Regional economic impacts of broadband adoption in Victoria
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Broadband will have a significant impact on productivity and employment within regional Victoria, particularly in some industries, such as insurance and finance. The Victorian Government has commissioned research into the economic impact of broadband in order to quantify these benefits.
This research also identifies areas in Victoria where the impacts of broadband are greatest but where supply side constraints are seemingly preventing the potential benefits from being realised.
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What did we find out?
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Sectoral impacts
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- productivity and economic impacts of broadband across the state vary considerably by sector
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- the services (financial, insurance and business) sectors show the highest direct productivity gains from the adoption of broadband - this productivity derives mainly from increased labour productivity
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- the largest output impacts are found in the construction, mining and trade (retail, accommodation, food and beverage sales) - this is despite the relatively reserved direct productivity gains estimated for these industries
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- the strong economic impacts of broadband in the above sectors are obtained through:
- - cheaper inputs to production as a result of improved productivity in other industries
- - higher private consumption leading to increased demand for their products
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- positive employment impacts are the strongest in the trade, construction, government services and mining sectors
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- there is a negligible and negative employment impact in the financial and business services sector due to increased labour productivity resulting from broadband use (resulting in less labour required for the same level of output)
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At a regional level
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- productivity benefits are strongest in the areas that have a combination of broadband availability and a strong industrial presence from the communications, financial and business services sectors
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- these sectors are concentrated in the Metropolitan Melbourne area and to lesser extent regional centres such as Ballarat and Wodonga
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- positive impacts in output are seen in the regions that contain large construction (expanding residential developments) and trade sectors (retail and tourism)
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- areas with the greatest improvements in outputs are actually on the urban fringe or outside Metropolitan Melbourne, such as Mornington Peninsula and Bendigo
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- areas that cater for large tourist populations, such as the Surf Coast, the Mornington Peninsula, Phillip Island, the Lakes Entrance area and the areas around the major alpine resorts (Falls Creek, Mount Hotham and Mt Buller) have the highest employment gains due to broadband
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Economic benefits