Broadband has power to stir economic growth

eGov Innovation Editors
07 Oct 2011

A new study, conducted jointly by Ericsson, Arthur D. Little and Chalmers University of Technology in 33 OECD countries, quantifies the isolated impact of broadband speed.

The report showed that doubling the broadband speed for an economy increases GDP by 0.3 %. This 0.3 % GDP growth in the OECD region is equivalent to $126 billion and corresponds to more than one seventh of the average annual OECD growth rate in the last decade.

The study also shows that additional doublings of speed can yield growth in excess of 0.3 % (e.g. quadrupling of speed equals 0.6 % GDP growth stimulus).

“Broadband has the power to spur economic growth by creating efficiency for society, businesses and consumers,” said Johan Wibergh, Head of Business Unit Networks, Ericsson. “It opens up possibilities for more advanced online services, smarter utility services, telecommuting and telepresence. In health care, for instance, we expect that mobile applications will be used by 500 million people."

During a keynote speech at Broadband World Forum 2011 in Paris, Wibergh said today's 1 billion people estimated to have broadband access is expected to grow to about 5 billion by 2016, majority of whom will be on mobile broadband.

The study is the first of its kind in that it quantifies the economic impact of increases in broadband speed in a comprehensive scientific method using publicly available data. Countries considered in the study are Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, UK and US.

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