I am writing this from the CeBit show in Hannover Germany, which is the world's largest information technology trade fair, typically attracting a half million people to a fairground boasting 27 huge halls. It covers everything IT, from automated industrial processes and customer relationship management systems to peer-to-peer file sharing and cloud computing. And this year, attendance is down 25%. That's over 100,000 people who could not justify making the trip.
This recession is getting scary. Well into its second year, it still seems to be accelerating. The experts are, one by one, throwing up their hands and saying they don't know what will come next. Economics columnist David Leonardt recently reported that job losses were greatest among the less educated, whereas the past two recessions hit hard on "white collar" employment. This recession is also affecting men more than women, who are suffering job loss at only 80% of the rate of men. At the community level, the impact is equally uneven. It depends where you are, what industries drive your economy and on whether or not you have robust broadband.
I believe in the positive economic impact of broadband - but I wish I had more facts to support my belief. We can observe that the broadband Web continues to stimulate a rising tide of new businesses and business models. I have seen many here in the halls of CeBit. And while most are highly speculative, some may be the next Amazon.com, iTunes, Google or Facebook. What's especially important about these broadband icons is that none stands alone. Each has become a platform spurring the growth of still more businesses, from eBay entrepreneurs to iTunes apps and Amazon.com Associates. The success of online businesses may have ripple effects that reach worldwide.
But the Web has also shown a unique ability to destroy business models. The recorded music business, feature films, and television are all being upended by broadband as digital files take the place of hard copies. Retailing has been likewise transformed, and the declines that business travel and hotels will experience in this recession may be cemented into place by faster growth in videoconferencing.
But the research into the economic impact of broadband is painfully thin. In June 2007, the Brookings Institution in the US found that, for every one percent increase in broadband penetration in a US state, employment increases by 0.2-0.3 percent per year. In February 2008, Connected Nation issued a report estimating that a 7% increase in broadband penetration in every state would give the US an additional $134 billion in economic benefit through new jobs, reduced costs, time saved and carbon emissions reduced.
Such broad estimates leave me unpersuaded. I see a burning need to conduct objective research at the community and regional levels - where the economic activity really takes place - to find out what impact broadband has and how it is produced. With the European Commission and the Obama administration preparing to invest billions in broadband infrastructure, it's past time for the facts.
More information on the Intelligent Community Forum can be found at www.intelligentcommunity.org.
This recession is getting scary. Well into its second year, it still seems to be accelerating. The experts are, one by one, throwing up their hands and saying they don't know what will come next. Economics columnist David Leonardt recently reported that job losses were greatest among the less educated, whereas the past two recessions hit hard on "white collar" employment. This recession is also affecting men more than women, who are suffering job loss at only 80% of the rate of men. At the community level, the impact is equally uneven. It depends where you are, what industries drive your economy and on whether or not you have robust broadband.
I believe in the positive economic impact of broadband - but I wish I had more facts to support my belief. We can observe that the broadband Web continues to stimulate a rising tide of new businesses and business models. I have seen many here in the halls of CeBit. And while most are highly speculative, some may be the next Amazon.com, iTunes, Google or Facebook. What's especially important about these broadband icons is that none stands alone. Each has become a platform spurring the growth of still more businesses, from eBay entrepreneurs to iTunes apps and Amazon.com Associates. The success of online businesses may have ripple effects that reach worldwide.
But the Web has also shown a unique ability to destroy business models. The recorded music business, feature films, and television are all being upended by broadband as digital files take the place of hard copies. Retailing has been likewise transformed, and the declines that business travel and hotels will experience in this recession may be cemented into place by faster growth in videoconferencing.
But the research into the economic impact of broadband is painfully thin. In June 2007, the Brookings Institution in the US found that, for every one percent increase in broadband penetration in a US state, employment increases by 0.2-0.3 percent per year. In February 2008, Connected Nation issued a report estimating that a 7% increase in broadband penetration in every state would give the US an additional $134 billion in economic benefit through new jobs, reduced costs, time saved and carbon emissions reduced.
Such broad estimates leave me unpersuaded. I see a burning need to conduct objective research at the community and regional levels - where the economic activity really takes place - to find out what impact broadband has and how it is produced. With the European Commission and the Obama administration preparing to invest billions in broadband infrastructure, it's past time for the facts.
More information on the Intelligent Community Forum can be found at www.intelligentcommunity.org.
Leave a comment