“In an underemployed economy, for every one percentage point increase in broadband penetration in a state of the USA, employment is projected to increase by 0.2 to 0.3 percent a year.” Robert Crandall, William Lehr and Robert Litan, “The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data,” Working Paper, Brookings Institution, 2007). To view full contents, please click here.

Mandel Finds Information Technology Sector to be Leader in Job Creation

July 28, 2010 written by John Watson

In a recent study entitled, “The Coming Communications Boom? Jobs, Innovation and Countercyclical Regulatory Policy,” Economist Michael Mandel from the Progressive Policy Institute discusses the impact of regulation on the communications sector.  Mandel observed that during previous economic recessions, the recovery phases have all been characterized by one “job leader,” that begins adding jobs before the rest of the private sector has recovered.   Based on current employment statistics, Mandel indicates that the communications sector is this recession’s job leader. 

Mandel’s memo observes that while millions of jobs that have been lost across the country in the last three years, employment at Internet companies has increased by 13 percent and wireless telecom carriers and the computer systems design industry have also been adding jobs at a steady pace.  In order for these industries to continue to flourish, however, there must be an appropriate regulatory environment both at the national level and here in the states.  Mandel does not blindly advocate for either stringent or lax regulations on the communications sector, but instead, proposes that the communications industry must be allowed to develop unfettered, and to only revisit the idea of regulations when it is fully established as an economic force.  Mandel has gleaned this lesson from the success that the Internet has had in the past few decades.  Mandel’s findings suggest the importance of having a regulatory environment that will allow the communications industry to grow.  Not only does the communications industry have a potential to be a jobs leader, as Mandel asserts, but growth among the communications sector means more innovation and investment in broadband and other digital technologies and that is a win for consumers.

To read Mandel’s policy memo in full, please click here.