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Can an Appalachian 'Silicon Holler' rise in coal's shadow?
June 8, 2015 / 4:37 PM / 2 years ago

Can an Appalachian 'Silicon Holler' rise in coal's shadow?

PIKEVILLE, KY, June 8 (Reuters) - Portraits of local heroes are stenciled onto the walls of an old Coca-Cola bottling plant in Pikeville, Kentucky: 10 images that seem to be watching over apprentices hunched over keyboards in what has become the office of businessman Charles “Rusty” Justice’s digital startup.

Those pathbreakers include John Goodlett, a NASA engineer who worked on the Mars Viking landers and Catherine Langley, the first Kentucky woman to serve in the U.S. Congress. All hailed from the coal producing counties of eastern Kentucky, now grappling with the industry’s decline.

Justice hopes they will inspire the apprentices, nine of whom are former coal workers, as they re-train at Bit Source, the software and web development company he co-owns.

“Coal miners are high-tech workers - they just get dirty,” says Justice, listing the tech skills that miners used daily: computers, robotics and 3D satellite imaging.

As market forces and federal regulations squeeze east Kentucky’s coal industry, people are searching for new lines of work.

“The middle skill economy is going to really explode in the next few years,” says Jack Conway, the state’s attorney general, a Democrat who is running for governor in November. “The jobs will be in logistics, infrastructure, health services and IT, and I want those jobs here.”

Kentucky hopes to lay the foundation for that kind of economy in August, when construction begins on the fiber backbone of a planned $250 million high-speed Internet network for the whole state, starting in the rural east.

Kentucky ranks 46th among U.S. states in high-speed Internet access, with nearly a quarter of rural areas lacking any access.

It will take at least a decade for high-speed Internet to have a real impact, says Robert LaRose, a professor in telecommunications at Michigan State University.

“Broadband access is only the beginning,” LaRose said. “The workforce has to be retrained, and overall levels of educational attainment need to be raised, including both school children and mid-life career changers.”

‘SILICON HOLLER’

In December, Kentucky signed a deal with Australia’s Macquarie Capital to build out the 3,000-mile (4,800-km) open access network with $50 million in state bonds and federal grants.

“We’re going to build the system and we’re going to make it available,” Governor Steven Beshear said in December. “But it’s up to our businesses, our communities and our educational institutions to take advantage of this opportunity.”

That point was underscored by Richard Lowenberg, a broadband planner who runs the 1st-Mile Institute’s New Mexico Broadband for All initiative.

“Building out needed broadband infrastructure to all alone will not assure improved quality of life as an outcome,” Lowenberg said. “That is dependent on how we use and what we do with our new high-bandwidth networks.”

Republican Congressman Hal Rogers, who has represented eastern Kentucky for 34 years, says broadband will create a “Super I-Way” of information technology jobs, like data management and call centers. He envisions the rise of what he calls “Silicon Holler,” a technology corridor in the small villages clustered between Appalachia’s rolling hills.

There was a hint of that potential this month when customer care and electronic billing company EOS announced plans to invest nearly $4 million in a 20,000 square foot (1,900 square meter) call center in Somerset, promising to create 150 jobs.

Jeff Whitehead, executive director of the Eastern Kentucky Concentrated Employment Program (EKCEP) in Hazard, a workforce training program serving 23 coalfield counties, says laid-off coal workers are “hungry” for IT and tele-working jobs.

Whitehead said EKCEP received more than 900 applicants when Bit Source asked him to recruit its first 10 trainees last year. EKCEP pays for Bit Source’s 22-week traineeships through its Hiring Our Miners Everyday (HOME) program, which gets $11.3 million from the Labor Department. Around 2,300 laid-off coal workers are enrolled.

The EKCEP is trying to create a local IT culture by working with community colleges to provide online courses that can be completed in months instead of a four-year degree, and intensive coding camps. EKCEP has found opportunities for workers outside the region, such as at Toyota’s manufacturing plant outside of Lexington in Kentucky’s more prosperous Bluegrass region. But many workers would rather remain in Appalachia.

Access to broadband, however, does not always translate into better education, Michigan State’s LaRose warned, and greater exposure outside the local community sometimes makes people “less satisfied with where they live.”

“When that’s all done, will the new knowledge workers stay around and/or is rural Kentucky a place that will attract tele-workers?”

Jack Duff, who manages a tele-works training hub in Hazard that has placed laid-off coal workers in jobs from customer service to billing, thinks it will.

“Our coal industry is going down,” Duff said. “One thing I’ve learned - and I am a old decrepit buzzard - is you’ve got to keep moving forward. Our people have to adapt.” (Reporting by Valerie Volcovici; Editing by Frances Kerry and Grant McCool)

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