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Broadband's Economic Impact (Opinion)


February 26, 2010 By

Despite the volumes that have been written about broadband and the changing world -- including much that has been published under the banner of the Digital Communities program -- I'm not sure the relationship between the broadband stimulus and a healthy U.S. economy is broadly understood.

How many simply viewed the $787 billion stimulus package as a stopgap measure to create immediate jobs rather than an opportunity to reform and retool the U.S. economy for a 21st-century marketplace?

According to Cisco CEO John Chambers, the country can't accomplish such reform unless it has the infrastructure to support it.

Writing on technology blog GigaOM, Chambers suggested that 100 Mbps broadband to the home -- which both Japan and South Korea are already approaching -- could be an essential vehicle to maintain U.S. competitiveness. This will, he added, enable new collaboration at a profound level, radically changing the very way we think.

Some efforts in the past have used real numbers and realistic projections to back up broad visions like this. According to a 2007 report from the Brookings Institution called The Effects of Broadband Deployment on Output and Employment: "For every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year. For the entire U.S. private nonfarm economy, this suggests an increase of about 300,000 jobs, assuming the economy is not already at 'full employment.'"

Chambers goes much further, suggesting that based on an upcoming Information Technology and Innovation Foundation study, deploying next-generation broadband to 80 percent of U.S. homes would create 2 million new jobs.

While such projections might seem optimistic, one core mission of the Digital Communities program is to continue to explore the evolving relationship between broadband, IT and the economic health of U.S. communities.

 


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