The importance of connectivity

Connectivity is of vital importance in an information economy, to enable speed and ease of connection, to create a space for entrepreneurship and the ingredients for social cohesion – and to overcome disadvantages due to lack of scale. In a globalised information economy size (or scale) is important, but not determinative, as the number of connections and the ease of connectivity provide an alternative route to success.

This is a significant observation, as, given these parameters, Australia may be able to compete with any economy, regardless of its size. Then, a successful information economy needs content appropriate to its economic and cultural needs; content that is dynamic and responsive.

It has been estimated that next generation broadband could produce economic benefits of $12 billion to $30 billion per annum to Australia (see here). This assumes that broadband is adopted as universally as the telephone over the next 25 years. A policy of encouraging widespread broadband adoption could deliver accelerated economic value within years rather than decades.

In the United States, studies have estimated that widespread, high-speed broadband access could increase US GDP by US$500 billion by 2006 and that building and using a robust, nationwide network will expand US employment by an estimated 1.2 million new and permanent jobs.

Broadband technologies make a range of networked communications possible, many of which are not apparent using first generation internet technologies. The ‘always-on’ network effect will also change business and user behaviour and revolutionise the way content and services are delivered and managed. Innovative use of broadband connectivity will be critical to Australia’s ability to participate and compete in the global economy.

As Thomas Friedman has said:Jobs, knowledge use and economic growth will gravitate to those societies that are the most connected, with the most networks and the broadest amount of bandwidth - because these countries find it easiest to amass, deploy and share knowledge in order to design, invent, manufacture, sell, provide services, communicate, educate and entertain. Connectivity is now productivity.