1、ITUPublicationsInternational Telecommunication UnionDevelopment SectorThe impact of digital transformation on the economyEconometric modellingApril 2025The impact of digital transformation on the economyEconometric modellingApril 2025 AcknowledgementsThis International Telecommunication Union(ITU)re

2、port has been prepared by the ITU Telecommunication Development Bureau(BDT),Digital Knowledge Hub Department(DKH),Regulatory and Market Environment Division(RME).The report is based on findings from the studies carried out as part of the ITU research on the economic contribution of broadband,digitiz

3、ation and ICT regulation,available at the portal:https:/www.itu.int/en/ITU-D/Regulatory-Market/Pages/Economic-Contribution.aspx.It is also based on extensive compilation and analysis of statistical data from national and international sources and on data from the ITU ICT Regulatory Tracker and the D

4、igital Ecosystem Development Index(developed by the Development Bank for Latin America,CAF).The lead author is Raul Katz PhD in Political Science and Management Science,MS in Communications Technology and Policy,Massachusetts Institute of Technology(United States),Maitrise and Licence in Communicati

5、on Sciences,University of Paris(France),Maitrise in Political Science,University of Paris-Sorbonne(France).Dr Katz worked at Booz Allen&Hamilton for 20 years,as a lead partner in the Telecommunications Practice in the Americas and member of the firms leadership team.After retiring from Booz Allen,he

6、 founded Telecom Advisory Services LLC in April of 2006.In addition to being the president of Telecom Advisory Services,Dr Katz is Director of Business Strategy Research at the Columbia Institute for Tele-Information at Columbia Business School(New York).Further important contributions were provided

7、 by:Fernando Callorda MA and BA,Economics,Universidad de San Andrs(Argentina)and project manager with Telecom Advisory Services.With a background in econometrics,Mr Callorda has led numerous economic impact studies of digital technologies in the United States,Europe,Asia,the Middle East,and Africa,w

8、hich were published by ITU and academic journals.Mr Callorda is a research fellow in the National Network of Public Universities(Argentina).Juan Jung PhD and MA in economics,University of Barcelona(Spain),BA in Economics,University of the Republic(Uruguay),senior economist at Telecom Advisory Servic

9、es,specialized in the telecommunications and digital industries.His experience spans economic impact and regulatory assessment in the telecommunications sector.Before joining Telecom Advisory Services,Dr Jung was Director of the Centre of Telecommunication Studies of Latin America(cet.la)and Directo

10、r of Public Policy at the Inter-American Association of Telecommunications Enterprises(ASIET).Dr Jung is a professor at Comillas Pontifical University(Madrid),where he teaches courses in macroeconomics and the digital economy.Please consider the environment before printing this report.ITU 2025Some r

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14、e binding and authentic edition”.For more information,please visit https:/creativecommons.org/licenses/by-nc-sa/3.0/igo/DisclaimerThe designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the International

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16、are endorsed or recommended by ITU in preference to others of a similar nature that are not mentioned.Errors and omissions excepted;the names of proprietary products are distinguished by initial capital letters.All reasonable precautions have been taken by ITU to verify the information contained in

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18、reflect the views of ITU or its membership.ISBN978-92-61-38511-8(Electronic version)978-92-61-38521-7(EPUB version)ivAcknowledgements iiForeword viiExecutive summary viiiAbbreviations xiii1 Introduction 12 The evolution of ICT after the pandemic:descriptive statistics 32.1 Progress in broadband conn

19、ectivity.32.2 Increasing broadband affordability.72.3 Dichotomy of broadband coverage.112.4 Stagnating capital investment in telecommunications.153 The economic impact of fixed broadband through 2023 193.1 Fixed broadband and its impact on the economy to the end of 2020.193.2 Fixed broadband and its

20、 impact on the economy through 2023.214 Mobile broadband and its impact on the economy through 2023 264.1 Mobile broadband and its impact on the economy until 2020.264.2 Mobile broadband and its impact on the economy through 2023.275 Global analysis of fixed and mobile broadband and its impact on th

21、e economy through 2023 326 Digitization and its impact on the economy through 2022 346.1 A new measurement of digitization.346.2 Digitization and its impact on the economy until 2021.366.3 Digitization and its impact on the economy through 2022.367 Conclusions and policy implications 40Bibliography

22、42APPENDICES 44A.1 Fixed broadband models:global sample.44A.2 Fixed broadband models:regional models.46A.3 Mobile broadband models:global sample.47Table of contentsvA.4 Mobile broadband models:regional models.48A.5 Digitization models.50B.1 Methodology-Countries analysed.51B.2 Methodology-Data sourc

23、es for models testing the economic impact of fixed and mobile broadband.55B.3 Indicators included in the Digital Ecosystem Development Index and data sources.56B.4 Econometric methodology.67List of figures and tablesFiguresFigure 1:Growth in fixed-broadband connectivity(per cent of households)(2022-

24、2023).5Figure 2:Unique mobile broadband subscribers(per cent of population)(2022-2023).7Figure 3:Fixed broadband affordability(service pricing as a percentage of GNI per capita)(2022-2023).9Figure 4:Mobile broadband affordability(service pricing as a percentage of GNI per capita)(2022-2023).11Figure

25、 5:4G coverage(percentage of population)(2022-2023).13Figure 6:5G coverage(percentage of population)(2022-2023).15Figure 7:Investment in telecommunications per capita(in USD prices,mean value last five years)(2022-2023).17Figure 8:GDP growth impact of a 10 per cent increase in fixed-broadband penetr

26、ation(2021 study:by economic development).20Figure 9:GDP growth impact of a 10 per cent increase in fixed broadband penetration(2021 study:by economic development).21Figure 10:GDP growth impact of a 10 per cent increase in fixed broadband penetration(2021 vs 2023 studies).24Figure 12:GDP growth impa

27、ct of a 10 per cent increase in mobile-broadband penetration (2021 study:by economic development).26Figure 13:GDP growth impact of a 10 per cent increase in mobile-broadband penetration (2021 study:by economic development).27Figure 14:GDP growth impact of a 10 per cent increase in mobile-broadband p

28、enetration(2021 vs 2023 studies).29Figure 15:Regional GDP growth impact of a 10 per cent increase in mobile-broadband penetration(2021 vs 2023 studies).30Figure 16:GDP growth impact of a 10 per cent increase in broadband penetration(2021 vs 2023 studies).33Figure 17:Digital ecosystem development ind

29、ex structure.34viFigure 18:Correlation between both indices of the digital ecosystem(last data available for each index).35Figure 19:Correlation between GDP per capita and digital ecosystem development index,2022.35Figure 20:Impact on GDP of a 10 per cent increase in the digital ecosystem developmen

30、t index.37TablesTable 1:Growth in fixed-broadband connectivity(per cent of households)(2019-2023).4Table 2:Unique mobile broadband subscribers(per cent of population)(2019-2023).6Table 3:Fixed-broadband affordability .8Table 4:Increase in mobile broadband affordability.10Table 5:4G coverage(percenta

31、ge of population).12Table 6:5G coverage(percentage of population).14Table 7:Investment in telecommunications per capita .16Table 8:Economic impact of fixed broadband(2021 vs 2023 studies).22Table 9:2021 and 2023 studies:economic impact of mobile broadband.28Table 10:Fixed effects regression of labou

32、r productivity on capital per worker and digitization.38Table 11:Fixed effects regression of total factor productivity on digitization.38viiForewordThis research applies econometric modelling techniques to examine the economic contribution of fixed and mobile broadband as well as digitization around

33、 the world.Building on a series of studies published by the ITU Telecommunication Development Bureau(BDT)it provides significant evidence on the economic importance of ICT.The findings underscore the critical role of ICT in driving future global economic growth.As digital infrastructure continues to

34、 expand,new opportunities emerge for innovation,productivity,and inclusion.While the pace of growth has moderated,the ICT sector remains a fundamental pillar of economic transformation,with ongoing advancements in connectivity and technology expected to sustain its long-term impact.The initial surge

35、 in broadband service adoption,driven by the pandemic,has since slowed.However,the adoption of these services is still progressing,fuelled by increasing service coverage and affordability.A significant driver of the ongoing increase in broadband adoption has been the reduction in service prices.Main

36、taining this affordability will be crucial for sustaining the upward trajectory of ICT adoption worldwide.The confirmed economic benefits of ICT underscore the importance of policy measures aimed at bridging the digital divide.To achieve this,it is relevant to implement initiatives that reverse the

37、decline in capital spending and stimulate investment,ensuring the continuous expansion of infrastructure.I hope this report will serve stakeholders in the ICT sector and beyond to further explore these economic trends and identify opportunities for improving digital transformation initiatives.Dr Cos

38、mas Luckyson Zavazava Director of the Telecommunication Development Bureau International Telecommunication UnionviiiExecutive summaryThe following research applies econometric modelling techniques to examine the economic contribution of fixed and mobile broadband as well as digitization around the w

39、orld through the end of 2023.A series of studies published by the ITU Telecommunication Development Bureau(BDT)between 2018 and 2021 estimated through quantitative analysis the economic contribution of broadband and digitization.1 Supported by econometric models built with data from a sample of up t

40、o 139 countries between 2010 and 20202,the studies provided significant evidence on the economic importance of ICT before the pandemic and as a builder of resilience during COVID-19,these studies will be referred to collectively hereinafter as“the 2021 study”(the year the global summary was publishe

41、d).Since 2021 the threat of COVID-19 has been receding,and this raises two critical questions:Will the ICT industry and consumers return to their pre-pandemic behaviour and trends or,alternatively,have the changes originated in 2020 become a permanent fixture of the sector going forward?Accordingly,

42、have the estimates of ICT economic impact generated at the time of the pandemic,fostered by the significant increase in adoption registered in 2020,declined in 2021,2022 and 2023?With the objective to addresses these questions and building on the 2021 study,the following research relies on similar e

43、conometric models and examines the fixed and mobile broadband as well as digitization impact on the economy through the end of 2023.The boost to broadband that started in 2020 in response to COVID-19 is slowing down,although adoption is still growing thanks to improved affordability and coverage:As

44、documented in the 2021 study,fixed broadband adoption jumped in 2020 because,under lockdown conditions,even late adopters had to resort to the service to keep up with impacted activities including telework,education,commerce and telemedicine.Since then,the global figure for fixed-broadband connectiv

45、ity has continued to grow,reaching 70.55 per cent of households in 2023.The rate of growth has decreased,however,possibly a sign that the connectivity needs have largely been met(in other words,a diminished need for additional digital service is behind the slowing rate of growth of fixed broadband).

