Socioeconomic Effects of Broadband Speed

2 Interest in the economic impact of Information and Communication Technology (ICT) investments is growing worldwide as governments seek new ways to spur growth. Moreover, investment decisions must undergo extra scrutiny in the current tough economic conditions. In 2010, Ericsson and Arthur D. Little conducted an in-depth study titled " Socioeconomic Impact of Broadband Network Investments, " which measured the economic effects of broadband penetration. It explored the latest understanding of the impact of fixed and mobile broadband investments. The study was based on more than 120 academic reports and business papers published between 2001 and 2010, and results showed that broadband penetration has positive effects on society. In 2011, Ericsson initiated a follow-up research project, " Socioeconomic Effects of Broadband Speed, " comprising two studies: the first on a macroeconomic (national) level, and the second on a microeconomic (household) level. This report focuses on the results of these two studies. The first study featured in this report is on a macroeconomic (national) level, and investigates the impact of broadband speed on macroeconomic growth. Using panel data econometric methods, Ericsson, in cooperation with Arthur D. Little and Chalmers University of Technology, investigated the impact of broadband speed on the economy. This study is a world first in quantifying the economic impact of broadband speed upgrades using a comprehensive, best-practice, scientific method based on empirical data. Data has been collected for 33 Organization for Economic Cooperation and Development (OECD) member countries, using publicly available sources. Results show high statistical significance, are robust to model changes and pass rigorous statistical testing regarding the direction of causality. the benefits of broadband, being cited in more than 150 press articles worldwide as well as at several industry conferences. The main result of the study can be summarized as follows: > Doubling broadband speeds for an economy can add 0.3 percent to GDP growth, in a simulation relative to the base year 2008 > The benefits of faster broadband can be categorized as: – Economic effects, including increased innovation and productivity in business – Social effects, including better access to services and improved healthcare – Environmental effects, including more efficient energy consumption PART 2 – SOCIOECONOMIC EFFECTS OF BROADBAND SPEED: A MICROECONOMIC INVESTIGATION The second study in this report is a microeconomic (household) level investigation which assesses the impacts of broadband access and upgrades on household income. The microeconomic study analyzes data from eight OECD …