Increasing Broadband Internet Penetration
In the OIC Member Countries
19
informational occupations and the adoption of technology to improve their productivity at the
macroeconomic level. This causal link is conceptually depicted in figure 4.
Figure 4: Causality Model: ICT innovation and diffusion is driven by the growth of
information workforce
Source: Jonscher (1982); Telecom Advisory Services analysisAccording to this causality framework, economic growth logically leads to increasing complex
production processes. In turn, complexity in production processes results in increasing the
functional complexity within firms (e.g. more inputs to be combined, more steps to be
scheduled in a timely manner, more interactions occurring with suppliers of raw materials and
with buyers of the end product). The first response of economic organizations to this effect is
the creation of “information workers”—laborers whose primary function is the manipulation
of information for purposes of organizing the production of goods. At some point, however,
information processing workers become a bottleneck in the economic system. They cannot
grow forever because this process reduces the overall availability of resources in other
occupations. Furthermore, when information workers become a large proportion of the
workforce, the complexity of information processing becomes a bottleneck itself. In other
words, there is a limit to the possibility of manually storing, transferring and processing the
growing amounts of information. This is where information and communication technologies
come in. Their development and adoption is aimed at increasing the productivity of
information workers and addressing this bottleneck. The availability of computing and
communications allows firms (and their information workers) to be more productive in their
manipulation of information. Broadband is a specific component performing this important
productivity enhancement.
For example, research on the impact of broadband on productivity has successfully identified
positive effects. For example, Waverman et al. (2009) determined the economic effect of
broadband on the GDP of 15 OECD countries for the time period of 1980 to 2007. These
included 14 European and the United States. By relying on an augmented production function
derived from Waverman et al. (2005), the authors specified two models: a production function
ECONOMIC
DEVELOPMENT
WORKFORCE
SPECIALIZATION
GROWTH OF
INFORMATION
WORKFORCE
NEED TO ADOPT ICT
TO INCREASE
PRODUCTIVITY OF
INFORMATION
WORKERS
Reduction of
uncertainty in
information
handling
Increasing
complexity
of
production
processes
At some point, the
information
workforce becomes
a bottleneck in the
system of
production
Productivity
increase (first
effect)
Productivity
increase
(second effect)