Better Broadband Means Better Economy in Rural Areas

Yesterday Telecompetitor mentioned a new report by the National Agricultural & Rural Development Policy Center (NARDeP) Rural Broadband Availability and Adoption: Evidence, Policy Changes and Options. Here’s the info in a nutshell in terms of the connection between broadband and economic vitality:

  • Broadband and economic health are linked in rural areas (potentially in a causal direction):
    • Low levels of adoption, providers, and broadband availability were associated with lower median household income, higher levels of poverty, and decreased numbers of firms and total employment in 2011
    • Increases in broadband adoption between 2008 and 2010 resulted in higher levels of median household income and total employment for non-metro counties
    • Broadband adoption thresholds have more impact on changes in economic health indicators between 2001 and 2010 than do broadband availability thresholds in non-metro counties

And some of the metro-rural differences:

  • The broadband adoption gap between metro and non-metro areas remained at 13 percentage points in both 2003 and 2010; however, this gap increased among low income, low education, and elderly
  • The most rural (non-core) counties experienced significant improvements in broadband adoption between 2008 and 2011
  • Traditional factors – income, education, age, race, and non-metro location – played a role in adopting broadband for both 2003 and 2010; low levels of providers had a negative impact on adoption while higher levels of broadband availability had a positive impact

These findings agree with Jack Geller’s findings on the issue. He often shows using Roger’s Theory of Adoption curve. We’ve seen a broadband adoption increase at a good clip over the last few years – and the remaining non-adopters are laggards. They have lower incomes, lower levels of education, they are older, minorities in rural areas.

adoption curve

Jack also points out that in some ways this is a demographic that will take care of itself, the older demographic more quickly than the young. I think the NARDeP research might indicate that it’s worth the effort and investment to reach out to these folks – especially if the increases in household income and employment seen from 2008-2010 could transfer to these laggards as well. The most difficult thing will be convincing the non-adopters. As the research indicates…

When asked their primary reason for not using broadband 40% of rural residents in 2003 said they didn’t need it. By 2010 that number had climbed to 47%.

The NARDeP also makes some policy recommendations…

  • Draw broadband infrastructure to less economically robust regions lacking it (via programs such as the FCC’s Connect America Fund)
  • Focus adoption programs on populations with lower levels of income and education as well as racial/ethnic minorities; involving community anchor institutions is particularly important
  • Build on diffusion factors such as trialability, observability, compatability to expose nonadopters to the technology
  • Though wireless deployment is helpful, many of the productivity gains and economic advantages of broadband are limited through this technology
  • Support improved data gathering related to price / affordability (including bundles) and service quality (speed)

Could turn out to be some good advice for Minnesota Legislators as they think about the Office of Broadband Development.

This entry was posted in Digital Divide, Research, Rural by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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