Study finds doubling broadband speeds boosts GDP

Wednesday, September 28th 2011
A 0.3 per cent rise in GDP can be recorded by doubling a country's broadband speeds.
Study finds doubling broadband speeds boosts GDP
Raising broadband speeds has a positive impact on the economy, according to a new joint study.

The research, conducted by Ericsson, Sweden's Chalmers University of Technology and consulting firm Arthur D Little, claimed that doubling a country's average broadband speed boosts GDP by 0.3 per cent.

For members of the Organisation for Economic Co-operation and Development (OECD), including the UK, US and Ireland, this increase is equivalent to 6 billion (£81 billion).

This, in turn, represents more than a seventh of the average annual growth enjoyed by OECD nations over the past decade.

GDP increases of greater than 0.3 per cent can be enjoyed if the typical broadband speeds more than double, the study discovered. For instance, GDP growth stimulus of 0.6 per cent can be achieved by quadrupling download capabilities.

The findings come after a separate study from Ericsson and Arthur D Little found the availability of fast internet access also has an impact on economic prosperity.

Every increase in broadband penetration of ten percentage points drives up a country's GDP by one per cent, the researchers revealed.

Speaking at the Broadband World Forum in Paris, Johan Wibergh - head of the business unit network at Ericsson - said broadband spurs economic growth through its ability to create efficiency for businesses and consumers.

"It opens up possibilities for more advanced online services, smarter utility services, telecommuting and telepresence. In healthcare, for instance, we expect that mobile applications will be used by 500 million people," he added.

"We expect a huge increase from the current estimate of around one billion people with broadband access to about five billion in 2016."

Earlier this month, president and chief executive of Ericsson Hans Vestberg insisted fixed-line and mobile broadband have a huge role to play in transforming life around the world and restated the company's commitment to broadband of all kinds.

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