Many international development projects promote national Internet infrastructure with the assumption that increased connectivity will lead to economic growth which will in turn increase the quality of life for citizens in the recipient nations.  However, what is the measured impact of Internet penetration on economic growth?

• The World Bank
  • 10% increase in Internet penetration leads to a 1% increase in GDP
• ITU Broadband Commission
  • 10% increase in broadband penetration in China contributes to a 2.5% growth in GDP
  • 10% increase in broadband penetration in low and middle-income countries contributes to a 1.4% increase in economic growth
  • Access to broadband in Brazil has added approximately 1.4% to employment
  • Broadband will create 2 million jobs by 2015 in Europe
• Kenyan Economic Update
  • Person to person mobile money transfers equated to about 20% of national GDP, with about two-thirds of adults engaging in transfers
  • ICTs are responsible for 0.9% of the 3.7% annual economic growth in Kenya over the past ten years.  In other words, ICTs accounted for one-fourth of the GDP growth in Kenya the past decade.

In addition to these statistics, the Broadband Commission released the following table on the impact of broadband on employment:

Despite these promising statistics, there are critics of broadband’s correlation with economic growth.  Charles Kenny from the Center for Global Development recently attacked the World Bank’s claim that 10% increase in Internet penetration leads to a 1% increase in national GDP.  Kenny argued that the study was not peer-reviewed or ultimately published (both of these claims are correct).

Overall, however, studies on national economies and Internet penetration seem to demonstrate a positive correlation between the two.  Hopefully, the ITU’s Broadband Commission will be able to produce more definitive studies in the future, though given their political stance in favor of broadband adoption, it may be more difficult for the ITU to be objective.