Research on Rural Broadband Finds Unexpected Results

 

Connecting state and local government leaders

When it comes to luring creative class employees and entrepreneurs, “it may not be having the effect you want,” notes one author of a recently published academic paper.

While establishing broadband internet connections in rural America is known to offer certain economic benefits, it may not be as effective as some might think when it comes to attracting entrepreneurs and so-called creative class employees to those places.

At least that’s what an academic paper published earlier this summer suggests. Researchers at Oklahoma State University found that as more households in a rural area get broadband, the number of entrepreneurs and creative class employees there may actually go down—not up.

Brian Whitacre, a professor in the department of agricultural economics at Oklahoma State, and one of the paper’s co-authors, said by phone Thursday that he’d expected to find the opposite.

“If you’re looking at broadband to draw in these creative workers from cities and other places,” he said, “it might not be having the effect you want.”

The paper, co-authored by Kelsey Conley, an agricultural economics graduate student at Oklahoma State, was published in this summer’s edition of The Review of Regional Studies.

As for what explains the unforeseen findings, Whitacre said one possibility is that broadband access might make it easier for people in rural communities to find new jobs, allowing them to give up on hardscrabble small business ventures, and to find work elsewhere.

He noted that frequently in rural areas business owners fall into a category known as “necessity entrepreneurs,” operating enterprises like antique stores, or home salons.

“They don’t really have many other options,” Whitacre said. “And what we argue is maybe, as broadband becomes more adopted, these people are finding other business opportunities.”

Whitacre describes himself as a rural broadband advocate.

“We’ve done a lot of work that shows, yes, there’s positive economic impacts associated with rural broadband,” he said, mentioning higher income growth and higher employment as two examples. “But it’s not just this cure-all that’s going to solve all your problems.”

He acknowledges there are limitations and caveats with the data used for the study, but said “It’s the best we have, so that’s what we use.” Whitacre also emphasized that the research did not take into consideration the various speeds of broadband connections in different places.

“Creative class” is an evolving term. It technically covers a wide range of careers, not just those in fields like the arts and design. Examples include, computer specialists, librarians, architects and lawyers. “I think a meat carver is considered a creative class worker,” Whitacre pointed out.

Nuances aside, many rural communities in the U.S. want to attract these types of workers, along with entrepreneurs, particularly Millennials born between the early 1980s and late 1990s.

This can especially be a priority in places where traditional economic engines like farming, manufacturing and mining have faltered. Communities where this happens can see their economy and tax base suffer as young people leave and the local population skews older.

Providing a high quality of life is generally seen as important for attracting Millennials who are entrepreneurial, or in the creative class. Whitacre and Conley write in their paper: “One commonly held perception is that broadband access is important for these types of employees.”

They also note that in recent years broadband access, and adoption rates by households in rural America, have increased dramatically. These upticks have coincided with big investments. The U.S. Department of Agriculture last year touted 254 broadband projects, worth $2.9 billion, which were financed by the department’s Rural Utilities Service.

What does Whitacre believe policymakers should take away from the findings of his research?

“Before you go out and invest in gigabit network or something like that in your community,” he said, “you need to think about the fact that there may be some negatives.” Perhaps most notably: “maybe people are going to use it to move to a more urban area.”

A full copy of the paper written by Whitacre and Conley is available here.

Bill Lucia is a Reporter at Government Executive's Route Fifty and is based in Washington D.C.

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