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Does faster broadband lead to greater economic growth?

The Economist has a nice nuanced discussion on the above question, starting thus:

DO DIGITAL economies grow faster than analogue ones? Rich-country leaders seem to think so. G7 and European Union governments are committed to a variety of digital stimulus packages; Australia, the biggest spender, has promised broadband investment of $33.4 billion (or 3% of GDP) to connect 90% of homes at ultra-fast speeds. “Digitisation” involves adopting technologies like wireless phones and internet access to generate, process and share information. It seems to make sense that replacing slow technologies with faster ones might speed up sluggish economies. But does the case for investment stack up?

I like the discussion, especially because it sees ICTs as complementary inputs, a point that has been central to the conclusions we have drawn from our work.

What concerns me are the indices and indicators used in the analyses. However sophisticated they are, in the end, they are only as good as the quality of the input data. And in most cases, that is ITU broadband/Internet data. Which stinks.

There will be another post that will comment on the studies referred to by the Economist after we go through them in greater detail.

1 Comment to Does faster broadband lead to greater economic growth?

  1. Abu Saeed Khan's Gravatar Abu Saeed Khan
    June 4, 2012 at 9:52 am | Permalink

    Listen to the industry. “Building a strong digital infrastructure is an imperative for nations that want to compete in the digital economy,” said Rajeev Singh-Molares, Alcatel-Lucent’s Asia Pacific president in the World Economic Forum on East Asia in Bangkok this week.

    He said the operators in Asia Pacific will have to spend $1.1 trillion on telecoms infrastructure over the next decade to be competitive in the digital economy.

    Although subscribers grew 1.5 billion throughout the area during last five years, Rajeev Singh-Molares said 25% people of this region still don’t have mobile phone. He said Asia Pacific must add 1.3 billion mobile users within next five years to bridge the gap, with networks capable of handling growing traffic, particularly in urban areas. Read more.


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