46、The same trend can be seen in all regions except for Africa,where the rate of growth in connectivity has increased between 2022 and 2023.In the case of mobile broadband,the 2023 statistics for unique mobile subscribers(as opposed to total connections,which would include IoT cards and dual phone owne

47、rship,among other drivers)indicate a continuing growth pattern worldwide,although the year-to-year growth rate in some regions continues to decline,indicating either saturation(in advanced economies)or the persistence of supply-side barriers(such as service coverage limitations,in some developing an

48、d least developed countries,or affordability constraints in the developing world,as detailed below).Growth rates for last year remain vigorous in Africa,the Arab States and the Asia and Pacific countries.1 See the ITU series entitled The economic contribution of broadband,digitization and ICT regula

49、tion and Regional Econometric Modelling.The reports are available at:https:/www.itu.int/en/ITU-D/Regulatory-Market/Pages/Economic-Contribution.aspx.2 Note that the studies relied on data sets through 2017 and 2020.ix Pricing reduction also contributed to the ongoing growth in broadband adoption,enab

50、led by lower prices for services and packages.In the context of increasing income per capita in the world,fixed-broadband prices3 as a percentage of gross national income(GNI)per capita declined worldwide by 629 per cent,with most of the effect realized in Arab-States(14.10 per cent),the CIS(10.50 p

51、er cent),Africa(7.73 per cent)and Asia and the Pacific(6.08 per cent).4 As of 2023,the weighted affordability level measured through fixed broadband service pricing as a percentage of GNI in the CIS and Europe was below 2 per cent.It is only in Africa that the price of fixed broadband reaches over 1

52、0 per cent of per capita GNI.As for mobile broadband prices,they have been below 2 per cent of GNI since 2019 in Latin American and the Caribbean,Asia and the Pacific,the Arab States,the CIS,Europe,and North America.This means that,on average5,except for Africa,the digital divide in the case of mobi

53、le broadband is driven by non-economic factors(low digital literacy,cultural relevance of content,and network coverage).Worldwide,coverage with fixed broadband(as a percentage of households)by 2023 is reaching an estimated weighted average of 76 per cent,with the Americas,Europe,the CIS,and Arab Sta

54、tes exceeding 90 per cent.Asia and the Pacific and Africa exhibited a lower coverage rate(75 per cent and 30 per cent respectively).Fibre-to-the-home(FTTH)is rapidly gaining share in fixed broadband coverage.It is estimated that approximately 44 per cent of world households are already covered by FT

55、TH.6 By contrast,wireless technology,especially 4G,has reached near-universal coverage:world coverage of 4G has reached 96.09 per cent,with Europe and North America having attained 99.00 per cent,and Africa 77.92 per cent.On the other hand,while 5G coverage is increasing,the gap between advanced eco

56、nomies and developing countries remains significant.In the countries of the Organisation for Economic Co-operation and Development(OECD),5G coverage jumped 4.3 per cent in one year,from 73.84 per cent in 2022 to 78.14 per cent in 2023.Meanwhile,Africa has remained relatively uncovered by 5G at 8.65

57、per cent,with Latin America at 37.15 per cent and Asia and the Pacific(which includes OECD nations such as Australia,Japan,Korea(Rep.of),and New Zealand)at 37.75 per cent.In other words,5G remains a technology mostly prevalent in the industrialized world.Despite the increase in adoption and coverage

58、 presented above(with the consequent growth in traffic),worldwide telecommunication/ICT capital expenses(CAPEX)per capita measured in current terms has continued to decrease:The only region with a consistent increase in CAPEX since 2019 is Europe.While the worldwide trend for decreasing CAPEX per ca

59、pita appears to be slowing down(2.37 per cent in 2022 vs 0.27 in 2023),it should be noted that,given the global inflation rate of 4.3 per cent7,capital spending per capita in real terms continues to diminish.For example,the figure for Africa,1.84 per cent increase in current prices,is the equivalent

60、 of a 2.17 per cent decrease in real terms;in Americas,a decrease of 1.69 per cent in 2023 in current prices translates to a 5.56 per cent decrease in real terms.This trend should be a source of concern considering the dichotomy between the advanced economies and the developing countries in FTTH dep

61、loyment and 5G coverage investment,challenging the ability of the telecommunication/ICT sector to close the digital divide.3 The ITU surveys prices of the least expensive plan from the operator with the largest market share.4 The increase in fixed broadband affordability is a critical piece of evide

62、nce in terms of the overall target of the Broadband Commission,which stipulated that by 2025,entry-level broadband services should be made affordable in low-and middle-income countries at less than 2 per cent of monthly GNI per capita.See Broadband Commission for Sustainable Development(2023).Achiev

63、ing the 2023 advocacy targets.Retrieved in:https:/www.broadbandcommission.org/advocacy-targets/5 As expected,since these values are calculated as an average,they do not address the economic barriers at the base of the socio-economic pyramid.6 Estimates by the author based on IDATE sources.7 IMF.Infl

64、ation rate,average consumer prices 2023.Retrieved in:https:/www.imf.org/external/datamapper/PCPIPCH WEO/OEMDC/ADVEC/WEOWORLDxThe changes that took place in the ICT ecosystem at the end of the pandemic have not substantially altered the importance of ICT as a driver of economic growth:In a context of

65、 an increase in broadband penetration,and a decline in service prices,the 2010-2023 fixed broadband model indicates that this infrastructure continues to have a significant impact on the world economy.In fact,the coefficient of impact has slightly increased since the 2021 study:with a dataset extend

66、ing through the end of 2023 worldwide,a hypothetical 10 per cent increase in fixed-broadband penetration would yield a 1.59 per cent increase in gross domestic product(GDP)per capita.The economic contribution of fixed broadband continues to be greater in countries with GDP per capita higher than USD

67、 22000(higher income countries),and countries with GDP per capita between USD 12000 and USD 22000.Of note,the coefficient of impact in high-income countries has increased from 1.25 in the 2021 study to 1.43 in 2023,suggesting the existence of increasing returns to scale becoming manifest as fixed-br

68、oadband penetration in this group of countries has risen.Additionally,this study also finds a positive,but lower,effect in low-income countries,indicating that expanding broadband fixed access can contribute to economic growth across all income levels,fostering greater digital inclusion and economic

69、 opportunities.In the context of an increase in mobile-broadband penetration,propelled by a generalized decline in service prices,the 2010-2023 mobile broadband model indicates that the technology exhibits higher impact than in 2021 on the world economy.The coefficient of impact has increased since

70、the 2021 study:with a dataset extended through the end of 2023,an increase of 10 per cent in unique mobile broadband subscriber penetration yields a GDP increase of 2.29 per cent.The economic dividend of mobile broadband continues to be greater in countries with lower levels of economic development(

71、3.02 per cent increase in GDP per capita for a 10 per cent increase in broadband penetration),diminishing in countries and regions with higher levels penetration and development(1.96 per cent in middle-income countries and 1.72 per cent in high-income ones),confirming the diminishing returns effect

72、linked to mobile broadband saturation and highly adopted fixed broadband capturing a large portion of the economic contribution.A similar effect as that of fixed broadband was found with a digitization composite index that captures all dimensions of the digital economy.The impact of digitization in

73、developed countries is higher(a 2.48 per cent increase in GDP per capita for a 10 per cent increase in the index)than in emerging countries(1.29 per cent),corroborating the existence of increasing returns to scale.Digitization was also found to be associated with higher labour productivity(a 2.8 per

74、 cent increase for a 10 per cent increase in the digitization index)and total factor productivity(a 3.1 per cent increase).The confirmation of the economic contribution of ICT through 2023 provides support for policy measures to address the digital divide.Policy-makers and regulators in developing c

75、ountries need to evaluate initiatives that should reverse the declining capital spending trend and lead to stimulation of telecommunications investment to ensure continuous roll-out of networks8:A modernization of the telecommunication/ICT regulatory framework should include,among other initiatives,

76、the granting of convergent licences,the availability of sufficient amounts of radio spectrum at reasonable prices,the possibility to trade this resource in the secondary market with the acquiescence of the regulator,as well as to carry out its 8 See ITU(2021).The impact of policies,regulation,and in

77、stitutions on ICT sector performance.Retrieved in:https:/www.itu.int/en/ITU-D/Regulatory-Market/Pages/Economic-Contribution.aspx.xirefarming,and the definition of the concept of significant market power(SMP)based on criteria that go beyond simple market share.9 Of the aforementioned elements,the cas

78、e of the radio-frequency spectrum is particularly noteworthy.Firstly,the assigned spectrum resources are insufficient.Secondly,empirical evidence shows that when state revenue is prioritized in determining spectrum prices,network deployment can be seriously compromised.By contrast,a 1 per cent reduc

79、tion in spectrum licence payments is associated with a 0.45 per cent increase in 4G coverage in developing countries.10 The benefits of reducing the cost of the spectrum are very significant,both directly(greater investment and adoption of services)and indirectly(through GDP growth associated with g

80、reater penetration).A higher penetration of telecommunication services and the associated GDP growth will generate increases in tax revenues that could compensate for what the state does not collect by lowering the cost of the spectrum.The implementation of a balanced tax and contribution framework

81、should include a ceiling on regulatory fees and on the size of the obligatory contribution to the universal service fund(USF),combined with the elimination of specific telecommunications taxes,and the elimination,if possible,of import tariffs on equipment such as fibre optics,cabling and consumer de

82、vices such as smartphones.Beyond the reduced contribution to the USF,collected funds should be used in the sector in an agile and transparent process with a clear emphasis on reducing the coverage gap in rural areas.If funds are not invested,it would be desirable to reduce the contribution until the

83、 effective use of these resources takes place.Moderate competition in telecommunications,as opposed to a model of unrestricted competition and unlimited consolidation,is the framework that represents a proper incentive to capital investment,guaranteeing an adequate level of investment and innovation

84、.In addition,governments should emphasize initiatives to promote digital literacy among the vulnerable and disadvantaged population:Programmes oriented to fostering digital literacy through formal education,embedding ICT training in curricula at the primary and secondary school level should be compl

85、emented with targeted programmes focused on teachers.Digital literacy programmes in the formal educational system should be,by definition,large-scale and centrally driven,generally hosted within ministries of education.Targeted digital literacy programmes can be of many varieties,potentially address

86、ing several objectives,not all necessarily consistent.In designing such programmes,policy-makers need to consider what the goals of the programme should be,since these goals will frame the methods of intervention and application.Among the goals to be considered in designing digital literacy programm

87、es,the following issues need to be considered:What is the overall objective of the programme?Digital literacy,conceived as a skill,represents the means to achieve a diverse set of goals,such as improving the quality of life,fostering civic values,promoting democratic participation,and improving soci

88、al inclusion.By outlining the ultimate objective,policy-makers will help frame the programme.What is the target group?Targeted digital literacy programmes take different shapes according to the population they will address.As an example,the type of content to be emphasized in programme delivery will

