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Does Caribbean broadband Internet really contribute to economic growth?

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A discussion of the results of a study conducted in the Eastern Caribbean on the impact of broadband Internet on economic growth.

In 2015, the Eastern Caribbean Telecommunications Authority (ECTEL), which is the regional hub of the telecoms regulatory machinery in the Organisation of Eastern Caribbean States (OECS), commissioned a study on the Impact of Broadband on Economic Growth in ECTEL Member States. The study, which was funded under the Caribbean Regional Communications Infrastructure Project (CARCIP) project, and conducted by  Mr. Curlan Gilchrist, St. George’s University in Grenada, sought to quantify, among the ECTEL Member States, the “extent to which investment in broadband technology and by extension broadband penetration would impact economic growth”.

It should be noted that such studies – to try to quantify the impact of broadband on economic growth – are not new. Organisations, such as the World Bank, Strategy& and McKinsey and Company, have conducted similar exercises, and found a relationship between penetration and economic growth. Specifically, for every 10 percentage point increase in broadband Internet penetration in low- and middle-income countries, economic growth increases by between 1.38 and 1.5 percentage points (Source:  World Bnk).

How do the results of the ECTEL study compare? Across the five ECTEL Member States, namely, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines, and for the period for the period 2002 to 2014, a correlation was found between economic output and broadband Internet penetration rate.  From the model built, the overall finding was that “an increase in the broadband penetration rate of 1% would lead to an increase in real economic growth of 0.076% (other variables held constant)” (Source:  ECTEL)

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