Gig Speeds Contribute to GDP Productivity

Gig Speeds Contribute to GDP Productivity

Does faster internet lead to more productivity? According to the latest research conducted by the Fiber Broadband Association’s Technology Committee and RVA LLC Market Research & Consulting (RVA), if work-from-home broadband users subscribed to a gigabit or more of fiber broadband connectivity, the U.S. could add a whopping $326 billion, around 1.2%, to its Gross Domestic Product (GDP).

“Is there true value to gigabit [service]?” said Michael Render, Founder and CEO, RVA. “Yes, I think there is, based on looking at bandwidth, time savings, and efficiency, effectiveness as well.”

Based on publicly available Open Vault data looking at user usage on a monthly basis, RVA estimated delays for uploading and downloading data using a 60 Mbps service wasted about 20 minutes daily waiting for web pages and files to transfer during the course of a typical online day. “We don’t think about it all the time, because it’s 20 seconds here, 30 seconds there,” Render said. “But it all adds up into a staggering figure on an annual basis, 120 hours, almost 14 eight-hour days.”

How much is that wasted time worth? At $35 per hour, the average wage rate in the U.S. in 2023, waiting for uploads and downloads costs the average user around $3,700 per year. Increasing speeds to the gigabit level resulted in reducing wait times to around 2 minutes per day, something barely noticeable to most of us on a daily basis. Applying a gig speed boost to the 23% of work completed in the U.S. from home and assuming a 10% productivity improvement through the increase in efficiency using cloud-based services, websites, searches, and other business applications, delivers a 1.2% increase in GDP.

“There are similar impacts for workers in the office,” stated Render. “Just as an aside, I don’t think we understand the value that fiber has to GDP in general. It is the basis of all high tech today, the internet, the cloud and database networks, cellular networks, AI, and quantum and everything else that we talk about with excitement today. A big portion of those things are owed to fiber in terms of the productivity and GDP improvements they bring.”

And while many people think that gigabit speeds are sufficient for today, John George, Senior Director, Solution Engineering & Professional Services of OFS and chair of FBA’s Technology Committee, notes that the growth in speed isn’t grinding to a halt anytime soon, driven by adoption of 8K streaming, AI, and AR/VR/XR. “We see two gigs symmetrical required by 2030,” said George. “As we’re extending into 2040, another 10 years, even at a lower 15% growth rate, 8 gig symmetrical.”

To learn more about why gigabit speeds are good, why latency is truly king, and how fiber is the way to meet the requirement for single-digit latency and higher bandwidth, listen to the latest Fiber for Breakfast.

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