89、 change significantly if the programme aims to target the elderly(requiring access to e-mail,e-government applications for social 9 Other criteria that may influence market power are geography,control of essential facilities,access to financial resources,and economies of scale.In turn,a modern regul

90、atory approach should periodically review market boundaries since,partly due to convergence,markets may be transformed as a result of the emergence of services provided from different platforms,but which may be substitutes in the eyes of users.10 Bahia,K.,&Castells,P.(2021).The impact of spectrum as

91、signment policies on consumer welfare.Telecommunications Policy,102228.xiiinclusion,and fostering of social and family ties)versus adults of working age(in need of applications to build employability skills,online education)and rural areas.Even within a single targeted group there might be a variety

92、 of diverse needs.Usage and adoption versus accessibility?Some digital literacy programmes emphasize training and skills transmission,while others complement this with infrastructure for public broadband access.This is a critical policy choice,since access and adoption do not necessarily equate to t

93、he capability to use broadband in a productive and beneficial manner.In fact,if the primary objective is usage,experience indicates that tailored courses,complemented with intense coaching,are the more appropriate approach.Formal versus informal delivery mode?Formal digital literacy training entails

94、 structured programmes based on established curricula,learning tools and certification.Informal training is not delivered in specific training environments and lacks a structured pedagogical process.While it might not be intuitively appropriate for targeted programmes,the emergence of new digital pl

95、atforms might lead to the adoption of informal approaches.Scale of implementation?This question addresses whether programmes will be focused on a particular region or deployed on a national scale.xiiiAbbreviationsARPUaverage revenue per userBDTITU Telecommunication Development BureauCAPEXcapital exp

96、ensesCISCommonwealth of Independent StatesFTTHfibre-to-the-homeGDPgross domestic productGMMgeneralized method of momentsGNIgross national incomeGSRGlobal Symposium for RegulatorsHHIHerfindahl-Hirschman IndexICTinformation and communications technology IMFInternational Monetary FundIoTInternet of Thi

97、ngsITU International Telecommunication UnionLDCsleast developed countriesLLDCslandlocked developing countriesM2Mmachine-to-machineOECDOrganisation for Economic Co-operation and DevelopmentPPPpurchasing power parityR&Dresearch and developmentSIDSsmall island developing StatesSMEssmall and medium-size

98、d enterprisesSMPsignificant market powerUSFuniversal service fundVPNvirtual private network1The impact of digital transformation on the economy 1 IntroductionA series of studies published by the ITU Telecommunication Development Bureau(BDT)between 2018 and 2021 used quantitative analysis to estimate

99、 the economic contribution of broadband and digitization around the world.1 Supported by econometric models built with data gathered between 2010 and 2020 from 139 countries,the studies provided significant evidence on the economic importance of information and communication technology(ICT),first du

100、ring the period leading up to the COVID-19 outbreak and then as a builder of resilience during the pandemic.Based on the evidence generated in the latest research,incorporated in the global study that was published in 2021(hereinafter“the 2021 study”),three findings emerged that were of critical imp

101、ortance for policy-makers and regulators in the telecommunication/ICT arena:Changes in the ICT ecosystem driven by the disruption caused by the pandemic(continuing capital spending on infrastructure roll-out in developed countries,a jump in broadband penetration,and the decline in pricing,especially

102、 for mobile broadband)have not led to any substantial change in the importance of ICTs as a driver of economic growth.The economic losses resulting from the COVID-19 pandemic in 2020 were not the same for every country affected.Controlling for a range of variables,the countries with better digital i

103、nfrastructure were able to mitigate part of the negative economic impact,allowing households,enterprises and governments to continue their social and economic activities.The confirmation of the economic contribution of ICTs throughout 2020 and the assessment that broadband and digitization helped mi

104、tigate economic disruption caused by the pandemic are a vindication of the measures taken by policy-makers and regulators to face the challenges it involved.The end of the pandemic confronts us with a new set of questions:Will the economic impact of ICT,estimated using data compiled during the pande

105、mic,subside to pre-pandemic levels now that the COVID-19 threat has almost disappeared?It will be recalled that the econometric models in the 2021 study,built with datasets through 2020,indicated that ICT had a significant economic contribution:A 10 per cent increase in fixed-broadband penetration i

106、s associated with 0.80 per cent growth in GDP per capita(more in developed economies).A 10 per cent increase in mobile-broadband penetration gives 1.60 per cent growth in GDP per capita(more in developing countries).A 10 per cent increase in digitization is associated with a 1.35 per cent increase i

107、n GDP per capita.The structural models used to calculate these coefficients were based on some variables that have been subject to major change during 2021-23(for example,investment in telecommunications has declined in real terms2,broadband service adoption has continued to grow across regions,and

108、GDP per capita has been affected by the pandemic disruption).Are those effects(which may be partially captured in the model year controls)continuing to affect the rate of economic impact?Is the differential impact across geographies constant or has it changed?1 The study reports,published as part of

109、 the ITU series The economic contribution of broadband,digitization and ICT regulation and Regional Econometric Modelling,are available at:https:/www.itu.int/en/ITU-D/Regulatory-Market/Pages/Economic-Contribution.aspx2 While,strictly speaking,the investment variable is not included in the econometri

110、c models,it is influenced indirectly by industry output.2The impact of digital transformation on the economyWhat is the role of ICT infrastructure in building the economic resilience of countries going forward?First and foremost,the digital divide has been highlighted as a critical barrier to the mi

111、tigation value of digitization.Second,while large enterprises benefit from access to well-established digital solutions already in place(collaboration tools,employee devices,cloud,virtual private networks(VPNs),digital platforms,etc.)and connectivity,this is not the case for many small and medium-si

112、zed enterprises(SMEs),particularly in developing countries.Datasets compiled through the end of 2023 should allow for a quantitative assessment of the ongoing role of ICT in mitigating future economic and social disruption.The research presented here builds on the 2021 study(with its datasets throug

113、h 2020),using econometric models that rely on the same structure and methodologybut extending the study of the economic impact of fixed and mobile broadband and digitization and their contribution to increasing social and economic resilience to the end of 2023.Chapter 2 presents the descriptive stat

114、istics characterizing the changes that have taken place since 2021 in ICT investment,deployment,adoption and use.Chapter 3 presents the econometric models and compares the economic impact coefficients for fixed broadband calculated in the 2021 study with the coefficients calculated to the end of 202

115、3.Chapter 4 does the same comparison for mobile broadband and Chapter 6 for digitization.Finally,Chapter 7 briefly summarizes the conclusions and policy implications generated through each analysis.The results of all models and the econometric methodology are included in the appendices.3The impact o

116、f digital transformation on the economy 2 The evolution of ICT after the pandemic:descriptive statisticsThe adoption and use of digital technologies is moving forward,however the pandemic spurred dramatic changes.To compensate for the isolation associated with lockdowns and to provide a measure of e

117、conomic and social continuity,rapid changes took place in broadband adoption and use,Internet traffic volume and patterns,and the adoption of Internet platforms.The telecommunication industry responded by increasing capital spending to foster network deployment in some geographies,while regulators a

118、round the world implemented novel approaches to stimulate technological upgrades.As the threat of COVID-19 has receded since 2021,the question became:will the ICT industry and consumers return to pre-pandemic behaviour and trends,or have the changes that started in 2020 become permanent?From a user

119、perspective,the pandemic led to an increase in the use of digital platforms for telecommuting,e-commerce and social activities.The videoconference platform Zoom saw its usage volume increase tenfold,while Microsoft Teams registered 2.7 billion meeting minutes in March 2020,a 200 per cent increase fr

120、om one year earlier(Nosratzadeh et al.,2022).It was appropriate to ask then whether these behavioural changes would remain after the epidemic-related disruption was over.Some researchers(Hu,2020)expected that changes in digital services use would continue,while others(Maikomo et al.,2021)argued that

121、 users would revert to earlier patterns of social and economic behaviour and reliance on digital technology will decline.The evidence indicates that the situation is more complex than either hypothesis would have us believe.First,where the use of digital services is seen to be recedingthis is not ne

122、cessarily an across-the-board phenomenon(i.e.a“return to the office”);in some locations and sectors it takes the form of a movement towards new norms,such as“3:2”formulas where workers spend three days at the office and work from home two days.Similarly,researchers have identified a post-lockdown de

123、cline in online shopping(Inoue and Todo,2023).Second,the reduction in the use of digital services in the post-pandemic period may be limited to certain segments of the population.Thus,users whose broadband service during the pandemic was plagued by poor quality and reliability(e.g.rural populations)

124、were expected to return promptly to physical interactions.Third,it is to be expected that those activities where the physical interaction conveys an additional social value,such as many leisure activities and in-person shopping,will bounce back.These factors indicate a mixed picture in terms of retu

125、rning to pre-pandemic behaviour,and it is relevant to inquire how this has been impacted by macro variables such as broadband connectivity,affordability,service coverage and capital spending.21 Progress in broadband connectivityThe 2021 study documented how fixed broadband adoption jumped in 2020,as

126、 even late adopters were forced3 to acquire the service to continue activities that could not be conducted otherwise under a lockdown(education,commerce,telemedicine).As indicated in Table 1,worldwide adoption increased by 7.27 per cent in 2020 and 8.25 per cent in 2021.The increase was particularly

127、 significant in the Arab States(16.98 per cent in 2021),the Americas(6.64 per cent in 2021),and even Africa,albeit from a lower base(15.45 per cent in 2020 and 9.76 per cent in 2021).3 A forced adoption of technology emerges when alternative behaviour requiring physical interaction disappears(Reinde

128、rs et al.,2008).4The impact of digital transformation on the economyStatistics released by ITU for 2023 indicate that adoption of fixed broadband has continued to increase on all continents and in all regions,albeit at a declining rate of growth(except in Africa)(see Table 1).Table 1:Growth in fixed

129、-broadband connectivity(per cent of households)(2019-2023)Region20192020202120222023Delta 2019-20Delta 2020-21Delta 2021-22Delta 2022-23World54.35%58.30%63.11%67.27%70.55%7.27%8.25%6.59%4.88%Africa3.22%3.71%4.08%4.54%5.10%15.45%9.76%11.37%12.45%Americas67.70%73.06%77.90%80.96%83.06%7.91%6.64%3.92%2.

