Internet Speed as an Economic Indicator
Before I sat down to write this post, I was on my computer trying to 1-day prime (yes I’m making prime a verb) a new charger because mine broke. As soon as I tried to press “confirm purchase”, my 3 bars of wifi turned to 1, and I watched the treacherous little loading sign endlessly spin in a circle before shutting my computer in defeat. I did not purchase the charger. I did not add those 15 dollars to the GDP. I did not get to contribute to the economy, all because of my slow internet connection.
It’s quite obvious that the internet has completely transformed the way our world works. Despite this, I was shocked at first to see “internet speed” as an actual economic indicator. But it makes so much sense. I rely on the internet everyday, businesses rely on the internet everyday … just about everything has a connection to the internet, and the more this grows, the more the economy relies on the internet. The internet opens up a whole new world for economies to grow and flourish. But the internet is not the indicator, it’s internet speed.
So what is internet speed? It defines itself, but internet speed refers to how fast the internet works, and it is measured in bits per second. As an indicator, it is measured in KBps, or thousand bits per second. In layman terms (which is the extent to which I know about it myself), the higher this number, the speedier your internet, and thus the greater a country’s internet economy can flourish. We’ve all had to deal with slow internet … it’s torturous. Not to be dramatic, but based on the way my wifi and Verizon data has been treating me recently, I was not surprised when the U.S. was not in the top ten fastest internet speeds (it may have been number eleven, but that’s not the point).
Okay, so the U.S. does not have the fastest internet speed, but it is still considered a global economic and technological power. How could this be? There’s definitely a disparity in internet accessibility and speed throughout the U.S.. Top tech companies are going to have a hell of a lot better internet speed than those that live in the middle of nowhere in Montana. There’s a huge range of internet speed in the U.S., and the lack thereof in some regions must take us down a few notches, even if the internet is exceptionally speedy in other places. I tried to do some research on how internet speed is calculated on a national level, but I honestly struggled to find any concrete information on it. Trading Economics, where I found the indicator information on says:
“This page has a list of countries compared by Internet connection as measured by the average speed of data transfer rates experienced by end-users. One thousand kilobits per second (Kbps) is equal to 1 Megabit (Mbps) or 0.125 Megabytes (M/B). The values were sourced from AKAMAI, a global content delivery network and cloud services company.”
I’m not really sure what that actually means, but it was the most specific information I could get without taking too deep of a dive into the internet. I would assume that national internet speed is calculated as an average of averages from different regions/states, but do not quote me on that.
So what countries do have the highest internet speed? South Korea has a pretty large lead as the country with the highest internet speed by a couple thousand KBps. This is followed by Norway, Finland, and Hong Kong. But how could fast internet help these countries?
The internet certainly contributes to a country’s GDP, one of the biggest economic indicators. The internet has created a whole new platform for jobs, another indicator. The internet easily allows you to look at and engage with the stock market, yet another indicator. The internet allows businesses to reach a limitless audience. The internet lets you purchase a car, house, food, vacations, etc. But all of this — “this” being the internet — is entirely dependent on internet speed. You can’t do your online job, trade that money, purchase that good, use that algorithm, without having a good internet connection. The faster the internet is, the faster (and more frequently) all these things can happen. To me, that makes internet speed arguably one of the most important economic indicators.
That being said, internet speed can only greatly influence an economy in countries where the internet and technology is widely used. Not all countries have access to fast internet, let alone internet at all. This doesn’t mean they can’t have a successful economy. The internet is not essential for this (obviously, because the internet was only introduced recently, and the ‘economy’ has existed forever(?)). Countries with a slower/no internet speed just have a potential to flourish that hasn’t been accessible/explored yet.
My internet is back up now so I will in fact be doing my part and contributing 15 dollars to the U.S. GDP. Thank you, internet.
