Effects and advantages of broadband
Economic growth
Broadband can hold vital business advantages. The enactment of broadband at the organization level has shown definite impacts on potency and employment formulation. The majority of effects today have been achieved by selection by more substantial, multinational organizations. At the same time, the greatest potential for further growth remains for small and medium-sized enterprises (SMEs) to improve operating efficiency by better integration of broadband in production, sales, marketing and distribution processes. Availability of reliable broadband infrastructure and services in rural areas in particular can create a strong foundation for businesses to locate and expand in these areas, helping to reduce the pressures of excess urbanization.
Some important research provides a good evidence base of broadband’s positive economic benefits. One widely cited study by the World Bank found that the average increase in gross domestic product (GDP) growth in developing countries was 1.38 per cent for each 10 per cent increase in broadband penetration. These results have established an initial benchmark for broadband-related economic impact studies, as well as a strong incentive for governments to invest in broadband growth.
More recently, research and reports have sought to assess the link between broadband development and economic growth. An ITU-sponsored study in 2012 presented recent research on contributions of broadband to economic growth, productivity gains, employment and output, creation of consumer surplus and improvement of firm-level efficiencies. The study also included research findings indicating that the impacts and benefits of broadband increase after adoption reaches a critical mass of about 20 per cent of the population, a level that many developing countries have not yet come close to achieving.
Key policy challenges and opportunities