The Link Between Broadband and Economic Growth

econDoes broadband spur economic growth? The intuitive answer is “of course” (unless new users do nothing but watch cat videos…). Two representative research studies take a more rigorous and quantitative approach to this question.

The first, from the World Bank, is “Exploring the Relationship Between Broadband and Economic Growth” (2016). The author, Michael Minges, reviews a number of studies that collectively show increases of GDP in the 1-2% range for every 10% increase in national broadband penetration.

The second, from Ericsson and Imperial College, is “How Important are Mobile Broadband Networks for Global Economic Development?” (2017). The study reviewed data from 135 countries and concluded that a 10% increase in mobile broadband penetration causes a 0.6-2.8 percent rise in Gross Domestic Product (GDP).

Both of these studies confront difficulties in researching this topic: securing timely and accurate data, teasing apart correlation and causation, trying to implement randomized controlled study design. Nonetheless, the preponderance of evidence suggests that broadband adoption has prompt and significant impact on GDP.

 

Addendum: A new study from the National Bureau of Economic Research concludes that the arrival of broadband to 12 African nations was responsible for 10 percent of the rise in employment.

One thought on “The Link Between Broadband and Economic Growth

  1. Pingback: Sustainable Development Goals and Broadband | Broadband Everywhere

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