Tech and Entrepreneurship in Rural America

Recently, the Center on Rural Innovation (CORI) set out to answer a number of questions about the tech landscape in rural America. What is the state of tech employment in rural communities? What are rural employers looking for in a tech workforce? What types of tech training programs are most helpful to get learners and workers through the door? And how are aspiring tech workers learning about local opportunities?

The result was the report  Rural America’s Tech Employment Landscape: How to Increase Tech Talent and Employment. 

“CORI is taking a really innovative and future-focused approach to rural economic development. And because of that, there are a lot of really interesting questions to ask,” says Mark Rembert, director of research and knowledge at CORI. Lightcast provided a custom data set for the report and last summer also released research examining job postings in rural counties. As such, we wanted to hear more about trends and shifts in rural America, so we sat down with Rembert to learn more about their research. 

What is rural?

As is often the case when conducting research, definitions first need to be settled upon. For this report, and for the larger work of CORI, defining rural America is always top of mind. 

Depending on the agency, policy, or program, you will likely get one of the more than a dozen definitions used by the federal government to define rural America. Two of the most used are the U.S. Census Bureau’s urban/rural definition, commonly referred to as the census rural definition. And the Office of Management and Budget’s (OMB) nonmetropolitan definition, known as the nonmetropolitan rural definition. 

Yet for a defining characteristic like population, these two definitions return vastly different numbers: 62 million using the census rural definition and 46 million using the nonmetro rural definition. Each definition has pros and cons, as do the other definitions. But Rembert has good advice when deciding which to use. “The goal should be to group places together that share the characteristics that impact social and economic outcomes,” he says.

For Rural America’s Tech Landscape, CORI went with counties defined as nonmetropolitan by the U.S. census that have an urbanized population of 50,000 or less. For a deeper dive into rural definitions, check out CORI’s Defining rural America article. 

Tech vs. digital

When examining the rural tech landscape another definition is needed: What is tech? CORI defines tech jobs as those in which “people help to design, build, and maintain computer hardware and software systems, such as web developers, cybersecurity specialists, and database administrators.” These jobs can exist within companies in the tech sector as well as in industries that use such technologies. Additionally, these jobs tend to be higher paying with good job security and career growth opportunities.

Digital jobs on the other hand primarily involve using technology to create digital products and services. Examples include graphic designers, data scientists, and financial analysts. These jobs are generally middle-wage and often allow for flexibility such as remote work or freelance.

During, and coming out of the pandemic, much of the anecdotal and media stories emphasized workers with digital skills and jobs taking their role remote to a rural location. And while this is an exciting development for Rembert and CORI—it supports economies of rural places, opens up more employment opportunities for rural residents, and expands access to talent for startups located in rural areas—developing tech economies in rural America is where Rembert sees the most promise.

“Tech jobs and businesses have the potential to create significant multiplier effects,” says Rembert. “So we focus on tech jobs as a proxy for the capacity of a rural area to generate high-growth-potential businesses. And we see that as really critical for the future of economic development because we know that these high-growth businesses really produce a lion's share of new job creation.”

The findings

To conduct its research, CORI used not only an analysis of labor market data but also a national survey of rural adult residents and a regional survey sent to rural employers. The findings were extensive but generally fall into four major themes: non-tech rural employers play a major role, rural residents are interested in tech and take varying paths into tech careers, and lowering the cost of tech training is needed.

Innovation hubs and investment in entrepreneurship

As Brookings and many others have highlighted, the last few decades have seen the tech industry cluster in a few “superstar cities” such as Seattle, Boston, New York, and San Francisco. But there is a belief that this is changing.  “We're not just optimistic about innovation happening in rural areas,  we see it happening,” says Rembert. "Between 2017 and 2021 venture capital in rural areas grew from $3.2 billion to $42.5 billion."

What this investment might speak most directly to is the growing entrepreneurial ecosystems in rural communities. Rembert stresses the importance of such ecosystems for new tech startups to form, and when investment comes, scale in the same community. “For rural areas to really benefit from technological advancements, tech companies need to be located in those areas. And that really starts with having a startup ecosystem that can support new tech startups form and scale,” emphasized Rembert.

And investment isn’t always in the form of venture capital. Massive public sector investments can help shift the concentration of tech from the superstar cities to other areas, including rural. The recently passed CHIPS Act ​​sets aside over $50 billion for American semiconductor research, development, manufacturing, and associated workforce development. When analyzing the tech sector, semiconductor manufacturing (NAICS 3344) is one of the six advanced industries Brookings uses. Communities with a tech ecosystem are thus very attractive for the types of investments being made in the semiconductor industry.

Developing from within

But while a large investment, whether a new production facility, infusion of workforce development funds, or an EDA grant is welcomed by most regions, rural communities recognize that no such investment is a panacea for their economic woes. Not only are such investments rare, but they can also go as quickly as they come. Rembert knows this well. His hometown of Wilmington, Ohio, took the brunt of the job loss when DHL slashed its US workforce back in 2008.

“A town of 12,000 people lost 10,000 jobs, so really just incredible economic loss,” recounts Rembert. “I had just graduated from college and was on my way to the Peace Corps, but decided to take a detour home. I ended up staying for the next 10 years to work with the community and help envision what the economy could look like in the future.” 

That vision included leveraging local assets along with new and creative ways to drive development from within instead of relying on a big employer. Rembert continues that work with CORI now, working to advance economic prosperity in rural America through the creation of inclusive digital economy ecosystems that particularly focus on supporting scalable entrepreneurship and tech job creation. “A simple way of saying that is we are trying to build tech economies in rural America,” says Rembert.