130、59%Asia-Pacific53.61%57.79%63.56%68.83%73.00%7.80%9.98%8.29%6.07%Arab States61.66%69.58%81.39%92.84%99.37%12.85%16.98%14.07%7.03%CIS66.41%68.35%69.77%71.96%73.66%2.93%2.08%3.13%2.37%Europe84.64%88.75%91.64%93.38%96.28%4.86%3.27%1.90%3.11%Low income0.71%0.70%0.71%0.74%0.79%-0.49%0.77%4.17%7.52%Lower

131、middle-income14.66%16.86%19.17%20.80%22.25%15.02%13.68%8.51%6.99%Upper middle-income88.93%96.02%105.32%114.25%121.15%7.98%9.68%8.49%6.03%High income93.86%97.82%102.31%105.60%108.56%4.23%4.59%3.22%2.80%LDCs10.16%12.11%13.01%13.98%14.88%19.22%7.46%7.46%6.40%LLDCs14.48%15.38%16.38%16.95%18.54%6.24%6.50

132、%3.45%9.35%SIDS60.03%63.14%67.76%69.60%70.10%5.17%7.33%2.71%0.72%Note:The differences with the statistics published in the 2021 study are due to the fact that they reflected preliminary estimates.Source:Analysis by the authors based on data available at ITU Data Hub.5The impact of digital transforma

133、tion on the economyFigure 1:Growth in fixed-broadband connectivity(per cent of households)(2022-2023)Source:Analysis by the authors based on data available at ITU Data HubWorld fixed-broadband connectivity has continued to grow,reaching 70.55 per cent of households in 2023.The rate of growth was low

134、er than in the previous years,possibly indicating the ending of the COVID-induced effect on connectivity needs(in other words,a diminished need for digital services has driven a decrease in the rate of growth of fixed broadband).The trend identified for world connectivity is replicated in all region

135、s except Africa,where the year-on-year rate of growth of connectivity increased in 2022 and 2023.The broadband-penetration rate in North America,Europe and the Arab States has moved beyond 90 per cent of households.However,figures such as 102.6 per cent penetration in North America(Canada and United

136、 States)do not imply that the region has fully addressed the digital divide,since that number includes enterprise connectivity.In Africa,broadband penetration,historically very low,continues to grow:the weighted figure for the region reached 5.10 per cent in 2023,with individual countries being much

137、 higher(Botswana:14.20 per cent,South 6The impact of digital transformation on the economyAfrica:15.21 per cent,and Senegal:16.83 per cent).The same is true of Latin America and the Caribbean,albeit with a higher adoption level as the starting point:the weighted regional average reached 71.46 per ce

138、nt,with individual countries much higher(Argentina 92.69 per cent,Barbados 96.50 per cent,Chile 89.51 per cent,Mexico 87.98 per cent,Trinidad and Tobago 96.50 per cent).In the case of mobile broadband,the 2023 statistics for unique mobile subscribers(as opposed to all subscriptions,which would inclu

139、de IoT cards and dual phone ownership)indicate continuing growth worldwide.While that growth rate continues to decline on a year-on-year basis,indicating that adoption is coming up against supply barriers(either service coverage limitations or affordability constraints),which has not been the case i

140、n Asia-Pacific and Europe in the last year(see Table 2).Table 2:Unique mobile broadband subscribers(per cent of population)(2019-2023)Region20192020202120212023Delta 2019-20Delta 2020-21Delta 2021-22Delta 2022-23World51.4855.0458.2660.4262.946.915.843.714.16Africa22.4024.0025.7327.7229.677.137.207.7

141、47.03Americas64.0466.7169.2271.5473.634.163.773.352.92Asia-Pacific49.0553.3957.2459.6362.708.83%7.234.175.14Arab States45.3948.4251.3454.5957.406.676.046.335.13CIS70.5372.0373.4674.9675.522.121.992.030.75Europe74.3177.9681.2582.5284.114.924.221.561.93Low income16.2617.5018.8420.2421.707.667.647.447.

142、19Lower middle-income32.9937.2440.8942.9845.6612.899.805.126.24Upper middle-income65.1468.4171.6774.2377.455.014.773.574.35High income76.3379.6982.6884.8986.364.403.752.671.73LDCs19.2121.0423.0925.1227.099.569.758.757.86LLDCs26.0627.2428.5630.0631.584.544.825.265.05SIDS60.1164.3168.3571.8875.386.986

143、.295.164.86Source:GSMA Intelligence;Cet.la;analysis by the authors7The impact of digital transformation on the economyFigure 2:Unique mobile broadband subscribers(per cent of population)(2022-2023)Source:GSMA Intelligence;Cet.la;analysis by the authors.It is worthwhile to draw attention to some regi

144、onal disparities in mobile broadband penetration.First,the advanced economies(North America and Europe)are approaching the saturation point.Second,penetration in upper middle-income countries is growing steadily at a rate of around 4per cent.Third,and most interesting,in Africa it continues to grow

145、at a rate of around 7 per cent,which is welcome news for reducing the digital divide in emerging economies.22 Increasing broadband affordabilityIt was not only the demand-side stimulus associated with COVID-19 that led to the increase in broadband penetration;lower service prices also contributed.Ev

146、en in the context of increasing income per capita in the post-COVID world,it is important to point out that,on a global average,fixed-broadband prices as a percentage of GNI per capita declined by 629 per 8The impact of digital transformation on the economycent,with most of the effect realized in Ar

147、ab-States(14.10 per cent),the CIS(10.50 per cent),Africa(7.73 per cent)and Asia and the Pacific(6.08 per cent)(see Table 3).Table 3:Fixed-broadband affordability(Service pricing4 as a percentage of Gross National Income(GNI)per capita)Region20192020202120222023Delta 2019-20Delta 2020-21Delta 2021-22

148、Delta 2022-23World7.367.167.296.556.14-2.811.81-10.06-6.29Africa51.4346.2145.4241.0837.91-10.16-1.71-9.55-7.73Americas2.312.642.862.572.4314.428.30-10.03-5.52Asia-Pacific2.843.143.292.802.6310.594.92-14.81-6.08Arab States3.223.573.673.322.8511.002.73-9.45-14.10CIS0.880.760.780.800.71-12.852.801.73-1

149、0.50Europe1.321.281.321.151.09-3.493.69-13.24-5.34Low Income135.67123.22118.45107.72103.14-9.18-3.87-9.05-4.26Lower middle-income6.946.977.286.30103.140.474.45-13.45-4.26Upper middle-income1.421.441.531.395.631.006.58-9.35-10.67High income1.121.241.281.161.3210.962.74-8.94-4.88LDCs59.5054.2152.9948.

150、3144.93-8.90-2.24-8.84-7.00LLDCs96.4090.3986.5786.4583.14-6.24-4.23-0.13-3.84SIDS2.752.523.143.032.62-8.3724.19-3.43-13.46Note:Regional figures are population-weighted averages.Source:ITU(2023)ICT Price Baskets;analysis by the authors4 Least expensive product from operator with largest market share.

151、9The impact of digital transformation on the economyFigure 3:Fixed broadband affordability(service pricing as a percentage of GNI per capita)(2022-2023)Source:ITU(2023)ICT Price Baskets;analysis by the authorsThe increase in fixed broadband affordability is of great relevance to the recommendation m

152、ade by the Broadband Commission that,by 2025,entry-level broadband services should be made affordable in low-and middle-income countries with prices below 2 per cent of monthly GNI per capita.5 As of 2023,the affordability objective was met in the CIS and Europe,with weighted prices for fixed broadb

153、and service below 2 per cent of GNI.The big outlier is Africa,where the price charged for a fixed broadband subscription makes up over 10 per cent of per capita GNI.It is true that this figure has been steadily declining,but it remains well beyond the means of ordinary consumers.In the case of mobil

154、e broadband,service prices had dropped to levels close to those for fixed broadband in the aggregate,with particularly large and more generalized declines in Africa,Arab-States,Asia-Pacific and the CIS.In other words,in all the world there is a constant and 5 Broadband Commission for Sustainable Dev

155、elopment(2023).Achieving the 2023 advocacy targets.Retrieved in:https:/www.broadbandcommission.org/advocacy-targets/10The impact of digital transformation on the economysignificant reduction in broadband prices compared to the previous year(15.46 per cent in 2023 versus 10.9 per cent in 2022).Region

156、s such as the CIS lead this reduction with 37.10 per cent as well as the Arab States with 27.58 per cent(see Table 4).Table 4:Increase in mobile broadband affordability(Service pricing as a percentage of Gross National Income(GNI)per capita)Region20192020202120222023Delta 2019-20Delta 2020-21Delta 2

157、021-22Delta 2022-23World1.801.731.571.401.18-4.33-9.22-10.90-15.46Africa7.015.705.414.273.57-18.60-5.22-21.04-16.41Americas1.361.221.171.021.00-10.01-4.27-12.51-1.95Asia-Pacific0.951.070.860.830.7412.82-20.27-3.55-10.80Arab States1.271.051.261.230.89-16.9619.02-1.91-27.58CIS0.990.860.910.720.46-12.5

158、45.09-20.16-37.10Europe0.600.610.550.450.431.86-9.52-18.75-3.41Low income13.5610.9510.097.626.92-19.22-7.87-24.49-9.14Lower middle-in-come1.551.801.521.401.1616.05-15.56-7.76-17.13Upper middle-in-come1.250.890.810.690.65-28.80-8.84-15.03-5.52High income0.560.560.640.600.54-0.5613.77-5.81-8.95LDCs7.6

159、06.265.614.394.06-17.55-10.39-21.79-7.45LLDCs11.289.348.606.254.59-17.20-7.88-27.41-26.51SIDS2.702.182.021.741.87-19.18-7.63-13.927.52Note:Regional figures are population-weighted averages.Source:ITU(2023)ICT Price Baskets;analysis by the authors11The impact of digital transformation on the economyF

160、igure 4:Mobile broadband affordability(service pricing as a percentage of GNI per capita)(2022-2023)Source:ITU(2023)ICT Price Baskets;analysis by the authors.Between 2019 and 2023 mobile broadband prices in the Americas,Asia and the Pacific,the Arab States,the CIS,and Europe never exceeded 2 per cen

161、t of GNI.This means that,on average6,except for Africa,the digital divide in the case of mobile broadband is driven by non-economic demand factors(e.g.:low digital literacy,low cultural relevance of content,and poor network coverage).7 23 Dichotomy of broadband coverageBy 2023,coverage with fixed br

162、oadband had reached an estimated 76 per cent of households worldwide(weighted average).That figure was above 90 per cent in the Americas,Europe,the 6 As expected,since these values are calculated as an average,they do not address the economic barriers at the base of the socio-economic pyramid.7 See

163、Katz,R.and Berry,T.(2014).Driving demand of broadband networks and services.London:Springer.12The impact of digital transformation on the economyCIS,and the Arab States.The Asia and the Pacific region and Africa exhibited a lower coverage rate of 75 per cent and 30 per cent respectively.8 Fibre-to-t

164、he-home(FTTH)is rapidly gaining share in fixed broadband coverage,currently reaching an estimated 44 per cent of households worldwide.In advanced economies this infrastructure is more developed,covering 69 per cent of European and 88.19 per cent of North American households,for example,9 followed by

165、 69 per cent coverage in Latin America and the Caribbean and over 43 per cent in Asia and the Pacific.As expected,FTTH is marginal in Africa,being available in only 1 per cent of households.On the other hand,wireless technology,especially 4G,has achieved near-universal coverage,at 96.09 per cent of

166、the global population,and fully 99.20 per cent in Europe.In Africa,it increased from 74.49 per cent in 2022 to 77.92 per cent in 2023(a 4.60 per cent growth rate).In the Americas region 4G coverage increased by just 0.62 per cent,compared to with 1.26 per cent in the prior year.Coverage in Asia and

167、the Pacific in 2023 also grew marginally,reaching 98.51 per cent-a 0.39 per cent increase,compared with 0.05 per cent in the preceding period.For upper middle-income countries,in 2023 the proportion of the population having access to 4G mobile broadband reached 98.59 per cent,leaving a supply gap of

168、 1.41 per cent(see Table 5).Table 5:4G coverage(percentage of population)Region20192020202120222023World90.7192.6794.5195.4396.09Africa48.1858.1067.7074.4977.92Americas92.4293.5394.7896.0496.66Asia and the Pacific96.5597.3598.0798.1298.51Arab States86.6693.0498.6798.9799.22CIS91.5393.6894.5195.1895.

