The 'death of distance' fifteen years on. Information technology and knowledge-based service firms in rural areas.

Since the seminal paper by Beyers and Lindhal on 'lone eagles and high fliers' (1996), rural knowledge-based services have received little attention, although the landscape of the information economy has dramatically changed. This paper embraces a comparative approach which endeavours to explore the existence of a possible digital divide between rural and urban firms, all other things being equal. The need to capture a locational effect requires a strict control of sector and size. Through a telephone survey implemented in early 2011, 400 business service firms located in rural areas in the South-East of France were asked about their use of telecommunication-based applications. Then, a sample of 300 similar firms based in the metropolitan area of Lyon was given the same questionnaire. The empirical analysis found that rural firms are less versatile users of information technology than their urban equivalents. However, the gap is thin and is not the result of a lack of telecommunication infrastructures. These findings suggest that, in the French context, local economic development policies must not solely rely on the provision of broadband infrastructure and services, but also on the stimulation of entrepreneurship, the rise of entrepreneurial skills, and the global enhancement of the community's attractivity