The digital divide: Implications for agribusiness and entrepreneurship. Lessons from Wales

Abstract

This paper investigates the impact of broadband access on agribusiness in rural Wales and the resulting implications on entrepreneurial activity. Despite attempts by Government and telecommunications providers to develop widespread broadband coverage in Wales, concerns remain in relation to an increasing digital divide between urban and rural locations. Broadband is a key enabling technology therefore connectivity is significant, not only in communication, but also in the ability for businesses to innovate and grow. Wales is a predominantly rural country with 84% of the total land area in Wales being used for agriculture (Welsh Government, 2013). The food and farming sector represents a significant part of the Welsh economy, and is dominated by small businesses. Connectivity and increased use of technology are vital for these businesses to overcome location constraints and various industrial challenges, notably Brexit. The research uses survey data from 738 farmers and 107 food SMEs in Wales, with 19 follow-up semi-structured interviews. The survey results highlight issues of technology adoption, with 19% of farmers in the survey having no access to broadband internet, with others reporting the speed of connection being a limiting factor. The consequences of poor connectivity point to limited computer skills and low levels of soft technology adoption, a lack of engagement with social media, limited scope for innovation and restricted business growth, with 55.1% of food respondents identifying poor broadband access as a barrier to internationalisation. This has led to agrifood businesses adopting a passive approach to growth opportunities. The findings suggest that rural areas remain at a disadvantage due to poor connectivity, an issue that must be tackled by the Welsh Government to readdress the balance in the economy and limit a brain drain of skilled people moving to urban areas, often outside Wales. Support for such businesses is vital, particularly given the pressures and uncertainty in the industry, as broadband access represents an important enabler for future innovation and entrepreneurial activity.