169、54Europe97.0298.0198.8799.1999.20Low income37.2446.2462.3771.8975.87Lower middle-income86.6490.0392.6393.6794.26Upper middle-income95.7996.4397.1697.7498.59High income98.9399.1299.2699.3799.43LDCs56.5562.7671.4277.2179.87LLDCs52.6859.1370.9677.5279.98SIDS94.9197.2398.2099.0099.01Source:GSMA Intellig

170、ence;Cet.la;analysis by the authors8 Analysis by ITU based on OECD and regulator data.9 These values include both FTTH furnished by telecommunications service providers and high-speed broadband from cable TV operators.13The impact of digital transformation on the economyFigure 5:4G coverage(percenta

171、ge of population)(2022-2023)Source:GSMA Intelligence;Cet.la;analysis by the authors.Meanwhile,5G coverage is increasing,albeit with a significant and persistent gap between advanced economies and the developing countries.The proportion of the population in OECD countries having 5G coverage jumped 4.

172、3 per cent in one year,from 73.84 per cent in 2022 to 78.14 per cent in 2023.This is in stark contrast to Africa(8.65 per cent),Arab States(22.65 per cent),and Asia and the Pacific(37.75 per cent,a figure that is skewed because the region includes OECD nations such as Japan,Korea(Rep.of),New Zealand

173、 and Australia).In other words,5G technology remains mostly confined to the industrialized world(see Table 6).14The impact of digital transformation on the economyTable 6:5G coverage(percentage of population)Region20192020202120222023World5.1717.7728.6333.0539.41Africa0.000.611.183.818.65Americas10.

174、1129.1939.7551.5159.46Asia-Pacific4.0517.3928.6031.0737.75Arab States7.3712.3517.1419.1622.65CIS0.000.000.002.004.32Europe10.5728.1154.1464.4570.66Low income0.000.030.050.631.62Lower middle-in-come0.000.412.824.6410.37Upper middle-in-come4.4324.6040.2346.8056.04High income20.6251.4777.1085.4289.62LD

175、Cs0.000.010.020.253.56LLDCs0.000.000.000.181.71SIDS4.0524.6027.9829.4231.53Source:GSMA Intelligence;Cet.la;analysis by the authors15The impact of digital transformation on the economyFigure 6:5G coverage(percentage of population)(2022-2023)Source:GSMA Intelligence;Cet.la;analysis by the authors.The

176、contrast in 5G coverage between advanced economies and developing countries suggests a new type of divide,as consumers in the former countries have access to high-quality service but in the latter have to make do with older technology(with the exception of upscale metropolitan areas).24 Stagnating c

177、apital investment in telecommunicationsGiven the gulf in 5G coverage between advanced economies and developing countries,the decreasing levels of capital spending in telecommunications do not bode well for a significant improvement anytime soon.An important finding in the 2021 study was that capital

178、 investment in developing regions(Latin America and the Caribbean,Asia and the Pacific,and Arab States)declined in 2020 while it was increasing in advanced economies(Europe and North America),the CIS and,marginally,Africa.The data for 2023 allow some additional findings to be drawn.First,the adoptio

179、n(with the consequent growth in traffic)and worldwide telecommunication CAPEX per capita in current 16The impact of digital transformation on the economyterms have increased.Since 2019 the only region with consistent growth in CAPEX has been Europe,while the Asia and the Pacific and the Arab States

180、regions have seen steadily decreasing levels of investment between 2019 and 2021(see Table 7).Table 7:Investment in telecommunications per capita(in USD prices,mean value 2015-2023)Region20192020202120222023Delta 2019-20Delta 2020-21Delta 2021-22Delta 2022-23World49.8749.3949.7050.8851.02-0.950.622.

181、370.27Africa9.889.249.229.009.17-6.44-0.20-2.371.84Americas127.01124.15123.19123.49121.40-2.25-0.770.24-1.69Asia-Pacific30.5530.2430.1031.3531.71-1.02-0.484.181.13Arab States45.7344.5142.9843.0443.53-2.66-3.430.131.14CIS31.9732.3634.6434.4334.961.237.05-0.611.52Europe101.49104.47111.08116.48119.372.

182、946.324.862.48OECD148.43149.42155.36160.65161.320.673.983.400.42EU-27115.08115.40119.46126.49131.200.283.515.893.72Low income6.676.346.184.834.79-4.98-2.58-21.80-0.78Lower middle-income13.3913.4512.2312.4011.900.45-9.071.38-4.05Upper middle-income39.2337.7737.3638.3339.92-3.73-1.082.594.17High incom

183、e170.57171.76178.84184.64184.720.704.123.240.05LDCs7.266.706.105.114.77-7.69-9.04-16.12-6.82LLDCs13.0612.0511.7010.199.76-7.74-2.91-12.87-4.23SIDS74.5172.0868.3664.2763.41-3.25-5.17-5.98-1.33Note:2023 numbers reflect ITU preliminary data complemented with GSMA Intelligence.Source:ITU Data Hub;GSMA I

184、ntelligence;analysis by the authors17The impact of digital transformation on the economyFigure 7:Investment in telecommunications per capita(in USD prices,mean value last five years)(2022-2023)Source:ITU Data Hub;GSMA Intelligence;analysis by the authors.While the worldwide drop of CAPEX per capita

185、in current prices appears to be slowing down(2.37 per cent in 2022 versus 0.27 per cent in 2023),the situation looks different in real terms(constant prices),given the world inflation rate of 4.3 per cent.10.For example,the figure for Africa,1.84 per cent in current prices,is the equivalent of a 2.1

186、7 per cent decrease in real terms;in the Americas,a decrease of 1.69 per cent in 2023 in current prices translates to a 5.56 per cent decrease in real terms.This trend should be a source of concern considering the dichotomy between the advanced economies and the developing countries in fibre optics

187、deployment and 5G coverage investment,challenging the ability of the telecommunication/ICT sector to close the digital divide.In the first place,while Table 7 indicates a decline in the world aggregate for capital investment in telecommunications,that aggregate includes the growing investments in th

188、e high-income 10 IMF.Inflation rate,average consumer prices 2023.Retrieved in:https:/www.imf.org/external/datamapper/PCPIPCH WEO/OEMDC/ADVEC/WEOWORLD18The impact of digital transformation on the economyeconomies,which means that the situation in the regions that most need investment to bridge the di

189、gital divide is even more dire than the aggregate decline would indicate.Second,the decrease in investment in telecommunications in the developing countries conceals a second effect in terms of the regional trend.Capital spending on network deployment in these countries tends to flow to the geograph

190、ies with high-income populations and enterprises,which represent the most promising market segment for returns on investment.This is another obstacle to addressing the digital divide.Finally,from an economic standpoint,the decline in investment negatively affects telecommunication network coverage,w

191、hich ultimately limits the growth in broadband penetration and consequently its beneficial impact on the economy.19The impact of digital transformation on the economy 3 The economic impact of fixed broadband through 2023Having assessed the changes in connectivity,affordability,network coverage and i

192、nvestment precipitated by the COVID-19 pandemic and thereafter,the next important question is whether the economic impact of ICT estimated on the basis of data compiled during the pandemic can be expected to remain at the same level,or if it will decline to pre-pandemic levels.To address this questi

193、on,this chapter compares the results obtained with the econometric models published in the 2021 ITU study“The economic impact and broadband and digitization through the COVID-19 pandemic11”(hereinafter referred to as the 2021 study),based on time series between 2010 and 2020,with the results obtaine

194、d when the same models are run on datasets extended through the end of 2023(hereinafter as“the 2023 study”).31 Fixed broadband and its impact on the economy to the end of 2020It will be recalled that the 2021 study relied on structural models based on four functions:aggregate production functionGDP

195、per capita it=a1(Capital it)+a2(Education it)+a3(Broadband_Penetra-tion it)+eit (1)demand functionBroadband_Penetrationit=b1(Rural_population)it+b2(Broadband_Price)it+b3(GDP per capita)it+b4(HHI)it+eit (2)supply functionBroadband_Revenue it=c1(Broadband Price)it+c2(GDP per capita)it+c3(HHI Fixed bro

196、adband)it+eit (3)output function Broadband_Penetration it=d1(Fixed_Broadband_Revenue it)+4it (4)The 2021 study examined data for 139 countries between 2010 and 2020,running the econometric models first for all countries and then for distinct groups of countries categorized by level of economic devel

197、opment,using the proxy of GDP per capita:higher than USD 22000(50 countries);between USD 12000 and USD 22000(26 countries);lower than USD 12000(63 countries).The 2021 study results indicated that the economic impact of fixed broadband tends to increase with economic development(see Figure 8).11 ITU

198、Publication:The Economic impact of broadband and digitization through the COVID-19 pandemic:Econometric modelling,available at https:/www.itu.int/pub/D-PREF-EF.COV _ECO _IMPACT _B-202120The impact of digital transformation on the economyFigure 8:GDP growth impact of a 10 per cent increase in fixed-b

199、roadband penetration(2021 study:by economic development)Source:International Telecommunication Union.The economic impact of broadband and digitization through the COVID-19 pandemic:Econometric modelling.June 2021The economic impact of fixed broadband was also measured by region:Africa(34 countries)A

200、mericas(18 countries)Arab States(14 countries)Asia-Pacific(18 countries)CIS(8 countries)Europe(38 countries)The results by region confirmed that the economic impact of fixed broadband was higher for regions with more developed countries than for subregions with developing countries(see Figure 9).21T

