Digital development in rural areas: potentials and pitfalls

The potential for rural areas to benefit from telecommunications technology is a persistent question. This paper examines data for the USA concerning the ‘digital divide’ and access of residences and businesses, which tend to suggest that all is (or will soon be) well. The paper also presents data on aspects of digital infrastructure in rural America, including points of presence and digital telephone switches, which suggest that there are major shortcomings in most rural communities. Demand aggregation is a possible solution, but more serious pitfalls are those related to shortages of human capital. These might be resolved in some rural places, where inmigration and return migration bring needed cerebral inputs to rural areas. A final set of improvements concerns how businesses use the Internet and e-commerce. In the end, telecommunications is not a ‘quick fix’ solution for rural development, and the desired improvements will be limited to a fraction of rural places.