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Beyond Broadband Deployment: The Multiplier Effect

By Howard Baldwin, Contributing Columnist

Before he was the chairman of George H.W. Bush’s Council of Economic Advisors, Michael Boskin was my Econ 101 professor. It was from him that I learned about microeconomics, macroeconomics, and their famed multiplier effect — the latter being the theory that money spent creates economic benefits that have ongoing impact beyond the original investment.

In my previous post, Stimulating Economic Growth with Broadband, I talked about quantifying the benefits in terms of what businesses could expect — in essence, the microeconomic view.

Today, looking at a report from Deloitte on 4G deployment within the U.S. market (with applicability anywhere in the world), I’m turning to the more wide-ranging impacts that wireless broadband investment might have for business and the economy — essentially, the multiplier effect of broadband infrastructure investment.

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Broadband Impact: The Macroeconomic Benefits

By Howard Baldwin, Contributing Columnist

Last June, the Broadband Commission for Digital Development, a joint project of the International Telecommunications Union and UNESCO, issued a report about the impact of broadband globally. It contained enlightening estimates — variations of which we’ve discussed frequently — about the value of broadband for business. For instance:

  • Europe: Broadband can create more than two million jobs and an increase in GDP of at least €636 billion by 2015
  • Brazil: Broadband has already added up to 1.4% to the employment growth rate
  • China: Every 10% increase in broadband penetration contributes an additional 2.5% to
  • GDP growth
  • Thailand: Even though only some 3% of households and 12% of individuals had broadband, broadband promotion could add 2.4% to the country’s GDP growth rate.

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