Doubling broadband speed enhances GDP by 0.3 percent

Doubling the broadband speed for an economy increases GDP
by 0.3 percent, according to a report prepared by Ericsson, Arthur D. Little
and Chalmers University of Technology.



A 0.3 percent GDP growth in the OECD region is equivalent
to $126 billion. This 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 percent (e.g. quadrupling of speed equals 0.6
percent GDP growth stimulus)



Both broadband availability and speed are strong drivers
in an economy. Last year Ericsson and Arthur D. Little concluded that
for every 10 percentage point increase in broadband penetration GDP increases
by 1 percent.



This growth stems from a combination of direct, indirect
and induced effects. Direct and indirect effects provide a short to medium term
stimulus to the economy. The induced effect, which includes the creation of new
services and businesses, is the most sustainable dimension and could represent
as much as one third of the mentioned GDP growth.



“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,” Wibergh added.



By Team
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