A new study by researchers at Carnegie Mellon and MIT provides strong empirical evidence for the claim that broadband Internet access drives economic growth. The report looks at data from 1998 through the end of 2002 and finds that there is a strong correlation between residential and small business broadband access (cable, DSL, and satellite) in any particular ZIP code and that area's job growth, IT growth, and rise in rates for rental housing (which are used as a proxy for property values).
"For the first time, we can say unequivocally that broadband access does matter to the economy, just as common sense suggests it should. We estimate that between 1998 and 2002, communities in which mass-market broadband was available by December 1999 experienced more rapid growth in employment, the number of businesses overall, and businesses in IT-intensive sectors."
The results are not especially surprising, but they do provide real evidence for a claim that until now has been largely speculative or forward-looking. One truly surprising result from the study, though, is that despite all the economic growth that increased broadband access brings, average wages in an area do not tend to increase. Housing prices go up, the number of jobs increases, and businesses expand, but workers do not go home with more money in their pockets. Also interesting is the news that broadband access has a greater economic impact on job growth in rural communities than in urban areas, even though we might expect to find less IT-related businesses outside of urban centers.
"For the first time, we can say unequivocally that broadband access does matter to the economy, just as common sense suggests it should. We estimate that between 1998 and 2002, communities in which mass-market broadband was available by December 1999 experienced more rapid growth in employment, the number of businesses overall, and businesses in IT-intensive sectors."
The results are not especially surprising, but they do provide real evidence for a claim that until now has been largely speculative or forward-looking. One truly surprising result from the study, though, is that despite all the economic growth that increased broadband access brings, average wages in an area do not tend to increase. Housing prices go up, the number of jobs increases, and businesses expand, but workers do not go home with more money in their pockets. Also interesting is the news that broadband access has a greater economic impact on job growth in rural communities than in urban areas, even though we might expect to find less IT-related businesses outside of urban centers.