201、he impact of digital transformation on the economyFigure 9:GDP growth impact of a 10 per cent increase in fixed broadband penetration(2021 study:by economic development)Source:International Telecommunication Union.The economic impact of broadband and digitization through the COVID-19 pandemic:Econom

202、etric modelling.June 2021Identical econometric models have been used to calculate the impact of fixed broadband for datasets running through the end of 2023 and compare these results with those of the 2021 study.32 Fixed broadband and its impact on the economy through 2023The same models were run wi

203、th data between 2010 and 2023 but only for those countries with a fixed broadband adoption level higher than five per cent(which yielded a sample of 107 countries and 5107 observations).Despite the smaller sample,the model generated statistically significant results,confirming those of the 2021 stud

204、y,which used data through 2020(see Table 8).22The impact of digital transformation on the economyTable 8:Economic impact of fixed broadband(2021 vs 2023 studies)Variables of fixed broadband model2021 study2023 studyLog(GDP per capita)Fixed broadband subscriber penetration0.080*0.1586*Gross fixed cap

205、ital formation0.109*0.0508*Skilled labour force0.051*0.0439*Log(fixed broadband penetration)Fixed telephone subscribers0.447*0.0021Mobile penetration-0.312*0.2028*Rural population-0.083*-0.3548*GDP per capita0.882*2.9146*Fixed broadband price-0.416*-0.0720*HHI fixed broadband-0.500*-0.0474*Log(fixed

206、 broadband revenue)GDP per capita1.301*0.7966*Fixed broadband price0.375*0.5765*HHI fixed broadband-0.869*-0.6692*Fixed broadband adoption growthFixed broadband revenue-0.446*-0.4264*DetailsObservations53285 107Number of countries139107Country fixed effectsYesYesYear and quarter fixed effectsYesYesY

207、ears2010-20202010-2023R-Squared 0.9920.991*,*,*significant at 1%,5%and 10%critical value respectivelyNote:all variables are expressed in logarithmsSources:ITU;analysis by the authors.In the context of an increase in broadband penetration,a decline in service prices,and a decrease in GDP per capita,t

208、he updated study indicates that this infrastructure continues to have a significant impact on the world economy.In fact,the coefficient of the impact has slightly increased from the 2021 study:with a dataset extending through the end of 2023 worldwide,an increase of 10 per cent in fixed broadband pe

209、netration yields an increase of 1.59 per cent in GDP per capita.The increase since the previous study can be attributed to 23The impact of digital transformation on the economythe greater reliance on digital technologies,suggesting that some relevant trends(such as the transition to 3:2 hybrid worki

210、ng schemes)have persisted past the end of the pandemic.Moreover,the structural model continues to provide estimates for other important parameters of the economy.As expected,fixed capital formation and skilled labour force continues to be a catalyst of GDP growth,suggesting an important contribution

211、 to the economy(positive and significant coefficient in both studies).Demand for fixed broadband services depends heavily on price.According to the 2023 model,a one per cent drop in prices will boost adoption by 0.07 per cent.While lower than the 0.42 per cent calculated in the 2021 study,it continu

212、es to be statistically significant.The lower price elasticity of demand may be explained by the fact that countries with extremely low penetration,with a more price-conscious population12,were excluded from the study.Income variation across the sample period seems to have a larger impact in driving

213、demand.Hence,increasing the average disposable income(proxied by GDP per capita)by one per cent yields 2.91 per cent more fixed broadband adoption(up from 0.88 in the 2021 study);further corroboration of the continuing relevance of affordability to fixed broadband penetration.Supply dynamics suggest

214、 that,as expected,income levels positively affect the revenues and investments of operators.At a global level,the consumption propensity for broadband services seems to have a significant impact on increasing the supply of digital offerings.Increasing the disposable income(proxied by GDP per capita)

215、by one per cent attracts 0.80 per cent more supply in 2023(a decrease from 1.30 per cent in the 2021 study).Finally,fixed broadband operator revenues are found to have a significant impact on the performance of the industry,implying a reinvestment of the output to the productive basis of the economy

216、13.This is an additional aspect that corroborates the existence of increasing returns to scale of ICT infrastructure,while the coefficient in the 2023 model has increased.The structural model was also run for selected countries sorted by development level to test whether fixed broadband economic imp

217、act is affected by increasing returns to scale.As in the 2020 study,the database was split into three groups of countries as measured by their GDP per capita:GDP per capita higher than USD 22000(53 countries);GDP per capita between USD 12000 and USD22000(28 countries);GDP per capita lower than USD 1

218、2000(26 countries).Similar structural models were run for each set of countries,yielding the following results(see Figure10).12 A word of caution:since this is a structural model based on a system of equations,the results of intermediate equations are inputs for the final result.For this reason,the

219、coefficients obtained in intermediate steps should not be considered general conclusions.For a model on mobile price elasticity in developing countries,see Katz and Berry(2014).13 This is particularly relevant for markets undergoing high growth,but it is not the case in saturated markets.24The impac

220、t of digital transformation on the economyFigure 10:GDP growth impact of a 10 per cent increase in fixed broadband penetration(2021 vs 2023 studies)Note:The 2021 study provides evidence of trends in 2010-2020 while the 2023 study is based on 2010-2023 data.Source:ITUThe results of the models run wit

221、h data through 2023 confirmed the effect identified in the earlier study.But now,the three models indicate a statistically significant positive effect of fixed broadband,but with an incremental effect in the countries with higher GDP.Of note,the effect on high-income countries has increased from a c

222、oefficient of 1.25 to 1.43,suggesting the existence of increasing returns to scale driven by the rise in fixed-broadband penetration in this group of countries.Also,the effect for middle-income countries has increased from a coefficient of 0.85 to 1.29,and for the low-incomes countries has increased

223、 from a not significant effect to 1.16.These findings were corroborated by running the model by world region(see Figure 11).Figure 11:Regional GDP growth impact of a 10 per cent increase in fixed broadband penetration(2021 vs 2023 studies)Source:ITU25The impact of digital transformation on the econo

224、myThe structural model was applied to all world regions with the 2010-2023 dataset,calculating the effect of a hypothetical 10 per cent increase in fixed broadband penetration on GDP per capita.The models yielded results consistent with those generated in the 2021 study:Africa region:reflecting the

225、growth in fixed-broadband adoption that has taken place in Africa in the last two years,the technology has emerged as a contributor to economic growth.Americas region:driven by the increasing returns to scale,countries across this region(North America,Latin America and the Caribbean)continue to bene

226、fit from the increase in broadband penetration,with a GDP increase of 2.10 per cent(up slightly from 1.97 per cent).Europe region:the 2021 study determined that an increase of 10 per cent in fixed-broadband penetration in high-income countries in this region would yield an increase of around 2.93 pe

227、r cent in GDP per capita.This increased slightly to 3.09 per cent using the data through 2023.Also,for low-income countries in the region in the same period the coefficient increased from 0.46 per cent to 1.05.This confirms again the increasing returns to scale effect driven by higher broadband pene

228、tration.CIS region:with the 2010-2020 dataset the model estimated that the region would see an increase of 0.77 per cent in GDP per capita,while in the period ending in 2023 that increased to 1.61 per cent.Asia and the Pacific region:in the timespan ending in 2023,the GDP impact of broadband adoptio

229、n increased to 1.84 per cent from an impact of 1.53 per cent,which might indicate an increasing return to scale of higher adoption levels.Arab States region:A similar effect might exist in the case of Arab States countries,although the change in per cent GDP impact of broadband adoption(0.53 per cen

230、t in the period ending in 2021 to 0.97 per cent in the series ending in 2023)might be also due to additional effects yet difficult to tease out.In summary,the comparison between the results of the structural model run on fixed broadband datasets for the period 2010-2020 with those for 2010-2023 yiel

231、ds the following conclusions:First,as shown in Figure 10,the increase in broadband penetration and the decline in service prices that took place in 2023 led to a higher coefficient of economic impact of fixed broadband than in the earlier study.This might indicate,in a confirmation of the prior stud

232、y,that those countries with higher broadband development were able to better mitigate the negative pandemic disruption.Second,as shown in Figure 11,suggesting an increasing returns to scale effect,the increase in fixed-broadband penetration in the Americas,Asia Pacific,Europe,the CIS and the Arab St

233、ates,resulted in a slightly higher coefficient of GDP per capita resulting from increase in penetration.Further research will be needed to confirm this trend in the future,as in some cases the current differences lie within the boundaries of the confidence intervals.Third,for the first time in these

234、 studies,the Africa region has increased its fixed-broadband penetration and,consequently,the economic contribution of the technology.26The impact of digital transformation on the economy 4 Mobile broadband and its impact on the economy through 2023The 2021 study,run with data between 2010 and 2020,

235、concluded that in countries that have low fixed broadband penetration(those that have low GDP per capita),it is mobile broadband technology that is the pre-eminent technology driving economic growth.The purpose of this chapter is to compare those results with the results of similar models based on d

236、atasets extended through the end of 2023.As mentioned above,the purpose is to determine whether the externalities of ICT noted during the pandemic remain.41 Mobile broadband and its impact on the economy until 2020The prior studies of the impact of mobile broadband were based on structural models li

237、ke those used to measure the contribution of fixed broadband.The models were run for 129 countries between 2010 and 2020,for the global sample,for groups differentiated by level of development,and for the different regions.The results of the study indicated that the economic contribution of mobile b

238、roadband was higher than that of fixed broadband,although the impact decreased with a countrys level of economic development(see Figure 12).Figure 12:GDP growth impact of a 10 per cent increase in mobile-broadband penetration (2021 study:by economic development)Source:ITU.The economic impact of broa

239、dband and digitization through the COVID-19 pandemic:Econometric modelling.June 2021The models were also run to measure the impact by region:Africa(34 countries)Americas(18 countries)Arab States(14 countries)Asia and the Pacific(18 countries)CIS(8 countries)Europe(38 countries)27The impact of digita

240、l transformation on the economyThe results indicated that developing countries benefitted from mobile broadband more than advanced economies(see Figure 13).Figure 13:GDP growth impact of a 10 per cent increase in mobile-broadband penetration (2021 study:by economic development)Source:International T

241、elecommunication Union.The economic impact of broadband and digitization through the COVID-19 pandemic:Econometric modelling.June 2021The impact of mobile broadband was then calculated using the same models with datasets between 2010 and the end of 2023.42 Mobile broadband and its impact on the econ

242、omy through 2023The models,run with the totality of the database(124 countries14)with data between 2010 and 2023,yielded statistically significant results,confirming the results published in 2021 with data through 2020(see Table 9).14 To avoid imputations in GDP data,the five countries without data

243、were excluded from the sample.28The impact of digital transformation on the economyTable 9:2021 and 2023 studies:economic impact of mobile broadbandVariables of mobile broadband model2021 study2023 studyGDP per capita(PPP)Mobile broadband subscriber penetration0.160*0.2286*Gross fixed capital format

