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Key findings > The benefits of increasing broadband access speed are
nonlinear and stepwise, with a minimum level required that is likely to rise over time
> Broadband access affects development:
- In OECD countries, gaining 4 Mbps of broadband increases household income by USD 2,100 per year
- In BIC countries, introducing a 0.5 Mbps broadband connection increases household income by USD 800 per year
> Broadband speed upgrades affect development:
- In OECD countries, upgrading from 0.5 Mbps to 4 Mbps increases income by around USD 322 per month
- In BIC countries, upgrading from 0.5 to 4 Mbps increases income by USD 46 per month
Previous research In 2011 Ericsson, in co-operation with Arthur D. Little and Chalmers University of Technology, conducted a macroeconomic study on the national impact of broadband investments titled "Socioeconomic Effects of Broadband Speed: a Macroeconomic Investigation." The study was the first piece of research in an ongoing project into the effects of broadband speed. Results showed that increasing broadband speed will have varied effects on Gross Domestic Product (GDP). The second study in the project is outlined in this report, and provides a detailed analysis on the effects of broadband on household income.
A study on the socioeconomic effects of broadband speed on household income As the Networked Society continues to grow, broadband is increasingly becoming a major factor in spurring economic growth. ICT investments have allowed countries worldwide to expand their broadband access and upgrade their existing broadband speeds. Although there has been significant research into the national impacts, there is little evidence on the effect faster broadband is having on individuals. A new study has been conducted investigating the socioeconomic effects of broadband speed on household income. By comparing certain countries with varying economic characteristics, it asks whether simply having access to broadband is enough to make an impact, or whether faster broadband is the way to significantly increase income.
This report summarizes the results of the new study, entitled "Socioeconomic Effects of Broadband Speed: a Microeconomic Investigation," and reveals the impact of broadband upgrades on household income.
This microeconomic study analyzed data from several Organization for Economic Co-operation and Development (OECD) countries, as well as Brazil, India and China (BIC), investigating the similarities and differences between them. It measured the impact of broadband speed on household income by analyzing whether leveraging the benefits of faster broadband can improve competitiveness in the labor market.
MEASURING THE IMPACT OF BROADBAND ON INCOME
Figure 1: Countries used in the microeconomic study
8 OECD countries Source Data
3 BIC countries
Variables investigated Countries included in the microeconomic investigation