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Another Needed Economic Jolt

Geraldine Gambale, Editor, Area Development Magazine (Apr/May 08)
It's practically official. Federal Reserve Chairman Bernanke warned Congress in early April that the U.S. economy might shrink over the first half of the year, signaling the start of a recession. He didn't actually say the word "recession" - only that the nation's GDP will not grow much, if at all, during the January-June 2008 period. In fact, Bernanke said the economy could even contract slightly. On a more positive note, the Fed chairman told Congress he expects more economic growth in the second half of the year and into next.

Now that we've stated the obvious, can we talk about something else? How about something that would provide an additional jolt to the economy - the use of information and communications technology - which just happens to be the focus of this issue.

A study from a national nonprofit, Connected Nation, recently measured the national economic stimulus of broadband legislation currently under Congressional consideration. The report's findings suggest the nation would realize a $134 billion annual economic impact from a modest increase in broadband adoption.

"Just as the Congress needed to pass the recent economic stimulus package to accelerate the economies of every state.the nation deserves passage of pending legislation that would accelerate access to and use of broadband," says Brian Mefford, CEO of Connected Nation. "It would provide a jolt to the nation's economy," he adds.

In order to assess the impact of national broadband legislation, which was in conference as part of the Farm Bill as we went to press, Connected Nation measured the impact of its first state-based program, ConnectKentucky. Kentucky's aggressive broadband efforts have resulted in an 83 percent rate of growth in broadband adoption (the national rate is only 57 percent) and consumer savings in time and miles driven and healthcare costs, as well as a positive impact on job creation and retention in the state.

From this information, Connected Nation extrapolated the economic impact of modest growth (just 7 percent) in broadband adoption for the country as a whole at $134 billion annually. Some $92 billion would be gained through the annual creation or retention of 2.4 million jobs. Additional annual savings would include $662 million in healthcare costs, $6.4 billion in mileage, $18 million in carbon credits associated with 3.2 billion fewer CO2 emissions, and $35.2 billion from 3.8 billion more hours spent accessing broadband from the home.

It's no wonder then that, in today's Information Age, growing companies are placing increasing emphasis on information and communications technology (ICT). In fact, site selectors often rank sites according to their "last mile" communications architecture. If a business can't connect to its suppliers or customers from a particular location, that location can be ruled out. Meanwhile, the nation's most "connected" locations are reaping the benefits of new ICT technologies that are increasingly saving companies time and money.

Therefore, if past business growth and U.S. economic expansions have been spurred by growth in technology - from new industrial processes to the use of computers and the Internet - increased government investment in the latest ICT technologies just might help to lift the nation out of its downward economic spiral.

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