economic impacts of the coronavirus pandemic. Building our nation’s internet infrastructure now is an investment not only in better connecting the country, but in better preparing for and minimizing the impact of future crises.


High-speed internet access also helps rural businesses and start-ups to grow, thrive and create future- proof jobs, which will be critical to the nation’s long-term economic recovery and supports a healthier, diversified American economy.

On average, digitally-connected businesses earn twice as much revenue per employee and are three times more likely to create jobs. Yet, small businesses in rural areas have lower rates of digital adoption than their urban counterparts, with about one in four rural businesses using only a basic level of digital tools5, likely due to the challenges of using digital tools in areas with limited broadband coverage.


We know that rural areas can be great places to grow and scale an innovative business. S2G has invested in many businesses that are doing just that, including Growers Edge, Egg Innovations and Clear Frontier. We also invest in companies that are headquartered in urban areas but serve customers in rural communities. Our portfolio companies have experienced the challenges and high costs of getting connected within our own operations.


Our companies were able to overcome the connectivity barrier, but it required a considerable investment of our own time, energy and resources that not all businesses have the capacity to make. Imagine how much stronger and more robust rural small businesses and start-ups could be if we eliminated the connectivity barrier and allowed those companies to focus on innovating, growing and scaling.


Digital technologies can also speed the ongoing modernization of the food and agriculture supply chain, making it more resilient against disruptions – but again, only if internet access is universal.


A major focus of the coronavirus pandemic has been the availability of food and the ability of the supply chain to adapt quickly to move food where it is needed most. While food supplies have been adequate to date, an area of focus for the future must be in using innovative digital tools and technologies to optimize production, boost shelf life, safety and traceability, and drive supply chain efficiencies.


Food and agriculture entrepreneurs and innovators are at the forefront of developing those tools and technologies – but tools and technologies are only effective if they can be fully deployed and used everywhere.


For example, precision agriculture tools like those offered by our portfolio companies Arable and Sentera can help farmers produce more food and make more money while reducing their climate and environmental impact. Without internet connectivity, these tools can’t work to their full potential. This leaves money on the table for farmers and also prevents the innovative companies that have built these tools from gaining new customers; a limited customer base could disincentivize or slow future innovation.

Food security and supply chain certainty are deeply intertwined with rural connectivity. A better- connected nation will drive the buildout of internet of things (IoT) technology, which will be transformational across agriculture and the food supply. To fully realize the benefits of IoT, however, connectivity infrastructure must be resilient and disruption-tolerant – and failing to make investments in both capacity and hardening of this infrastructure puts our future food security at risk.


Individual companies and start-ups have undertaken their own efforts to expand rural internet access and fill the connectivity gaps. Stories abound of teachers and students leaving their homes and sitting for hours in parking lots at libraries, restaurants and stores, grateful for the free WiFi that allows them to conduct class.67 Non-profits and companies like Land O’Lakes have stepped up to establish new WiFi hotspots to meet demand during the pandemic.


We appreciate their leadership and willingness to dedicate resources to doing so, but it should not be this way forever and it does not have to be.

We need a coordinated federal strategy – supported by the efforts of the private sector – to truly solve this issue. We urge Congress to prioritize funding to address broadband infrastructure gaps and incentivize telecommunications companies to bring broadband connectivity to all communities.


Innovative large companies, small businesses, start-ups and entrepreneurs will be an essential part of the recovery effort, creating jobs and building an economy that is better, stronger and more resilient than before. We are best positioned to do that when the nation is fully connected.


Sources:

  1. https://docs.fcc.gov/public/attachments/FCC-20-50A1.pdf

  2. https://broadbandnow.com/research/fcc-underestimates-unserved-by-50-percent

  3. https://www.speedtest.net/global-index/united-states#mobile

  4. https://broadbandnow.com/research/best-states-with-internet-coverage-and-speed

  5. https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/connected-small-businesses.html

ABOUT THE AUTHOR

Aaron Rudberg

Managing Director

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