Broadband to drive the ‘new’ economy

18/02/2009 - 22:00

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Globally, high-capacity broadband is the infrastructure on which 21st century business will be built.

TOP quality telecommunications services are vital to businesses of all sizes, from large manufacturers managing their global supply chain, to mid sized retail and service based businesses connecting to customers, the home based consultant or eBay business.

Broadband does not act on the economy in isolation, but as a complement to other information technologies.

It has become the critical enabler for the use of computer-based applications that need to communicate. Many of these applications change the behaviour and productivity of both firms and individuals.

Public infrastructure increasingly depends on broadband communications networks for significant functions, including traffic light control, control of sewerage systems, air traffic control as well as maritime and rail transport and logistics management systems.

Many aspects of business are already taking place over broadband networks, such as supply chain management, fleet management, e-procurement, e-invoicing, online recruitment, customer service, call centres, online payment systems, ecommerce, co-ordination of fragmented production processes, and the connection of tele-workers to their employers.

Consumers have also made great use of broadband networks for e-commerce, online payment systems, online reservations, online auctions, and online entertainment services.

In the commercial world the impact of high-capacity broadband is felt most directly in terms of productivity growth and greater opportunities for innovation.

Productivity growth is generally regarded as the most important measure and determinant of economic performance.

Economists now generally accept that the ICT revolution incorporating broadband infrastructure was, and continues to be, responsible for the lion's share of the post-1995 rebound in productivity growth among developed economies.

The switch to broadband services has produced significant cost savings for businesses. At the same time the new networks have had beneficial impacts on process efficiency, work organisation, procurement costs, product quality and customer service.

Sophisticated telecommunications networks, together with other information technologies, boost productivity by:

- enabling employees to do more things at the same time;

- allowing routine tasks to be automated and remotely managed where appropriate;

- enabling firms to restructure their supply chains;

- facilitating more productive self service;

- allowing bits to be substituted for atoms;

- enabling the creation of markets and market signals where before there were none; and

- helping markets to be more efficient by expanding consumer information.

Broadband-enabled information technologies have given managers better tools by which to make decisions. In today's world, shorter product cycles, rapidly changing economic environments and a multitude of new competitors means that business leaders must make decisions faster and with more accuracy than ever before.

As broadband spreads throughout the economy transformations are taking place in the way business is done, work is organised and resources are allocated. These effects are most noticeable in the service sector of the economy in areas such as financial services, business services, transportation, real estate, travel and tourism, retail, and communication services.

Among experts in the field of innovation there is a significant consensus that broadband infrastructure has had a major beneficial impact on innovation. Once again in association with other key ICTs, broadband has made it easier to uncover and develop good ideas and easier to create new products and services.

The most direct way in which ICTs boost innovation is by giving researchers more powerful tools for doing research. Broadband is the infrastructure that adds value to the ICT toolbox and facilitates vital forms of interaction in effective innovation.

Broadband has become the world's knowledge conduit, making it possible for innovators to learn faster than ever before what other innovators are doing and what level of opportunity the market offers.

Whereas once R&D was virtually the sole preserve of large corporations, computers and the internet have made it practical for SMEs to participate and compete. Knowledge management has become a reality rather than a theoretical possibility as a result of broadband infrastructure and a whole new generation of knowledge management tools and technologies. Broadband has made it practical and more cost effective to run a network of geographically dispersed facilities to enforce standards of operation, branding and all other aspects of successful marketing.

Until a few years ago, broadband was a matter of minor interest to the world's technologically literate. Today it is a business, professional and domestic, essential for many millions of people as a vital enabler of economic activity and a key component of Australia's entertainment and cultural life.

Bandwidth capacity and speeds have increased remarkably, but have a long way to go. In the late 1990s normal household access speeds to the internet in Australia were in the range of 128-256 kilobits per second. By 2007 the majority of Australian's were enjoying connection speeds above 1.5 megabits per second. Globally, at present, connection speeds are doubling every 15-18 months.

Many overseas communities are already enjoying connections speeds of 20-30Mbps and planning for speeds of up to 100Mbps. During 2008 in both Singapore and New Zealand national governments committed to programs to deliver FTTH (fibre-to-the-home) operating at a minimum of 100Mbps. To be globally competitive, a target for Australia would be to build fibre to every home and every business providing connection speeds of between 50 and 100Mbps at home, one to 10 gigabits per second at work, and wireless available on a ubiquitous basis to fill in the gaps.

To enjoy the vast range of continuously emerging new online products and services, Australian businesses and households will be looking for connection speeds of 20, 30, 40, 50, and 100Mbps in the very near future. Such speed can only be delivered reliably on high-capacity broadband delivered by fibre to the premises.

While the business world and government agencies will comprise a very important part of the demand for next generation systems, the real breadth and depth of the demand for high-capacity broadband will come from home users.

Technology, from radio and record players to television and DVDs, has a long history of opening up new forms of entertainment. However, it is the broadband revolution that is now defining exciting possibilities to improve, expand and enhance recreational and entertainment experiences. The availability of high-capacity broadband is redefining consumers' relationships with traditional media

Top quality broadband is improving the quality of entertainment, offering more choices in entertainment, allowing more control of the media and enabling consumers to participate in creating media.

Demand for consistent and higher speeds and higher upstream capacity is growing as new web services and the uploading and downloading of video in particular increase in usage. To put the time frames in perspective, Flickr photo sharing was launched in 2004, You Tube video sharing in 2005, Facebook in September 2006, Gmail in 2007, iPlayer in December 2007 and Apple TV 'Take Two' in January 2008. The consequent growth in traffic during the past few years has been dramatic.

Perhaps the most challenging aspect of the growth in demand for increased bandwidth from the home will be simultaneous use of bandwidth-hungry applications such as home-based business operation, videoconferencing, real time online gaming, distance education experiences, social networking and remote health monitoring.

Health care systems worldwide are under great and increasing pressure associated with escalating costs, changing disease patterns, the ageing of the population and increasing mobility of patients and professionals.

The power of information and particularly communications technologies has been harnessed in creative ways in recent years as health care professionals and administrators strive to deliver better and more efficient health care services.

Education systems are confronting challenges not altogether dissimilar to their counterparts in the health service, especially with regard to escalating costs. As in health, the power of information, and particularly communications technologies, has been harnessed in creative ways in recent years to assist educational professionals and administrators to deliver better and more efficient education services.

In the foreseeable future secondary, primary and early childhood education services will feature fibre to the classroom and, quite conceivably, fibre to the desk as a key feature of contemporary facilities. Ubiquitous high-speed wireless systems will also be part of the mix.

It is hard to overstate the importance of broadband technology in ensuring public safety. Fast, interactive, content-rich services that are the fundamentals of high-capacity broadband in times of emergencies are now relied upon to simultaneously deliver voice, high-speed data and high-quality video for a range of strategies.

Beyond local emergencies, at a national or regional level, broadband infrastructure is essential for real-time interagency coordination, monitoring and mobilisation.

In terms of the current economic crisis we are confronting, high-capacity broadband is one of our best hopes for recovery and one of our best hopes for the next long-term wave of prosperity, if we invest in the infrastructure.

It is also one of our best hopes to identify, unlock and harness the extraordinary opportunities for the 21st century.

A rapidly growing school of thought also suggests that high-capacity broadband will be integral to any success we have in tackling the challenges of climate change and delivering a low-carbon future.

n Mal Bryce is adjunct professor of public policy at Curtin University of Technology.

 

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