The Telecommunications Economy: Small Business

A 2003 study by CAZITech Consulting compared two cities in Iowa. The smaller city, Cedar Falls, installed optical fiber in its municipal telecommunications network. Waterloo upgraded its private cable system to digital cable and broadband. After installation of the fiber network, new construction in Cedar Falls outpaced that of Waterloo and the city required fewer funds to fuel growth.

According to this same study, teleworking allows employers to hire and retain the best employees, regardless of distance, while improving productivity by 10-20%. The savings realized from such programs is much greater than the associated costs.

The CAZITech study also states that teleworking can realize a time savings of approximately $4,000 a year for each employee. For those employees who must drive to their offices, but who have the flexibility to commute outside of rush hour, the time savings amount to $700 per worker each year.

Businesses have realized the productivity benefits of broadband. Spending by small businesses for Internet access will increase to $8.2 billion by 2009. Small businesses spent $4.4 billion on Internet access in 2005, because of greater adoption of digital subscriber lines, a form of broadband internet access, and the availability of higher bandwidth services, according to Customer Relationship Management Today.

In a 2004 study by ACNielsen, more than half of the companies surveyed state that the Internet has improved their profitability. 58% indicate that it has helped their business grow or expand.

A 2004 joint study by Covad and Sprint shows that broadband has had a positive impact on the functioning of small businesses. Respondents stated that high speed Internet has increased workplace efficiency, increased employee productivity, and enhanced the ability to compete.

A 2005 report from the Massachusetts Institute of Technology shows that broadband access has a measurable positive economic impact. According to this report, communities with widely available broadband access experienced more rapid employment growth and an increase in both the number of overall businesses and the number of information technology businesses.

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