244、ion0.137*0.0340*Years of education0.048*0.0142*Mobile broadband subscriber penetrationMobile penetration 1.694*0.6746*Rural population-0.052*0.1519*GDP per capita0.046*-0.0617Mobile broadband ARPU-0.0120.0397*HHI mobile broadband-0.331*0.0050Mobile broadband revenueGDP per capita0.517*4.3311*Mobile

245、broadband ARPU0.129*1.0128*HHI mobile broadband-1.547*-0.1272*Mobile broadband adoption growthMobile broadband revenue-0.008*-0.2749*Observations52276 063Number of countries129124Country fixed effectsYesYesYear and quarter fixed effectsYesYesYears2010-20202010-2023R-Squared 0.9930.995*,*,*significan

246、t at 1%,5%and 10%critical value respectivelyNote:all variables are expressed in logarithmsSource:ITU;analysis by the authors.In the context of an increase in mobile-broadband penetration and a generalized decline in service prices,the results for 2010-2023 indicate that the impact of the mobile infr

247、astructure on the world economy has increased since 2021.With the dataset extended through the end of 2023,an increase of 1 per cent in mobile-broadband penetration yielded an increase of 0.23 per cent in GDP(compared to a coefficient of 0.16 in the 2021 study).This increase can be explained by two

248、main factors.In the first place,as in the case of fixed broadband,it suggests that some of the patterns generated in society during the pandemic continue to persist,as digitization remains a more important factor in economic growth than previously.Second,the growth of 5G has made wireless technologi

249、es more attractive to industry(for IoT,M2M,and so on),and 29The impact of digital transformation on the economythus more relevant for economic activity.Moreover,the structural model provides estimates for other important parameters of the economy.The importance of fixed capital formation as a cataly

250、st of GDP growth has receded,its coefficient declining from 0.14 per cent to 0.03 per cent,which could be partly a consequence of the COVID-induced recession.15 Additionally,the educational level of the labour force continues to have a positive and statistically significant impact on economic growth

251、,underscoring the importance of human capital development in sustaining long-term economic performance.In terms of the demand equation,considering the effect of the pandemic,a change in the sign of the effect of the rural population and GDP on adoption can also be observed.Within a rural context or

252、low GDP per capita,fixed broadband coverage is low,so the population relied on mobile technology to remain connected.It should also be noted that,for mobile broadband,ARPU is positively associated with penetration.While this might be counter-intuitive,ARPU is a more comprehensive variable than simpl

253、y price(as used in fixed broadband)since it encompasses non-standardized parameters such as type of service plan,technology purchased(5G vs 3G),and revenues that are not directly associated with users,such as those from wholesale activity.The structural model was also run with 2010-2023 data to test

254、 whether mobile broadband economic impact was affected by an increasing return to scale effect.As in the prior studies,the database was split in three groups of countries as measured by their GDP per capita as follows:GDP per capita higher than USD 22000(53 countries)GDP per capita between USD 12000

255、 and USD 22000(28 countries)GDP per capita lower than USD 12000(43 countries)Similar structural models were run for each set of countries,yielding the following results(see Figure 14).Figure 14:GDP growth impact of a 10 per cent increase in mobile-broadband penetration(2021 vs 2023 studies)Source:IT

256、U;analysis by the authors.15 Gross Fixed Capital Formation,a measure of net investment,is generally subject to a decline under recessions.30The impact of digital transformation on the economyThe results obtained by running the models with data through the end of 2023 confirmed the effects identified

257、 in the earlier study.First,they showed that the impact on GDP per capita remains higher for mobile broadband than for fixed broadband.Second,they confirmed the positive effect for countries with low and middle income.Third,they confirmed the diminishing returns effect for highly developed countries

258、,but now the coefficient of economic impact for countries with GDP per capita higher than USD 22000(higher income countries)is statistically significant.Fourth,the results of the later 2023 study are consistent with those of the earlier one,although given the advance of 5G in high-income economies,m

259、obile broadband was found to have a statistically significant impact in these regions as well.These findings provide an insight that could be validated by running the model for the whole-world sample(see Figure 15).Figure 15:Regional GDP growth impact of a 10 per cent increase in mobile-broadband pe

260、netration(2021 vs 2023 studies)Source:ITU;analysis by the authors.Econometric modelling was thus applied to all the worlds regions with 2010-2023 dataset,assuming an increase of 10 per cent in mobile-broadband penetration to calculate the effect on GDP per capita.The models suggested the following c

261、hanges with respect to the 2021 study:Europe(high-income countries):consistent with the“diminishing returns”effect due to saturation,the impact on GDP per capita derived from mobile broadband is positive but low(only 1.43 per cent).However,the notable increase in the coefficient with respect to the

262、previous study can be associated with the increasing economic importance of 5G.Europe(low-income countries):the coefficient of economic impact decreased marginally from 1.89 per cent to 1.69,well within the 90 per cent confidence interval.Americas:driven by the increasing returns to scale resulting

263、from increasing penetration in Latin America,the Americas region shows that GDP would increase by 1.79 per cent(rather than 1.27 per cent in 2021).When isolated from the rest of the Americas region,the coefficient of impact on GDP per capita for Latin America increases from 1.70 per cent to 1.96.Aga

264、in,the development of 5G networks,particularly in North America,may lie behind these effects.Asia-Pacific:a 10 per cent increase in mobile penetration would cause GDP per capita in the region to increase by 0.85 per cent,down from 1.06 in the 2021 study.The coefficient of GDP impact for Asia and the

265、 Pacific(low-and medium-income countries)decreased,31The impact of digital transformation on the economyalbeit at a lower rate and,again,consistently within the 90 per cent confidence interval:from 2.48 per cent to 2.15 per cent.Africa:as in the prior study,most countries in the region would enjoy a

266、 significant increase in GDP per capita if mobile penetration were to increase by 10 per cent:the calculated coefficient of 3.16 per cent is an increase from the 2.60 per cent in the 2021 study,suggesting an incremental return to additional mobile-broadband penetration.Arab States:the coefficient ca

267、lculated for this group would increase from 1.81 per cent in the 2021 study to 1.96 with data through 2023.CIS:the countries in this region would see increase in the coefficient to 1.79 per cent,up from 1.65 per cent in the 2021 study,although again that result is within the 90 per cent confidence i

268、nterval.A comparison between the new results of the structural model and those obtained with the 2010-2020 broadband datasets thus leads to the following conclusions.First,in the context of an increase in mobile-broadband penetration,and a partial decline in service prices,the calculated coefficient

269、 for the economic impact of mobile broadband has increased.Some regions(Africa,CIS,the Americas,and high-income Europe)have undergone an increase in the economic impact of mobile broadband.Second,the reduction in the economic impact coefficient in Europe(low-income countries)and in the Asia and the

270、Pacific region suggests that a“diminishing returns”effect may be kicking in as mobile-broadband penetration in those regions approaches saturation.Third,given the advance of 5G in high-income economies,mobile broadband was found to have a statistically significant impact in these regions as well.32T

271、he impact of digital transformation on the economy 5 Global analysis of fixed and mobile broadband and its impact on the economy through 2023In summary,running the structural models for the dataset ending in 2023 for fixed and mobile broadband suggests the following:The changes that took place in th

272、e broadband ecosystem in many countries during and after the pandemic(continuing capital spending on broadband expansion,increased penetration,and more affordable pricing,especially for mobile)have not substantially altered the conclusions drawn in the 2021 study.However,the calculated increase in p

273、er capita GDP resulting from a 10 per cent increase in broadband penetration in the global sample has increased for both fixed and mobile broadband,indicating continued increasing returns to scale.The contribution of fixed broadband continues to be greater in developed than in developing countries.T

274、he economic dividend of mobile broadband continues to be greater in countries with lower levels of economic development,diminishing in countries and regions with higher levels of penetration and development.Repeating the modelling using the dataset extending to the end of 2023 and comparing the resu

275、lts with those obtained in the 2021 study has identified a higher economic contribution of mobile broadband in low-income developed countries and of fixed broadband in middle-income developed countries.Figure 16 presents a comparison between the findings of the 2021 and 2023 studies regarding the ec

276、onomic impact of a hypothetical 10 per cent increase in broadband penetration.The top figure indicates that,on a global scale,the calculated economic contribution of such an increase in penetration has increased for both fixed and mobile broadband.This confirms the existence of increasing returns to

277、 scale,which establishes that the economic impact of the technology increases with the adoption of the technology.In other words,if the objective is to maximize the economic contribution of the technologies,it is important to accelerate their adoption.The two bottom figures also compare the economic

278、 impact of fixed and mobile broadband in countries with different levels of development for the two studies.The comparison confirms and shows that while the contribution of fixed broadband continues to be greater in developed than in developing countries(1.43 per cent in high-income economies versus

279、 1.16 per cent in low-income ones),the economic dividend of mobile broadband continues to be greater in countries with lower levels of economic development than in regions with higher levels of penetration and development(3.02 per cent in countries where GDP per capita is under USD 12000 versus 1.72

280、 per cent in countries where it is above USD 22000).33The impact of digital transformation on the economyFigure 16:GDP growth impact of a 10 per cent increase in broadband penetration(2021 vs 2023 studies)Source:ITU;analysis by the authors.34The impact of digital transformation on the economy 6 Digi

281、tization and its impact on the economy through 202216Digitization is the transformation of the techno-economic environment and socio-institutional operations of a nation through the deployment and use of digital technologies and applications.The 2018 and 2020 study introduced a digitization index th

282、at measured the cumulative economic effect of adoption and usage of multiple information and communication technologies across individual users and enterprises,the development of digital industries,and the factors of production of the digital economy,among other factors.This chapter compares econome

283、tric models to estimate the impact of digitization on GDP and productivity through 2022.61 A new measurement of digitizationSince the 2021 study,a new index has been developed aiming to capture better the new dimensions of the digital economy.The new index,developed in 2022,is based on seven pillars

284、 and 158 indicators(see Figure 17).Figure 17:Digital ecosystem development index structureSource:CAF Latin America development BankA comparison of the prior and new indicates a high level of consistency(see Figure 18).16 The analysis extends up to 2022,as this is the latest available data point for

285、the Digitalization Index.35The impact of digital transformation on the economyFigure 18:Correlation between both indices of the digital ecosystem(last data available for each index)Source:CAF;analysis by the authors.As in the 2021 version,the newly developed digital ecosystem index correlates with e

286、conomic development(see Figure 19).Figure 19:Correlation between GDP per capita and digital ecosystem development index,2022Sources:CAF;International Monetary Fund(IMF);analysis by the authors36The impact of digital transformation on the economy62 Digitization and its impact on the economy until 202

