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Uncovering Perry County's (Indiana) Assets for Economic and Community Development
1. “Hidden” Assets for Economic and
Community Development
January 16, 2014 – Tell City, IN
Scott Hutcheson, Ph.D.
Purdue Extension
Purdue Center for Regional Development
2. Goals for Tonight
• Learn about our community‟s “hidden” economic and
community development assets
• Understand how other communities are developing
asset-based economic growth strategies
• Consider how you could better leverage your unique
assets in Perry County
3. Our Grandparents Built the Indiana
Economy on Our Assets
• Rich soils
• Waterways: Lake
Michigan and the Ohio
River
• Crossroads of America
What were our community’s greatest economic
assets 100 years ago?
4. Our Grandchildren Will Inherit an
Economy Based on a New Set of Assets
• The Talent of Our People
• Our Most Vibrant Industries
• Our Capacity for Innovation
• Our Fastest Growing Companies
• Our Unique Story
• Our Special Places
5. Our Grandchildren Will Inherit an
Economy Based on a New Set of Assets
• The Talent of Our People
• Our Most Vibrant Industries
• Our Capacity for Innovation
• Our Fastest Growing Companies
• Our Unique Story
• Our Special Places
6. The Talent of Our People:
Occupational Clusters
• An “Occupational Cluster” is a group of related
occupations
• The Purdue Center for Regional Development has
defined 21 basic Occupational Clusters
• Many communities have a higher concentration
than average of one or more clusters
• Occupational Clusters can be part of an economic
development strategy
7. Occupational Cluster: Ideas in Action
Bring together Information Technology
professionals to foster new ideas for high
tech start-ups
8. The Talent of Our People
LQ = Location Quotient. The US LQ for each cluster is set at 1.00.
Anything above that means there is a greater concentration than the
overall US. For example, an LQ of 1.80 means that a cluster had
80% more jobs than the US.
Occupations Perry Indiana
Agribusiness, Food Technology 3.36 1.27
Skilled Production Workers 1.45 1.25
Engineering and Related Sciences 1.00 0.93
2012 Data
9. Occupational Clusters:
Questions to Consider
• Did a look at Occupational Clusters give us
any new insights?
• What explanation might there be for our
occupational strengths?
• Do we need to find out more about our
Occupational Cluster assets?
10. Vibrant Industries: Industry Clusters
Industry Clusters can be
nurtured and supported
– Articulated
– Activated
– Accelerated
– Accessing
11. Industry Clusters: Ideas in Action
Appalachian Ohio’s Salsa Cluster
• 20-plus boutique salsa businesses in the region
• $700,000 annual sales among new businesses
• Trains over 200 existing and emerging entrepreneurs
annually
• 350 gallons and 445 lbs of fresh and preserved foods
delivered to the region‟s food pantries each year
12. Industry Clusters: Our Community’s
Most Vibrant Industries
Cluster Perry Indiana
Forest & Wood Products (12) 4.53 2.65
Agribusiness Food Processing & Technology (10) 1.70 1.19
Advanced Materials (9) 1.63 2.41
Life Sciences (17) 1.19 1.17
Number of Establishments (data for 2012)
13. Industry Clusters:
Questions to Consider
• Did a look at Industry Clusters give us any
new insights?
• What explanation might there be for our
industry strengths?
• Do we need to find out more about our
Industry Cluster assets?
14. Our Capacity for Innovation
• Capacity for Innovation can provide valuable insights
• Innovation is defined as the new products, services,
processes, and business models that get translated into
business growth
• The Purdue Center for Regional Development has
created an Innovation Index
• The index is a simple way to look at lots of different
factors related to innovation.
15. Innovation Index: Ideas in Action
Think of a high ratio of “small firms” as an
asset and launch a business growth
program
18. Innovation Index:
Questions to Consider
• Did a look at Innovation Index give us any
new insights?
• Which of the index factors that showed good
capacity did you find most interesting?
• Do we need to find out more about our
innovation assets?
19. Our Fastest Growing Companies:
Second-Stage Firms
• Most economic growth comes from 2nd-Stage
firms
– Privately-held firms
– 10-99 employees
– $750K-10 million in annual revenue
– Dealing with growth issues instead of survival issues
– Intend and capacity to keep growing
20. What Do Second-Stage
Businesses Need?
