The Internet, Broadband, 4G and Jobs

By David Byrd

As I earlier communicated this week, I listened to an economist indicate that while the Internet is creating jobs, it is doing so at a pace that is far lower than those created by the manufacturing industry. While intuitively this seems true, given our role in expanding the use of the Internet and IP communications, I believe we should know what effect our daily efforts to deliver VoIP/SIP trunks is having on job creation. Interestingly, I finally found research that quantifies the number of jobs created as a result of the interplay among the Internet, broadband and the transition from 3G to 4G on job creation. The research study, The Employment Effects of Advances in Internet and Wireless Technology: Evaluating the Transitions from 2G to 3G and from 3G to 4G” by Robert J. Shapiro and Kevin A. Hassett offers some concrete facts, figures and analysis to quantify such job creation.

In simple terms, the authors state that the transition from 2G to 3G wireless technologies and Internet infrastructure created 1,585,000 jobs from April 2007 to June 2011 and that every 10 percent increase in the adoption of 3G and 4G wireless technologies could add at least 231,000 jobs. This summary is a bit different from the McKinsey Global Institute I reference earlier in the week in that it attempts to quantify the number of jobs created. Shapiro and Hassett provide us with metrics that can be used to estimate and predict job creation associated with the Internet and wireless infrastructure. According to their research and some borrowed from McKinsey, Arthur D. Little, Ericsson and the Chalmers University of Technology, a 1 percent increase in broadband penetration is accompanied by a 1 percent increase in GDP and as broadband speed doubles GDP rises 0.3 percent. The White House Council of Economic Advisers advises that for every 1 percent increase in GDP in the US approximately 1 million jobs are created.

As one reads the entire study developed by Shapiro and Hassett, the numbers and analysis can become a bit overwhelming and certainly go beyond the typical analysis presented in this blog. However, I agree with the conclusion that the economic benefits associated with the adoption of new technologies are very significant. This reinforces the need to support investment in technology and infrastructure improvements by both private and government entities. It also positions Internet/wireless companies like Google, Facebook, Apple and others as job creators not based upon their individual hiring or even ecosystem expansion but more because of the effect they have had on the economy as whole. As broadband and wireless infrastructure is improved, new applications and innovations follow. Similarly, as Google and Apple present us with new online tools, devices and operating systems, companies outside of their ecosystems will develop ways to exploit them to their economic advantage.

Job creation in the mode of a manufacturing economy is long gone for the U.S. However, if we view job creation globally then we can observe its effect upon individual countries whose economies may be driven by manufacturing, services and/or information technology. The global GDP attributed to the Internet and wireless is 3.8 percent, which translates to millions of jobs. So, as we develop and sell VoIP, SIP Trunks, Unified Communications and IP infrastructures (IP PBXs, SBCs, IADs, etc.), know we are contributing to this recovery and job growth for the future.

See you on Monday!

David Byrd is vice president of marketing and sales for

Broadvox

, and is responsible for marketing and channel sales programs to SMBs, enterprises and carriers as well as defining the product offering. Prior to joining Broadvox, David was the vice president of Channels and Alliances for Eftia and Telcordia. As director of eBusiness Development with i2 Technologies, he developed major partnerships with many of the leaders in Internet eCommerce and supply chain management. As CEO of Planet Hollywood Online he was a pioneer in using early Internet technologies to build a branded entertainment and eCommerce website company partnered with Planet Hollywood. Having over 20 years of telecom sales and marketing experience, he has held executive positions with Hewlett-Packard, Sprint and Ericsson.