Broadband infrastructure and knowledge-based economic growth

According to the results of a new study by the Ifo Institute, the expansion of broadband networks has positive effects on economic growth. An analysis of annual data of 25 OECD countries over the period 1996 to 2007 shows that after the introduction of a broadband infrastructure in a country, per-capita income was, on average, 2.7 to 3.9 percent higher than before the introduction. This implies that with an increase in broadband use in the population of 10 percentage points, the annual per-capita economic growth rises by between 0.9 to 1.5 percentage points. These 10 percent points correspond approximately to the gap by which the broadband user rate in Germany in 2003 was smaller than that of the leading OECD-countries. If in 2003 Germany had increased its broadband user rate by 10 percentage points, per-capita GDP in 2007 would have been between 3.7 to 5.9 percent higher.