• Help in re-articulating and realigning with their
Core Business Strategy
• Market Intelligence to answer important
questions
• Leadership & management team
development to makes sure people are
slotted right
21. Second-Stage Firms: Ideas in Action
Littleton, Colorado
• Littleton, CO developed and began to
execute the strategy in 1989
• Focused on “wealth” creation not “job”
creation
• Eliminated all incentives and tax breaks
for business recruitment
• Since 1989, more than doubled the
number of jobs from 15,000 to 35,000
• Sales tax revenue tripled from $6.8
million to $19.6 million
22. Second Stage Firms in Our Community
Establishments Jobs
Size of Firm Indiana Perry Indiana Perry
Self-Employed 29% 33.3% 3.7% 5.7%
Stage 1 (1-9) 59.3% 57.3% 23.2% 31.4%
Stage 2 (10-99) 10.5% 8.4% 35.2% 34.4%
Stage 3 (100-499) .1% 1% 22.5% 28.5%
Stage 4 (500+) 0.1% 0% 15.5% 0%
23. Second-Stage Firms:
Questions to Consider
• What insights do we gain by considering the
role of second-stage companies in our local
economy?
• What do we currently offer our second-stage
firms?
– Companies to Watch
– Participation in the Indiana Business Growth
Network
24. Our Unique Story
• Every community has a unique story that is being
created.
• We need to pay attention to the story we are telling
ourselves and the one those outside our community
are hearing about us.
• We have the power to shape these stories.
26. New Narratives: Ideas in Action
L.A.’s Sunset Strip
• The Sunset Strip in LA
was in decline
• The ownership of the
famed “Roxy” nightclub
began using Twitter
• Others followed, a new
story emerged, and the
neighborhood has been
transformed
30. Our Special Places: Infrastructure
Traditional
• Roads & Interstates
• Rail
• Water
• Electricity
• Water & Sewer
Emerging
• Public Spaces
• Sidewalks
• Trails
• Bike Lanes
• Third Places
• Broadband
• WiFi
31. Public Spaces: Creating Economic,
Social, and Environmental Value
Public space is all around us, a vital part of everyday urban life: the
streets we pass through on the way to school or work, the places
where children play, or where we encounter nature and wildlife; the
local parks in which we enjoy sports, walk the dog and sit at
lunchtime; or simply somewhere quiet to get away for a moment
from the bustle of a busy daily life. In other words, public space is
our open-air living room, our outdoor leisure centre.
The Value of Public Spaces: How High Quality Parks & Public
Spaces Create Economic, Social, & Environmental Value, Bartlett
School of Planning, University College London.
32. Public Spaces: Ideas in Action
Three Oaks, MI
• Renovated dilapidated downtown
theatre to show classic films –
Opened in 1996 with a showing of
Citizen Kane.
• Opened art gallery in the lobby
• Now a „fine arts” theatre
• Averages over 1,000 customers
per week
• Community now hosts film festivals
38. More Information
• Occupational Clusters - http://www.statsamerica.org/innovation/data.html
• Innovation Index - http://www.statsamerica.org/innovation/data.html
• Second Stage Firms - http://www.youreconomy.org/
• Economic Gardening - http://www.littletongov.org/bia/economicgardening/
• Industry Clusters - http://www.statsamerica.org/innovation/data.html
• ACEnet (Salsa Cluster) - http://www.acenetworks.org/
• Twitter Search - http://twitter.com/#!/search-advanced
• Broadband Data - http://www.broadband.gov/
• National Maple Syrup Festival – http://www.nationalmaplesyrupfestival.com
• Purdue Guitar Summer Camp - http://metalsound.tech.purdue.edu/default.aspx
• Ball State Community Assets - http://asset.cberdata.org/
Notas del editor
In most communities, if you ask leaders to identify their significant and unique economic and community development “assets” they will might come up with things like the available square footage of industrial space or maybe their cheap labor, land, and utilizes, or even low taxes. These may certainly be significant but are they unique? Do they set one community apart from another? There is another set of assets that are not usually so apparent and some of these “hidden” assets are what I would like to talk about today.
In our time together today I hope we will all learn more about our community’s assets for economic and community development, learn from examples of other communities, and consider how we might be able to leverage the unique assets in this community to help grow our economy and enhance the quality of life for all the people who live here.
