Thursday, March 22, 2012
Broadband and GDP
A study conducted by Ericsson, Arthur D. Little and Chalmers University of Technology in OECD countries concluded that "increased broadband speed contributes significantly to economic growth". According to a report:
"A new report... quantifies the isolated impact of broadband speed, showing that doubling the broadband speed for an economy increases GDP by 0.3%."
"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."
"These results have been derived using rigorous scientific methods where the direction of causality, data quality and significance levels have been appropriately tested..."
It is good to note that this is not just a correlation but that causality was considered too.
Also a similar report last year found "that for every 10 percentage point increase in broadband penetration GDP increases by 1 percent."
It would seem likely that recent economic growth in Guyana may be due, in some part, to recent progress in broadband penetration due to the roll-out of DSL by GTT, limited increases in broadband speed and probably rapid increases in cell phone penetration.