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Broadband is like a river (but not the way you think)

Richard Adler | May 4, 2015
Just as rivers were the engines of prosperity for the U.S. as it emerged as a superpower, so now is broadband an engine of innovation. We need to tune that engine to stay ahead.

The first order of impact comes from the construction of broadband networks, which generates jobs and stimulates the broader economy through "multiplier" effects. According to USTelecom, the broadband industry has spent more than $1.3 trillion since 1996 to build both wired and wireless broadband networks. Just in the year 2013, the industry invested some $75 billion in new construction. The importance of these expenditures is suggested by a study that found that investment in ICT -- of which broadband is a significant part -- accounted for nearly two-thirds of all economic growth attributed to capital investment in the U.S. between 1995 and 2005.

Beyond direct investments, the adoption of broadband by organizations and individuals improves productivity by enabling more efficient business processes. And broadband supports the creation of new applications and services that also contribute to the growth of GDP.

Although there was considerable variation in the results of individual studies reviewed in the ITU report, the authors conclude that, collectively, they provide strong evidence that "broadband has a significant positive effect on GDP growth" (estimates of the impact of broadband ranged from under 1% to 1.38% for every 10% increase in broadband penetration).

What's next
Broadband is still a work in progress. In fact, it could be argued that the technology is still in its infancy. Performance continues to improve, with gigabit speeds in the offing for both wired and wireless networks. Coverage continues to grow, and novel applications continue to emerge. The next big thing, which is beginning to appear today, is the much-heralded Internet of Things (IoT).

The connection of millions, then billions, of objects equipped with sensors and intelligence will open up entirely new uses and new business opportunities in areas ranging from energy and transportation to agriculture and healthcare. With sensors everywhere and intelligence built into devices of all sorts, we will gain the ability to monitor processes in real time and at unprecedented levels of precision, making it possible to eliminate waste and improve efficiency across virtually all industry sectors.

According to supporters, the economic impact of the IoT will dwarf that of previous technology innovations. For example, Cisco CEO John Chambers has predicted that what he calls "the Internet of Everything" will generate some $19 trillion in new revenues and new savings over the next decade an impact that could be larger than that of the Internet itself.

Keeping our edge
America's ability to develop and deploy new technologies has been an important source of competitive advantage globally. But unlike rivers and harbors, tech-based infrastructure like broadband is not a permanent God-given asset. Every country in the world has exactly the same amount of spectrum -- the one natural resource that is critical for telecom infrastructure -- available to it as the U.S. does.

 

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