Indiana’s economic history is really a story of how our previous generations took advantage of our great state’s assets. Like much of the Ohio Valley we are blessed to have some of the best soils in the world and agriculture helped make Indiana what it is today. We were able to easily export our grains because of waterway assets like Lake Michigan and the Ohio River. Soon our shipping infrastructure created the opportunity for the production and movement of the steel that would help build much of America during the industrial boom. A few decades later Indiana found itself at the crossroads of the federal highway system opening up even more opportunities.If you think back to the history of our own community, what were some of the economic assets that have helped us grow over the last two centuries?
As we look toward the future we envision a very different set of opportunities for the next generation. Most of the members of this next generation will not be working on the farm, in steel mills, or even in auto parts plants. Although these are still vibrant industries in Indiana, gains in productivity mean that we just don’t need the same number of people in these jobs that we once did. The formula for economic growth has not changed. We still have to build on our assets but a new set of assets has come into play. The successful communities of tomorrow will be the ones that focus on (1) building world-class brainpower, (2) translating that brainpower into innovation and entrepreneurship, (3) creating and telling new stories about our communities, (4) making our communities quality connected places where new ideas can flourish, and (5) finding new ways to collaborate with one another.
As we look toward the future we envision a very different set of opportunities for the next generation. Most of the members of this next generation will not be working on the farm, in steel mills, or even in auto parts plants. Although these are still vibrant industries in Indiana, gains in productivity mean that we just don’t need the same number of people in these jobs that we once did. The formula for economic growth has not changed. We still have to build on our assets but a new set of assets has come into play. The successful communities of tomorrow will be the ones that focus on (1) building world-class brainpower, (2) translating that brainpower into innovation and entrepreneurship, (3) creating and telling new stories about our communities, (4) making our communities quality connected places where new ideas can flourish, and (5) finding new ways to collaborate with one another.
One of the ways we can measure the Talent of Our People is to look at something called “Occupation Clusters.” These can be a “hidden” asset because not all of these workers may work for the businesses you might expect. For instance, a community might find that they have an Information Technology-related occupational cluster without having any businesses that would be considered IT firms. This could occur because these IT works are embedded in other industries like the hospital, the schools, the IT staff at a manufacturing firm.The Purdue Center for Regional Development, along with Indiana University and other partners, has developed a set of tools that helps us look at 21 different basic Occupational Clusters to see within which ones, if any, we have a high concentration. Having this information can be useful in developing strategies to leverage these occupational assets to grow our economy.
Here is an example of how one community used occupational clusters to develop a strategy to to encourage new business formation. This small community had no IT firms but after looking at occupational cluster data they learned that they did have some IT workers working in non-IT businesses. Upon learning this information, the Chamber of Commerce decided to start hosting “Tech Tuesday” lunch programs to which the community’s IT professionals were invited. The Chamber provide lunch, brought in speakers, and created the opportunity for these people to get to know one another. As relationships fostered, some new ideas were born. Two people realized they share a love for fantasy baseball and decided to create a new venture to develop a fantasy baseball smartphone app. They worked nights and weekends for several months and launched their product on the iTunes App Store. Sales grew steadily and they decide to create an LLC to develop additional apps. The are keeping their day jobs for now but hired three people to do the programming work. They also leased and renovated an office space downtown. Now the community really DOES have an IT company.
So let’s take a look at some Occupational Data for our own community. Here are the six Occupational Clusters in our community with the highest Location Quotient (LQ). This means that our community has a higher concentration of these occupations than does the US. For instance our LQ for Arts, Entertainment, Publishing, and Broadcasting is 39% higher than the US. We can also see the LQ for the state and the region. We have 960 people in this cluster, which represents a greater concentration than the US, the state of Indiana, and our region. Our LQ for Agribusiness is also very high with 653 workers in this cluster, a little higher than the state LQ but significantly higher than the region.
Looking at this sort of data should cause us to consider some questions: (1) Does this information give us any new insights or reveal something we didn’t know before (2) What are the possible explanations for why we have these strong concentrations? (3) Do we need to find out more information? Your mind may already be jumping to possible strategic initiatives that could help build on these assets but hold onto those ideas until we consider the other assets.
