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ITU study quantifies economic value of digital tech

Read time 2min 20sec
The ITU is able to measure the economic impact of broadband technologies on GDP growth.
The ITU is able to measure the economic impact of broadband technologies on GDP growth.

The International Telecommunication Union (ITU) can now quantify the economic impact of fixed and mobile broadband penetration, and digital transformation, on national economies.

This was revealed by ITU secretary-general, Houlin Zhao, following the release of the UN telecoms organisation's latest study, "The economic contribution of broadband, digitisation and ICT regulation".

The study, which builds on the ITU's 2012 research on the impact of broadband on the economy, provides a framework to measure the value of ICT technologies on economic growth.

"Investment in ICT infrastructure is an absolute priority to expand access to broadband services, and to help accelerate achievement of the sustainable development goals," says Zhao.

The findings show fixed broadband had a significant impact on the world economy between 2010 and 2017. Furthermore, this impact was found to be higher in more developed countries than those less developed.

However, the economic contribution of mobile broadband is found to be higher in less developed countries than in more developed countries, reads the study.

"Overall, an increase of 1% in fixed broadband penetration yields a 0.08% increase in gross domestic product (GDP), while an increase of 1% in mobile broadband penetration yields a 0.15% increase in GDP. This translates into an increase of 10% in fixed or mobile broadband penetration, yielding an average increase of 0.8% and 1.5%, respectively, in GDP.

Brahima Sanou, director of the ITU Telecommunication Development Bureau, states: "The findings will make the case for broader adoption of digital technologies and digital policies across the globe and be instrumental in evidence-based decision-making across ITU members."

In regards to digitisation, the ITU says the economic impact of the digital ecosystem is greater than that resulting from fixed broadband and similar to that produced by mobile broadband penetration.

"An increase of 1% in the digital ecosystem development index results in a 0.13% growth in GDP per capita. The impact of the digital ecosystem on more advanced economies is higher than developing countries. An increase of 1% in the digital ecosystem development index yields an increase of 0.14% in per capita GDP for OECD countries, while the impact of a similar change in non-OECD countries will have a 0.10% increase."

The ITU also points out that ICT regulation can have a positive impact on the growth of national economies and prosperity. "Further, investment in the digital ecosystem is directly and positively influenced by the maturity of ICT regulatory frameworks and by ICT competition frameworks."

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