Ookla’s May 2024 report on mobile and home broadband shows Singapore and Hong Kong leading the list of countries with the fastest speeds, which is not surprising at all.
You might not have expected Chile to rank third, the UAE and Iceland in spots four and five. The United States ranks sixth, which is sort of an anomaly. Over the past half century or so, it would not have been uncommon for U.S. metrics to rank anywhere from 12th to 20th on measures of tele-density or internet access bandwidth.
We might reasonably ask how much importance such speed rankings actually mean. One might argue the rankings generally suggest that small city-states and small countries can produce good broadband infrastructure faster and better than any large country, simply because the physical facilities are smaller in coverage area, with higher density. And network size and population density directly affect the cost of such facilities.
Hong Kong, Singapore and other such areas will always be able to create high-performance access infrastructure faster than any continent-sized country with low population density.
Nor, looking only at city-states and small countries, might we see clear correlations between growth and home broadband speeds. Singapore and UAE might be strong performers in that regard. But other small countries might not show the same strong correlations. It might be the case that only rarely, if ever, are home broadband and economic growth rates uncorrelated.
But the correlations are not consistent. So it is worth speculating about how important such rankings actually are, when it comes to applying the tools and wringing business or economic value out of them.
To be sure, lots of studies suggest there is a correlation between economic growth (gross domestic product) and home broadband availability and speed, with perhaps greater correlations related to availability than speed.
But it might also be worth noting that there are similar correlations between gross domestic product gains and educational attainment; rule of law; capital investment; income and wealth; or infrastructure density and availability.
And correlation is not causation.
In fact, “causality” might even be the reverse of what we might think.
Keep in mind that economists generally economists might generally agree there is a “causal” relationship between growth and:
Capital accumulation (both physical and human)
Innovation and technological progress (research and development; creation of new ideas)
Macroeconomic stability helps (Low and stable inflation; sound fiscal policies)
Openness to trade
Quality Institutions (rule of law and low levels of corruption)
Financial markets well developed
So we might consider education an input to future capital; innovation or technology development. We might consider home broadband another form of capital.
But it's often unclear whether some factors said to cause growth are themselves caused by growth. Does financial development, trade openness and political stability cause growth, or does growth cause financial development, trade and political stability? We cannot really say.
Consider “good schools,” quality home broadband, medical care or other supposed platforms aiding growth.
It might plausibly be the case that demand for good schools and fast internet access, for example. Are the product of demand from citizens who already have the resources to pay for such quality broadband, as well as the use cases.
Likewise, if local schools are funded by property taxes, then “good schools” might be “caused” by affluent citizens who can afford expensive housing, which comes with high property values, leading to high tax revenues to fund schools.
In fact, one might well argue that often, the prevalence of quality home broadband, transportation infrastructure or any number of other supposed producers of economic growth might instead be a result of pre-existing strong economic growth.
Rather than robust economic growth being “created” by quality broadband; educational attainment and other drivers, it is equally plausible that pre-existing high growth creates wealth and resources that in turn lead to the other outcomes.
You might suspect educational attainment, for example, is correlated with stronger economic growth, and studies support that notion. But a flywheel might be at work, where pre-existing high attainment leads to more attainment; high growth reinforcing more high growth.
Likewise, studies of transportation infrastructure also tend to be correlated with gross domestic product, but sometimes only moderately.
The point is that we cannot be very sure that faster home broadband is the result of growth or the cause of growth. Nor can we know very much about how the “quality” of broadband (speed and latency performance, for example) produces growth or is a reflection of growth.
