Broadband: the driver of economic and job growth

Broadband Lightning Talk ICT Solutions Day, SDN Forum , World Bank

February 28, 2013

Impact of Broadband investment is well established

Source: Katz (2010); Analysys Mason (2010); Qiang & Rossotto (2009); and Czernich et.al. (2009) * Only includes Germany. ** Average of 5 country studies, including the UK, Australia, New Zealand, Malaysia, and a Middle Eastern country, from various sources (2003 and 2004) and Qiang and Rossotto 2009 study; *** Limited to mobile broadband impact in India; + various countries, upper range applies to developing countries and lower range to developed countries; ++ sample of 20 OECD countries.

Impact on GDP of an increase of 10% in broadband penetration

0.26% 0.24%

0.60%

1.10%

1.21%

0.90%

0.00% 0.50% 1.00% 1.50%

Katz*

McKinsey (average)**

Analysys Mason***

Qiang & Rossotto +

Czernich et.al. ++

Minimum

Maximum

1.38%

1.50%

0.70%

Study Year Scope Type

I Type

II Network

Effect

Crandall et.al. 2003 US … 2.17 …

Katz et.al. 2008 CH 1.4 … …

Atkinson et.al. 2009 US … 3.60 1.7

Katz et.al. 2009a US 1.83 3.43 …

Libenau et.al. 2009 UK … 2.76 …

Katz et.al. 2009b DE 1.45 1.93 …

Estimated broadband employment creation multipliers

Source: Katz (2009), citing Crandall et.al. (2003); Katz et.al. (2008); Atkinson et.al. (2009); Katz et.al. (2009a); Libenau et.al. (2009); and Katz et.al. (2009b)

Note: Type I (Direct+Indirect)/Direct; Type II (Direct+Indirect+Induced)/Direct

10% annual broadband penetration increases annual GDP growth by 0.24-1.5 p.

p., and creates 1.5 to 4.5 indirect jobs for each job created.

There is a growing need to supply exploding demand and traffic

Total Broadband Traffic Forecast

Source: Cisco VNI, 2011

Mobile Broadband Traffic Forecast

Source: Cisco VNI Mobile, 2012

… and a significant gap exists in many developing countries

46.3

25.9 24.2

13.4

9.7 7.1

3.6

0

5

10

15

20

25

30

35

40

45

50

Europe CIS** TheAmericas

World Arab States Asia &Pacific

Africa

Mobile broadband subscriptions per 100 inhabitants, 2010*

* Estimate ** Commonwealth of Independent States Regions are based on the ITU BDT Regions, see: http://www.itu.int/ITU-D/ict/definitions/regions/index.html Source: ITU World Telecommunication /ICT Indicators database

23.9

15.5

8.7 8.0

5.7

2.3

0.2 0

5

10

15

20

25

30

Europe TheAmericas

CIS** World Asia &Pacific

Arab States Africa

Fixed broadband subscriptions per 100 inhabitants 2010*

* Estimate ** Commonwealth of Independent States Regions are based on the ITU BDT Regions, see: http://www.itu.int/ITU-D/ict/definitions/regions/index.html Source: ITU World Telecommunication /ICT Indicators database

World Bank Backbone Projects: Africa

2011

2007 submarine cables

Implemented

Committed FY07-10

Committed and in Preparation

East Africa (RCIP): US$424 million

Central Africa (CAB): US$312 million

West Africa (WARCIP): US$260 million

Our Broadband Value Proposition

6

Our Connect Pillar Value Proposition

• Trust, integrity and quality of end-products – Deliverables with a neutral point of view and strong quality control.

• A broad-based agenda – A broad agenda within and across sectors and macro issues increase effectiveness of policy implementation.

• Political economy issues – Access to high-level positions, understanding of their interests and conflict resolution during difficult political changes. The Bank catalyzes policy changes and assists champions of reform.

• Value of Bank’s brand – The presence of the Bank increases the confidence of the private sector and increases visibility and seriousness of policy actions in the international community.

• Knowledge: collection, organization and dissemination

• Funding – In some countries, the Government can not finance recommended activities (e.g. IDA, post-conflict)

7