Does Broadband Matter for Rural Entrepreneurs and Creative Class Employees?

Abstract

Efforts to attract entrepreneurs and "creative class" workers have become important components of economic development strategies for rural communities. One commonly held perception is that broadband access is important for these types of employees; however, empirical research on the relationship between the two is generally lacking. This study uses county-level data from the continental U.S. to estimate spatial and first-differenced regression models on the association between broadband and measures of entrepreneurship/creative-class employees in rural areas. The results suggest that high levels of broadband adoption may in fact serve to reduce the numbers of entrepreneurs and creative class employees in rural America. These findings serve as a reminder that broadband is not a panacea for all issues of importance to rural communities and provide evidence that there may be negative implications associated with efforts to increase levels of rural broadband access and adoption.

Broadband and Firm Location: Some answers to relevant policy and research issues using meta-analysis

“…Although data limitation is probably one reason, investigating the economic effects of CJRS/RCSR | Volume 42, Numéro 1 broadband availability is particularly relevant from a policy perspective, as it allows for directly testing the effect of public deployment programs (Bertschek & al., 2015). Overall, it seems that studies using adoption-related indicators conclude that broadband effects are higher and generally more positive (Bertschek & al., 2015;Whitacre & al., 2014-a;2014-b), but in some cases, they can also be more negative (Conley & Whitacre, 2016).…”

“…A majority of studies, however, find very limited (Duvivier & al., 2018;Kandilov & Renkow, 2010) or insignificant effects on firm location (Canzian & al., 2019;Mack & Wentz, 2017;Whitacre & al., 2014-a). Conley & Whitacre (2016) even show that nonmetropolitan counties with the largest increases in broadband experience the strongest drop in entrepreneurship and the number of creative workers because broadband allows individuals to be better aware of alternative job opportunities in neighboring metropolitan areas. Although studies focusing on urban areas show more positive effects than those focusing on rural areas, studies providing direct comparisons of broadband effects between urban and rural areas are more mitigated.…”

“…Although studies focusing on urban areas show more positive effects than those focusing on rural areas, studies providing direct comparisons of broadband effects between urban and rural areas are more mitigated. While some indicate that broadband matters more in urban areas (Conley & Whitacre, 2016;Mc Coy & al, 2018 3 ), others indicate the opposite (Atasoy, 2013;Mack, 2014-b;Prieger & al., 2017). Obviously, the diversity of results can arise from the use of different samples 4 and definitions of urban and rural areas.…”

“…Literature reviews, theoretical, qualitative and descriptive papers, and quantitative works that do not provide effect size (e.g., Mack, 2014-a;Mack & Grubesic, 2009;Tranos & Mack, 2016) are thus excluded. Moreover, some studies that use an outcome variable that we judge to be insufficiently related to firm location, such as the amount of investment or the share of nonfarm proprietors (Cumming & Johan, 2010;Conley & Whitacre, 2016), are excluded. Finally, for each selected study, we include only estimates that meet all criteria (e.g., when studies assess the effect of broadband on both firm location and employment, we include only estimates for firm location).…”

Interregional Competition for Mobile Creative Capital with and Without Physical Capital Mobility

“…Angelopoulos et al (2015) point out that in Australia, tolerant-but not necessarily diverse-places are likely to be successful in attracting the creative class. Conley and Whitacre (2016) point out that it is commonly thought that a lack of access to broadband prevents rural America from attracting the creative class. Even so, empirical analysis demonstrates that making broadband easily available is not a viable economic development strategy 2 in the sense that it may actually reduce the number of creative class members who are willing to reside and work in rural America.…”