Bandwidth a big driver of economic success, says McKinsey & Co

Connectivity helps drive a nation’s economic performance, McKinsey finds

Gustav Grundin, an associate principle in McKinsey & Co’s Telecommunications, Media and Technology Practice in Asia, claims there is a very close correlation between a nation’s economic performance and its level of connectivity, and says that connectivity is the driver of economic performance.

His comments are likely to stir up the debate in Australia about how much broadband bandwidth the country needs, although Grundin said McKinsey did not have data on the impact of fibre to the home (FTTH) level bandwidths on economic performance — only that of bandwidths up to about 40 megabits per second.

Addressing a session at the CommunicAsia 2016 conference in Singapore, Grundin put up a slide derived from World Economic Forum data that showed a link between increasing economic competitiveness and increasing ICT readiness.

“The first time I saw this chart I thought it was rigged because the correlation is so striking,” Grundin said. “But it is true: The more connectivity, the better the economic performance.”

He dismissed the view that economically successful nations might have better connectivity by virtue of their economic success, saying: “We have looked at that, and it is very clear connectivity is what drives economic performance… Connectivity has massive benefits of various kinds.”

However, Grundin was not able to throw any light on one of the central questions surrounding Australia’s NBN: Whether the bandwidths available over fibre to the node (FTTN) and hybrid fibre-coaxial (HFC) will be adequate, or whether there would be significant additional benefits from FTTH.

He broke down connectivity into four levels: Voice-only, basic connectivity (“something like 3G”); high speed connectivity (“we are talking about 30 or 40 megabits per second: The sort of things you can do with VDSL; watch HDTV without problems, for example”); and ultra-high-speed connectivity, which is “essentially fibre and the most advanced LTE with carrier aggregation.”

Grundin said: “We have no data yet on the last section we don't know what fibre to the home will do but it will do something.”

At the other end of the scale, Facebook vice-president and global access policy lead, Kevin Martin, spelt out to a forum at CommunicAsia 2016 the benefits that basic communications could bring to populations.

“Bringing connectivity in the developing world to the level that in the developed world would create about 450 million new jobs. It would give 650 million children access to information for education that they do not have today. It would save 2.6 million lives in infant mortality,” he said.

He said Facebook had identified three barriers to achieving this: Lack of infrastructure, lack of awareness or perceived need and affordability.

“There about 1 billion people around the globe who do not have access to infrastructure and about half of the 4 billion people around the world who are not connected don’t connect because they are not even aware of it or don’t know what they would do with it, and there are about 1 billion people who simply cannot afford to connect.”

He said that Facebook had come up with ways to address all three of these issues.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags broadbandnational broadband networkNational Broadband Network (NBN)

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stuart Corner

Computerworld
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?