Another hidden asset to consider are industry clusters, or collections of business that are similar or that have something else in common like being part of the same supply chain. Some industry clusters occur in a birds of a feather sort of way. You can see this at our highway interchanges. There is usually not just one fast-food restaurant but several. They flock together because they share similar needs – interstate access, a steady group of customers needing something fast and inexpensive to eat.Other clusters are based on a anchor asset and then nurtured along by supportive legislation, a pipeline of skilled workers from universities, and other supportive factors. The Indiana life sciences cluster is an example of that. Building on the presence of the Eli Lilly Company, BioCrossroads was formed to guide investment in and support for the life sciences cluster in Indiana.
Another interesting example of an industry cluster can be found in Appalachian Ohio where a significant concentration of salsa producers has emerged. In this very distressed area, economic developers looked to the area’s tomato farmers to see how they could build on that asset. Today the region is home to more than 20 boutique salsa makers.
So lets look at some Industry Cluster data for our own community. Here are the ten clusters with the highest Location Quotient (LQ). Location Quotient is the same measurement we used to look at occupation clusters. This means that our community has a higher concentration of firms in these clusters than does the US. For instance our LQ for Electronic Equipment, Appliance, and Component Manufacturing is almost four times higher than the US and over 400% larger than the Indianapolis region. We can also see the LQ for the state and the region.
Looking at this sort of data should cause us to consider some questions: (1) Does this information give us any new insights or reveal something we didn’t know before (2) What are the possible explanations for why we have these strong concentrations? (3) Do we need to find out more information? Your mind may already be jumping to possible strategic initiatives that could help build on these assets but hold onto those ideas until we consider the other assets.
Another asset related to the talent of our people is the capacity to translate talent into innovations: new products, services, processes, and business models that find their way into the marketplace in the form of new ventures and in the growth of existing businesses. The Purdue Center for Regional Development, along with Indiana University and other partners, has created an Innovation Index that is made up of 23 different factors that contribute to innovation. These factors include some items you might expect like patents but other data as well.
Something called “economic churn” is one of the factors in the Innovation Index and here is a story about one urban county that ranked high on economic churn and they decided to look at that as an asset. Economic churn is the rate at which new business are born and then die. That may not sound like much of an “asset” but actually a high-rate of churn is usually a good sign, when accompanied by other factors. Even places like Silicon Valley have high rates of churn. Leaders in this community interpreted churn to mean that their entrepreneurs and small business owners don’t give up easily. When one business fails they jump right into a new one. They decided to pilot a program to add two additional Small Business Development Center Business Counselors and locate them in community centers. It was not long before entrepreneurship workshops were taking place and local business owners were getting much-needed technical assistance. Before long, more businesses began to make it beyond the start-up phase and some of the other factors of the Innovation Index began to rise.
Now here’s a look at the overall Innovation Index shows that our community is not quite as innovative as the nation, the state, or our region but since we are focusing on our assets, we can take a deeper look at those 23 sub factors and see where our innovation strengths are.
Looking at the sub factors, our community is doing well on many of them. Here are some of those. Look, for instance at the chart in the lower left hand corner. This is the Average Net Internal Migration from 2000-2009. In a time when population growth has been flat in the US and actually declined in the State of Indiana, it has grown pretty well in our region, but grown significantly in our community. This indicates that our community is attractive to job seekers and families, a key ingredient for innovation to occur. The chart in the lower right shows the Change in Average Proprietors’ Income from 1997-2008. This means that our community is a great place to be a business owner, with income growing nearly twice the rate as the region and over twice the rate of the State.
Looking at this sort of data should cause us to consider some questions: (1) Does this information give us any new insights or reveal something we didn’t know before (2) Which of the strong factors jumped out at you? (3) Do we need to find out more information? Be thinking about what you learned regarding our community’s capacity for innovation and we will discuss it soon.
Another asset related to innovation and entrepreneurship can be found in our community’s 2nd Stage Companies. We’ve just recently learned that these companies contribute significantly to our economic growth and they are typically not on our radar screen when it comes to economic development programs that can assist them. To understand what help they need to grow, we need to better understand some of the distinctive characteristics of these 2nd-Stage Companies. We say that they are in their “second” stage because they are beyond their initial, or start-up stage. For some the first stage may have been just recently but others have been in this second stage for a long time. Some of what these businesses have in common is that they are typically privately held, have fewer than 100 employees but more than ten, have annual revenues of $750,000 to $10 million. They want to grow, have the capacity to grow, and are dealing with growth-related issues.
