Supply, demand and ICT-based services: A local level perspective

While much of the economic development literature urges greater emphasis on demand-based strategies, policies designed to create economic development advantage by leveraging telecommunications investment continue to be supply side oriented. The rationale underlying telecommunications investment efforts is that if the technology is low cost, both financially and from a cognitive usability standpoint, then it will be used. This paper examines the use of supply side strategies by one small community, LaGrange Georgia. LaGrange sought to enhance its competitiveness in the knowledge economy through the deployment of an Internet television like service designed to be free and easy to use called LITV. Based on a survey of 494 households and selected case studies, the study found that a major group of households that took up the service already had an Internet computer at home. They adopted LITV primarily because it was free rather than because it was an upward path toward economic transformation, as was the case for a segment of African-American female-headed households that adopted LITV. In spite of the fact that LITV was free and nominally easy to use, many citizens did not adopt LITV. Nonadopters and those who initially adopted but then dropped the service spanned the socioeconomic spectrum--rich and poor, well educated and dropouts, with Internet computers at home and beyond. This finding suggests that reducing the cost of technology alone is not enough to raise demand. More attention must be paid to tailoring policies to stimulate demand through targeted applications and broader supporting policies.