Benefits

Successive governments have struggled to communicate concrete reasons for an investment in the NBN. Debate has continued to focus on download speeds and entertainment. No ‘National Objectives’ are presented as the drivers of the NBN, as they might be for any other infrastructure project. The strategic review continues the failure to address any of these missing components. The costs benefit has no specific benefits to analyse, only costs.

 

Some people regard the broadband network as a glorified entertainment system. Below are some conclusions of studies on how broadband systems can affect the ecomomy of countries.

  • A World Development Report Exploring the Relationship Between Broadband and Economic Growth of 2016 shows the following increase in GDP per 10% point broadband penetration increase:

    Study

    Number of countries

    Years

    GDP Increase

    Qiang et al. 2009 (Highincome economies) 120 1980–2006 1.2
    Qiang et al. 2009 (Lowincome economies) 1996–2007 1.4
    Czernich et al. 2009 25 OECD (300 observations) 1996–2007 0.9-1.5
    Koutroumpis 2009 15 European Union (60 observations) 2003–2006 0.3-0.9
    Zaballos and LópezRivas 2012 26 Latin America and the Caribbean (121 observations) 2003 2003–2009 3.2

    Relationship Between Broadband and Economic Growth

  • A report published in 2011 , conducted jointly by Ericsson (NASDAQ:ERIC), Arthur D. Little and Chalmers University of Technology in 33 OECD countries, quantifies the isolated impact of broadband speed, showing that doubling the broadband speed for an economy increases GDP by 0.3%.
  • A study by the worldbank showed the impact of broadband on the Korean economy:

    Broadband has played a significant role in transforming Korea’s overall economy and improving its global competitiveness. Korea’s media, automotive, and banking industries have benefited from the introduction of broadband, changing their business models and production and supply chain management. According to the National Statistics Office, Korea’s e-commerce market more than doubled between 2002 and 2006, from $178 billion to $414 billion. Moreover, a much larger share of the population in Korea accesses news information through broadband than in Europe, Japan, and the United States. This helps develop a well-informed population that is ready for global integration and competition.
  • The same broadband study, dealing with other developed countries, have the following to say:

    Evidence of broadband promoting firm growth has been fairly well documented in developed countries, particularly its ability to lower costs and raise productivity. Internet business solutions have enabled private companies to cut costs (by $155 billion in the United States and a collective $8.3 billion in France, Germany, and the United Kingdom) and increase revenues (by a collective $79 billion in France,Germany,and the United Kingdom)—suggesting that the companies focused their Internet solutions on growth rather than just on cost savings (Varian and others 2002). For example, British Telecommunications (BT) had about 8,500 workers who worked from home using broadband in 2004, a setup that provides significant financial benefits to the company. On average, each worker saved the company accommodation costs of about £6,000 a year; had a productivity rate increase of 15–31 percent (averaging 20 percent); and took an average of only 3 days of sick leave a year, compared with an industry average of 12 days.All this added up to annual savings of more than £60 million for the company. BT has also extended flexible working arrangements to its engineers. The latest data from a trial of 3,000 engineers show that service quality has risen by 8 percent. The engineers in the trial worked an average of two hours less per week but earned more, and BT was saving money through the elimination of overtime payments
  • Chalmers University of Technology, Gothenburg, Sweden concludes in a study: Does broadband speed really matter for driving economic growth?

    This study concludes that the hypothetical impact of broadband speed on economic growth is statistically significant... Having identified the importance of high-speed broadband, this study recommends that the initiatives for next-generation telecommunications networks are even more crucial at a time when the labour market conditions are particularly weak as they can help preserve jobs and head off a potential burden on social safety nets. Bringing forward longer term aggregate spillover effects of broadband can improve the productivity of the entire economy and is consistent with enhancing longer term growth and development

  • Impact of Broadband on the Economy. This study contains the following sample estimates for impact on GDP:

    Research by

    Country

    Measure of Impact/Value

    McKinsey & Company Cross-country 10 % increase in broadband, shousehold penetration delivers a boost to a country’s GDP that ranges from 0.1 – 1.4%
    Boston Consulting Group India $60 billion in 2013
    Booz &Co Cross-country
    • 10 percent higher broadband penetration in a specific year is correlated to 1.5 percent greater labor productivity growth over the following five years.
    • Countries in the top tier of broadband penetration have also exhibited 2 percent higher GDP growth than countries in the bottom tier of broadband penetration
    Gartner India $67.058 billion in 2014
    Copenhagen Economics India $41 billion –estimatefor 2015(intermediaries excluding private investments)
    McKinsey& Company Argentina 2.2% of GDP in 2012
    BostonConsulting Group HongKong 5.9%of GDP in 2009
    BostonConsulting Group Sweden 7.7%of GDP in 2012

    Sample Estimates for Impact on GDP

Specific benefits

The links below detail specific benefits.