Broadband/Network | Emerging Trends | ICT4SDG | Infrastructure
October 22, 2018

Triggering positive change in the global economy

By Brahima Sanou, Director, Telecommunication Development Bureau, ITU

The transformative power of digital technologies is empowering people everywhere, creating an environment that nurtures innovation, and is triggering positive change in business processes and in the global economy.

Our new study, “The economic contribution of broadband, digitization and ICT regulation,” analyses in detail the positive economic impact of broadband, digital transformation and effective ICT regulation on the global economy.

It provides evidence of the importance of regulatory and institutional variables in driving digital growth, and illustrates that fixed and mobile broadband and digitization have a positive impact on the growth of national economies and prosperity.

Among the key findings I would like to highlight:

The economic impact of fixed and mobile broadband

The study finds that fixed broadband has had a significant impact on the world economy in the past seven years. The economic impact of fixed broadband is found to be higher in more developed countries than in less developed, while the economic impact of mobile broadband is found to be higher in less developed countries than in more developed countries.

Investment in the digital ecosystem is directly and positively influenced by the maturity of ICT regulatory frameworks and by ICT competition frameworks.

Overall, an increase of 1 per cent in fixed broadband penetration yields a 0.08 per cent increase in Gross Domestic Product (GDP), while an increase of 1 per cent in mobile broadband penetration yields a 0.15 per cent increase in GDP (this 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 economic impact of digital transformation

The study reveals that the economic impact of digitization is higher than that of fixed broadband and similar to that of mobile broadband. According to the study, achieving broadband penetration is only one aspect of required policies; maximization of the economic impact of digitization can only be achieved through the adoption of a holistic set of policies ranging from Internet access and computing to electronic commerce. It also recognizes that the digital ecosystem has an economic impact on productivity.

The impact of policy and regulatory frameworks

The study provides further evidence of the importance of regulatory and institutional variables in driving growth in the digital ecosystem. It states that connectivity for digital services is significantly correlated with the level of advancement of ICT policies and regulations, as well as the competition and market power regulatory set-up. Further, investment in the digital ecosystem is directly and positively influenced by the maturity of ICT regulatory frameworks and by ICT competition frameworks.

These findings make the case for broader adoption of digital technologies and digital policies across the globe and are instrumental in evidence-based decision-making across ITU members.

This landmark study also presents, through the framework, models and formulas and it includes a blueprint for assessing the economic impact of broadband, and enabling a full-blown data analysis of digital transformation and evidence-based policy-making.

This new study builds on the first ITU research on this topic, “The impact of broadband on the economy”, published in 2012, which provided initial evidence on the positive economic and social impact of broadband and underlined the importance of data gathering to refine impact measurement. The study has become an authoritative reference and has informed policy-makers across the ITU Membership.

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ITU is the United Nations' specialized agency for information and communication technology. Any opinions expressed and statistics presented by third parties do not necessarily reflect the views of ITU.

Triggering positive change in the global economy

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