Northeast Regional Center for Rural Development, Enhancing the capacity of Land Grant Universities to foster regional prosperity and rural development.

rural innovation

Experimenting in the Cloud: The Digital Divide’s Impact on Innovation

August 8, 2023

This paper builds on a National Science Foundation working paper that identified a strong association between cloud use and various types of innovation but did not consider whether 1) cloud adoption is a reliable indicator of the innovation orientation of a firm, or 2) cloud adoption enables various types of innovation. The researchers estimate propensity score matching and endogenous treatment effect models to control for innovation orientation, producing evidence to test the second explanation. Findings support an enabling effect of the cloud on innovation providing concrete evidence of the adverse impact of the digital divide.

Publications

Internationalization of the Rural Nonfarm Economy and the Cloud: Evidence from US Firm-Level Export Data

July 23, 2023

The move toward universal broadband availability envisioned in the Broadband Equity, Access, and Deployment Program presents a double-edged sword for many rural communities: increasing the leakage of local spending to more internet sales countered by better opportunities for tapping remote markets. This paper uses confidential data to examine how export intensity is affected by subscription to cloud computer services—a technology that requires very high-speed broadband. Earlier research identified an enabling effect of the cloud on various types of firm-level innovation, effectively reducing the cost of experimentation by replacing large fixed IT investments with a pay-as-you-go service. To the extent that exporting places new demands on IT-enabled functions such as order fufillment and tracking, marketing, or document control, cloud subscriptions could substantially reduce the cost of entering, and excelling in, export markets.

Publications

An Examination of the Informational Value of Self-Reported Innovation Questions

October 1, 2022

Self-reported innovation measures provide an alternative means for examining the economic performance of firms or regions. While European researchers have been exploiting the data from the Community Innovation Survey for over two decades, uptake of U.S. innovation data has been much slower. This paper uses a restricted innovation survey designed to differentiate incremental innovators from more far-ranging innovators and compares it to responses in the Annual Survey of Entrepreneurs (ASE) and the Business R&D and Innovation Survey (BRDIS) to examine the informational value of these positive innovation measures. The analysis begins by examining the association between the incremental innovation measure in the Rural Establishment Innovation Survey (REIS) and a measure of the inter-industry buying and selling complexity. A parallel analysis using BRDIS and ASE reveals such an association may vary among surveys, providing additional insight on the informational value of various innovation profiles available in self-reported innovation surveys.