Home » 

UK ISP News Archives

 » 
Sponsored

Study Claims Doubling Broadband ISP Speeds Positively Boosts GDP by 0.3 Percent

Posted: 27th Sep, 2011 By: MarkJ
broadband speed dialpound signA 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.

Erik Bohlin, Professor at Chalmers University of Technology, said:

"These results have been derived using rigorous scientific methods where the direction of causality, data quality and significance levels have been appropriately tested. The results of this study support governmental policies that recognize and promote the importance of broadband."

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).

Johan Wibergh, Ericsson's Head of Business Unit Networks, said:

"Broadband has the power to spur economic growth by creating efficiency for society, businesses and consumers. It opens up possibilities for more advanced online services, smarter utility services, telecommuting and telepresence. In health care, for instance, we expect that mobile applications will be used by 500 million people.

We expect a huge increase from the current estimate of around 1 billion people with broadband access to about 5 billion in 2016, most of whom will have mobile broadband. Connectivity and broadband are just a starting point for new ways of innovating, collaborating and socializing."

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).
 Latest UK ISP News
 Cheapest Superfast Broadband ISPs
  • Hyperoptic £17.99
    Speed 33Mbps, Unlimited
    Gift: None
  • NOW £20.00
    Speed 36Mbps, Unlimited
    Gift: None
  • Shell Energy £21.99
    Speed 35Mbps, Unlimited
    Gift: None
  • Vodafone £22.00
    Speed 38Mbps, Unlimited
    Gift: None
  • Plusnet £22.99
    Speed 36Mbps, Unlimited
    Gift: £70 Reward Card
Large Availability | Compare More ISPs
 Cheapest Ultrafast Broadband ISPs
  • Gigaclear £17.00
    Speed: 200Mbps, Unlimited
    Gift: None
  • Community Fibre £20.00
    Speed: 150Mbps, Unlimited
    Gift: None
  • Hyperoptic £22.00
    Speed: 158Mbps, Unlimited
    Gift: None
  • Virgin Media £25.00
    Speed: 108Mbps, Unlimited
    Gift: None
  • Vodafone £25.00
    Speed: 100Mbps, Unlimited
    Gift: None
Large Availability | Compare More ISPs
Promotion
Cheapest Superfast ISPs
  • Hyperoptic £17.99
    Speed 33Mbps, Unlimited
    Gift: None
  • NOW £20.00
    Speed 36Mbps, Unlimited
    Gift: None
  • Shell Energy £21.99
    Speed 35Mbps, Unlimited
    Gift: None
  • Vodafone £22.00
    Speed 38Mbps, Unlimited
    Gift: None
  • Plusnet £22.99
    Speed 36Mbps, Unlimited
    Gift: £70 Reward Card
Large Availability | View All
Cheapest Ultrafast ISPs
  • Gigaclear £17.00
    Speed: 200Mbps, Unlimited
    Gift: None
  • Community Fibre £20.00
    Speed: 150Mbps, Unlimited
    Gift: None
  • Hyperoptic £22.00
    Speed: 158Mbps, Unlimited
    Gift: None
  • Virgin Media £25.00
    Speed: 108Mbps, Unlimited
    Gift: None
  • Vodafone £25.00
    Speed: 100Mbps, Unlimited
    Gift: None
Large Availability | View All
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Promotion
The Top 20 Category Tags
  1. FTTP (4116)
  2. BT (3152)
  3. Politics (2118)
  4. Building Digital UK (2026)
  5. Openreach (1969)
  6. FTTC (1922)
  7. Business (1834)
  8. Mobile Broadband (1606)
  9. Statistics (1510)
  10. 4G (1379)
  11. FTTH (1371)
  12. Virgin Media (1277)
  13. Ofcom Regulation (1241)
  14. Fibre Optic (1235)
  15. Wireless Internet (1234)
  16. Vodafone (927)
  17. EE (906)
  18. 5G (898)
  19. TalkTalk (821)
  20. Sky Broadband (787)
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms  ,  Privacy and Cookie Policy  ,  Links  ,  Website Rules