Digital technology: a vehicle for making rural businesses competitive

Abstract

Purpose

The purpose of this paper is to determine if rural firms can utilize technology to communicate with their customers, compete for business, reduce costs, and improve operations to maintain competitive advantage.

Design/methodology/approach

Businesses in the service area were anonymously surveyed to identify the perceived needs and benefits the firms had concerning digital technology. The various business sectors such as manufacturing, retail, construction, wholesale, financial services, healthcare, and food services were juxtaposed with there data to see if there were any correlations between the needs and perception of the categories of business and size of the businesses. The total number of respondents was 309, from five counties in three contiguous states located in Appalachia.

Findings

This study revealed answers to the following research questions: what percentage of annual business revenue is spent to improve technology? Does the business use computers and does it vary by industry and size? Is technological information important to business and does it vary by industry and size? What methods do businesses utilize to contact their customers and do they vary by size? Can technology reduce costs in business? Does new technology help business stay competitive?

Research limitations/implications

This study focused on five counties in Appalachia and its findings may not necessarily be applied to other populations. Future research could focus on underrepresented categories of business such as wholesale firms. In addition, the definition of technology needs to be consistent from business to business. Furthermore, the specific software applications used by firms, the training and their return on investment could be evaluated via the firm's classification, size, ownership, location, and number of employees.

Practical implications

Firms in Appalachia need to be encouraged to invest their hard‐earned profits in technology. These investments must be aligned with their business plans to provide cost‐saving, efficiency, and/or customer‐relationship benefits. Furthermore, state and country governments should promote technological advances, infrastructure development, and technological literacy. While this study focused on businesses in Appalachia, its implications and impact are far reaching. In this time of recession, unemployment, and financial hardships, the use of electronic technology may be a stimulus for job creation and competitiveness. Digital technologies have enabled firms of any size and at any location to improve their marketing, communications, and business operations to reach customers and improve efficiencies. Investments in electronic technologies could enable them to not only reach new customers, but also be competitive with their larger, urban counterparts.

Originality/value

This paper provides both theoretical and empirical data to increase the body of knowledge about small business practices in Appalachia. In addition, it cites the importance of technology for competitiveness.

Citation

Rahman, S.M., Tootoonchi, A. and Monahan, M.L. (2011), "Digital technology: a vehicle for making rural businesses competitive", Competitiveness Review, Vol. 21 No. 5, pp. 441-451. https://doi.org/10.1108/10595421111171948