Obstacles Remain Between State, 'New Economy'
Gazette 10/24/00
Rural areas must upgrade Internet services or be left behind, AOL Chairman Case says
By Jim Ross
Huntington – Rachel Welsh, a native of Spencer, designs Web sites in the Fairmont office of a San Francisco firm that creates Internet – based educational materials.
Sami Shaaban, founder and president of Nurelm.com, wants to bring his firm from Austin, Texas, back to his hometown of Montgomery.
Eric Lewis, who helped found a 140 – person firm called Ultraprise and a newer company called Butterfly.net, hopes to stay in Shepherdstown, where he grew up.
All three would be considered part of the technology-based "New Economy." All want to work in their native state. But West Virginia posts obstacles to their dreams that, unless solved, threaten to keep the state mired in the Old Economy, they said.
Welsh, Lewis and Shaaban were panelists Monday in the first West Virginia Forum on Technology & Information at Marshall University. The event was organized by Sen. Jay Rockefeller, D-W.Va.
"It’s an effort to take on a problem that is challenging and daunting," Rockefeller said in his opening remarks. "If we don’t do it. We’ll be in very deep trouble. Are we going to take this on and become part of the 21st Century, or not? We’ll have to say some things that are hard."
"The term New Economy is an attempt to describe in simple terms the massive changes the country is taking new technology," he said.
"Make no mistake. If we do nothing, the New Economy will pass us by. It will be like we never discovered coal, we never had a chemical industry and there was no oil and gas in West Virginia."
Among the obstacles are a lack of investors willing to take chances on new companies, a shortage of well-trained workers, and an inadequate telecommunications system, Rockefeller and the panelists said.
Lewis, 26, said he was able to raise $30 million to launch Ultraprise, which now has 140 employees earning an average salary of $70,000 a year. "We were lucky enough to hook up with Tom Loehr and Steve Day (former CEO of City Holding Corp.). They really understood the New Economy. We were lucky to obtain venture capital from them."
"Without seed capital, companies can’t take the risk to succeed in the new economy," he said.
Nine out of 10 New Economy firms fail, Rockefeller said, but the one that succeeds spawns 20 or 30 more companies.
Welsh said students lack computer skills needed to succeed. She said she was amazed when one student told her she didn’t know women could do computer work.
"We are not developing a desire in students to enter high technology fields," she said. "We’re not developing enough incentives to keep good students in the state. We’re not spending enough time recruiting high-tech companies to the state."
Shaaban thinks he can help retain some of those trained students. In Austin, he said, competition for the best minds is so tight that good jobs go unfilled. "We are looking for a place with a good quality of life. In a new business, looking for knowledgeable workers, real good people, West Virginia produces that." Most leave, he said, adding, "That has to be turned around."
AOL Chairman Steve Case, whose keynote speech was delayed when fog prevented his corporate jet from landing in Huntington, said rural areas can be left behind because of the digital divide.
Most areas now have slow-speed Internet access, but rural places lack broadband and wireless services, he said. "We have to make sure everyone has the same opportunities."
Three out of four families earning $75,000 or more a year have Internet access, he said. "Less than 10 percent of poorer families do."
