Texas economy

Report: Texas economy benefits more than any state by connecting rural residents

According to a new report, rural businesses in Texas could earn $3.7 billion for local rural economies — more than any other state — by connecting them to digital tools and high-speed internet access.

Online retail sales nearly doubled between 2011 and 2016, and web tools helped businesses in the commerce sector, according to the US Chamber of Commerce and Amazon report. Small rural businesses have often been excluded from these gains due to a lack of labour, training programs and broadband connectivity.

More than 25% of rural Texans lack high-speed Internet access, compared to 2% of urban residents.

Rural businesses also lack manpower. According to forty percent of rural business owners who responded to the report, local talent is not available in their communities to build websites. They use online marketing, logistics and cloud computing tools to help businesses grow.

“What we’ve seen for Texas, in these rural communities, they could add over $11.2 billion to the state economy and over 70,000 jobs over the next three years,” said Allison Flicker, spokesperson for Amazon.

“It’s huge for businesses and for everyone,” said Lonnie Hunt, executive director of the Deep East Texas Council of Governments. Unlike many government councils across the state, DETCOG does not have major cities.

“We can’t get a new company to invest where they don’t have access to broadband. It’s no longer a luxury, it’s a necessity,” Hunt said.

Amazon supports the study, which is consistent with other efforts the company has made to increase small business access to its platform, Flicker said.

“A lot of people don’t realize that more than half of the stuff you see on Amazon is actually sold by small and medium businesses,” she said.

Amazon could benefit from increased sales on its platform to more rural online businesses. More rural online businesses also mean more potential customers for Amazon Web Services, the nation’s largest provider of server space, web hosting and online tools. AWS earned $25 billion in 2018, more than McDonalds. It accounts for most of Amazon’s overall profit.

More than a third of Texas homes do not connect to broadband. Affordability of access was the primary cause why homes in Texas were not connecting to broadband.

“In rural communities, this is often due to a lack of competition,” said Dallas Federal Reserve Bank senior researcher Jordana Barton. “This study makes the case for (broadband) investment.”

Small businesses have accounted for 65% of job gains over the past 25 years, but Barton said that skews urban centers.

“To get some of that benefit for rural America — the unique potential of online access to break down geographic barriers, we don’t realize the full potential,” she said.

The FCC maintains a broadband accessibility map for the country, but communities like DETCOG — even though they appear to have multiple providers — are often prohibitively expensive, officials said.

Public-private partnerships resulting in more broadband and more training could entice some people to turn to rural counties, countering the so-called brain drain. Only 16% complete college and many never return, according to the US Department of Agriculture.

Since 1980, rural Texas has grown slowly, by fewer than 600,000 people. Its urban cousins ​​have more than doubled, from 11 million to 25 million, according to the USDA.

“We have 12 counties. Seven of them have lost population since the 2010 census,” said Hunt, who sees the future of his rural Texas strip in the development of a local broadband consortium, which the county has budgeted a half a million dollars to study.

“We live in a wonderful part of Texas. Beautiful forests and beautiful lakes, and good quality clean air and water and good people – but there are no jobs,” he said. “And people will migrate to where the job opportunities are.”

Paul Flahive can be contacted by email [email protected] or on Twitter @paulflahive.