There are three key areas in which many 2nd stage companies need some assistance and a growing number of communities and economic development organizations are launching programs to provide them with these things. Most of these businesses started out with a niche business rather than a commodity business. In other words, they provide a service or product that is of high value and being the lowest-cost provider of their product or service was not as important to their success as was having a niche. They also have a need for good market intelligence, information that is hard to find, expensive to get, or both. Larger firms usually have in-house market research functions but these second stage firms are just not big enough to have that capacity.They also often are dealing with issues related to their top management team. Sometimes executives have been taken on roles for which they might not be well suited.
Littleton, CO had been providing these services to their Second Stage Companies for over 20 years and use the term “Economic Gardening” to describe their work. The success in Littleton has been so significant that they no longer do any industrial recruiting, focusing all their attention on helping their existing businesses grow. As you can see they have experienced significant growth that outpaces both the state of Colorado as well as their own region.
Here is some data on the businesses in our community broken down into the four stages. You will notice that in terms of percentages of all businesses, 2nd Stage firms make up just 6.6% of our total number of businesses but 34.5% of total employment and nearly 40 percent of our jobs come from Stage 1 companies. In many communities the Stage 3 and 4 firms get most of the attention yet these smaller firms are really what keeps our local economy vibrant. Some communities are turning to programs like economic gardening to help these companies grow even faster.
What are we doing in our community to help our 2nd Stage companies? Do we have any programs in place? There are two statewide programs that are specifically designed for 2nd Stage Companies. One is the “Companies to Watch” program which is an annual nomination and recognition of Indiana’s 2nd Stage companies. Businesses that are designated as a “Company to Watch” get significant visibility that can lead to the possibilities of new capital and new customers. Another is the Indiana Business Growth Network which works with local economic development organizations to bring economic gardening and other business-growth resources to their community’s 2nd Stage companies.
The next asset area to consider is New Narratives. Every community has an existing narrative, or a story or set of stories that affect how people who live there feel about their community and how outsiders think about the community. These stories emerge and evolve over time. They can be positive or they can be negative. Some community leaders are starting to pay attention to this narrative and working hard to shape it.
It was not too long ago that creating stories about communities was left to the professionals: TV, newspapers, radio, public relations firms. Social media has changed all that. Progressive economic developers and other community leaders are using all of these tools, both the traditional ones and the new ones, to shape the narrative about their communities. Perhaps, even more powerful, however, is the narrative that is being created organically through Facebook status updates by the people in our community, by the Tweets of those passing through, and by the YouTube videos being posted by our young people and others. All of this “chatter” adds up to a story that is shaping who we perceive ourselves to be and how others outside our community see us as well.
Nic Adler was born in 1973, the same year his dad opened The Roxy, it soon became one of THE places to be in LA nightlife. Other nightclubs and concert venues saw success on the Sunset Strip as well. A few years ago, however, the neighborhood had declined and so had the number of people showing up at The Roxy and the other places on the strip. When Nic took over for his dad he began using social media tools like Twitter to communicate directly with a small group of Roxy devotees. As the number of Twitter followers grew so did the crowd at the club. Then Nic did something very counter-intuitive. A couple of the other clubs had also begun using Twitter and Nic sent a message to his followers inviting them to also become followers of his competitors. Almost immediately, the Twitter buzz began and soon all the clubs were busy and the neighborhood began to be transformed. Nic’s strategy worked because he gained even more followers and now has over 75,000. His club is now the anchor of a growing “cluster” of vibrant nightclubs in West Hollywood.
We may or may not have something as “Twitter worthy” as an historic nightclub in our community but people out there are having conversations about what’s going on locally. Here are a few Tweets from June 2011 along with a couple of photographs that a couple of people included. What story is this telling?There is also a way new way to get a check on the attitudes association with our community by searching Twitter for the name of your community PLUS the little smile and frown emoticons, those sideways faces people make using colons or semicolons for the eyes and either the right parentheses for a smile and the left or a frown. I am happy to report that there were not frowning tweets and several smiling tweets.Of course this is just a one-time snapshot of a few people who happen to be Twitter users but companies are starting to pay attention to this sort of data to monitor the buzz about their products. Maybe more communities should be paying attention as well.
