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Does Broadband Hold the Key to Economic Development?


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Broadband connectivity is frequently seen as a key ingredient for a successful, innovative economy. The reach of the Ethernet network, the speed and number of users plugged into the network are seen as key economic indicators.

The Organisation for Economic Co-operation and Development (OECD) produced results in 2006 that should the percentage reach of broadband in a host of countries.

The results showed that Denmark with a reach of 29.3% where top, Netherlands next with 28.8%, the UK was 10 with 19.4%, USA 12% with 19.2%.

Since this table was published Chile has passed the 1 million users bench mark giving it a percentage reach of 6.8. In South America, Chile's 6.8 percent penetration rate is followed by Argentina with a 3.2 percent penetration rate, Brazil with 2.6 percent, Peru and Costa Rica with 1.5 percent, and Colombia with 1.1 percent. It puts Chile well clear of the rival economies in the region. Chile's GDP per captia is also the highest of the South American countries ranking 54 in the world, above Argentina 57, Costa Rica 75, Brazil 78 and Peru ranked 83. It raises the issue that is Chile the most connected because it has the best GDP per captia or does it has the best GDP per captia because it is the best connected? Only a long term study of trends will be able to determine the answer.

The strongly held belief that broadband connectivity is a key factor in economic growth has started to effect public policy and investment. In Australia the ruling Labor Government have pledged $4.7 Billion in a bid to massively improve the infrastructure of the countries broadband connectivity. The Welsh Assembly Government has pledged £100 million to fast track the development of the broadband infrastructure in Wales. Telekom Srbija recent deal with Interoute is another example of the rapidly expanding reach of broadband into new markets in Europe.

It will be worth watching the GDP growth rates compared to the broadband connectivity percentage over the next few years to see if there really is a link between the two.

Tony Heywood ©

Ethernet Reach

Ethernet Connection


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