Tuesday, May 19, 2009

Economic Benefits of Broadband in age of peak oil and cap and trade

[A very good comprehensive analysis of economic benefits of broadband. I would also argue that broadband is going to more critical to our future economy as we enter age of peak oil and cap and trade. As the famous economist Jeff Rubin argues the end of the age of global trade is coming to end. Only virtual products and services on broadband networks will be able to transcend this new economic transition– BSA]


Source: USTelecom
New USTelecom analysis reveals that the broadband-fueled Information, Communications and Technology (ICT) industries far outpace all other sectors in contributions to U.S. economic growth and provide among the highest-earning, fastest-growing jobs in the country. The analysis, “The Economic Benefits of Broadband & Information Technology,” was published in the latest edition of New York Law School’s Media Law & Policy journal.

The converging sectors of broadband, media and information technology add nearly $900 billion annually to the nation’s economy and are expanding at a rate that is two to five times faster than the overall U.S. economy. The USTelecom analysis also points out that jobs in the broadband/ICT sector pay 50% more than the hourly national average, and broadband-enabled jobs are projected to remain among the leading high-growth areas for at least the next 10 years.

Based on our analysis of the Bureau of Labor Statistics’ Occupational Employment Statistics, there were more than 10 million broadband/ICT jobs in 2007, with 5.7 million in ICT industries such as broadband service providers, content producers and equipment manufacturers. Additionally, the data shows 4.4 million ICT-centric jobs in industries outside of the ICT sector (e.g., network administrators in schools and hospitals). And, these employment tallies do not count the many more jobs made possible by broadband as an enabling technology—for example, self-employed rural Americans working from home over the high-speed Internet.


Mr. Rubin has taken his long-standing forecast that inevitably declining production and rising demand will send oil prices inexorably higher - over $200 (U.S.) a barrel by 2012 or earlier, just for a start - and imagines how the world will have to change to adjust to such a reality.

“ I think, ironically, it's going to be a return to the past ... in terms of the re-emergence of local economies. ”— Jeff Rubin

Like many oil crisis prophets, Mr. Rubin is a disciple of "peak oil" theory - the concept that world oil production is near its peak, and is destined to a long, slow decline, as existing low-cost oil fields dry up and new supplies become harder and more expensive to unlock.

But unlike many previous peak oil books, which typically don't get much past "we're in big trouble," Mr. Rubin's conclusions are refreshingly optimistic. His world of the oil-starved future, at least for Western societies, looks a lot like the bygone years of our fond memory, where people work and vacation nearer to home, eat locally grown foods and buy locally produced goods, and suburban sprawl is replaced by revitalized cities.

"I think it will really restructure the economy in ways that people haven't even begun to imagine," he said. "But I think, ironically, it's going to be a return to the past ... in terms of the re-emergence of local economies."
Indeed, the book's title is derived from this central argument - that expensive fuel will force a reversal of globalization, as long-distance trade becomes increasingly expensive and impractical. The only alternative may be a relentless cycle of economic shocks triggered by oil price surges.

"Chances are, we're going to bang our head on this oil constraint very soon in an economic recovery, unless certain things change. And I don't think we're going to have to wait five years to test that Rubin hypothesis. I think in the next six to 12 months you're going to see that," he said.

"There's a lot of historical context to suggest that we can change, that things have evolved in response to economic signals," he said. "But in order to change ... we're going to have to rearrange a whole lot more things than perhaps we recognize."