Broadband's Impact on California Economy
The Sacramento Regional Research Institute (SRRI) recently published a report on the "Economic Effects of Increased Broadband Use in California. " The study, commissioned by telecom leader AT&T, concluded that the state's economy would benefit significantly from increased broadband usage.
According to one of the report's authors, Dr. Kristin Van Gaasbeck of CSU Sacramento, "there is a clear connection between investing in broadband technology and job growth." Analyzing economic and broadband usage data from 2001 to 2005 to forecast future growth in 24 regions, researchers predicted that a 3.8 percent annual spike in broadband usage could provide Californians with a cumulative gain of 1.8 million jobs and $132 billion in wages for the period between 2005 and 2015.
Those figures are undoubtedly music to the ears of the AT&T execs who funded the study. Beyond that, the findings send an important message to economic development professionals looking for ways to boost job opportunities in their communities.
Other key takeaways include:
- SRRI found that broadband growth has a negative effect on the establishment of businesses in California, which might have to do with more people telecommuting instead of traveling to a physical location. While this initially seems like grim news, the researchers reported mixed results and said "findings for this variable are suspect."
- Adoption rates for broadband (defined as a cable or DSL connection) have skyrocketed in California from 15.2% of the adult population in 2001 to 53.5% in 2007.
- SRRI credits broadband usage in California between 2002 and 2005 with contributing to the addition of 198,000 jobs and $11.6 billion of payroll
- Because California is a state with a diverse population that includes both large metropolitan areas and small rural communities, broadband usage rates varied from as low as 4 percent in some towns to as high as 66 percent in other areas.
- Not surprisingly, between 2001 and 2006, the greatest gains in broadband usage as a percentage of the population took place in the Northern California communities surrounding Silicon Valley, including the areas around Vallejo, San Jose and Sacramento.
- On a regional basis, SRRI forecasts indicate that even small rural communities could see more job growth if broadband usage increased. The biggest gains would be in the larger metropolitan areas though, led by the Los Angeles-Long Beach region.
For more info, you can download a PDF of the 41-page report online. Published: November 13, 2007.
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