Productivity Questions for Public Sector Fast Fibre Network Financiers

Communications and Strategies, No. 78, No. 2, pp. 127-145, 2010

19 Pages Posted: 19 Apr 2011 Last revised: 9 Sep 2014

Bronwyn E. Howell

Victoria University of Wellington - School of Management

Arthur Grimes

Motu Economic and Public Policy Research Trust

Date Written: June 15, 2010

Abstract

Fast internet access is widely considered to be a productivity-enhancing factor. However, despite promises of substantial gains from its deployment, the evidence from recent empirical studies suggests that the productivity gains may not be as large as originally hypothesised. If substantiated, these findings suggest that current government plans to apply significant sums to bring forward the deployment of fast fibre networks (e.g. in both Australia and New Zealand) may not generate returns to the extent anticipated by their sponsors. Drawing upon the original 'computer productivity paradox' literature, this paper develops a critical questioning framework to assist policy-makers in identifying the salient productivity issues to be addressed when making the decision to apply scarce public resources to faster broadband network deployment. Using multiple literatures, the framework highlights the nuanced and highly complex ways in which broadband network speed may affect productivity, both positively and negatively. Policy-makers need to be satisfied that, on balance, government-funded investments in faster networks will likely generate the anticipated net benefits, given the significant uncertainties that are identified.

Keywords: Internet, broadband, productivity, public investment

JEL Classification: H49, O33

Suggested Citation

Howell, Bronwyn E. and Grimes, Arthur, Productivity Questions for Public Sector Fast Fibre Network Financiers (June 15, 2010). Communications and Strategies, No. 78, No. 2, pp. 127-145, 2010. Available at SSRN: https://ssrn.com/abstract=1810555

Bronwyn E. Howell (Contact Author)

Victoria University of Wellington - School of Management ( email )

Wellington 6001
New Zealand
+64 4 463 5563 (Phone)
+64 4 463 5566 (Fax)

Arthur Grimes

Motu Economic and Public Policy Research Trust ( email )

19 Milne Terrace
Island Bay
Wellington 6002
New Zealand

Paper statistics

Downloads
51
Rank
319,231
Abstract Views
557