There has been plenty of discussion about the minority community’s lack of access to broadband. Evidence supporting that narrative includes findings by the Pew Research Internet Project showing that while 87% of whites use the internet, only 80% of blacks do so. In addition, 74% of whites have broadband at home while only 62% of blacks access the internet using broadband from their residences.
Arguments have been made that given this disparity in access between white and black Americans that blacks are falling behind on accessing economic opportunities especially when it comes to competing for jobs. Even though blacks are over-indexed on smartphone ownership and access to the Internet via mobile devices, it is very difficult to create or submit business proposals or resumes using a smartphone.
Honestly, I’m no longer that concerned about access to the broadband protocol for transmitting and accessing information over the internet. Part of the reason is that given the level of investment in deployment over the last decade and a half, approximately 99% of Americans have access to broadband. In my opinion, if minorities are to garner any true wealth creation from the broadband, it will have to come in the form of intellectual property with a particular emphasis on owning patents.
In addition to pursuing job opportunities, the discussion of wealth generation via broadband access has centered on creating content. From the distribution of movies and television shows via Netflix to Maggie Watson providing fitness tips on YouTube, there is an abundance of video content. Netflix and YouTube account for 50% of North American internet traffic. The other well-known and not so well-known traffic generators bringing up the rear include:
Not only are these companies sending content downstream, but they are aggregators of content and as such create bottlenecks to producers that want to get their content in front of as many eyeballs as possible. Bottlenecks increase the costs of doing business for content providers making it even more difficult to create market niches.
With the abundance of content, however, comes the reality that creating a wealth-generating niche becomes increasingly difficult as content providers compete for more space.
And let’s not talk about apps. The number of apps in existence is well over one million, but the vast majority of these apps generate little revenue. For example, for the developer creating an app for Apple, the average revenue is around $4,000.
So where are the opportunities on the internet for minorities? First, let’s look at the future needs of the internet and its sub-component, broadband transmission protocol. In September 2014, Accenture released a report documenting the opportunities for growth in services, products, and revenues via the “Industrial Internet of Things.” Accenture found that global investment in IIOT is expected to top $500 billion in 2020. According to Accenture’s report:
“Companies that introduce automation and more flexible production techniques to manufacturing can boost productivity by as much as 30 percent, and predictive maintenance of assets can save companies up to 12 percent over scheduled repairs, can reduce overall maintenance costs by up to 30 percent and can eliminate breakdowns by 70 percent.”
One path to increasing productivity via IIOT is through innovation via intelligent technologies. Again, according to Accenture:
“Manufacturers soon will be building intelligence into every machine they produce and the innovative applications that accompany these smart machines will be vehicles for driving new revenue streams out of product-service hybrids. To reap the full benefits of the Industrial Internet of Things, says Accenture’s report, companies must exploit sensor-driven computing, industrial analytics and intelligent machine applications and weave together enterprise and machine-generated data to create new monetization opportunities.”
Building intelligence into every machine calls for inventive activity and this is where I see the best opportunity for Americans in general and people of color in particular. Closely related to inventive activity is the ownership of the patented technology that can drive innovation.
The Brookings Institution reports that the average patent is worth approximately half a million dollars, a much more attractive sum than the paltry $4,000 for an Apple app. Although patent values are increasing, the U.S., according to Brookings, has to face certain challenges in order to remain competitive, including maintaining funding for research and development and ensuring access to high-quality education, especially for lower income students. If students are not prepared academically to contribute to research and development and the inventive activity necessary for keeping America innovative, the innovation system would be deprived of people that can make or market important discoveries.
I believe that this is where more black and Hispanic Americans should place their focus; on being inventive and innovative. Finding better ways to efficiently and effectively deploy internet infrastructure including broadband technology is still a challenge especially in rural areas. Also, developing new and better technology for the more efficient use of spectrum is necessary for connecting mobile devices to the internet.
To be true players in the content and information industries, inventiveness and ownership is where it’s at for minorities.