Does Broadband Matter for Rural Entrepreneurs or 'Creative Class' Employees?

Abstract

Broadband, or high-speed Internet, has changed the way our society operates; yet there are still parts of rural America where the connection is lagging behind. Closing the �digital divide� is still a priority on rural America�s agenda, with government policies focusing on providing broadband infrastructure to unserved (or underserved) areas. An unanswered question, however, is whether a relationship exists between broadband availability and the existence of entrepreneurs or �creative class� workers in rural communities. These types of workers have been shown to be particularly important for economic growth in rural areas. One relevant hypothesis is that some threshold related to broadband exists (a specific download speed, or number of providers) that is positively related to the existence of rural entrepreneurs; such a finding would have meaningful implications for future U.S. broadband policy. This research explores this relationship using county-level data from the 2012 National Broadband Map and measures of entrepreneurship and creative class employees from the Census and ERS. Spatial econometric tools are used to assess the cross-section relationship as of 2012. First-differenced regressions are also used to determine whether increasing levels of broadband have influenced changes in entrepreneurship or creative class employees in rural areas over time. Results indicate wired broadband availability is important to entrepreneurs in rural areas. The opposite is true for creative class employees in rural areas � broadband adoption, and wired/ wireless availability actually has a negative influence. These results suggest that the direction is not always positive, which is an interesting finding and one that should be taken into account as specific rural development policies are developed.