The Internet is becoming more important to business each year and the UN Human Rights Council has declared broadband access a human right. What trends are we seeing in Internet/broadband bandwidth and penetration on a global basis?
- There’s a huge connection between broadband access and GDP
- Mobile broadband boosts economic growth in all economies
- The evolution of IoT, online and digital is transforming industry
Global broadband adoption rates have hit 60 percent, according to Akamai. The total number of broadband connected households reached 700.2 million in June 2014, claims PointTopic.
Why is this significant?
- A 2010 ITU study claims that for each 10 percent increase in broadband penetration GDP increases by 1 per cent
- A second 2011 study identified that doubling broadband speed increases a country's GDP by 0.3 per cent
- A recent US National Telecommunication and Information Administration (NTIA) study revealed a $4 billion investment in getting US communities online has increased economic output “as much as $21 billion annually”.
Broadband’s economic importance means the US government is changing laws in order to accelerate deployment.
"Communities across the nation know that access to robust broadband is key to their economic future -- and the future of their citizens," said FCC Chairman Tom Wheeler.
Internet user penetration among the entire population of this planet is 37.9 percent, according to recently published 2013 figures from the Broadband Commission for Economic Development (a joint initiative by ITU and UNESCO).
In most developed economies in excess of 80 percent are already online. However, average Internet user penetration of developing economies reached 29.9 percent in 2013.
China accounts for 200 million of the 700.2 million connected households identified by PointTopic, many of these connections rely on mobile.
(I will explore some of the implications of mobile broadband in a future blog).
Overcoming the digital divide has economic consequence.
fast broadband drives economic growth
More content, services and users are driving a need for speed.
Akamai notes that while the global average connection speed is over 4Mbps, it declined slightly in 2014, dropping 2.8% to 4.5 Mbps. It sees broadband adoption driving usage, and broadband adoption and speeds in all territories growing rapidly.
IPTV services are predicted to grow at a CAGR of 18.1 percent into 2020, creating a $79 billion industry, according to Transparency Market Research, posing fresh demands for bandwidth and service quality.
Broadband Trends notes operators offering Gigabit Broadband see the need to support UltraHD TV and cloud services as principal drivers for their infrastructure investments.
Given the importance of cloud services, IoT devices and video to the online economy, super-fast broadband will also deliver economic advantage, but how much?
- In the UK, one operator predicts its £3 billion investment in high-speed broadband could be worth “up to £8 billion” to the UK economy.
- The Columbia Institute of Tele-information calculates that installing ultra-fast broadband across Germany would deliver 0.6 percent annual growth in GDP across ten years.
unlocking economic opportunity
The connection between broadband access and GDP in developed economies is now well-established, but it is also unlocking the potential of developing economies.
Rapid adoption of mobile payments and health solutions in developing economies is itself fostering further broadband deployments, driving fresh innovation and opportunity there.
Sectors potentially ripe for development in developing online economies include video, media, health, retail, services, payments, entertainment, communications and social networking, robotics and more.
These opportunities will impact, empower and enrich every industry.
The Internet is driving digital transformation, from omnichannel retail to communication-enabled business processes and beyond.
“The change is revolutionary,” states Accenture’s Technology Vision 2014 report. “Industrial companies are becoming customer service companies. Consumer products companies are becoming Internet companies. Energy companies are becoming information companies. And media and entertainment companies are becoming logistics companies.”
The digital transformation has just begun, and already it seems global economic prosperity has become inextricably connected to connecting technologies.
Jon Evans is a highly experienced technology journalist and editor. He has been writing for a living since 1994. These days you might read his daily regular Computerworld AppleHolic and opinion columns. Jon is also technology editor for men's interest magazine, Calibre Quarterly, and news editor for MacFormat magazine, which is the biggest UK Mac title. He's really interested in the impact of technology on the creative spark at the heart of the human experience. In 2010 he won an American Society of Business Publication Editors (Azbee) Award for his work at Computerworld.