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OSU economist links broadband use, rural economies

Study compares growth, high-speed connections
by OSU Agricultural Communications Services, Modified: August 20, 2014 at 9:47 am •  Published: August 25, 2014

STILLWATER — An Oklahoma State University Cooperative Extension economist is showing that broadband spurs growth in rural communities, especially when a large segment of the population adopts the technology.

Brian Whitacre, who was the leader of a national study on broadband, said the team’s findings are among the first to support a long-held assumption that rural economies are boosted by broadband. The findings were published in the most recent issue of Telecommunications Policy.

“When broadband first came out, there were all sorts of claims that it would be great for rural areas, but until now we really hadn’t seen any firm evidence on whether broadband impacts economic growth in these areas,” Whitacre said.

The study found that rural counties that sufficiently adopted broadband had higher rates of income growth and lower rates of unemployment growth.

The researchers used 2010 U.S. county-level data to compare all non-metro counties in terms of their broadband availability and adoption. Among the sources were the National Broadband Map and county-level data on broadband adoption from the Federal Communications Commission, Whitacre said. U.S. Census data also was used.

Then they compared the counties’ economic growth between 2001 and 2010, using household income, employment growth and number of firms. When they analyzed the two data sets, they found a significant relationship between broadband adoption and economic growth.

Counties in which 60 percent or more of the households had a wired high-speed Internet connection experienced higher income growth and saw a smaller increase in unemployment rates compared to counties that did not reach that threshold.

Counties in which less than 40 percent of the households had broadband saw lower growth in the number of businesses and employees.

Researchers found broadband availability alone was far less important to growth than adoption — a point that has important policy implications, Whitacre said.

“If you look at how we’ve been spending money, the vast majority goes to establishing infrastructure in rural areas. There’s not much being spent on showing people what can be done with broadband or getting people to use it productively,” he said. “We might want to spend more public funds on promoting adoption, as opposed to just giving people access by subsidizing the providers.”

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