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Webinar Highlights Research Showing the Economic Benefits of Broadband

Mon, September 30, 2019

The September 19 BroadbandUSA webinar, “Measuring the Economic Impact of Broadband” showcased current research on the economic impact of broadband.Alison Grant, Dr. Roberto Gallardo from Purdue University and Professor Brian Whitacre from Oklahoma State University discussed a number of studies including their own that show positive impacts of broadband connectivity at the local, state and national level, particularly in rural and agricultural communities.

Grant, a Research Assistant and Instructor in the Department of Agricultural Economics at Purdue University, presented findings from the study, “Estimation of the Net Benefits of Indiana Statewide Adoption of Rural Broadband.” This study analyzed the costs of providing broadband and projected the statewide net benefits that could be obtained from installation of rural broadband in areas served by Rural Electric Member Cooperatives (REMC) in the state of Indiana. It draws upon an initial analysis the team conducted for the Tipmont Cooperative. The study found that for every $1 invested in broadband, $4 is returned to the local economy. After these studies were published, the state of Indiana announced its intention to invest $100 million to develop high-speed Internet access in its rural counties.

Dr. Brian Whitacre, Professor of Agricultural Economics at Oklahoma State University, provided an overview of the many research studies that examine the economic and social impacts of broadband availability, adoption, usage and speed. Overall, research shows that increased broadband adoption and availability positively impact economic and social outcomes, including household income, employment levels, the attraction of existing firms to rural areas, farm profits, civic engagement, and housing values. Dr. Whitacre said studies also show that broadband adoption and use is a more important factor than just availability.So far, research has not shown a correlation between increased broadband speed and local economic outcomes.

Roberto Gallardo, Ph.D., Assistant Director of the Purdue Center for Regional Development and Community & Regional Economics Specialist for Purdue Extension, provided insight on the impact of broadband and digital inclusion on the digital economy. According to the U.S. Department of Commerce Bureau of Economic Analysis statistics, the digital economy accounted for 5.1 million jobs with an average compensation of $132,233, representing about $1.35 trillion or 6.9% of the U.S. Gross Domestic Product in 2017. Dr. Gallardo highlighted the importance of all aspects of digital inclusion, including broadband availability and affordability, Internet-enabled devices and computers, digital skills, technical support and relevant applications, and online content. Digital literacy and skills are particularly vital to the future of the workforce and education. A McKinsey Global Institute report projects that up to 54 million workers in the US (one-third of the workforce) may need to switch occupational categories by 2030 as jobs shift because of technology.

The speakers emphasized the importance of communicating the benefits of broadband usage to build support for broadband connectivity. They recommended that local and state governments make broadband adoption and digital inclusion efforts a priority in their broadband programs. In order for communities to realize the benefits of broadband, people need to use the Internet in ways that are meaningful to their lives.