The Digital Road to Recovery

Half a million jobs. That's what could be created by a nationwide effort to expand high speed Internet access, according to a new report from the Information Technology and Innovation Foundation (ITIF). Investment in this essential technology doesn't just connect Americans to the enormous benefits of the digital age--it serves as a much-needed stimulus to our ailing economy.

As the report states,

"Spurring investment in our nation's infrastructure is an effective strategy for getting Americans back to work during an economic downturn, particularly one that is expected to be longer than normal in duration. Although projects to improve the country's traditional physical infrastructure (e.g., roads, bridges, sewer systems) are necessary and important, investments in certain parts of our national information technology (IT) infrastructure--America's digital infrastructure--will have a greater positive impact on jobs, productivity, and innovation."

Both CWA and ITIF have been calling for high speed Internet investment as economic stimulus for some time. But this new report continues to build the case with solid estimates of job creation and specific policy recommendations.

A $10 billion investment in high speed networks, according to the report, would support 498,000 new or retained jobs. This is due to the "multiplier effect," in which infrastructure investments create direct jobs, such as the technicians who lay new high speed cables; indirect jobs, such as those who supply the materials and other production inputs; and induced jobs, created when the newly employed spend their paychecks and create economic growth.

What's more, investment in high speed Internet infrastructure also sets the United States up for long-term growth and allows us to compete in the global economy.  But as the report argues, these benefits are only possible if the federal government takes the lead in high speed Internet investment:

"The federal government cannot rely on the private sector acting alone to develop broadband networks... The private sector will tend to underinvest in these networks because it is unable to capture all of the benefits (externalities) of its investments and because of other well-documented market failures... In broadband, significant network externalities exist that consumers of broadband by definition do not receive. Moreover, building out some parts of the broadband network, particularly to high-cost areas, is not economical absent some incentives...The United States should take a page from other nations like Japan, South Korea, and Sweden, which have successfully used incentives, including tax incentives, to spur the private sector to invest more in digital infrastructures."

To achieve this growth, the report outlines a three-step plan:

"ITIF proposes a three-tiered set of investments focused on addressing the three primary broadband policy goals: (1) getting broadband to unserved areas; (2) expanding network speeds in areas currently served by first-generation broadband (3 Mbps or less); and (3) spurring increased adoption of broadband by households."

With Congress currently considering the economic stimulus package--and President-elect Obama having indicated his support for high speed investment--the time is right to get all Americans connected and help pull our country out of the current financial woes. After all, as the ITIF report concludes,

"With the U.S. economy now mired in a deep, and potentially prolonged, recession, increased investment is one of the best tools to stimulate aggregate demand and quickly get American workers back on payrolls. Spurring investments in IT infrastructure not only can provide an important short-term boost to the U.S. economy; it also can lay the groundwork for long-term economic growth, international competitiveness, and significant improvement in Americans' quality of life."

The Digital Road to Recovery: A Stimulus Plan to Create Jobs, Boost Productivity and Revitalize America (ITIF)

Information Technology and Innovation Foundation

Communications Workers of America: Proposals to Stimulate Broadband Investment

CWA and allies urge Congress to include broadband in economic stimulus (Speed Matters)

Obama cites broadband as key to economic stimulus (Speed Matters)