Brief analysis 22: The economic significance of the Internet in Austria

On behalf of ISPA (Internet Service Providers Austria), the economic research institute EcoAustria has examined the overall economic effects of broadband internet infrastructures and the digital services based on them. The result: both conventional basic broadband networks and modern high-broadband networks have enormous potential for innovation, productivity and ultimately also for domestic economic growth.

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Press release on the brief analysis 22

Brief analysis 22: The economic significance of the Internet in Austria

Study: The economic significance of the Internet in Austria

Figures: Difference between the development of Austrian real GDP (baseline scenario) and the alternative GDP development for fixed broadband (Figure 1) and mobile broadband (Figure 2), in billions of euros 2012-2021

While real GDP in Austria rose by around 8% between 2012 and 2021, it would have only increased by just under 7% in alternative scenario 1 (fixed broadband). With regard to mobile broadband (alternative scenario 2), the figure is 1.2% lower. The cumulative difference in GDP in alternative scenario 1 and the base scenario amounts to EUR 20.8 billion, which is around 5.7% in relation to GDP in 2021. Similarly, the cumulative difference in GDP trends for alternative scenario 2 (mobile broadband) is around EUR 18.6 billion for the past ten years, which corresponds to around 5.1% in relation to real GDP in 2021. The combination of the two contributions (fixed broadband network + mobile network) would mean an increase of up to EUR 39 billion.

Based on the above study results, the Institute therefore makes the following recommendations for action:

1. Subsidies for the expansion of high broadband networks can be justified in retrospect, particularly with reference to the proven high positive externalities. Comprehensive subsidies also play a role in preventing a socially undesirable digital divide and rural exodus of the population.
2. From the point of view of efficient use of public funding, it will be important to promote complementary demand-side funding models in the future.
3. Furthermore, concrete measures are needed to increase effective participation in broad sections of the population so that essential digital services are used even more. This requires appropriate educational policy support measures to increase general ICT skills ("e-literacy").
4. Parallel to the general promotion of ICT skills among the population, this must also be promoted in the world of work in conjunction with organizational adjustments. This applies in particular to adjustments in the organization of work and the provision of technical infrastructures.
5. Finally, funding models must be specifically geared towards the supply-side establishment of cloud infrastructures. It is also important that the connection with high-performance fiber optic connections, especially in rural locations that are attractive in terms of costs in this business area, is included in the funding packages.