Economists sometimes talk about the “ripple effect.” Activity – sometimes seemingly minor activity – in one sector of the economy has larger significance in other sectors. A new white paper by Purdue University’s Center for Regional Development, “Job Creation from Rural Broadband Companies,” (PDF) attempts to trace the ripples created by broadband providers in rural America.
“Although rural telecommunications providers are typically small, they make a significant economic impact in their communities,” concludes the research, which was sponsored by the Rural Telephone Finance Cooperative, the Foundation for Rural Service and JSI. “Data indicate that rural communications providers contributed to more than 77,000 jobs in the United States and supported more than $10 billion in economic activity across a wide range of industries.”
Purdue used data supplied by members of NTCA—The Rural Broadband Association in 44 states. It was able to find rural broadband had significant ripple effect on 29 different industries in those states. The study divides the industries in three categories. “Rank one” is “wired telecom carriers,” which includes cable TV companies, computer design companies as well as companies that tend to get direct benefit from high-speed data, such as medical facilities, video production companies and movie theaters.
The second rank of “engineering and semiconductors” includes manufacturing facilities that focus on electronics in the production phase. Accounting companies, gas stations, and convenience stores also tend to land in the second ripple. Colleges/universities, commercial banks and the postal service are among those in the third rank.
“For every job created by an NTCA member, almost two additional jobs were created due to the interaction with other industries served by or supported from the spending by the telecom employees,” according to the study.
This study is the Purdue Center for Regional Development’s second investigation into rural broadband. A report released a year ago examined seven Indiana electric cooperatives and concluded that the state economy would improve by $12 billion if broadband extended to all households.