By Doug Adams, Knight Center of Digital Excellence
Our nation’s broadband economic stimulus plan – part of the American Recovery & Reinvestment Act – is placing a bet that our economy will improve with the expansion of high-speed Internet.
Of course, there are the jobs created just through basic construction, such as the building of broadband networks including fiber and towers. This is no different from jobs created through construction of a building. But if a region builds an office building with no use – with hardly any potential tenants – the economic impact will be short-lived and limited to the building project itself.
So what will we do with all of this broadband once we have it? The promise of broadband is much more significant than opportunities a new office park might provide. Faster and more pervasive Internet service provides a platform for innovation, research and development for all citizens – bringing with it new products, services and most importantly, revenue streams.
What kinds of products and services? Well without broadband, there would have been no impetus for the iPod, Kindle and digital cameras – and no explosive growth in the electronics market. Without broadband, there would be no way to communicate with your doctor over Internet-enabled video conferencing, potentially leaving health care costs to skyrocket even more than they already have. And without broadband, there would be no way to watch your favorite shows from anywhere on your laptop or smart phone – and along with that, there would be no growth in online advertising revenues.
To understand the economic benefit of massive broadband expansion, you need to appreciate the benefits known and unknown, seen and unseen. Early in the decade, as broadband became more common, there was no way to predict the economic impact each development would have. We wanted faster access to Web pages. The iPod and Kindle weren’t even ideas yet.
Beyond platitudes or the hypothetical, what proof do we have that broadband actually has a significant impact on our economy?
In a 2006 study funded by the U.S. Department of Commerce, researchers from the Massachusetts Institute of Technology and Carnegie Mellon University concluded that broadband access “does enhance economic growth and performance, and that the assumed economic impacts are real and measurable.” Looking at a cross-section of communities across the nation, the study found that between 1998 and 2002, communities that had mass-market broadband experienced more rapid growth in employment and in the number of businesses, especially in technology-intensive sectors, compared to communities without broadband.
Another study titled, “Broadband and Economic Development: A Municipal Case Study from Florida,” by the consulting firm Applied Economic Studies, found that as a result of municipal investment in broadband networks in the early half of this decade, Lake County, Fla., experienced roughly 100 percent greater growth in economic activity than other comparable counties in Florida by a combination of indicators.
And finally, earlier this summer a report from the World Bank Group found developing countries saw an increase in economic growth of 1.3 percentage points for every 10 percentage-point increase in broadband.
Beyond the economic benefits derived from building a platform for innovation, broadband impacts productivity – making us more effective, freeing up our creative energies and allowing us to focus on the next big idea. Broadband shrinks our world and enables telecommuting for collaborative projects across the country or across the globe, making tomorrow’s iPod or Kindle a reality faster – and with it, infusing capital into our markets.
So unlike the construction of an empty building, one we hope to fill with tenants, the investment in broadband construction is sure to fill our nation with hope and change, in the form of innovation and opportunities, as we were promised last November.
Also read “It’s ‘patent-ly’ obvious: U.S. needs better broadband.”
Doug Adams oversees public information efforts for the Knight Center of Digital Excellence based in Akron, Ohio. The center is operated by Cleveland-based technology nonprofit OneCommunity, in partnership with The John S. and James L. Knight Foundation, and is dedicated to creating connected communities through strategies that utilize information technologies to drive civic progress and economic development. To learn more about the Knight Center, go to www.knightcenter.org or e-mail info@knightcenter.org.
