A new research has identified that quadrupling the UAE’s broadband speed can boost the country’s gross domestic product (GDP) by more than $2 billion.
The study, the first of its kind, was conducted by Ericsson, Arthur D. Little and Chalmers University of Technology to evaluate the link between broadband speed and economic growth. The researchers said that when the speed of broadband in the UAE is increased by four times, the nation’s GDP could grow by 0.6 per cent.
The positive effect of broadband speed increase comes from automated and simplified processes that increase productivity in addition to offering better access to basic services such as education and healthcare.
While doubling the country’s broadband speed would lead to a 0.3 per cent increase in GDP worth almost $1.08 billion, quadrupling Internet access speeds would add approximately $2.16 billion. The study also showed that additional doublings of speed can yield corresponding GDP growth stimuli.
According to analyst firm Business Monitor International (BMI), broadband connections already accounted for 99.4% of total internet connections in the country in the first quarter of 2012. While the number of Internet users in the country was estimated to be 4.892 million in 2011, BMI projects an increase of 1.755 million users to a total of 6.647 million by 2016.
“Broadband has emerged as a significant driver of economic growth even as we continue to evolve from an information society to what we call a Networked Society,” said Anders Lindblad, president, Ericsson Region Middle East and North Africa. “Broadband, whether mobile or fixed-line, is a vehicle for economic growth, innovation and productivity.”
“The government and telecom operators here in the UAE have clearly recognised the importance of broadband and this is reflected in their collective efforts to achieve 100 per cent penetration in the country,” he added.
In 2010, Ericsson and Arthur D. Little concluded that for every 10 per cent point increases in broadband penetration, GDP increases by one percent. This growth stems from a combination of direct, indirect and induced effects which provide short to medium term stimulus to the economy.
The induced effect, which includes the creation of new services and businesses, is the most sustainable dimension and could represent as much as one third of the mentioned GDP growth.
From : Khalij