Broadband and National Economies Are Inseparable

Carl Weinschenk

The use of broadband for many everyday activities has a huge cumulative impact on the economic welfare of a nation. It is difficult to get an exact read on how great the impact is. A few things are certain, however: The impact indeed is large, it is growing and nations that don’t deploy broadband will be left behind.

At FierceSmartGrid, Point Topic CEO Oliver Johnson took some year-old numbers on the tax impact of broadband. He extrapolated going forward and came to the conclusion that tax revenues rise in tandem with broadband penetration increases. The value of broadband can be seen in simply looking at the amount of money being left on the table by not having full deployment. Wrote Johnson:

The picture improves in 2020, as more markets approach 100 percent saturation. However, we still estimate that governments will be losing out on anywhere between $67 billion and $503 billion globally by not having 100 percent penetration.

The point is that those lost billions of tax dollars accrue from the parts of the infrastructure that are not using broadband. That suggests the amounts coming from wired infrastructure are immense.

Though it is half a world away, Arab News makes the same basic point. It reports on a study done by Chalmers University, Arthur D. Little and Ericsson. The conclusion suggests how vital broadband is:

The researchers examined broadband speed trends and the corresponding economic growth rates across the 34 Organization for Economic Cooperation and Development (OECD) member countries, along with other variables such as growth in populations, labor forces and telecom revenues. Recognizing a clear pattern, the researchers found that doubling a country's broadband speed would lead to a 0.3 percent increase in GDP, quadrupling it would add 0.6 percent to its economy and so on.

The unnamed writer also pointed to indirect benefits surrounding the upgrade of the communications infrastructure. The Global e-Sustainability Initiative has released a study entitled “Measuring the Energy Reduction Impact of Selected Broadband-Enabled Activities Within Households.” The study gauged the energy impact of “telecommuting, using the Internet as a primary news source, online banking, e-commerce, downloading and/or streaming media (music and video), e-education, digital photography, and e-mail.”

The study suggests that 2 percent of total energy consumption could be saved across the eight categories. It’s not surprising that telecommuting is the big winner with 83 to 86 percent of the net savings. The story points out that the 2 percent figure only is an example: Broadband has become an everyday presence in far more than the eight categories studied. The real savings can’t be calculated, but certainly is a great number.

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