Fixed broadband adoption drove 10.9% of the accumulated growth in the U.S. gross domestic product (GDP) between 2010 and 2020, according to a new economic study from Telecom Advisory Services published on the Network:On website.
Network:On, which calls itself a “new public service campaign dedicated to celebrating the connections brought about by America’s broadband networks,” highlights Comcast, Patreon, Zoom and the Consumer Electronics Show as sponsors.
Broadband Economic Study
In 2010, the average U.S. download speed was just over 10 Mbps but that speed increased to 174.2 Mbps in 2020, explained Dr. Raul Katz, author of the new broadband economic study at a Washington, D.C. event hosted by Network:On and also available to registered attendees via Zoom.
As an executive summary of the study explains, “broadband now constitutes a key component of the underlying infrastructure for development, like roads and electricity.”
According to the analysis made by Katz and his research team, capital accumulation is the biggest contributor to GDP growth, accounting for more than half of total GDP growth between 2010 and 2020. Human capital and labor growth also were substantial contributors, accounting for a combined 21.3% of growth. But growth in broadband adoption, combined with broadband speed growth, had about the same impact as human capital and labor growth, accounting for a combined 22.4% of GDP growth.
As Katz explained at the Network:On event yesterday, the researchers used four different economic models to measure GDP growth and “we proved the point on all four models.”
The researchers also estimated that if broadband adoption and speeds had remained at the 2010 level, the 2020 U.S. GDP would have been $1.3 trillion lower, which is equivalent almost $4,000 less per year for the average American.
The executive summary of the Telecom Advisory Services broadband economic study is written in a scholarly style that could make it difficult for the average reader to picture what is being said. But a panel presentation at the same event today attempted to fill in that picture.
Real World Examples
Perhaps the best example came from Caroline Kitchens, lead for government affairs and policy partnerships for Shopify, a website designed to enable small businesses to sell their offerings online. A monthly subscription gives businesses the ability to accept online payments and provides tools to set up a web page.
Kitchens offered several examples of small businesses in rural areas that have thrived as a result, including Barnswallow Flowers in Iowa and River Babe Threads in Michigan. Those businesses would not have been able to have that success without broadband, however.
Also on the panel was NTIA Administrator Alan Davidson, who has the awesome task of overseeing the $42.5 billion Broadband Equity Access and Deployment (BEAD) program that aims to ensure that broadband is deployed to all Americans.
Davidson highlighted the BEAD program and other NTIA broadband initiatives that target digital equity and inclusion. While he primarily covered ground already familiar to Telecompetitor readers, he did offer one bit of news – that NTIA has received “dozens” of applications for funding in the Middle Mile program and expects to receive “hundreds” more.