It is a common belief that a prolonged, nation-wide outage of communications networks would hit developed countries harder than developing countries. A study made by Scott Dynes et al. in 2006 has estimated losses for three segments of US economy if communications networks go down (see “Costs to the U.S. Economy of Information Infrastructure Failures: Estimates from Field Studies and Economic Data”, 2006 for details). The study highlighted three important areas of potential impact: electric, automobile, and oil refining. In a case of an outage affecting the first two segments, the study looked at losses if the Internet goes down. The study found that oil refining is not as dependent on the Internet, so the losses were estimated if their SCADA systems would become unavailable. Total losses for these three segments of US economy are estimated to be in a range of US $500 million for a 10-day outage.
There is a country whose east and west coasts border on major oceans. Its major cities dot its coastline, while its internal areas, while populated, could accurately be described as “flyover” zones. It takes about six hours to fly coast-to-coast.
Its government is making the single largest infrastructure investment in the country’s history, investing $43 billion over eight years in order to connect 90+ percent of all its homes, schools and workplaces with broadband services over fiber-optic cable with speeds up to 100 megabits per second, 100 times faster than those currently used by many households and businesses.
Which forward-looking nation committed to this bold goal?
The way a nation’s people collectively participate in the Global Networked Economy may seem like a complex topic that’s only relevant to the few academics and industry analysts that study these emerging trends.
However, recent events in Egypt offer insight about the close relationship between the cause and effect of Information and Communication Technology (ICT) policy decisions, and the likely resulting socioeconomic impact on the whole population.
In my prior dialogue with U.S. economic development practitioners, sometimes they would raise concerns about being unable to quantify the tangible benefits of telecommunications network infrastructure assets. Granted, it can be a challenge.
In his recent State of the Union address, President Obama identified government investment in infrastructure as a key antidote to the U.S. economic doldrums. This is not a new concept. During the Great Depression, the Works Progress Administration spent $7 billion over a three year period to construct buildings, roads, parks, and bridges, bringing short-term jobs and long-term competitive advantage.
Nor is it strictly a U.S. strategy. During the recent downturn, multiple countries have started taking the same tack, but instead of dams and highways, they’re funding telecommunications network infrastructure.
According to a 2009 speech by Taylor Reynolds, an economist with the Organization for Economic Cooperation and Development (OECD), the numbers are impressive for countries both large and small:
After writing several recent posts on the telecom infrastructure efforts of Connect Africa, I’ve gotten a much better sense of what’s going on there from an ICT standpoint. The conventional wisdom for places like Africa states that it has the potential to achieve telecom parity more quickly than the U.S. and Europe did.
Why? Because it can skip the cost of wireline installations and go straight to wireless. An easier infrastructure, a faster deployment, a more rapid road to the connected life. The question, perhaps, is that optimism unfounded?
You might think so if all you saw was the political news coming out of Africa over the last weeks of 2010: bombings in Johannesburg; a disputed election in Ivory Coast; secession in Sudan; Kenyan politicians named in a drug dealing scandal. Telecom operators are no different than any other business — they’re attracted by stability and repelled by instability.