Availability of high-speed internet impacts labour market, productivity & house prices
The internet and digital technology has become a pervasive part of everyday lives. The diffusion of high-speed fiber-based and mobile broadband availability has been a key economic policy goal of the European Union and many other countries and regions. In 2023, the European Commission proposed the 'Gigabit Infrastructure Act' with the aim to ensure that everyone in the EU has access and connectivity to high-speed mobile data by 2030.
Research has found that that high-speed broadband internet is related to key socioeconomic benefits, with evidence for economic and productivity growth, house prices, labour market effects, education and economic resilience. The availability or supply of high-speed broadband and migration to customers on these surveys can enable efficiency gains for business such as ability to process large amounts of data, teleworking or working from home to technologies such as remote health care. The availability of digital services also became part of a region or country's resilience during and after COVID-19 and economic crises. Differences in the availability of high-speed internet can vary by small geographical areas such as municipalities, creating widespread inequalities.
A study of 135 countries found that a 10% increase of mobile broadband adoption was linked to a 0.8% increase in GDP. Others have linked it to labour market effects, including an increase in employment in rural areas, with a 100% increase in download speed increasing employment in all sectors by 0.23% (across 159 countries), with an additional year of access to high-speed broadband increasing local employment by 1.3% in Italy. Another study in Germany found that high-speed broadband internet availability at the local level improved reemployment rates after unemployment, concluding that internet access increased online job searches and interviews.
Looking at 20 industries in 20 countries across 1.5 million observations, another study determined that a 10% increase in high-speed internet adoption increased TFP (total factor productivity) instantaneously by 1.4% and after 5 years a 5.8% higher TFP for an average firm. Others found that it resulted in the creation of new firms, such as an increase in new foreign firms, a 2.7% higher chance of municipalities to create new firms than those without high-speed broadband (France), particularly in rural areas (US). Housing prices have likewise been positively associated with internet speed in the US, Germany and France.
Finally, education and development of human capital has been associated with access to high-speed broadband. The findings, however are mixed, which warrants further research since some find high-speed internet availability in schools increases grades, or student math and reading test scores, whereas others found a decrease in (Italian) language and mathematics scores, particularly with those from the lowest socioeconomic backgrounds.
(Written by Melinda C. Mills, updated 04 December 2024)