TVA Rural Studies

Telecommunications and Rural Development:
Threats and Opportunities

Edwin B. Parker
Parker Telecommunications
May 1996

2. Global Transformations

No place in the United States is exempt from the changes being brought about by the current revolution in information technologies. The economy of not just the United States but of the entire world is in the midst of a structural transformation that is taking place faster than the historic changes that we now call the Industrial Revolution. Viewed from an historical perspective, the Information Revolution is transforming society faster and more deeply than the massive changes of the Industrial Age. There is nowhere to escape the pressures of change. As always, when there is change on this massive scale, the pace of change is uneven. Some places are on the cutting edge and others appear to be peaceful backwaters. Appearances are deceiving because the peacefulness is only temporary.

Better communication has made competition for good and services, and for jobs, national or international instead of local. Better computer processing of information permits businesses and other organizations to operate more efficiently, with less need for “middle management” jobs or people who perform routine clerical tasks. The “mass markets” of recent times have given way to a much wider variety of targeted specialized markets. We receive mail order catalogs and telephone solicitations based on precise demographic measurements and records of our past purchases. Highly automated factories produce short runs of specialized products that operators quickly change in response to market demands. We order computers and other products by telephone and get delivery within days, unaware that the vendor assembled the products to our specifications after we placed the order.

Businesses have transformed themselves with computer and telecommunications technologies, and laid-off many former employees in the process. Successful survivors have increased their productivity (that is, they have provided more and higher quality of output per unit of labor input (and improved responsiveness to markets to achieve a competitive advantage in the changed global economy. Governments and schools have been slower to make the organizational and technical transformations that businesses are making. Taxpayers, conditioned by their experiences with businesses, may participate in taxpayer revolts when governments fail to improve the quality and responsiveness of government services with reduced government costs.

Competition is spreading the advantages of technical and organizational transformations to formerly isolated regions. The Iron Curtain (symbolized by the Berlin Wall) crumbled in response to the unstoppable flow of information from the rest of the world to the people behind the wall. Competitive enterprises are beginning to bring to the peoples of Eastern Europe some of the goods and services their monopoly government enterprises were unable to provide. In the past decade, China has unleashed the competitive entrepreneurial spirit of its people to achieve rapid economic growth, while shrinking to less than 30 percent the portion of its national product provided by nationalized enterprises. Improved access to, manipulation of, and rapid response to information is stimulating increased competition in all parts of the globe.

No rural community in the United States can long remain a peaceful backwater in this river of global change. To remain viable as communities, all must adapt to the changed environment by using information and information technology to keep their communities competitive. Communities that fail to do so will have fates similar to small communities that were bypassed by canals, railroads and highways in earlier times.

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