Friday, July 02, 2010

Broadband investment: "Regrets, I've had a...well, none actually!"

This from Computerworld Australia yesterday:
"The World Bank’s lead ICT policy specialist has cautioned against pulling back on infrastructure spending like Australia’s National Broadband Network (NBN). In the face of renewed economic turmoil in Europe and uncertainty of the pace of recovery in North America, Dr Tim Kelly told Computerworld Australia it would be prudent economic policy to forge ahead with expensive infrastructure spending like that of Australia's broadband plan."
Kelly's comments in detail:
“It would send the wrong signal to the markets to back track on existing commitments to stimulus expenditure...We used the phrase "no regrets" investment to capture the idea that, even if broadband does not immediately deliver the direct benefits expected, in terms of jobs and competitiveness, it will certainly benefit the economy as a whole and therefore the indirect benefits (for instance in terms of capacity-building, opportunity creation or speeding up the general flow of information) are substantial. In other words, the broader, intangible benefits of investment in broadband mean that it is rarely if ever a bad investment...It is probably worth differentiating between impacts that would be slowed and other impacts that might not be realised at all. In terms of impacts that would be delayed, this would include the benefits related to GDP growth. World Bank research has indicated a relationship between a 10 per cent increase in the penetration of broadband and a 1.4 per cent increase in GDP. If infrastructure investment is slowed, then it would take longer to achieve the 10 per cent increase in penetration, in which case the increase in GDP would also be achieved more slowly. Eventually, Australia would catch up, but it would clearly happen much more quickly if a public/private partnership were in place. In terms of impacts that might disappear, here one would look at commercial opportunities that might be seized by companies in other countries where broadband is already better developed.”
More on the World Bank's e-Development Thematic Group (e-TG, "a global forum and community of professionals interested in the role of ICT in development") here.

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