New report by U.S. Chamber of Commerce and Amazon finds rural digital transformation will add tens of thousands of jobs and expand economy
More than 60 percent of the U.S. population lives in metropolitan areas, making cities a primary sales and marketing target for technology vendors. However, a new study by the U.S. Chamber of Commerce and Amazon finds the digital transformation of rural America is a multibillion-dollar opportunity that could produce significant economic returns.
The Lowdown: The U.S. Chamber of Commerce study commissioned by Amazon finds that investments in digitally transforming rural regions could add more than $140 billion to the U.S. economy and create more than 360,000 full-time jobs in non-urban communities.
The Details: Rural America is home to just 15 percent of the U.S. population and accounts for just 4 percent of the U.S. economic output. The adoption of digital technologies and embrace of digital transformation, however, could radically change the economic output of rural areas, driving as much as $84 billion in new economic activity each year, the study finds. Southern states stand to reap the greatest return on investment in rural digital transformation.
The study finds that digital transformation and online tools are already having a significant impact on rural businesses.
> One in five rural businesses are already digital, earning at least 80 percent of revenue by selling their products and services online.
> 55 percent of small businesses say that e-commerce helps expand their sales productivity.
> 40 percent of rural businesses say online tools help them reach customers in other states and countries.
> 29 percent say digital tools help reduce the cost of materials and resources.
The Impact: Rural businesses recognize the potential benefits of digital transformation and adoption of technology tools to automate and optimize their operations. However, they’re challenged in their adoption of new technologies. Nearly 40 percent of rural businesses say they can’t hire the talent required to implement and maintain digital infrastructures, and two-thirds of rural businesses say they don’t have access to adequate Internet or cell phone service. The implication is that digital transformation could radically improve the performance and fortunes of rural businesses while opening huge revenue opportunities for technology vendors and solution providers that can deliver and support digital infrastructures and resources.
Background: Technology go-to-market strategists tend to focus on urban centers, as they have the greatest economic impact. The top 25 U.S. cities by population generate more than one-half of the annual gross domestic product. The current plan for 5G infrastructure development is to focus on key metropolitan markets and then spread out to suburban and rural areas. While the strategy will get next-generation connectivity and cloud-based services to the majority of American businesses and people, it will leave significant coverage gaps.
The Buzz: “The opportunity to successfully start and grow a rural small business in our country is a great example of how technology is positively transforming nearly every aspect of our lives,” said Tim Day, senior vice president of C_TEC, the Chamber Technology Engagement Center at the U.S. Chamber of Commerce. “Digital tools and technologies allow rural small businesses to compete in a global economy — regardless of their size or location — which is essential to a vibrant U.S. economy.”
“We’ve seen firsthand how rural entrepreneurs can transform their businesses through digital technology, from reaching millions of new customers around the world by selling online to quickly scaling their start-ups thanks to affordable access to cloud computing,” said Jeff Wilke, CEO of Amazon’s worldwide consumer division. “Ensuring that small businesses in rural America have good digital skills, are able to attract tech talent, and benefit from fast connectivity will deliver increased economic prosperity in rural communities.”
Channelnomics Point of View: The rural American business sector is