We may or may not have something as “Twitter worthy” as an historic nightclub in our community but people out there are having conversations about what’s going on locally. Here are a few Tweets from June 2011 along with a couple of photographs that a couple of people included. What story is this telling?There is also a way new way to get a check on the attitudes association with our community by searching Twitter for the name of your community PLUS the little smile and frown emoticons, those sideways faces people make using colons or semicolons for the eyes and either the right parentheses for a smile and the left or a frown. I am happy to report that there were not frowning tweets and several smiling tweets.Of course this is just a one-time snapshot of a few people who happen to be Twitter users but companies are starting to pay attention to this sort of data to monitor the buzz about their products. Maybe more communities should be paying attention as well.
We may or may not have something as “Twitter worthy” as an historic nightclub in our community but people out there are having conversations about what’s going on locally. Here are a few Tweets from June 2011 along with a couple of photographs that a couple of people included. What story is this telling?There is also a way new way to get a check on the attitudes association with our community by searching Twitter for the name of your community PLUS the little smile and frown emoticons, those sideways faces people make using colons or semicolons for the eyes and either the right parentheses for a smile and the left or a frown. I am happy to report that there were not frowning tweets and several smiling tweets.Of course this is just a one-time snapshot of a few people who happen to be Twitter users but companies are starting to pay attention to this sort of data to monitor the buzz about their products. Maybe more communities should be paying attention as well.
Connections have always been important in community and economic development and the public sector has done a great job of building our connections infrastructure. Rural electrifications connected farmers and other rural residents to the grid. The railroad helped tame the wild west. The interstate highway system allowed people and goods to move faster from one community to another. Today communities extend water, sewer, and other services to spur economic development. This sort of infrastructure remains important for economic and community development but another type of infrastructure is becoming just as important. Sidewalks, trails, and bike lanes are becoming less of an amenity and more of a an expectation for an increasing portion of the US population. Civic spaces and Third places are vital for people to connect socially. Civic spaces are where the community can come together to have crucial conversations and “third places” is a term coined by urban sociologist Ray Olenburg to describe the places besides home and work where we can connect socially. A local coffee shop can serve as a great third place. Another vital aspect of the quality connected community is broadband and wifi. Today’s economy is as much about moving ideas and information as it is moving goods and services and communities without accessible broadband has a sever disadvantage.
Several recent studies have demonstrated that broadband has an impact on both population and economic growth and specific industry sectors are even more dependent on it. It can be concluded that competition is good. The more providers the greater the penetration and business with high-speed internet make more money.
Regional leaders in Northeastern Pennsylvania came up with a strategy for economic growth that would not be possible without the capacity for moving large amounts of data instantaneously. In the aftermath of 9/11 this rural region positioned themselves as “Wall Street West,” a place for data backup services for New York City’s financial sector. They found that they had the unique advantage of being far enough away from NYC so that a human or natural disaster hitting New York would not likely also hit them yet close enough for people to get back and forth from the two areas. They invested in fiber optic infrastructure for not just their region but to connect them to NYC.
So how does our community stack up in terms of our broadband assets? Actually pretty well. Our number of available providers is high and remember that has a positive affect on both population and economic growth. Our speed of connection is near the top third of the state but not as high as it could be.
So how does our community stack up in terms of our broadband assets? Actually pretty well. Our number of available providers is high and remember that has a positive affect on both population and economic growth. Our speed of connection is near the top third of the state but not as high as it could be.
So far today we’ve discussed seven assets for economic and community development. Merely identifying assets, however, is just the first step. The real power comes in combining assets in new and innovative ways. We call this linking and leveraging. One of these asset, in and of itself has value been but when it gets combined with another valuable asset something entirely new can be created that has exponentially more value than either of the single assets alone. Like on the Periodic Table of Elements combining the right amounts of hydrogen and oxygen creates water.
Neither a festival nor a summer guitar camp will transform a local economy but the days of one big transformative event are probably behind us. Plant relocations or expansions bringing in 2,000 or more jobs is not the reality for most communities. Economic and Community Development occurs slowly, over time, and transformation occurs because of the cumulative effect of lots of modest successes.
More information about the many resources we’ve discussed today can be found online
More information about the many resources we’ve discussed today can be found online