Doubling broadband speed increases GDP by 0.3% - study

Tuesday, September 27, 2011

Doubling broadband speeds increases an economy's GDP by 0.3%, according to a report that quantified the isolated impact of broadband speed in 33 OECD member countries.

The report - jointly developed by Swedish telecoms equipment manufacturer Ericsson (Nasdaq: ERIC), global consultancy Arthur D Little, and Chalmers University of Technology - argued that broadband availability and speed are strong drivers in economies.

"Broadband has the power to spur economic growth by creating efficiency for society, businesses and consumers," said Johan Wibergh, head of business unit networks at Ericsson. "It opens up possibilities for more advanced online services, smarter utility services, telecommuting and telepresence."

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"In health care, for instance, we expect that mobile applications will be used by 500mn people."

GDP growth of 0.3% among OECD member states is equivalent to US$126bn. This corresponds to more than one-seventh of the average annual OECD growth rate over the last decade.

The study also showed that additional doublings of speed can yield growth in excess of 0.3%.

Last year, Ericsson and Arthur D Little concluded that for every 10 percentage point increase in broadband penetration, GDP increased 1%.

In Latin America, Chile and Mexico are members of the OECD.