Dr. Val Farmer
Rural Mental Health & Family Relationships

High Tech And Rural America: Promise Or Threat?

April 16, 2001

How is information age technology affecting rural communities? The jury isn’t out yet. The evidence is still being gathered.

Whether we like it or not, the information age economy is a huge wave washing over us and is transforming the way we live, interact and do business just as surely as the agrarian, industrial and post-industrial revolutions did to our ancestors. Every aspect of out lives is touched, some better than others.

Knowledge is power in the information age. Computers and digital technology gives us access to information and transforms it into knowledge.

Rural communities find opportunity. Rural electronic cottage industries are hooked up and can now sell products on a national and global scale into niche markets. Businesses and consumers link up and bypass traditional dealers and commercial outlets to complete transactions. Modern shipping and electronic money transfers make transactions quick and trustworthy. Computerized information gathered about consumer behavior streamlines inventory control, shipping, and marketing. Even service and technical support can be provided via the Internet. In this world, geography is no longer destiny.

The infrastructure - switching devices, fiber optic transmission lines and bandwidths - need to be available and using a single standard, not a rural and urban standard. Otherwise rural communities will be bypassed as surely as an interstate highway channels commerce along its path. Rural communities need to educate, attract and retain information technology workers, not only for software and product development but also for technical support.

Nor is distance barrier to a learning. Workers and entrepreneurs who are not technologically educated will be at a competitive disadvantage. Youth need to be educated in the new technologies. Their teachers need to be trained and ahead of the technology curve.

Some rural communities have expanded their tech labor force by networking business sites in various locations. Others have built technology centers so several local businesses can share office services.

Adult education is helping to develop a computer and technical skills workforce needed by e-commerce companies. Rural communities also foster the creation and expansion of new businesses and provide needed support.

That is the good news and the challenge.

What is the bad news? Rural communities will need to be a part of the information age economy to stay even and not fall behind. This is no panacea. The same phone lines that bring business to rural communities take business away.

Rural consumers, though accustomed to face-to-face contact, will gravitate to the lowest price and quality of goods and services in the global marketplace. Powerful "brick and mortar" companies can add e-commerce and integrate it with their existing structure to become an even greater force in the marketplace.

Don Dillman, a rural sociologist at Washington State University, was an early proponent of information age technology for rural communities. He still is. But he sees the adaptation of e-commerce as an emerging threat to rural communities. Local businesses are being by-passed as people actually use the Internet to make purchases.

Dillman describes an "80/20" rule. Eighty percent of the merchandise is bought by twenty percent of the people. Those who fly a lot have the greatest incentive to use online purchasing and shop for the lowest price via the Internet. People gravitate to the cheapest provider. This is a centralizing force in a consumer driven economy.

Apply this concept at a local level. Local businesses who are already beset with competition from discount stores and have thin margins could lose 20 percent of their best customers. Dealer networks are being disrupted or bypassed, sometimes by direct competition from their parent organization. Farmers who used to purchase seeds, pesticides, fertilizers and other inputs locally are finding new suppliers. Small town economies can ill afford to lose twenty percent of their best customers.

People also use the Internet to comparison shop. Local businesses can’t take top dollar for their product when their customer can measure the deal in other markets via the Internet. Even if the customer stays local, the profit margins are shaved by the regulating function of the Internet.

No other way. Do we change? Do we embrace technology and use it? Even though the full impact of e-commerce isn’t in yet, I don’t think we have a choice. The genie is out of the bottle. It will become an ever-increasing force in the marketplace. In ten or twenty years, will shopping be a recreational activity? Will we all live in bedroom communities? What will be your niche?