A new study conducted jointly by Ericsson, Arthur D. Little and Sweden's Chalmers University of Technology in 33 OECD countries (including the UK) has claimed that doubling the broadband internet access speeds for an economy can increase its Gross Domestic Product (GDP) by 0.3% (i.e. equivalent to £80.65 billion ($126bn) in the OECD region).

The connection between GDP, a yearly measure of a country's overall economic performance, and broadband access is perhaps a foregone conclusion and has frequently been referenced, although pinning down precisely how much of an impact it actually has is very difficult.


Tim Johnson, Chief Analyst at Point Topic UK, most recently suggested that "broadband is a great mechanism to add a percentage point or two to GDP" (here). The UK governments Culture Secretary, Jeremy Hunt MP, agreed last year that "a superfast network will ... [add] billions to our GDP" (here).

A growth of 0.3% in GDP, to an untrained eye, might not seem like much but consider that the UK economy only grew by 0.2% in the second quarter of 2011 and its significance begins to make more sense. At the end of 2009 the UK's annual GDP was worth £1.4 Trillion (down from £1.8 Trillion in 2007).

Ericsson claims that the GDP figure of 0.3% corresponds to more than one seventh of the average annual OECD growth rate in the last decade. Furthermore it found that additional doublings of speed can yield growth in excess of 0.3% (i.e. quadrupling of speed equals 0.6% GDP growth stimulus).


It goes without saying that broadband speed alone is often only part of the equation, with affordability and availability (coverage) being key to the overall picture. Last year Ericsson and Arthur D. Little concluded similar research, which revealed that for every 10% increase in broadband penetration GDP increases by 1%. Striking stuff.

The government's Broadband Delivery UK (BDUK) office is currently spending £530m to ensure that 90% of "people in each local authority area" can access a superfast broadband (24Mbps) ISP service by 2015 (the remaining 10% will only get a minimum speed of 2Mbps). Ericsson's study shows just how important it is to get the job done properly.

The study itself used publicly available data, such as the average achieved broadband speed statistics provided by Ookla (Speedtest.net).