Broadband Boosts Economic Development to a Point

My husband once calculated that $131 of our taxes will go toward the $7.2 billion in broadband stimulus money. As far as I’m concerned that would be money well spent on our part, because as a telecommuter and as someone whose work is dependent on the Internet, I am a devout believer in the power of broadband. The Public Policy Institute of California put out some research today that attempts to calculate some of the benefits of broadband — not on the part of people or companies, but the economic development of communities.

The report sought to answer the following questions:

  1. Does employment grow faster in areas with greater broadband expansion?
  2. Does the relationship between broadband and employment differ by industry or geography? For example, is it stronger for industries that are more reliant on technology or that use workers who are more technically knowledgeable? Is it stronger in places that are more isolated or in those with more amenities?
  3. Is there a positive relationship between broadband and employment growth? Does broadband expansion cause employment growth?
  4. If broadband does boost employment, who benefits? Is employment growth accompanied by a greater likelihood of employment, higher pay, increased income, or greater flexibility to be able to work from home?

The respective answers it offered up were:

  1. Moving from zero broadband providers to as many as three is associated with employment growth of about 6.4 percentage points over the 1999-2006 period.
  2. Industries that rely more on technology inputs and on workers in computer specialist occupations are those in which broadband expansion is most associated with employment growth.
  3. The research generally points in the direction of a causal relationship between broadband expansion and a large increase in local employment growth in certain sectors.
  4. There is no relationship between broadband expansion and either the employment rate or average pay per employee. Whatever positive effects broadband may have on employment growth, it did not result in either higher employment rates (some workers leading to employment growth came from outside the municipality so overall rates didn’t change) or higher pay for residents in areas where broadband expanded in the 1999–2006 period. It also doesn’t boost telecommuting.

Summed up, broadband is good for people who you would expect to benefit, but isn’t going to change lives. However, I think as we increasingly tie our health care and education with network access, those things will change. And then the economic development angle is just another reason that broadband will be a basic necessity.

Thumbnail image courtesy of Flickr user dvs

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