How Broadband Will Boost Economies

Emma Okonji with agency report

A new study published by the International Telecommunications Union (ITU) has highlighted the economic impact of broadband and digitisation on national economies.

The study stated that an increase in both fixed and mobile broadband penetration has a positive impact on the economy.

In terms of digital transformation, the study showed that the economic impact of a digital ecosystem and found that effective policy and regulatory frameworks could drive growth in the digital ecosystem.

Analysing the report, ITU Secretary-General, Mr. Houlin Zhao, said: “With this landmark study, we can now quantify the impact of broadband and digital transformation on economic growth.”

Investment in ICT infrastructure is an absolute priority to expand access to broadband services, and to help accelerate achievement of the Sustainable Development Goals, Zhao further said.

The study also included models and formula, which included a blueprint for assessing the economic impact of broadband, and enabling a full-blown data analysis of digital transformation and evidence-based policy-making.
The Director, ITU Telecommunication Development Bureau, Brahima Sanou said: “The study builds on years of robust and reliable data resources. The findings will make the case for broader adoption of digital technologies and digital policies across the globe and be instrumental in evidence-based decision-making across ITU members.”
Giving insights to economic impact of fixed and mobile broadband, the study noted that fixed broadband has had a significant impact on the world economy in the past seven years.

The economic impact of fixed broadband was found to be higher in more developed countries than in less developed, while the economic impact of mobile broadband was found to be higher in less developed countries than in more developed countries.

Overall, it noted that an increase of one per cent in fixed broadband penetration yields a 0.08 per cent increase in Gross Domestic Product (GDP), while an increase of one per cent in mobile broadband penetration yields a 0.15 per cent increase in GDP, which translates into an increase of 10 per cent in fixed or mobile broadband penetration yielding an average increase of 0.8 per cent and 1.5 per cent respectively in GDP.

The study further revealed that the economic impact of digitisation was higher than that of fixed broadband and similar to that of mobile broadband.

According to the study, achieving broadband penetration was only one aspect of required policies, as maximisation of the economic impact of digitisation can only be achieved through the adoption of a holistic set of policies ranging from internet access and computing, to electronic commerce. It also recognised that the digital ecosystem has an economic impact on productivity.