Study finds broadband adoption is tied to economic growth

Study finds broadband adoption is tied to economic growth

Utility poles in rural area

Researchers say rural U.S. counties with high adoption rates display improved economic indicators.

It's adoption of broadband, not just availability, that matters most for rural economies, researchers say.

Author: Stewart Schley

Academic researchers led by an Oklahoma State University associate professor have new proof to back a familiar claim: that high-performance broadband network usage correlates with economic growth in rural America.

The team of researchers examined county-level data describing economic conditions including household income, the number of employers and growth in employment. They then compared these data with broadband adoption in the same geographies from 2001 to 2010, finding a “significant relationship” between broadband adoption and economic gains. The study was released in August 2014.

Among findings: counties with a high broadband adoption levels, defined as 60% or greater penetration of wired high-speed Internet, saw higher income growth and a smaller increase in unemployment rates than counties with broadband adoption below 60%.

Adoption is key

A key point the author stress: It’s adoption of broadband, not mere availability, that makes the difference. Policymakers should be mindful of this fact, suggests lead researcher Brian Whitacre of Oklahoma State University.

“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 in this summary release

Whitacre is cautious about framing the results, noting it’s impossible to come to an exacting conclusion about whether high broadband adoption actually causes economic growth. Although the researchers took pains to compare similar counties, with broadband adoption the differentiating factor, “There are certain unobservable community traits that may account for the differences between these otherwise similar counties. For example, maybe a county did a really great job recruiting an outside firm or promoting entrepreneurship,” said Whitacre. “We wouldn’t be able to account for that in our model.” 

The research was funded by the National Agricultural and Rural Development Policy Center (NARDeP), which is funded by the USDA National Institute of Food and Agriculture. The report was published in the journal Telecommunications Policy.