The Impact of the Broadband Internet on Employment

Abstract

This chapter argues that, based on the evidence, broadband contributes to the creation of jobs in certain industries and geographies, while also being a key factor in capital-labor substitution under certain conditions. First, broadband construction programs create direct, indirect, and induced jobs under attractive multipliers. Second, deployment of broadband in emerging countries enables them to attract employment from industrialized economies. Third, broadband Internet in advanced economies leads to the emergence of businesses that were previously nonexistent. Fourth, broadband enables businesses to redeploy functions in different geographies to benefit from the availability of wider labor pools or lower factor costs; this leads in turn to job creation in certain regions. Fifth, firms can rely on broadband to deploy distribution channels in unserved remote geographies, leading to additional job creation.