287、1The economic impact of digitization in the 2021 study was tested through two econometric models run on data for 73 countries.17 An endogenous growth model was used to test the impact of digitization on GDP growth,based on the Cobb-Douglas production function:In addition,two models to test the impac

288、t of digitization on productivity were based on the following models:The results of the models run on the prior version(2021)of the index indicated the following:On a global scale,digitization has a larger economic contribution than fixed broadband,on a par with that of mobile broadband:a hypothetic

289、al 10 per cent increase in the digitization index is associated with a 1.35 per cent increase in GDP per capita.The impact of digitization on advanced economies is higher than in emerging countries,confirming the increasing returns to scale effect:a 10 per cent increase in the digitization index yie

290、lds an increase of 1.54 per cent of GDP per capita in OECD countries and 1.00 per cent in non-OECD countries.Digitization boosts labour productivity:a 10 per cent increase in the digitization index yields an increase of 2.50 per cent in labour productivity.Finally,a 10 per cent increase in the digit

291、ization index is associated with a 1.9 per cent increase in total factor productivity.63 Digitization and its impact on the economy through 2022Using the same model,the economic impact of digitization through 2022 was then estimated for two variables:GDP growth and productivity.Digitization and GDP

292、growthThe impact on GDP growth was tested through a generalized method of moments(GMM)dynamic panel data model run for 101 countries with data between 2004 and 2022,once for the global sample and once for OECD and non-OECD countries separately(in the latter case,the series started in 2005).Figure 20

293、 compares the results of this analysis with those generated in the 2021 study.17 The economies included:Argentina,Australia,Austria,Azerbaijan,Barbados,Belarus,Belgium,Bolivia,Brazil,Bulgaria,Canada,Chile,China,Colombia,Cte dIvoire,Czech Republic,Denmark,Dominican Republic,Ecuador,Egypt,El Salvador,

294、Estonia,Finland,France,Germany,Greece,Guatemala,Haiti,Honduras,Hong Kong(China),Hungary,Iceland,India,Ireland,Israel,Italy,Jamaica,Japan,Kazakhstan,Kenya,Latvia,Lebanon,Luxembourg,Malaysia,Mexico,Netherlands,New Zealand,Nicaragua,Norway,Panama,Paraguay,Peru,Poland,Portugal,Republic of Korea,Romania,

295、Russian Federation,Saudi Arabia,Singapore,Slovakia,Slovenia,South Africa,Spain,Sweden,Switzerland,Thailand,Trinidad and Tobago,Trkiye,United Arab Emirates,United Kingdom,United States,Uruguay,Venezuela.Not all countries are included in the regression in every year due to a lack of control data in so

296、me cases.37The impact of digital transformation on the economyFigure 20:Impact on GDP of a 10 per cent increase in the digital ecosystem development indexSources:ITU;analysis by the authors.As indicated in Figure 20,the results of the current study models are higher for 2022 than those for the previ

297、ous year,as digitization aided in countering the GDP decline due to the pandemic.On the global scale,the impact of the digital ecosystem index increased from 1.35 per cent to 2.16 per cent.Second,as in the earlier study,the impact of the digital index on developed nations is higher than in developin

298、g countries(2.48 per cent vs 1.29 per cent),confirming the returns to scale effect.Again,this confirms the increasing relevance of digitization for economic activity since the pandemic.Digitization and productivityTo measure the impact on labour productivity,the starting point was a Cobb-Douglas pro

299、duction function where GDP depends on physical capital stock(K)and labour(L):where the total factor productivity term(A)depends on the degree of digitization of each country:.By assuming constant returns to scale on capital and labour,the function was converted to state that labour productivity depe

300、nds on digitization and on physical capital stock per worker(lower-case letters y and k denote output and capital in worker terms).By applying logarithms for linearization,the following model was defined:Where is a fixed effect assumed to be specific for each country.The linear regression estimate w

301、as performed for a sample of 99 countries for the period 2009-2022.38The impact of digital transformation on the economyTable 10:Fixed effects regression of labour productivity on capital per worker and digitizationDependent variable:Coefficientlog(Digitization Index)0.2758*(0.0920)log(k)0.5688*(0.0

302、774)Country fixed effectsYesYear fixed effectsYesR-squared(within)0.808Observations1385Note:*p1%.Robust standard errors in brackets.Source:The Conference Board;analysis by the authors.The coefficient of 0.2758 with high statistical significance in Table 10 indicates that a 10 per cent increase in th

303、e digitization index is associated with a 2.8 per cent increase in labour productivity.This result is not markedly different from the one calculated for 2020,where the coefficient was2.5.Alternatively,as stated initially,the total factor productivity term depends on the digitization level of each co

304、untry,plus an individual fixed effect for each economy.By applying logarithms,this can be expressed as:The corresponding regression yields the following results for a sample of 100 countries for the period 2004-2022:Table 11:Fixed effects regression of total factor productivity on digitizationDepend

305、ent variable:Coefficientlog(digitization index)0.3136*(0.1313)Country fixed effectsYesYear fixed effectsYesR-squared(within)0.134Observations1900Note:*p5%.Robust standard errors in brackets.Source:The Conference Board;analysis by the authors.This means that,with the data through 2022,a 10 per cent i

306、ncrease in the digitization index is associated with a 3.1 per cent increase in total factor productivity.In the study published in 2021,that coefficient was 1.9 per cent.39The impact of digital transformation on the economyThe increase in the impact between the 2021 and 2023 studies reinforces the

307、need for countries to build an agenda focused on development of the digital economy.That should comprise five areas of policy intervention18:Development of digital infrastructure,which consists of ICT capital spending,increased connectivity,and affordability.This should be achieved by providing the

308、necessary incentives through enhanced universal service funding,balancing fiscal policies,reforming the management of spectrum,and taking innovative approaches to infrastructure sharing.Digital human capital,which entails the development of digital skills to match the changing needs of economies und

309、ergoing digital transformation.This should include educational and training programmes for skilling and reskilling,both in the general population and in the labour force.Digital innovation relating to the scale of research and development and the fostering of incubation ecosystems,by enhancing addit

310、ional fiscal and financial incentives to support research and development.Digital adoption,which comprises the adoption of ICT services,devices and digital platforms by individuals,enterprises and governments.This should include lowering barriers to accessing digital devices and equipment by reducin

311、g import duties and bringing down local manufacturing costs.Development of a domestic digital sector,which entails the incubation of local sectors offering digital products and services both for local consumption and exporting.18 See ITU(2023).Best Practice Guidelines:Regulatory and economic incenti

312、ves for an inclusive sustainable digital future.ITU Global Symposium for Regulators(GSR)2023.40The impact of digital transformation on the economy 7 Conclusions and policy implicationsThis research has provided evidence that the ICT ecosystem has continued to grow in the time since the 2021 study.Th

313、e following particularly notable trends were identified in the 2023 study.The expansion of broadband service coverage that began in 2020 in response to the COVID-19 pandemic,while slowing down,continues,thanks to increasing affordability and service coverage.Worldwide,fixed-broadband connectivity ha

314、s grown to 71 per cent of households in 2023,although the rate of growth has diminished,possibly indicating that the pandemic-induced connectivity needs have been largely met(in other words,a diminished need for digital service has driven a decrease in the rate of growth of fixed broadband).The ongo

315、ing increase in broadband adoption was enabled by lower service prices.In the context of increasing income per capita in the post-COVID world,fixed-broadband prices19 as a percentage of GNI per capita declined worldwide by 6.29 per cent the last year.Except for Africa,the digital divide is driven by

316、 non-economic factors(low digital literacy,lack of culturally relevant of content,and poor network coverage).Worldwide,fixed broadband(as a percentage of households)by 2023 was reaching an estimated average of 76 per cent of the population.The figure was above 90 per cent in North America,Europe,the

317、 CIS,and Latin America and the Caribbean and the Arab States.Coverage is lower in Asia and the Pacific and in Africa(75 per cent and 30 per cent respectively).While FTTH and 5G coverage is increasing,the gap between advanced economies and the developing countries remains significant.Despite the incr

318、ease in adoption presented above(with the consequent growth in traffic),worldwide telecommunication CAPEX per capita measured in current terms has increased at low rates.While the rate at which worldwide CAPEX per capita is increasing has slowed somewhat,from 0.62 per cent in 2021 to 2.37 per cent i

319、n 2022 and 0.27 per cent in 2023,it should be noted that,given a global inflation rate of 4.3 per cent20,capital spending per capita in real terms is diminishing,hampering the continued growth of network coverage and consequently adoption of broadband,especially in rural areas.These trends notwithst

320、anding,the changes that took place in the ICT ecosystem at the end of the pandemic have not substantially altered the importance of ICT as a driver of economic growth:A hypothetical increase of 10 per cent in fixed-broadband penetration is associated with a 1.59 per cent increase in GDP per capita.A

321、n increase of 10 per cent in mobile-broadband penetration is associated with a 2.29 per cent increase in GDP per capita.Digitization also drives increases in GDP,labour productivity,and total factor productivity.The confirmation of the economic contribution of ICT through 2023 provides support for p

322、olicy measures aimed at bridging the digital divide.Policymakers and regulators in developing countries need to evaluate initiatives to reverse the decline in capital spending and stimulate investment in telecommunications to ensure continuous roll-out of networks.The modernization of the telecommun

323、ication regulatory framework should include,among other initiatives:granting convergent licences;making sufficient radio spectrum available at reasonable prices;allowing this resource to be traded in the secondary market with the acquiescence of the regulator,and to be refarmed;and defining signific

324、ant market power based on criteria that go beyond simple 19 The ITU surveys prices of the least expensive plan from the operator with the largest market share.20 IMF.Inflation rate,average consumer prices 2023.Retrieved in:https:/www.imf.org/external/datamapper/PCPIPCH WEO/OEMDC/ADVEC/WEOWORLD41The

325、impact of digital transformation on the economymarket share.Of these elements,radio spectrum availability is particularly noteworthy,first,due to the lack of assigned amounts of this resource,and second,due to excessive pricing.In addition,governments should emphasize initiatives to promote digital

326、literacy among the vulnerable and disadvantaged.Programmes are needed to foster digital literacy in formal education,embedding ICT training in primary and secondary school curricula,complemented with targeted programmes focused on teachers.Digital literacy programmes in the formal educational system

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330、oi.org/10.1016/j.jum.2020.08.001 IMF(2023).World Economic Outlook AprilIMF.Inflation rate,average consumer prices 2022.Retrieved in:https:/www.imf.org/external/datamapper/PCPIPCH WEO/OEMDC/ADVEC/WEOWORLD Inoue,H.and Todo,Y.(2023).“Has Covid-19 permanently changed online purchasing behavior?”in EPJ D

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