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Exploring the Relationship between IT Infrastructure and Income Inequality through Diffusion of Innovations Theory

Some cities in the United States experience gaps when it comes to income inequality. Entrepreneurs, managers, etc. can take advantage of information technologies (IT), while those in the middle and the bottom see fewer benefits. San Francisco is a perfect example of this dichotomy. Meanwhile, some countries, such as Iceland, are more capable of using the diffusion of Internet infrastructure to reduce income inequality, which contributes to the wellbeing of its citizens. This paper explores the relationship between the diffusion of IT infrastructure and income inequality through Rogers’s Diffusion of Innovations Theory. Using quantitative data through hierarchical regression, the empirical results show this theory’s tenets do not necessarily hold, because there is a significant negative relationship between infrastructure diffusion and income inequality growth. This paper contributes to research by expanding economic and sociology work to the IS domain, and provides suggestions for practice, such as more focused IT infrastructure investments.