The Economic Impact of Digital Exclusion

Digital Impact Group and Econsult Corporation have produced an assessment of the economic impact of digital exclusion in the US.

The report quantifies costs associated with the significant proportion of the population that lacks high-speed Internet access at home, and estimates an annual cost to individuals, government and the nation of $55 billion. In the US, over 100 million individuals representing over 40 million households are unable to use high-speed Internet, or broadband, because they cannot access it, cannot afford it, do not know how to use it, or are not aware of its benefits. This "digital divide" is costly not only for those who lack computer access and skills, but for businesses, government, and the nation as a whole.

The DIG/Econsult report develops a taxonomy of negative economic impacts associated with digital exclusion, articulates the mechanisms through which digital exclusion has adverse impacts, and qualitatively and quantitatively evaluates 11 categories of significant impact. For example, in the area of education, analysis focuses on increased earnings potential resulting from increased educational success made possible by broadband access. The estimate in the economic opportunity category accounts for increased job searching ability via the Internet, and greatly improved access to employment for the disabled, citing the vast proportion of companies that accept job applications online only. The report seeks to identify minimum likely levels of impact in each category. The estimates of all 11 categories of economic impact yield an aggregate estimate of the current cost of digital exclusion of over $55 billion per year. The cumulative figure does not directly account for a number of significant, albeit hard to quantify, considerations that are more diffuse in nature but are no less important. For example, the study notes but does not attempt to quantify the social and economic benefits of greater civic engagement, or the environmental impacts associated with the reductions in travel that result from online shopping. In these areas and more, as well as in those areas that were quantified, the report is intended to be the start of a conversation about the economic impact of digital exclusion. As such, it identifies aspects of the cost of digital exclusion that warrant further exploration and precision.