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Strong link between mobile broadband and GDP

The role of ICT in development
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As part of our efforts to better understand the economic impact of mobile communication, Ericsson has been running a joint research project with Imperial College in London for the past two years. One of our papersinvestigates the extent to which the diffusion of mobile broadband (MBB) has impacted economic development in terms of GDP. The research is based on data from 135 countries in total, using statistical methods to investigate causality.

The results show that, on average, a 10% increase in the MBB adoption ratio causes a 0.8 percent increase in GDP. Moreover, when we control for the years since MBB was introduced, we can see that the economic effect gradually decreases over time. This means that for a country with median average growth of MBB penetration, the economic effect disappeared six years after MBB introduction.

Our results also show that the effect from MBB is considerably larger and more significant in low-income and non-OECD countries compared to high-income and OECD countries. This means that there is considerable potential for low income and non-OECD countries to leapfrog in their economic development by investing in MBB infrastructure, and ultimately catch up with OECD countries.

In the short video below, Imperial College Professor Jonathan Haskel and I explain the significance of the project’s findings:

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