Broadband Ahead

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Essential concepts for a broadband strategy

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Broadband Ahead

  1. 1. „Broadband in the 21st century“ CEPS, Brussels, May 26th, 2009 Broadband ahead! Essential concepts for a broadband strategy Dr. Martin Fornefeld Gilles Delaunay Stadttor 1 D – 40219 Düsseldorf Albertstr. 12 D – 10827 Berlin phone +49 (0)211 – 3003 420 · fax +49 (0)211 – 3003 200 www.micus.de info@micus.de 1 Bild: Tagebau bei Cottbus, Brandenburg, von „Flicker/smitty42“, Creative Commons License © 2009 MICUS Management Consulting GmbH
  2. 2. MICUS: who we are and what we do a consulting partner for private companies and the public sector in Germany and Europe. Market research and strategy development for public services and private companies Information and communication technologies Modernization of the public administration (examples) • The use of Galileo applications in public services On behalf of the German Ministry of Circulation, Building and Urband Development, 2009 • Assessment of the Re-use of Public Sector Information (PSI) On behalf of the European Commission, 2008 • Alternative communication channels for critical processes On behalf of the German Federal Administration for IT security, 2007 2 © 2009 MICUS Management Consulting GmbH
  3. 3. Evidence of the impact of Broadband on Growth and Productivity: ‘actnow’ in Cornwall Empirical evidence in the business services sector Cornwall 1998-2001 Cornwall 2001-2005, with actnow 0% 20% 0% 20% 7,96% 17,67% 5,26% 5,49% 2,56% 11,55% UK 1998-2001 UK 2001-2005 0% 20% 0% 20% 8,65% 6,99% 5,01% 2,88% 3,46% 4,00% GVA growth Employment growth Productivity growth 3 © 2009 MICUS Management Consulting GmbH
  4. 4. Broadband workers and broadband companies: who are they? Broadband workers have access to a large information base and a worldwide business network: high productivity, high innovation potential Broadband companies specialize in information intensive activities: - High productivity, increase productivity in other economic sectors - Innovation intensive to stay ahead of worldwide competition Companies with broadband connection: 74.5% + 13.2%/year „Broadband companies“: 23.1% + 3.0%/year (EU27, 2006, MICUS based on Eurostat statistics) 4 © 2009 MICUS Management Consulting GmbH
  5. 5. Knowledge-intensive jobs are essential to sustaining high employment levels in a global economy European/ American workers are highly qualified, but with high salary levels. We are not competitive for routine jobs and „low intelligence“ occupations. A current situation under high pressure from the global economy -1,319,000 jobs/year go further in developing +1,424,000 jobs/year comparative advantages in Come back to a lower +105,000 jobs/year • high competencies life standards level • innovation capacity (only broadband-related) • information intensive activities +2,112,000 jobs until 2015 (net jobs creation, best case, EU27) Broadband development belongs to a coherent strategy towards high competences and information intensive activities. 5 © 2009 MICUS Management Consulting GmbH
  6. 6. Broadband is all about innovation 70% of jobs creation related to broadband is directly due to innovation. Broadband development is strongly related to innovation policies. „In developed markets, innovation is a priority.“ (CEO Briefing 2007, Economist Intelligence Unit) Broadband impact, %GDP + 1,00% + 0,89% EU27: + 0,80% +0.71% + 0,70% + 0,63% + 0,60% + 0,47% Innovation is about “making the first move”. + 0,40% In an open, global economy, being among + 0,20% the group of pioneers is necessary to get the benefits of innovation. + 0,00% Less Quickly Large Advanced developed developing industries knowledge The impact of broadband is stronger in the broadband societies most advanced and innovative countries. 6 © 2009 MICUS Management Consulting GmbH
  7. 7. Do not underestimate human factors Not all companies having a broadband connection do take advantage of broadband potentials. Entering the „knowledge economy“ is not trivial. Correlation between internet use, infrastructure and human factors at the national level (EU27) Infrastructure factors Human factors 66% 34% Internet use Positive impact +13% connected companies but only +3% annual adoption Only +0.29% annual of broadband applications in productivity increase! businesses A very slow process, independently from investments in new infrastructures Even worse in SMBs and less developed countries: the digital divide is still growing. 7 © 2009 MICUS Management Consulting GmbH
  8. 8. Scenarios: best case, base case and worst case More than 1.5 billion jobs can be created until 2015 Employment, EU27, 1000s jobs, cumulative 2006-2015 2.000 Employment growth, 1000s jobs, 1.500 year 2005 =0 1.000 Best case Base case 500 Worst case 0 Growth, EU27, bn€, cumulative 2006-2015 -500 1.000 2006 2008 2010 2012 2014 900 GDP Growth, bn€, year 2005 = 0 800 700 600 Best case 500 Base case 400 Worst case 300 200 100 0 2006 2008 2010 2012 2014 © 2009 MICUS Management GmbH – page 8
  9. 9. Policy recommendations Four main strategic lines apply in all cases: 1. Develop the broadband infrastructure. 2. Rely strongly on education for a long-term development of the knowledge society. 3. Use adequate drivers to foster the use of online applications in companies and by individuals. 4. Promote innovation. But: No “one suit fits all”. Distinguish adequate strategies for each level of development. 9 © 2009 MICUS Management Consulting GmbH
  10. 10. Tank you for your attention Thank you for your attention Dr. Martin Fornefeld +49 211-3003 420 fornefeld@micus.de MICUS Management Consulting GmbH www.micus.de 10 © 2009 MICUS Management Consulting GmbH

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